Advantages of Implementing E-Commerce

In the pre e-procurement days

In a manual, non-e-enabled procurement environment, the purchasing process typically is:

• Product selection: The sales representative must search numerous vendor catalogs without knowledge of which vendors offer discounts. The sales representative may even be in the field with no access to the company’s product catalogs.
• Check availability/prices: Calls may need to be made to the vendor to confirm pricing, quantity, availability, etc
• Create and approve requisition: A paper requisition with correct item numbers and prices needs to be created and approved, a process that often takes up to 3 days or more.
• Generate and approve P.O.: Once the requisition is approved, the purchasing department splits the requisition into several purchase orders because the material requested must be supplied by multiple vendors.
• Send P.O. to vendor: Purchase orders are eventually mailed or faxed to the vendors.
• Vendor confirmation: The vendors confirm receipt of the purchase orders and promise delivery within three business days.

Typically, the promised delivery date ranges from 5-7 business days from the time the requisition is initially filled out. In the interim, our enterprising sales representative, knowing the delays and accompanying frustrations of the company’s purchasing process, has decided to buy the items at a local office supply superstore. This way, the representative acquires the necessary equipment without delay and with a lot less effort. Unfortunately, the company’s cost for paying retail price is much higher than necessary.