PROCUREMENT PROCESS AND ICT

PROCUREMENT PROCESS AND ICT

From a broader point of view development in information communication technology (ICT) has radically changed the manner in which people do business. Things like speed of communication and information exchange mean that you can offer real-time answers to customer inquiries, process transactions, convert potentials into paying clients etc. The procurement process is not an exception to these changes.

Of course there often is a mixed experience when it comes to technology and procurement profession in the sense that some people in the procurement department will perfectly go for ERP Systems and P2P Systems, while others may choose to rely on old stock control systems and excel.

For most organizations, Procurement or otherwise, the question of whether to adopt or not adopt technology often comes down to performance and returns, the differential goes like this;

1. The automated process should result into better performance than the manual process
2. The technology should achieve cost efficiency

The internet, for example which is how you end up with eprocurement system anyway, has afforded the procurement function a number of benefits such as;

1. Improved supply chain relationships and coordination, arising from data sharing. Remember in supply chain network the success as far as upstream operations and downstream operations are concerned will be reflected by the degree of collaboration and informed customer service
2. Organisations get to maintain low inventory levels and efficient stock turnover since they can safely rely on just in time systems given that information is quickly relayed and responded to
3. The choice of suppliers will increase because with the internet one can have both global and local suppliers. Although you have to note that technology like the internet just points you to where these suppliers are, you will still have to make strategic and tactical choices on your own.
4. The organization gets to save on procurement costs through electronic communication, greater accuracy and electronic transaction processing.

As far as the procurement process is concerned, there are three principal parts to improving procurement capability, that is, people, process and technology, and yet most procurement managers tend to focus on the first two.

Eprocurement can be used in Request for information (RFI), Request for proposal (RFP), Request for quotation (RFQ) as well as etendering , eauctions, vendor management, catalogue management, purchase ordering, einvoicing, epayment and contract management.

The need for technology in procurement should not be driven by the technology itself but by the need for process improvement to meet the objectives of an organization and its customers.