Page 133 - Introduction to Electronic Commerce and Social Commerce

4.4 One-from-Many: E-Procurement at Buy-Side E-Marketplaces 113

Figure 4.5 Traditional (manual) procurement process

as an electronic data exchange (EDI). For the different types
• Conduct bidding in a reverse auction system where of EDI and the trading community, see edibasics.com/
suppliers compete against each other. This method types-of-edi.
is used for high-value items or when large quanti- Some activities done by e-procurement include enabling
ties are involved (Section 4.5). buyers to search for products and suppliers, comparing
• Buy from the catalog of an intermediary (e- distributor) prices, facilitating reverse auctions for buyers, and automat-
that aggregates sellers’ catalogs (Section 4.6). ing paperwork and documentation.
• Buy from the company’s own internal buyer cata- Some of these activities are done in private marketplaces,
log. Such catalogs usually include agreed-upon others in public exchanges.
prices of items from many suppliers. This is part of
desktop purchasing, which allows the users to The Goals and Process of E-Procurement
bypass the procurement department (Section 4.6).
• Join a group-purchasing system that aggregates par- As stated earlier, e-procurement frequently automates activi-
ticipants’ demands, creating a large volume. Then ties in the purchasing process from multiple suppliers via the
the group may negotiate prices or initiate a tender- Web for better execution and control.
ing process (Section 4.6). Improvements to procurement have been attempted for
• Buy at an exchange or industrial mall (Section 4.7). decades, usually by using information technologies. Using
e-procurement results in a major improvement. For compre-
hensive coverage and case studies, see zdnet.com.
E-Procurement Concepts Essentially, e-procurement automates the process of auctions,
contract management, vendor selection, and management.
E-procurement (electronic procurement) is the online For an overview of e-procurement goals and processes,
purchase of supplies, materials, energy, work, and services. see plenitude-solutions.com/index.php?option=com_cont
It can be done via the Internet or via a private network such ent&view=article&id=54&Itemid=62.