- Saves time
- It is efficient
- It is reliable
- Reduced transaction costs through the automation of requisitioning, purchase order management and accounting processes by the use of internet technology including online ordering etc.
- Less paper work as compared to manual
- Variety of suppliers and products to make a decision/ option
- Choice of high quality of products or latest technology
- Cuts on the cost of middlemen
- Reduction of ‗Maverick‘ purchasing i.e. purchases made outside the organizations contractual arrangements.
- Improved information flow and service through real time market intelligence and information. Such information includes finding the best price and quality points across a large range of suppliers through the use of marketplaces, order status and tracking, reduced inventory levels and also better demand forecasting.
- The ability to aggregate purchasing across multiple depts. or divisions without taking away any needed individual control or introducing time wasting authorization routines.
There are seven main types of e-procurement:
- Web-based ERP (Electronic Resource Planning): Creating and approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on internet technology.
- E-MRO (Maintenance, Repair and Overhaul): The same as web-based ERP except that the goods and services ordered are non-product related MRO supplies.
- E-sourcing: Identifying new suppliers for a specific category of purchasing requirements using internet technology.
- E-tendering: Sending requests for information and prices to suppliers and receiving the responses of suppliers using internet technology.
- E-reverse auctioning: Using internet technology to buy goods and services from a number of known or unknown suppliers.
- E-informing: Gathering and distributing purchasing information both from n to internal and external parties using internet technology.
- E-market sites: Expands on web-based ERP to open up value chains. Buying communities can access preferred suppliers‘ products and services, add to shopping carts, create requisition, seek approval, receipt purchase orders and process electronic invoices with integration to suppliers‘ supply chains and buyer‘s financial systems
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