A Study on electronic procurement

Abstract

The tremendous growth of the Internet has led a critical mass of suppliers and customers to participate in the global online marketplace. The rapid adoption of the Internet as a procurement tool has caused firms to experiment with innovative ways of purchasing in computer-mediated environment. The Internet and the World Wide Web are changing the inefficient, complex, costly purchasing processes and improving them in terms of quality, flexibility, and lead-time. The market for systems and services to support business-to-business relationships is one of the hottest areas of growth in Internet-commerce today. This paper addresses the main issues and the values firms can derive from using electronic procurement. First, the paper proposes a framework for examining electronic procurement including the role of the government and industry. The paper then examines the main factors that have led to the implementation of electronic procurement, evaluating the benefits it provides to both suppliers and customers. The paper illustrates these through examples of successful early adopters from business to business electronic commerce including the case of POSCO. The paper finally reviews some of the current issues in electronic procurement systems and suggests recommendations for purchasing professionals in pursuit of electronic procurement development.