E-Procurement for Contemporary Organisations: How E-Procurement Changes the Role of Purchasing and Its Relationships with Suppliers
Nowadays, the interest in purchasing and supply management has been considerably increased because e-procurement and other e-operations have changed the role of these processes. Purchasing tries to maximize its contribution to the organizational performance considering different financial, operation, and supply chain aspects (Kim, Suresh, & Kocabasoglu-Hillmer 2015). At the same time, purchasing aims at ensuring economic supply and keeping a company in operation procuring goods, services, and supplies. Can it happen that e-procurement can change the role of purchasing and its relationships with suppliers? This paper investigates the current changes in purchasing and supply management about e-procurement and other opportunities available on the Internet.
Companies should control the flow of money, promote control, develop effective supply sources, and maintain good relations with suppliers (Pooler & Pooler 2012). The appearance of a new platform, the Internet, has already influenced the way of how the majority of business transactions occur. People start spending less time on the recognition of their needs, the identification of possible suppliers, the analysis of the opinions, the determination of delivery issues, the processes of placement and payment of their orders, and even the development of the relations with the suppliers from different parts of the world.
Pablos et al. (2012) admit that purchasing that is also defined as procurement is the main process that links suppliers and organizations. In case some changes take place in the process (in this case, ordinary purchasing turns into e-procurement), the relations between suppliers and companies should undergo certain changes anyway. The investigations show that not all organizations have successfully implemented even some basic e-procurement systems (Quesada et al. 2010).
Therefore, not all organizations and suppliers can use the same schemes in their work. They have to spend some time to analyze their opportunities and choose the most appropriate methods in the development of their relations. Still, the companies and people, who have already tried e-procurement, realize how electronic operations may change the role of purchasing and supply management. The following aspects attract the attention of organizations and people, who want to benefit with e-procurement:
- The reduction of paper processes is the most evident contribution of e-procurement;
- The decrease of damaging supply interruptions that can influence the performance (Caniels & Gelderman 2005);
- A considerable reduction of delivery time;
- A possibility to gain control over ordering costs and practices;
- The access to the information about suppliers.
These changes help to save time and efforts of people to improve their purchasing practices and performance. As a result, they focus on the quality of services they offer and the guarantees they provide their consumers with. To experience all positive outcomes of e-procurement, companies should choose appropriate strategic designs and improve their supply chain management processes. The supporters of e-procurement underline the necessity to implement new systems and overcome the existing barriers that are may be based on various cultural, social, and economic differences but not to spend time on analyzing the benefits of innovations.
Reference List
Caniels, MCJ & Gelderman, CJ 2005, ‘Purchasing strategies in the Kraljic matrix – a power and dependent perspective’, Journal of Purchasing & Supply Management, vol. 11, pp. 141-155. Web.
Kim, M, Suresh, NC & Kocabasoglu-Hillmer, C 2015, ‘A contextual analysis of the impact of strategic sourcing and e-procurement on performance’, Journal of Business & Industrial Marketing, vol. 30, no. 1, pp. 1-16. Web.
Pablos, PO, Lovelle, JMC, Gayo, JEL & Tennyson, RD 2012, E-procurement management for successful electronic government systems, IGI Global, Hershey. Web.
Pooler, DJ & Pooler, VH 2012, Purchasing and supply management: creative the vision, Springer Science & Business Media, New York. Web.
Quesada, G, Gozalez, ME, Mueller, J & Mueller, R 2010, ‘Impact of e-procurement on procurement practices and performance’, Benchmarking: An International Journal, vol. 17, no. 4, pp. 516-538. Web.