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E-PROCUREMENT

PST 06208

By TESHA
Department of Business Studies
 INTRODUCTION TO E-PROCUREMENT
AND CONCEPTS RELATED TO E-
2
PROCUREMENT.
Learning Objectives
 Explain the concept of e-Procurement.

 Identify e-Procurement activities.

 Explain objectives of e-Procurement.

 Explain benefits of e-Procurement.

 Explain challenges for e-Procurement

TESHA 07/06/2023
 e-Procurement
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 CIPS defined e-procurement as 'The

combined use of electronic Information and
Communications Technology (ICT) in order to
enhance the links between customer &
supplier, & with other value chain partners, &
thereby to improve external & internal
Procurement & Supply Management
processes.

TESHA. 07/06/2023
 e-Procurement cont…
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 The use of Information Technologies to

facilitate B2B purchase transactions for
materials & services (Wu et al., 2007).

 It is the technology solution addressing the

buying process by using the internet
(Schoenherr et al., 2007).

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 e-Procurement cont…
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 …a procurement system that utilizes the

possibilities created by Information and
Communication Technology to increase
procurement processing efficiency.

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 e-Procurement cont…
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 In its broadest sense, e-Procurement involves

electronic data transfers to support
operational, tactical & strategic procurement.

 e-Procurement has therefore been around for

much longer than the term itself which first
came into usage after the establishment of the
internet in the1990s.

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 e-Procurement cont…
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 From the 1960s until the mid 1990s, e-

procurement primarily took the form of
Electronic Data Interchange (EDI).

 Nowadays, e-procurement is often supported

by internet technologies & is becoming more
prevalent.

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 e-Procurement cont…
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 However, there is currently no wide use of

electronic public procurement practice in
Tanzania.

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 e-Procurement may include activities such as;
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 Electronic advertising of tenders,

 Electronic submission of tenders,

 Post bid results electronically,

 Electronic ordering,

 Internet sourcing
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 e-Procurement activities cont…
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 Electronic payment to vendors,

 Electronic checking and monitoring,

 Electronic mail between buyers and sellers,

 Integration of procurement with inventory

systems.
TESHA 07/06/2023
 Objectives of e-Procurement
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 To reduce cost of doing business for both

government & suppliers.
 To enhance transparency in procurement
process,
 To establish level playing field and “fair”
competitive platform for the suppliers.
 To enhance monitoring & control in
procurement process.

TESHA. 07/06/2023
 Benefits of electronically generating
& transmitting purchasing
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documents
1. Elimination of paperwork & paperwork
handling.

2. A reduction in the time between need

recognition & the release of an order.

3. Improved communication both within the

company & with suppliers.
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 Benefits cont…
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4. A reduction in errors.

5. Reduced transaction costs.

6. A reduction in the time spent by purchasing

personnel on processing purchase orders &
invoices.

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 Benefits cont…
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7. Reduction in overall lead time in the procure-

to-pay cycle.

8. Reduce the problem of maverick buying.

9. Increased compliances.

10. Improved management of information.

TESHA. 07/06/2023
 Challenges for e-Procurement
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 Concern about the security of the Internet.

Electronic payment systems for Internet-based
commerce are relatively new and many people
consider it too risky for payment transactions.

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 Challenges cont…
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 Significant investments in hardware, software

to implement e-Procurement may be
expensive.

 Significant investment in staffing & training

required by e-Procurement.

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 Challenges cont…
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 Poor ICT infrastructures in developing

countries

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 TASK
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 Find out other challenges in adopting and

implementing e-Procurement.

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