Following the e-procurement trends over the past 20 years highlights some successes but some challenges too. There is no doubt that the Internet is drastically changing the way purchasing is done globally. It has grown and evolved into a complex marketplace with many players offering a variety of e-procurement and business-to-business services.
E-procurement is a catch-all term incorporating many aspects of electronically-assisted buying. It can include services such as hosting of databases, catalogue management, managing tenders and auctions on behalf of clients through to a complete outsourced procurement service. One example, it eliminates tedious manual work associated with preparing and submitting large tenders using customized software.
Externally hosted e-procurement services are clearly part of a growing trend. Some specialize by industry sector, like those serving the oil and gas, pharmaceutical and mining industries all of which have embraced e-procurement more than some other sectors. Some e-procurement service companies provide the full range of supply network services to support global procurement transactions.
Another e-procurement trend is where large corporations elect to manage their e-procurement in-house. Successful implementations of e-procurement are considered as one of the measures of a world-class purchasing organisation. To do this they need to install enterprise-wide software to manage the database and transactions but the big investment in time and money sometimes means that there is not a compelling business case.
Some governments in mature economies are adopting e-procurement more extensively as it provides structure, audit trails and transparency of transactions. However, governments in emerging markets are often unaware of the benefits that e-procurement can provide. World Bank research has also found some reluctance by governments in adopting a system that is so fully transparent.
Certain basic requirements need to be fulfilled before an e-procurement system can achieve maximum potential in government. These are recommendations by the World Bank which include expanding ICT services, guaranteeing a secure online environment, development of standards and processes, and most importantly, for purchasers to be trained.
Potentially, the development aid and emergency support sector of the economy can benefit greatly from using electronic procurement services. Savings of up to 10% have been achieved on price and there is some evidence available showing savings in processing time. E-procurement allows aid-funded buyers to compare prices quickly and easily, to review specifications and delivery dates from suppliers worldwide. This may be the area where e-procurement really takes root.