E-procurement is the combined use of information and communication technology through electronic means to enhance external and internal purchasing and supply chain management processes. This tool and solutions deliver a range of options that will facilitate improved purchasing and supply chain management. It is the business-to-business or business-to consumer or business-to-government purchase and sale of supplies, work, and services through the Internet as well as other information and networking systems, such as electronic data interchange and enterprise resource planning.
The key enabler of e-procurement is the ability for systems to communicate across organizational boundaries. While the technology for e-procurement provides the basic means, the main benefits derive from the resultant changes in business procedures, processes and perspectives. E-procurement is made possible by the open standard of XML (Extensible Markup Language), a structured language that allows easy identification of data types in multiple formats and can be understood across all standard internet technologies. Adoption of XML will help organizations to integrate applications seamlessly and exchange information with trading partners.
The e-procurement value chain consists of indent management, e-Tendering, e-Auctioning, vendor management, catalogue management, Purchase Order Integration, Order Status, Ship Notice, e-Invoicing, e-Payment, and contract management. Indent management is the workflow involved in the preparation of tenders. This part of the value chain is optional, with individual procuring departments defining their indenting process. In works procurement, administrative approval and technical sanction are obtained in electronic format. In goods procurement, indent generation activity is done online.