User Maintenance

Closely related to the two preceding process management components, user maintenance includes defining the individuals authorized to use the e-procurement system, how these users will be enrolled, and how to provide them access to the trading community. This component serves as the foundation for managing the complex buyer-supplier relationships that will occur within the marketplace.

E-procurement user maintenance must address two primary tasks

Establish user profiles, access rules, catalog filters, and workflow Allow for unique pricing and contractual relationships between a buyer and supplier The following steps are vital to successful user management

Creating the buyer organization: Identifying and defining the individual buyers, how they will form buying groups, and how they will access the e-procurement process Creating the supplier organization: Identifying sellers, maintaining company profiles, and creating shipping options and other high-level parameters for supplier activities E-procurement organization: Aggregating the entire marketplace, including buyer and supplier, to include such things as hours of operation, billing rates, etc.

Additionally, user maintenance requires establishing authorization levels and associated procedures to precisely govern buyer and supplier capabilities. Three authorization levels that must be addressed are:

Access to the electronic catalog: Defines who may access catalogs and how to do so Creating and editing requisitions: Defines who can create requisitions, who can edit requisitions, and who can edit accounting codes

Managing orders: Defines who has access to POs and who has authorization to override shipping or billing information

Establishing Buyer/Seller Relationships

This component has two phases: managing supplier relationships and managing pricing. Buyers and sellers may be linked based on their previous buying relationship or based on the buyer’s unique needs. Buyers may make purchases based on negotiated contracts or choose the specific commodities they need from customized catalogs. Price lists too may be customized for a buyer or buying group. For example, prices may be established by adding filters that dynamically calculate a price as a markup or discount of the list price. Or groups of buyers may be categorized into classes with filters applied for each group.

Billing Management

E-procurement revenues are generally based on transaction fees. A billing management system will calculate usage charges and generate and distribute statements or invoices to buyer-seller members of the e-procurement network. Suppliers may also use the billing system to calculate ordering charges or to distribute operating costs for specific orders. These functions must directly interface with back office invoicing systems to automatically generate bills.

Price Establishment

Effective pricing enables buyers to negotiate the best possible deals and sellers to liquidate excess inventory. Two major pricing options are used: Dynamic Pricing and Fixed Pricing. Dynamic pricing: Allows buyers and sellers in an Internet market to trade goods and services at prices determined by market forces instead of by a predetermined price list or catalog. An example of dynamic pricing includes business services such as auctions, reverse auctions, and exchanges Fixed pricing: Based on a predetermined price list or catalog prices negotiated between a buyer and seller