What is E-Procurement?

E-Procurement is the acronym of ‘Electronic Procurement’ which in turn refers to the process of purchase and sale of goods or services through electronic methods using the Internet as a primary medium. This method of procurement was introduced as a substitute of the manual procurement where energy and time consumption was high. But, e-Procurement is better in many ways than manual procurement in terms of efficiency and optimal utilization of resources. Many organizations are increasingly opting for e-Procurement platforms, realizing its potential to eradicate irregularities and unnecessary costs. As the term procurement means ‘obtaining’ something, supply chain management is very essential in the current market. Right from the manufacturing unit to the customers, procurement plays a very crucial role in the market. Thus e-procurement is widely getting accepted by the both the customers and organizations for an easy and efficient procurement processes.

Components of e-Procurement

As a process, e-procurement hosts multiple components and procedures within itself. These components decide the functioning of the procurement in an effective way. These components are as follows:

Indent Management
RFX Creation
Bid Submission
Bid Opening and Evaluation
e-Auction
Vendor Selection and Finalization
Vendor and Contract Management

Each component plays a vital role in defining e-procurement at various levels, which is described herewith.

Indent Management

It is the first step involved in e-tendering, indent creation or the creation of requisition. This is then followed by its evaluation and approval. It is also considered as the workflow involved in the preparation of tenders and procuring departments defining their indenting process. In e-Procurement, the complete works are submitted and acquired by means of internet.

RFP Creation

Request For Proposal (RFP), Request For Information (RFI), Request For Bids (RFB) and Request For Quotes (RFQ) are few important terms used in e-procurement procedures. This also involves formulating commercial qualification criteria. This attracts several prospective bidders to get them involved in the business.

Bid Submission

The interested bidders are registered to the e-procurement portal where they submit their bids which will contain all details pertaining to technical information and commercial practices.

Bid Opening and Evaluation

The practice of e-Auction happens at this stage where the vendors are scrutinized for their authenticity after their information is submitted in the e-procurement portal. All the submitted details are checked for their authenticity and compatibility.

E-Auction

An e-auction is carried out purely based on requirements. These auctions are where the goods meant to be procured are considered worthy of procurement.

Vendor Selection and Finalization

After the e-Auction, one or more vendors are finalized and the Purchase Order issued according to the requirement. This step concludes the procurement process.