What is e-procurement?
Explore the definition, procedures and benefits of e-procurement and what the term means for the business supply chain process.
Sometimes known as ‘supplier exchange’, the purpose of e-procurement is to secure goods or services at the correct time for the desired price. E-procurement first began in the 1980s following the creation of electronic data interchange (EDI). EDI enabled the electronic sharing of documents between businesses and individuals, meaning physical distribution was no longer required. This was ground-breaking at the time and meant big changes for procurement.
How does e-procurement work?
E-procurement uses a closed system, connecting registered users with one another to request, order and exchange goods or services. Interactions between preferred suppliers come typically in the form of bids, purchase orders and invoices. Traditionally, manual processes were involved with lots of supplier management and data entry. E-procurement reduces and automates such tasks.
A business will typically use a third party e-procurement provider. The third party will have the technology, expertise and continuous investment that creates an efficient and automated business supply chain process.
Key components of a successful e-procurement system include the management of e-invoicing, e-orders and e-purchasing.
- E-invoicing - The electronic exchange of an invoicing document between a supplier and a buyer.
- E-orders - Orders created, submitted and received in an electronic format between supplier and buyer.
- E-purchasing – The automation of the purchasing process from the creation of the requisition (an official order) through to payment.
Once a business has found a provider who can cover the management of their needs, it’s important to ensure that the provider can integrate into existing business systems. With leading providers, such as Unifiedpost Group, businesses can keep existing enterprise resource planning (ERP) systems or accounting software, and benefit from one seamless collaborative workflow without needing significant IT work.
Why do businesses use e-procurement?
For forward-thinking businesses, e-procurement makes sense for a number of reasons:
- Automation/cost saving - Automating the procurement process and eliminating manual tasks saves time and creates a faster payment cycle.
- Improved workflows - Stakeholders and employees have the power to work efficiently with technology. They can monitor purchasing activity, meaning optimised procurement performance and increased productivity.
- Visibility/reporting – Users are able to view the status of transactions in real-time and generate customisable reports.
- Free resources - Manual tasks become issues of the past, meaning that employees are free to focus on more meaningful activity.
How to get started on your e-procurement journey
Unifiedpost Group’s e-procurement solutions help companies create one consistent, automated procure-to-pay process, no matter the channel, protocol or technology of suppliers involved. Our leading Crossnet network allows the secure exchange of supply chain documents between businesses of all shapes and sizes.
Businesses are able to communicate with other participants through one single technical connection, meaning IT infrastructure does not need to change. Over one million companies already exchange their documents and data using Crossnet.
Learn more about our e-procurement offering, and find a solution suited for your type of business.