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ACKNOWLEDGMENT

I am indebted to many persons for their help and contribution during the preparation of this seminar. There are individuals who deserve specials mention in this sector for their help. First and foremost, I would like to thank Er. Akhtar Hussain (my honorable guide) for his prodigious guidance, persuasion, painstaking attitude, reformative and prudential suggestions throughout my seminar work. I am greatly thankful to all faculty members of computer engineering department for instilling in me a sense of self-confidence and helping me as and when I needed them. Finally, I am also thankful to my friends who have directly or indirectly helped me during the preparation of this seminar.

Amit Kumar Shrivastava Final Year (Comp. Engg. & Info. Tech.) M.I.T. Moradabad

CONTENTS
1. SYNOPSIS 2. WHAT IS E-PROCUREMENT 3. WHY E-PROCUREMENT 4. HOW E-PROCUREMENT WORK 5. MAJOR COMPONENTS OF AN E-PROCUREMENT SYSTEM 6. ADVANTAGE OF IMPLEMENTING E-PROCUREMENT 7. HOW E-PROCUREMENT POSITIVELY IMPACT MY BOTTOM LINE 8. KEY FACTORS FOR E-PROCUREMENT SUCCESS 9. HOW TO CHOOSE AN E-PROCUREMENT PACKAGE 10.WHAT EXPERTISE ENSURE E-PROCUREMENT SUCCESS 11.SERVICE AND SUPPORT 12.TRAINING INFORMATION OVERVIEW 13.SUPPLIER INFORMATION 14.CONCLUSION 15.BIBLIOGRAPHY

SYNOPSIS
Computers are everywhere and business and industry are using them in new ways. Some of the ways in which computers are integrated into business have been discussed in the following report. These application are cost and budgetary control, stoke control and sales, distribution, payroll and personnel records, banking, insurance and stock broking, aid to management and information system in business. The common applications tend to be bookkeeping variety. In the past, a large but manageable amount of bookkeeping was handled manually, but such has been the expansion in various sectors that use a huge labor force would be needed to tackle todays massive volume of bookkeeping. The computer is necessary because there is no other way of dealing with the problem. In most instances, the computer is sited entirely; branches are equipped with terminals giving them an on-line facility and enable them to interrogate the central system for information. Company can be benefited from the immediate availability of information, which the computer provides. Thus if computers are evicted on this day, the entire business and industry would come to a grinding halt.

CONCLUSION
To be successful in implementing an e-procurement solution and realizing the maximum possible ROI, an enterprise must remember a single principle: One solution. One solution to cover all of its procurement needs, from product searching to payment One solution that can be configured to map to its organization structure, eliminating the need for multiple systems supporting the diverse needs of multiple lines of business One solution that can be extended to adapt to an enterprises particular needs with utilities that make customizations standardized and repeatable One solution that interoperates seamlessly with the worlds largest electronic marketplace, the Global Trading Web One solution that currently has the largest global customer base of any e-procurement application, spanning six continents The one solution that can boast all of those claims is Commerce One some of the largest companies in the world have selected Buy Site and Commerce One as their e-procurement solution, including General Motors, British Telecom, Nippon Telephone and Telegraph, Warner Lambert, BellSouth, Schlumberger, Pacific Gas and Electric, Singapore Telecom, Deutsche Telecom, Bass Breweries, Columbia/HCA, Siemens, and Hilton.

BIBLIOGRAPHY

Matter are collected from website http://www.ncgov.com/ Sue Hamilton Jim Myron Jeff Leech Website http://www.ejiva.com/

A Procurement Directors Guide By:

Accelerating Global Electronic Procurement with Commerce One Buy site 6.0 Enterprise Edition Website http://www.commerceone.com/ Matter from IFFCO Phulpur Allahabad Website http://www.iffco.nic.in/

Entering the Dynamic New Eprocurement Marketplace


WHAT IS E-PROCUREMENT? In simplest terms, electronic procurement defines the automation of an organizations procurement processes using web-based applications. Unlike enterprise resource planning (ERP) systems that enable businesses to automate their internal processes, e-procurement enables widely dispersed buyers and suppliers to come together, interact, and execute purchase transactions directly over the Internet. In a fully web-enabled e-procurement system, each step in the procurement process occurs electronically. From creating and submitting POs to receiving and paying for goodsall transactional data is automatically routed through workflow processors, reducing the time and cost of procurement activities, and boosting operational efficiency of the eenabled organization. E-procurement applications consolidate the paper-based catalogs of multiple vendors by digitizing product information into a single, one-stop shopping source for direct and indirect goods and services. In most cases, eprocurement applications are transparent to end-users. Embedded in the business processes and IT systems of buyers and suppliers, e-procurement applications lower process and inventory costs, extend supplier reach, and improve customer access to suppliers. Instead of flipping through a mountain of outdated supplier catalogs, buyers can tap the powerful search capabilities of the Internetto compare

up-to-date product information, determine availability, delivery options, warranty, service, and other pertinent factors to make the most informed, cost-effective purchases.

Bringing it all together. E-procurement links buyers and sellers in a dynamic virtual marketplacea thriving electronic village void of traditional barriers, where fundamental economics rules and competition reigns supreme.

WHY E-PROCUREMENT? The state is moving from a procurement environment that is paperbased to an Internet-based environment, called electronic procurement, or eprocurement. Transacting electronically can create significant administrative cost savings for both buyers and suppliers, thereby allowing for price savings as well. The transition to e-procurement has high-level support from the Governor and executive sponsorship from the Department of Administration Division of Purchase and Contract, the Office of the State Controller, and the Office of Information Technology Services. HOW E-PROCUREMENT WORKS While there are many variations, the most common e-procurement model involves a host or intermediary service provider linking buyers and sellers in an interconnected supply chain using a web-based e-procurement

application. The host manages transactions, facilitates communication, aggregates and maintains catalog content, and provides the general infrastructure for the virtual marketplace. The E-Procurement Service performs all procurement activities electronically; including requisitioning, purchase order transmission, notification of electronic quotation requests and electronic quote response. Through this network, buyers may compare products from multiple suppliers in a single electronic catalog or check on an items price and availability in real time before electronically creating a PO. Once a PO is approvedalso electronicallyits sent to the supplier via the hosts Web portal. This same Web portal enables suppliers to automatically return real time PO status. After an order ships, buyers can process tracking and receiving functions right from their workstations. Creating an invoice and authorizing payment is handled electronically through the same portal as well! Beyond merely automating shipping and receiving tasks, however, eprocurement offers far more process improvements and innovative options for streamlining business operations and maximizing strategic initiatives. E-procurement enables access to global suppliers, real time communication between buyers and suppliers, electronic payment of invoices, and assignment of logistics freight rating and routing. Eprocurement has also spawned creative new business models such as auctions for suppliers to sell excess inventory, reverse auctions where suppliers bid to fulfill a buyers order, and trade exchanges where buyers and sellers simultaneously bid for each others business (see Table 1).

MAJOR COMPONENTS OF AN E-PROCUREMENT SYSTEM Regardless of the e-procurement model, each has similar components that must be properly considered and managed to ensure a successful system. These include: catalog content, e-procurement processes, user maintenance, establishing buyer/seller relationships, billing management, price establishment, data transmission, and system maintenance. Catalog Content At the heart of every e-procurement process lays an electronic catalog. Similar to a traditional mail-order catalog, electronic catalogs contain detailed information on products or services available for sale. Suppliers customize the content to address the specific needs of targeted buyers. This content is manipulated and imported into a database that the e-procurement application integrates into web pages.

The management of catalog data can be handled using import and aggregation tools or by outsourcing the task to companies specializing in content management. Content providers generally offer the following services: Convert catalog data into a uniform language and format Gather and aggregate data from multiple suppliers into one catalog Publish and maintain the product catalog Once a catalog is created, various cataloging strategies are used to provide access to the content. Strategies include using a centralized catalog model where the aggregated data is hosted at a central location, a distributed model where data resides at multiple sites, or a content-retrieval method where suppliers present catalog data directly to buyers. There are three types of catalogs that address various buyer needs: Product catalogs: Contain data on tangible items such as office products, medical supplies, rolls of steel, etc. Service catalogs: Offer professional service intangibles such as office maintenance services, temporary personnel services, etc. Commodity-specific catalogs: Offer specific product families or groups such as chemicals, paper, or other raw materials E-procurement Processes In addition to creating an electronic catalog, existing procurement processes need to be electrified end-to-end to support the entire eprocurement process. This includes requisition and order management, realtime tracking and receiving, online order fulfillment, automatic billing, invoicing and payment, as well as workflow management, commerce transactions, and reporting and analysis tools.

Note that an effective e-procurement platform must support both the buyers and the suppliers business processes. It should also offer functionality that can easily be customized and configured to meet specific e-procurement requirements. In general, a successful e-procurement solution will be founded on an open, component-based model that offers easy configure ability and scalability. User Maintenance Closely related to the two preceding process management components, user maintenance includes defining the individuals authorized to use the eprocurement 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 eprocurement 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 buyers 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 Data Transmission Transmitting data over the Internet involves two facets: messaging agents and security. Data and messaging tools enable the Internet-based exchange of transactional data between different buyers and suppliers in the eprocurement marketplace. To do this, transactions are sent via the Internet as messages and then integrated into a supplier or buyers back-office system, enabling financial postings that coincide with the receipt, payment, and invoicing processes. Data messaging tools are also used to cancel transactions and log failures when messages cant be delivered within a predefined time period or following a specified number of attempts. The most important aspect of the messaging tool is that it enables real-time communication between buyers and sellers.

Coincidentally, security is an important aspect of any Internet transaction. Protecting a buyers confidential financial information and ensuring that only designated buyers have access to supplier product information is critical to ensuring confidence in any e-procurement system. System Management Maintaining an e-procurement system involves configuring and monitoring performance usage, average response time, transaction sources, and traffic patterns. To maximize the benefits and strategic opportunities e-procurement systems offer, this information should be used to analyze growth patterns, session times, and ultimately to fine-tune the systems performance to fit specific market communities or technical environments. Once an e-procurement system is up and running, its important to monitor traffic and system security on a day-to-day basis. Inadequately designed transaction engines can result in poor marketplace performance, lack of scalability, breakdowns in security, and, ultimately, frustrated users. ADVANTAGES OF IMPLEMENTING E-PROCUREMENT To fully appreciate the merits of e-procurement, it helps to view them in contrast to traditional purchasing processes. For example, consider the plight of a sales representative who needs $100 worth of office supplies to support a customer presentation. The Old Way to Buy... In a manual, non-e-enabled procurement environment, the purchasing process might typically be: Product selection: The sales rep must search numerous vendor catalogs without knowledge of which vendors offer discounts. Worst-case scenario:

The sales rep is in the field with no access to the companys 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 PO: Once the requisition is approved, the purchasing department splits the requisition into several purchase orders because multiple vendors must supply the material requested. Send PO 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 companys purchasing process, has decided to buy the items at a local office supply superstore. This way, the rep acquires the necessary equipment without delay and with a lot less effort. Unfortunately, the companys cost for paying retail price is much higher than necessary. The E-enabled Way to Buy... The benefits of e-procurement over manual purchasing are many and multifaceted. For example: Streamlined processes reduce transaction time: Buyers can search electronic catalogs containing goods and services from multiple suppliers

and compare products and prices on-line. Real time communication allows buyers to check current prices and quantities. Suppliers can provide instant PO status. Greater standardization of procurement processes: Electronic catalogs provide a standardized listing of items allowing for easier item comparison. Business rules governing all users and all transactions can be built into the application. Regardless of where theyre located, buyers can access catalogs using a standard web browser. Greater access to suppliers: Using virtual e-procurement portals, buyers have access to suppliers around the globe, which translates into a wider selection of goods and services. Global operability: E-procurement applications can support multiple languages and currencies, as well as international financing, taxation, and shipping regulations. Ease of configures ability and scalability: Web-based procurement applications can be configured to meet the unique needs of buyers and sellers and be scaled to grow as the organizations grow. Building of trading communities: E-procurement allows the development of both horizontal and vertical trading communities offering consolidated buying power for the purchaser and increased range for new supply chains. Lower costs: Cost efficiency results from a variety of factors including reduced time between order creation and order fulfillment, greater selection of goods and services from which to choose, formation of trading communities to consolidate buying power, the opportunity to purchase surplus products and services below market prices, and more! Increased productivity: Automated procurement processes can yield significant timesaving at all levels across an enterprise, increasing

opportunities for employees to focus on more strategically important tasks and functions. Increased opportunity to leverage preferred vendor relationships: According to a leading e-procurement systems vendor, 80% of indirect goods and services are purchased from vendors classified as other. This results from the frustrations and time delays inherent in processing paperbased purchases. This practice decreases the volume of purchases from preferred vendors and consequently drives up costs. HOW E-PROCUREMENT POSITIVELY IMPACTS MY BOTTOM LINE? E-procurement systems tend to drive down the prices of goods and services in three ways: Increased preferred vendor purchases: E-procurement fosters purchasing from preferred vendors, who in turn offer volume discounts and contract pricing. A typical e-procurement system can boost preferred vendor transactions by 25%, returning substantial savings assuming a weighted average preferred-vendor discount of 7%. Preferred vendor consolidation: As volume shifts to preferred vendors, low-volume vendors will eventually be eliminated from the supplier network, driving more purchases to preferred vendors and enabling them to increase consumer discounts. Spot discounts: Because of the dynamic nature of on-line pricing, vendors can offer limited-time spot discounts on excess inventory. Even a onepercent reduction in purchasing expenses can yield significant savings for large organizations. The really BIG savingsReduced labor time/reduced transaction costs

By far, the greatest e-procurement savings result from the combination of less time required for the total purchasing cycle and the subsequent reduced transaction costs. Together, these decreased transactional factors translate into significant cost savings. Table 2 shows the approximate time it takes to complete each step in a single corporate purchasing cycle, comparing manual or electronic data interchange (EDI) purchases to e-procurement. This Table demonstrates the dramatic, nearly fivefold reduction in time and nearly 80% reduction in cost directly attributable to e-procurement.

Table 2Time and Money:

E-procurement Offers Tremendous Opportunity to Save Both Now project your own potential e-procurement benefit by multiplying the Per Purchase Savings rate by the number of purchase orders your own organization processes in a single year. Depending on the size of your enterprise, e-procurement savings could amount to millions of dollars annually. For suppliers, e-procurement stands to yield significant reductions in inventory holding times and safety stock levels, and an overall reduction in the purchasing cyclethe time it takes from ordering an item to receiving it. KEY FACTORS FOR E-PROCUREMENT SUCCESS While e-procurement offers many quantifiable benefits, it still poses many issues that must be carefully considered before implementing a specific solution. Effectively addressing these issues will help ensure both a rapid and a complete implementationone that will help your organization realize all the benefits of e-procurement, including a lower initial system investment and an increased return on your investment. Consider these questions before you choose an e-procurement solution or provider, and consider how your answers will help you minimize the risks and maximize the rewards of your new system: Is my organization ready for e-commerce? Do you already have an e-commerce strategy? How will e-procurement integrate into that strategy? If you dont have an e-commerce strategy in place, how can you build one that will support e-procurement as well as all future e-commerce activities?

How will I bring my suppliers on board? E-procurement will change the buyer/seller relationship. How will your current supplier relationships need to change to maximize the e-procurement solution? What strategies must be developed to build and maintain those relationships? How wills my current procurement processes need to change to maximize e-procurement? Is your business model aligned with your system model? Where are the gaps and how can they be closed? How can I create a scalable infrastructure that will support future growth? Industry studies indicate that e-procurement is poised for explosive growth. Factors driving this growth include the number of buyers and suppliers participating, increased accessibility to authorized users throughout an organization, improvements in Internet e-commerce software, and organizational growth. This translates into increased transaction volume that can easily overwhelm the capacity of an e-procurement system. Note that e-procurement software must be object-based to support the addition of custom or third party applications, as well as easy integration with your current back office systems, as the needs of your marketplace change. HOW TO CHOOSE AN E-PROCUREMENT PACKAGE With the recent proliferation of proven, commercial e-procurement applications, theres no need to build your own. However, consider the following factors when choosing your own solution: Does it support the full e-procurement cycle?

Does the application take advantage of your organizations current Internet environment? Does the e-procurement application provide ease of configure ability and scalability? How secure is the data going across the Internet? Are catalog content-management services provided? How easily will the e-procurement solution integrate with your existing back-office ERP or legacy systems? What support is provided to bring suppliers on board? Does system administration lend itself to adding and changing routine system information on users, bill-to and ship-to addresses, cost centers and organizational attributes, suppliers and related information? Does it support extended business services such as auctions, reverse auctions, and exchanges? Does it support value-added services such as bill payment, logistics, and taxation? Will the vendor provide regular updates and software support? WHAT EXPERTISE ENSURES E-PROCUREMENT SUCCESS? Successful e-procurement implementation requires a number of unique technical, functional, and project-management skills including: Knowledge of the current e-commerce marketplace Industry expertise in procurement practices E-procurement implementation expertise Experience integrating e-procurement packages with ERP and legacy systems

Strategies for supplier adoption and maintaining supplier relationships Experience in managing product catalog content Technical knowledge of web-based development tools and networking architecture SERVICE & SUPPORT Online self-registration for new vendors and self-maintained vendor registration functionality. Training will prepare suppliers to successfully conduct electronic business and help suppliers to maximize the value of a new online sales environment. Customer Service including e-mail and phone support will be available to help answer supplier questions. TRAINING INFORMATION The E-Procurement Project team is in the process of developing materials to train the estimated 40,000 users that will eventually use the NC E-Procurement Service. The sections below provide specific information about the training process and will be updated frequently. What is e-procurement training? E-Procurement training will instruct employees from numerous agencies to complete the following procurement processes using the Internet-based EProcurement Service: o E-Requisition o Requisition Approval o Receiving o Purchasing/e-Quote

Goal of Training The overall goal of training is to prepare employees in agencies, universities, community colleges, schools and other local governments to perform their procurement roles using the E-Procurement Service. How is e-procurement training delivered? Training Delivery Format Users take only the courses they need to perform their roles. There will be two types of training available: o Web-based training (WBT) o Instructor-led training (ILT) The Web-based training will be available online over the Internet. It will explain how the system works. Users learn how to use the E-Procurement Service independently and at their own pace. Instructor-led training will be given to users at government agencies in computer classrooms. Participants will have "hands-on" exposure to the system while under the instruction of their own agencys trainer. Interactive exercises allow the user to practice how to use the system. Instructor-led training will use a train-the-trainer approach to train users at agencies that have the E-Procurement Service integrated with their accounting system. Trainers will be nominated by the project contact for each agency. Once trainers have been identified, they will receive Train-the-Trainer training conducted by the e-procurement training team. Participants in instructor-led training courses will receive participant guides. The guide will present processes and detailed steps so that it can be used as a reference after training. Instructors will demonstrate steps in walkthroughs while participants follow along on their computers and take

notes in their participant guides. Practice exercises reinforce skills after every walkthrough. Job aids (or laminated "cheat sheets") will also be developed for all users to provide a quick reference tool when back on the job. Go to ILT Materials You will need to enter a password to access the ILT Materials. The password is the same as the one you used to access the WBT Login screen for the first time. Training Courses Courses Topics Description Overview and Navigation E-Procurement Overview Course Materials Overview User Security System Navigation Personal Profile Settings Search Functionality Frequently Asked Training Questions If I have to stop working on a WBT course before I complete it, do I have to start the course over the next time I access the system? No. The web-based training system automatically records where you are in each course at the time you sign off. The next time you login, you can begin right where you left off. How do I access the system after training? The E-Procurement project team will send each user e-mail with instructions on how to access the system along with a User ID and password. Web-based training shows how the system works and gives users an opportunity to try it for themselves, at their own pace and as often as they

want. During instructor-led training, learners use the system, practice real life scenarios, ask questions and receive coaching. Quick learners, particularly those with good purchasing, computer and Internet skills, may find that web-based training alone is sufficient. Most agencies, especially those with learners at middle and lower skill levels or those with needs for high efficiency and accuracy, want to offer instructor-led courses in addition to the web-based training. How is e-procurement training delivered? Should we take web-based training first? Web-based training can be taken any time. The web-based training teaches basic functionality and gives opportunities to practice as many times as you want. Use it to familiarize yourself with the system before taking the instructor-led course and use it later as a refresher. One great benefit to the E-Procurement Service is that it is quick and easy to use. Most users will to be able to complete their procurement tasks more efficiently and accurately than previously. Training will help smooth the transition to the new system. On the other hand, not everyone needs to be able to use the system at once. In the beginning, you need to make sure that at least a couple of people at each site can use the system not everyone at that site. For Instructor-Led Training, will there be one session for each agency during the two-week period, or will there be multiple sessions for each agency during that period? The instructor-led Train-the-Trainer training is for the agency trainers to learn how to deliver training to the end-users at their agency. Most agencies will have 2 trainers who can sign up together if they want. Trainers may take all the e-procurement instructor-led courses: eRequisitions, eQuote, Approval, and Receiving. The schedule starts with

the large agencies that have more trainers to be trained and who will require more time to roll out training to their end-users. SUPPLIER INFORMATION What Does It Cost? Suppliers will be charged a 1.75% marketing fee for purchase orders for goods issued through the E-Procurement Service. Services are exempt at this time. This marketing fee percentage is consistent with other states, and there are no up-front registration or annual subscription fees. The marketing fee covers the cost for the development and ongoing operations of the EProcurement Service, including: Customer Service and Support for Both Buyers and Suppliers Online Training, Catalog Services, Software and Hosting The marketing fee will be invoiced monthly based on purchase orders issued through the E-Procurement Service during the prior month. For more information on the marketing fee, please see the Fee Matrix. 1. Why is the State moving to electronic procurement? It provides both its buyers and suppliers a more efficient, cost effective method for conducting procurement. All suppliers will need to register with the E-Procurement Service to continue receiving purchase orders from the State. Wherever possible current vendor information is being retained so that most suppliers will only have to confirm their information rather than starting from scratch. However, some new information will need to be captured, most notably being the method for receiving electronic purchase orders in the future. 2. What types of purchases are included?

Purchase orders for both goods and services will be produced through the EProcurement Service; however, initially the marketing fee is only applied to purchases of goods. 3. How does this affect me? Suppliers fit into three different categories within this process: 1) Term contract suppliers, 2) Suppliers participating in eQuote (informal bidding process), 3) All other suppliers. Term contract suppliers will have electronic catalogs built and loaded onto the system. Suppliers participating in eQuote will receive and respond to requests for quotes by logging into the system. If you dont fall into either of these categories, the only change will be that you will now receive purchase orders with a consistent format through electronic means (e-mail or fax). You will also now have the ability to maintain vendor information online. For term contract suppliers, electronic catalogs will be created, so those suppliers will have an initial time commitment to provide the data necessary and to work with the team building the catalogs. After this introductory period, the time needed for maintenance will be minimal. 4. How will this affect my companys sales representatives? This initiative should free your sales representatives to do two things: spend more time strengthening relationships and less time on manual order processing, and pursue new business opportunities offered as a result of access to a statewide and national marketplace. 5. Whats in it for suppliers? E-Procurement will provide suppliers of all sizes access to an aggregated audience of purchasers and the opportunity to expand their market share, as

well as the ability to receive standardized electronic orders, manage complex bidding opportunities, and migrate customer service functions online, thereby reducing the overall cost of sales. 6. How will E-Procurement affect the relationships I have with my customers? E-Procurement reduces much of the manual work associated with offline processes and paper-based orders, freeing sales representatives to spend more time building valuable relationships with their customers. 7. How do I get orders? Suppliers select the method they wish to receive orders when they register. Delivery options include: fax, e-mail, EDI, and cXML. Each supplier will have the opportunity to select their preference for receipt of orders during the registration process. 8. What support will suppliers receive? The States Supplier Manager will work closely with the term contract suppliers to build and load their electronic catalogs, as well as support them in maintaining data going forward. Those suppliers participating in eQuote will also receive training and support services to enable them to participate. 9. What does the 1.75% marketing fee get used for? The fee helps pay for the development and ongoing operations of the EProcurement Service; this includes the services required to effectively implement an initiative of this size, develop and execute training required for both buyers and suppliers, and provide the ongoing maintenance and services needed to sustain the Service.