February 25, 2022

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E-procurement advantages E-procurement advantages are becoming more evident as the wider understanding of its many uses becomes apparent. The main reason companies have embraced e-procurement is to increase productivity, provide visibility into day-to-day transactions and make it easier for users to get the supplies that they need. It has not been an easy road for e-procurement as implementation has its challenges and it has taken time for business managers and procurement departments to fully accept it. The advantages of e-procurement are slowly being understood: Reducing costs: Costs can be reduced by leveraging volume, having structured supplier relationships and by using system improvements to reduce external spend while improving quality and supplier performance. E-procurement eliminates paperwork, rework and errors. Visibility of spend: Centralized tracking of transactions enables full reporting on requisitions, items purchased, orders processes and payments made. E-procurement advantages extend to ensuring compliance with existing and established contracts. Productivity: Internal customers can obtain the items they want from a catalogue of approved items through an on-line requisition and ordering system. Procurement staff can be released from processing orders and handling low value transactions to concentrate on strategic sourcing and improving supplier relationships. Controls: Standardized approval processes and formal workflows ensure that the correct level of authorization is applied to each transaction and that spend is directed to draw off existing contracts. Compliance to policy is improved as users can quickly locate products and services from preferred suppliers and are unable to create maverick purchases. Using technology: E-procurement advantages can only be fully realized when the systems and processes to manage it are in place. Software tools are needed to create the standard procurement documentation: electronic requests for information (e-RFI), requests for proposal (e-RFP) and requests for quotation (e-RFQ).These are proven methods to source goods and make the framework agreements that offer the best prices. An adequate, fully integrated e-procurement approach is needed for overall success. Additional programs provide the framework for the supplier databases and spend management as well as holding key vendor information and being an electronic repository for contracts. All these facilities cost money and a clear business case must be made for e-procurement. In most cases this is fairly clear that cost savings are possible. It pays for companies to spend money on e-procurement technology, this investment will boost efficiency. The longer term reduction in costs will enable companies to direct their resources to more strategic initiatives. E-procurement advantages are significant bottom-line benefits, including cost reduction, process efficiencies, spending controls and compliance. Benefits of e-procurement 1. Management benefit Better availability of information from all areas of procurement to management for decision making. Better control of individualist spend and better use of corporate contracts. Greater management influence and control over purchasing 2. Supplier benefit Time saving Cost saving Reduction of paperwork and duplicated records Bills are paid on time and more quickly Improved relationship with the buyer 3. Operation-Purchasing Reduction in paperwork Time saving and cost saving Reduced inventory level and inventory cost 4. Strategic Purchasing Benefit Increased purchasing power Increased profit margin More efficient purchasing process Disadvantages of e-procurement 1. Lack of qualified workforce. 2. Unreliable systems. 3. Security threats 4. Staff resistance to change. 5. Expensive to implement and maintain.

The term eProcurement refers to the use of electronic means in conducting a public procurement procedure for the purchase of goods, works or services. In order to have a common view within the eProcurement Forum, for the scope of this initiative the following sub-phases of the electronic public procurement process have been identified: E-informing/ E-Noticing E-informing is not directly associated with a stage in the procurement process; it is the process of gathering and distributing procurement information both from and to internal and external parties using Internet technology. E-requisition E-Purchase Requisition System is a complete web based system for managing, tracking and controlling purchase requisition process in your organization. Key Benefits: Reduce the paper trail. Instead of filling out tons of paper forms, everything in the system is done electronically and kept electronically. Users simply submit an electronic requisition and check the status online. Everything is online. Reviewing piles of paper requisitions is a troublesome task, with e-Purchase Requisition System; managers can review electronic requisitions online that provide far more information and take less time to review. Any reviews or comments can be communicated with the requestor via e-mail. Easy approval setup. Administrator can setup the approval matrix easily using the administrative panel. Approval matrix can be set according to organization’s policy. Easy integration with various ERP systems- e-Purchase Requisition System is designed to have a quick and easy integration with various ERP systems. It interfaces with the various modules (Finance, Inventory or Purchasing) to provide creation of PR’s and various analysis reports. Reporting make easy- e-Purchase Requisition System features a variety of comprehensive reports for managers to do analysis and budgeting control. Security and privacy- e-Purchase Requisition employs extensive security measures to ensure your data is secure, and accessible only by authorized users within your organization. Access is controlled via a unique user name and password which users must enter each time they log on to the system. E-Purchase Requisition System extremely simple to use, data is automatically defaulted in for you wherever possible, and the description that you enter on-line for your goods/services is exactly what you request for. In addition, your order gets out to the vendor much quicker. It allows organizations to leverage the expense control benefits of traditional purchasing procedures without incurring the associated financial overhead or administrative burden. It helps to eliminate tons of paper forms as everything is done electronically. Organizations simply set up their procurement processes and procedures in e-Purchase Requisition System, and the entire purchasing process is handled online. In additional, e-Purchase Requisition System can be integrated with various ERP systems such as Microsoft Dynamics AX. It interfaces with the Inventory Module to provide creation of PR’s from the Low-level Inventory Report. It also interfaces with the Purchase Order Module. Creation of PO’s from PR’s and maintenance of inventory levels is automatic. E-Purchase Requisition System consists of various sections for easy to use and maintain:- Purchase Requisition Requisition Review Approval Cycle Purchase Order Reporting E-Ordering E-ordering and web-based ERP is the process of creating and approving procurement requisitions, placing purchase orders, as well as receiving goods and services ordered, by using software systems based on the Internet System. Usually used… E-ordering For indirect (facility) goods and services. E-ordering and web-based ERP E-ordering and web-based ERP is the process of creating and approving procurement requisitions, placing purchase orders, as well as receiving goods and services ordered, by using software systems based on the Internet. E-sourcing E-sourcing supports the specification phase; it can be used to pre-qualify suppliers and also identifies suppliers that can be used in the selection phase. For suppliers the benefit is: “marketing” and for the buying organizations the benefit is facilitating the sourcing of suppliers. E-tendering E-tendering supports the selection stage and acts as a communication platform between the procuring organization and suppliers. It covers the complete tendering process from REOI via ITB/RFP to contracting, usually including support for the analysis and assessment activities; it does not include closing the deal with a supplier but facilitates a large part of the tactical procurement process. It results in equal treatment of suppliers; transparent selection process; reduction in (legal) errors; clear audit trial; more efficiency in the tactical procurement process and improved time management of tendering procedures. Some UN organizations such as UNDP-IAPSO and UNHCR have used E-tendering in the formulation of long-term agreements for vehicles, tents, motorcycles and pharmaceuticals through an in-house developed tendering portal. E-auctioning E-auctioning supports the contract stage. It enables the closing of a deal with a supplier if parties agree on price. They operate with an upward or downward price mechanism e.g. e-auctioning with upward price mechanism for the selling organization and e-reverse auctioning with a downward price mechanism for the buying organization. They can be made in accordance with traditional ITB/RFP. They are internet based using open or closed systems. There are 2 types of e auctions: Forward Auction(Upward auction) A single seller offers an item for sale with buyers competing to secure the item by bidding upwards Reverse Auction A single buyer makes potential sellers aware of the intent to buy a specified good or service. The seller bid against each other by driving prices of the item downwards. Steps in e-Auction 1. Define requirements and goods 2. Invite all potential suppliers to an open(RFI) 3. Prequalify potential suppliers 4. Clearly document all requirements 5. Hold a Q & A session 6. Monitor the Auction 7. Follow through and award promptly Limitations of e-auction 1. It requires auction software 2. Possibility of fraud 3. Requires skill/ training to participate 4. It is time sensitive

An online procurement process that reduces steps and saves money. The process is executed on a real time basis involving global suppliers. eProcurement is the counterpart of eSourcing because it starts when e-sourcing ends and ends where eSourcing begins. STEPS FOLLOWED IN EPROCUREMENT PROCESS Requisition Where the buyer recognizes a need and places a request for goods. It may be within or without a contract. Authorisation Each requisition is sent to an approval agent. Approval verifies that goods needed are of an appropriate contract and that the purchase amount is acceptable. If ok a Purchase Orders is generated else the Purchase Requisition is returned with reasons. Purchase order Created on approval purchase requisition. It contains data on goods, contract number, pricing, delivery terms and dates. Receipt of goods Buyer issues a receipt once they are received (Goods Receipt Note). Invoice Prepared by suppliers and sent alongside shipping or automatically sent through electronic means. It indicates foods ordered and amount charged. Reconciliation After goods are received the invoice is reconciled with a purchase order after which payments are made. Reclamation of taxes– where suppliers are obligated to pay taxes e.g. VAT should be refunded Feature/Core capabilities of eProcurement 1. Electronic receipt E-procurement should automatically produce and deliver receipts on delivery of goods. Systems should integrate bar code readers for automatic recognition of goods. 2. ePurchasing orders The system should be capable of automatically producing and delivering purchase orders since its most crucial document. 3. eInvoicing The invoice defines and leads to payment hence a system should be able to accept and process it 4. ePayment eProcurement system should support multiple ePayment options e.g. e-card, automated cheques printing 5. Alerts The system portal should allow suppliers to self-register, self-activate, self-update and then automatically send invoices

Purchasing has traditionally involved three main phases each requiring specific documents & considerable transactional activity. Identification Phase Notification of the need to buy by; A requisition issued by stores, stock control or potential user A bill of materials issued by the drawing office or production control Ordering Phase On receipt the requisition or bill of materials will be checked by the buyer for accuracy, conformity to specifications & purchase records for „rebuy‟ or new buy If standard rebuy & supplier has been meeting expectations, repeat order may be issued. For a new buy, steps to follow; Enquires or request for quotations (RFQs) – will be send to possible suppliers accompanied by drawings, specifications Quotations will be received in response to the enquires & details of price, quality, delivery, tool costs etc. & terms of business compared When quantities are substantial & quality or delivery of great importance, further negotiations with suppliers will be done – e.g. capacity Purchase order will be issued to the vendor that gave the quotation amended where necessary by subsequent negotiation that was most acceptable. Copies of order will be given to e.g. user department, production control, stores etc. An order acknowledgement should be required from the vendor. Ensure order has been accepted on the terms & conditions defined by the buyer & subsequently agreed between the parties. Post-ordering Phase It may be necessary to expedite the order to ensure that delivery dates are met An advice note – goods have been dispatched or are ready for collection will be issued by supplier On receipt goods will be checked for quantity and quality by stores & inspection dept. goods received note will be filled & sent to purchasing department. An invoice of the value of goods will be received from supplier. This will be compared with purchase order & goods received note. On completion, the order will be transferred to a completed orders file. ADVANTAGES OF MANUAL PROCUREMENT PROCESS 1. No threat to data e.g. Virus 2. Information is readily available i.e no passwords 3. Documentation of future reference e.g. In case of legal claims 4. Simple to learn i.e. no technical skills 5. Reliable in documentation e.g. Not affected by computer breakdowns 6. One on One communication between buyer and supplier can help gauge suppliers reliability. THE LIMITATIONS OF A MANUAL PROCUREMENT PROCESS 1. A sequence of non-value adding clerical activities 2. A lot of time is consumed when processing internal and external orders. 3. Numerous costs are incurred in transactionary activities e.g. photocopies, cabinets 4. Human error – forgetting to enter a record 5. Labour intensive e.g. continuous monitoring to ensure to ensure each transaction is accounted for and product appropriately maintained. 6. Excessive documentation e.g. for a new buy you need: requisition, enquiry, quotation, order acknowledgement, advice note, GRN, Invoice

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Traditional procurement and electronic procurement both have advantages and disadvantages. Manual procurement is generally done face-to-face, or via telephone, while e-procurement is generally done online. But that simple answer hides many factors. Manual procurement is really a collection of processes that involve many steps and interactions with the other departments of a company and with suppliers. Because purchasing costs typically run to 50% of operational costs, the procurement process provides many opportunities for cost savings that can make a great difference to a company’s bottom line. The rule of thumb is that a 5% savings in purchasing costs can increase profit by 50%, and would equal an increase in revenue of 50%, or a reduction in overhead costs of about 20%. That is why the procurement process has evolved. Traditionally, procurement was paper- and conversation-based, usually with procurement officers interacting with long-time partners or well-known suppliers and purchasing at fixed prices. In recent years, this has changed somewhat to become a strategic function: Procurement officers seek suppliers that fit with a company’s overall strategy. E-procurement involves moving the procurement process online to cut out steps and save money. For example, traditional procurement involves getting quotes and then approval, probably from finance, as well as a purchase order, which could take more than a week. With e procurement, this process is simplified and speeded up considerably, thanks to real-time interaction with pre-approved suppliers and trading partners, who can be anywhere in the world. With online purchasing, the purchase can be approved online and the order completed within minutes; the required item often arrives within days. In business, time is money, so the more a company can reduce staff time involved in purchasing, and the more quickly it issues a purchase order, the more it can reduce operational costs.

The strategic benefits of e-Procurement have been verified by many leading companies worldwide, and eProcurement is a significant tactic in most companies‟ e-Business strategies. The consensus is that e-Procurement benefits organizations with respect to the procurement cost and process efficiency associated with procurement activities. This is due to web-based eProcurement solutions can support four major B2B tasks in organizations: search, processing, monitoring and control, and coordination. Since the internet arrived on the scene as a supply management tool in the mid-2009 enterprises have tried to gain the benefit e-procurement can deliver: cost reduction, process streamlining, improved contract compliance, increased spend under management, and more. However many challenges stood in the way and only in the recent years have leading enterprises taken full advantage of the value of e-procurement systems. 1. For private Sector Organizations 2. For public sector Organizations 1. To improve service levels to buyers, suppliers and users involved in public sector procurement. 2. To develop a more integrated approach to procurement across public sector agencies and sectors. 3. To minimize the transaction costs associated with procurement through standardization, streamlining and automation of the procurement processes within and where appropriate across agencies and sectors. 4. To maximize value for money for the public sector expenditure by enhancing the buying power of the public sector. 5. To promote competition among suppliers while maintaining reliable sources of supply. 6. To optimize inventory levels through the adoption of efficient procurement practices. 7. To make effective use of human resources in the procurement process. 8. To promote the use of ecommerce in the wider economy. 9. To improve the auditability of public procurement expenditures. 10. To be progressive in the adoption of procurement related Information and Communication Technologies (ICT). BENEFITS OF E-PROCUREMENT  A virtual elimination of paperwork and paperwork handling A reduction in the time between need recognition and the release and receipt of an order Improved communication both within the company and with suppliers A reduction in errors Lower overhead costs in the purchasing area Purchasing personnel spend less time on processing of purchase orders and invoices, and more time on strategic value-added purchasing activities

The term Public eProcurement (“electronic procurement” in the public sector) refer to the use of electronic means in conducting a public procurement procedure for the purchase of goods, works or services. To successfully conduct electronic procurement across borders, eProcurement systems rely on some “key-enablers” E-Signature An electronic signature, or e-signature, is any electronic means that indicates either that a person adopts the contents of an electronic message, or more broadly that the person who claims to have written a message is the one who wrote it (and that the message received is the one that was sent by this person). By comparison, a signature is a stylized script associated with a person. In commerce and the law, a signature on a document is an indication that the person adopts the intentions recorded in the document. Both are comparable to a seal. In many instances, common with engineering companies for example, digital seals are also required for another layer of validation and security. Digital seals and signatures are equivalent to handwritten signatures and stamped seals. Increasingly, digital signatures are used in e-commerce and in regulatory filings as digital signatures are more secure than a simple generic electronic signature. The concept itself is not new, with common law jurisdictions having recognized telegraph signatures as far back as the mid-19th century and faxed signatures since the 1980s. In many countries, including the United States, the European Union, India, Brazil and Australia, electronic signatures (when recognised under the law of each jurisdiction) have the same legal consequences as the more traditional forms of executing of documents. E-Identity The dynamic collection of all attributes, in electronic format, related to a specific entity (citizen, enterprise, or object) which serve to ascertain a specific identity. E-attestations The e-Attestation module is a supplier profiling and database tool. It allows Contracting Authorities to build sophisticated strategic sourcing databases and Suppliers to upload relevant information on selection and exclusion criteria that apply to a specific category. Contracting Authorities may: Search for suppliers. Create lists of suppliers. Collect pre-qualification data. Export data for the procurement phase. Manage contracting authorities and users. Suppliers may: Search for open business opportunities. Automate import of supplier data. Manage multiple supplier profiles. Submit pre-qualification data Manage users of the organisation E-catalogues Printed catalogues or product lists that provide specifications, prices and, frequently, illustrations of the items that suppliers can provide. The disadvantages of hard copy catalogues are that they may be obsolete even before they are published and are too slow to provide information in a dynamic marketplace. Definition- A web page that provides information on products and services offered and sold by a vendor and supports online ordering and payment capabilities. The e-Procurement platform provides to public officers and suppliers an easy and fast access to the different applications that allow the electronic progress of public procurement processes. E-Catalogue allows contracting authorities to manage their catalogues online, to share their catalogues with other authorities and to handle orders electronically. Suppliers can upload their catalogue, submit it for approval through the application and can receive orders electronically. E-archiving Use of electronic means for long-term preservation of documents in digitalised format, ensuring that they can be easily retrieved without conversions. People believed that e-archiving (EDMS) is the process of converting documents, paper documents to electronic documents by scanning through scanners and storage through storage media circulation. According to this belief, many Government and private enterprises believes in no doubt that you archive all of their files and paper documents and are ready to enter the digital world and electronic government waged. The fact that concept – assuming health-contrary- to the modern day full of electronic documents that are already stored on an electronic storage media do not require us to any scan operations, does that mean that it’s archived? If so, since there is no need for content management systems or archiving systems and just saved to the hard drive of your computer and end up. Of course this is illogical, everything we have done here just store information not archived or so-called Imaging. EDMS is primarily responsible for the registration information of value to an enterprise to manage and keep them as long as possible or even forever. This simply means that the electronic archiving of document conversion and documentation at the end of its documentary legal records cannot prejudice or change in the original content for protection and easy access when needed, it is not enough to scan a document to tell him that archived electronically. In fact, archiving in accordance with this concept we practice all process in everyday you when you write a letter to anyone what you are dealing here with a can modify and change but once sent this letter to her had become a record cannot modify because it already sent and here we are talking about an archived log retention period shortened or increased and disagree and conservation and its way of storing. Therefore, the electronic archiving are simply records management process that ensures protection, maintenance and accessibility and begin from the moment of creating the document and ending with destroyed or legacy is preserved forever, not only in volume or scanning. Log Record can be defined as information that is recorded and maintained and managed by the person or body or establishment either for legal purposes or for its value for business. Records that are no longer on any establishment kept confined to paper only, but now includes a number of information sources that are no longer as important as paper documents and mail halls and instant messages, Web pages and information sent through social networks, all of this information may be recorded in accordance with their importance. Of course not all registry information must, otherwise it will show us a tremendous amount of records you might not find a place to save. For business to adopt a clear strategy for records management are: 1. Determine what information you have registered and from different sources. 2. Select

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