eProcurement / Procure-to-Pay: Definition

eProcurement

eProcurement also called Procure-to-Pay is the business-to-business purchase and sale of supplies, work and services through the Internet in order to optimize and streamline companies purchasing function and modes of supply. It provides services such as purchase orders management and advanced administrative functions, thereby improving operational efficiency and reducing processing costs. eProcurement also relies on the use of electronic catalogs and tools for purchase requests internal approval to manage, simplify and automate processes and procurement decisions. The implementation of an eProcurement solution allows purchasing departments to focus on strategic sourcing, a role with higher value added.

eProcurement must not be mistaken with:

  • EDI (Electronic Data Interchange) used since the 80s, which is a technique for automated data exchange between predefined and structured information systems of major customers and suppliers. Among the disadvantages of EDI, its high implementation and management cost makes it usable only for larger companies. 
  • eSourcing which aims to optimize the upstream of the purchasing process by standardizing and automating the search, selection, negotiation and contracting with suppliers.

The eProcurement process covers the following steps:

Some of the typical goals of an eProcurement implementation are:

  • Simplify and formalize the company purchasing processes through a complete review of existing processes.
  • Define the internal purchase request approval workflow. The most typical worflow, for example, enables the end user to select products from catalog(s) and trigger a validation request from his manager.
  • Integrate the eProcurement solution with the company information system (ERP). This avoids to re-keying data, which is error-prone and a waste of time and also to facilitate the company reporting.
  • Give each employee the opportunity to create his own requisition and order any item by leveraging company and suppliers catalogs.

 


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