Electronic Procurement (e-procurement) is the business to business purchase and sale of online services and supplies and other networking systems and information. E-procurement connects business processes and business houses processes with their suppliers through the management of all the correspondence between them. The increased popularity and the requirement for the ideal e-procurement solution have been driven by the success of the B2B commerce websites. Although the ultimate goal is the automation of workflows, the optimization of purchasing processes and the identification of new sourcing opportunities so that businesses can use their time managing to serve the needs of their customers and earn revenue although this term is also referred to as Supplier Relationship Management.
The sectors in India that have adopted this software have reaped many benefits although the adoption of this purchase optimization tool is in evolutionary stage. Those benefits include:
? Lowering levels of inventory levels
? Increased transparency that encourages fearless, free, and fair, participation in bidding
? Better access to dynamic analytical reports that help to identify the correct bidder
? Payment and the tracking of product delivery is easier
? Contractor and vendor management schedules are better managed
? Bidding is easier
? There is a reduction in processing time and cost for the tenders
? There is transparency in the tendering process
? Submissions online for bids and tenders
? Transactions can be tracked
? Information is organized very neatly
? Efficiency is improved
Adopting these e-procurement solutions offer businesses a better way to serve their customers and increase their revenue but there are some risk factors involved. One of these risk factors involves the confidentiality of tenders and bids although there are high stakes involved with tenders and bids and they need to be managed with much transparency and fairness. Making sure that they are kept confidential might be problem that could lead to some irregularities that might negatively affect the business opportunities
Another risk factor is the investment of considerable amounts of a business' revenue in the procurement of this software might be too risky for a small business because these procurement solutions only seem to work efficiently for large businesses. However, that doesn't mean that small businesses can't take advantage of e-procurement. They will simply have to purchase less expensive e-procurement packages.
Another problem might arise if the e-procurement system won't integrate with the current legacy systems then they might create duplicative work steps that could jeopardize the reliability of the business.
Also, if a supplier doesn't participate it could hinder the supply e-procurement management system that relies on the mass participation of the suppliers.
However most of the business analyst's have advised that there will be a large increase in the list of the businesses that will adopt these e-procurement solutions to optimize their business.
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