Origination and Evolution of E-Procurement - Essay Example

E-procurement Name Course number Institution Date Definition and description E-procurement is also known as electronic procurement. It refers to buying and selling of work, goods or services through the internet as a vehicle of exchange (Ashoori, 2009). The exchange might be from one business to another (also known as business-to-business). It can also be between a business and an end consumer (also known as business-to-consumer) or even between a business and government (also called business-to-government). Apart from the internet, any other information system or networking system can also be used. For example, enterprise resource planning or electronic data interchange (Baily, 2008). Origination and evolution E-procurement has grown to a level where the software used is on demand or as software as a service. This implies that the complex software used for e-procurement does not have to be fully owned by the user, but it is an inbuilt service that can even be carried in a simple handset, i.e. in a hand phone. One can, therefore, transact business through a press of a button that is on the phone that is in their hands. Initially, however, such transactions could only be carried out using software that was found in large computers. Nowadays, the process has been made simpler and less tedious because one can buy a service or a good using the phone that they own. They do not need to have large costly computers to transact basic business deals (Hamblen, 2002). Advantages and differences from traditional purchasing techniques It can also be seen from this discussion that initially, the cost was so high, but as demand for the services increased, the cost of transactions went much lower than the usual paper money transactions. It is much more convenient to transact through e-procurement than carrying around vast sums of money. One can carry out transaction worth millions unobtrusively. Initially, however, people would wire their money through their banks, which is more secure compared to other means of transferring money. Nowadays, one does not even have to see the money that is used in the transaction. They only need to see the figures representing the amount of money that has exchanged hands in the process of buying goods, services or work (Goffman, 2003). Also, in the past, both the buyer and the seller had to be in near each other for any business transaction to take place. This has changed in the advent of e-procurement, because the transactions can be carried out by people who are miles apart. E-auction E-auction refers to electronic auctioning. Here, people place their bids on an electronic platform, and the bids can even exceed each other only by a few cents. It differs from traditional auctioning because a person does not have to time the auctioning process. It is all done automatically through an inbuilt system. The said system starts counting down each time a new bid is placed. It leaves no room for foul play since every person only bids based on the amount they can afford to place on any given item. Also, the transaction can be done by many people living in diverse geographical regions. The only hitch to this is that when the successful bidder is exceedingly far away from the place the auctioned product is, the product has to be posted to him (Wyld, 2003). E-catalogue An electronic catalogue is a list of items that are up for sale in an electronic platform (Neef, 2001). It is an electronic price list that gives the buyer the amount of money he pays on each item. It also includes any shipping and handling charges that might be accrued if the item on sale has to be transported to the new owner. E-marketplace E-marketplace is the platform upon which electronic transactions take place. It is an electronic platform where the goods and services are brought out for sale. It is a virtual marketplace that is not very much unlike the usual market. All transactions that can take place in the usual market can also be carried out in this virtual market. Nevertheless, it is a much bigger market place than the usual market because it houses people from all around the globe. The idea behind an electronic market place is to have all goods and services being bought and sold electronically. One can also go window shopping at the electronic market place, because similar goods are offered for sale at different prices by people from different parts of the globe. Perusing through different catalogues ensures that a person gets the best bargain for the products he plans to buy (Gladwin, 2001). E-payment An e-payment is any money that has been paid to someone using an electronic means. E-payment has made the process of procurement much easier than before, especially when people come from different countries using different currencies. This also implies that the process of payment is much cheaper than before, because there is no need for foreign exchange bureau services. The system has an in built converter tool that converts one currency to another using real time conversion rates. Also, given that the buyer gets to know the rates prior to making a payment means that he can save a lot of money by making the transaction when the rates are much lower than usual, therefore, favoring his interests (Grygo, 2007). Disadvantages of e-procurement There are also many problems associated with electronic procurement. One of these is the presence of unscrupulous business people. They can put up something for sale that does not belong to them. Given the large network of buyers and sellers, tracing such a good once it has been sold might be apparently very difficult. Another problem is that people can put up things for sale that are not readily available in the market. In an ideal situation, one should immediately handle a good he has paid for, but in the electronic market, one has to wait for the good to be transported by the seller. Trouble comes when the seller cannot avail the goods in time or ever at all. Therefore, a person who is buying goods through electronic procurement needs to have a lot of patience. They also need to have a lot of trust for other people, because many a businessman may fail to deliver if they have a feeling that they are not trusted. Finally, goods bought through electronic procurement can also be damaged in the process. It becomes problematic determining who should pay for damages incurred. Should it be the seller, the buyer or the shipping company? In conclusion, the traditional marketplace and marketplace terminologies are swiftly changing shape. A system that is more robust than the former on is now taking root in the form of e-procurement. E-procurement ensures quick delivery of goods and services, but it requires much patience and trust on the part of all players in the market. References Ashoori, M. (2009). Toward a Framework for Dynamic Service Binding in E-Procurement. In G. Babin, P. Kropf, & M. Weiss, E-Technologies: Innovation in an Open World: 4th International Conference, MCETECH 2009, Ottawa, Canada, May 4-6, 2009, Proceedings (pp. 89 - 99). Heidelberg: Springer. Baily, P. J. (2008). Procurement principles and management. Harlow: Prentice Hall Financial Times. Gladwin, L. (2001, February 12). E-marketplaces. Computerworld , p. 45. Goffman, R. (2003). Electronic Procurement. In H. Bidgoli, The Internet Encyclopedia (pp. 645 - 658). New Jersey: John Wiley & Sons. Grygo, E. (2007, August 7). Federal Reserve eyes broader online role for U.S. banks. Infoworld , p. 16. Hamblen, M. (2002, Dec 23). After the hype. Computerworld , pp. 33 - 35. Neef, D. (2001). E-Procurement: From Strategy to Implementation. New Jersey: FT Press. Wyld, D. (2003). The Auction Model: How the Public Sector can Leverage the Power of E-Commerce through Dynamic Pricing. Maryland: Rowman & Littlefield. Read More