What is E-Procurement? Here’s What You Need To Know

Last Updated July 26, 2023

Improved global connectivity and the adoption of technology have greatly increased the volume of business conducted via the Internet. With the impacts from the coronavirus pandemic, virtually every business that can be conducted remotely is now online.

This includes supply chain transactions, as both buyers and sellers embrace electronic procurement or e-procurement. E-procurement is shown to increase productivity and transparency while reducing costs.

What is E-Procurement?

E-procurement is the process of buying and selling supplies and services over the Internet. It differs from e-commerce in that it makes use of a supplier’s closed system typically available only to registered users.

When implemented properly, e-procurement opens the lines of communication between a company and a supplier by creating a direct link and facilitating interactions such as bids, purchase orders and emails.

What are the Benefits of E-Procurement?

E-procurement offers substantial benefits to the function of procurement management within a purchasing organization, including:

Cost Savings

Built-in monitoring tools help control costs and maximize performance, reducing overhead and paperwork. Fully automated systems streamline processes and can result in a faster cycle from creating an order to fulfillment. There also is an opportunity for a larger selection of products and services.

Shorter Purchasing Cycles

Centralized transaction tracking simplifies reporting on orders, payments, and requisitions, as well as ensuring contract compliance, all of which can reduce delivery time. Buyers have electronic access to available products, services, and prices.

Improved Inventory Control

Procurement professionals can quickly locate products from preferred suppliers and are limited to the purchases they can make, so inventory is better controlled.

Transparency

All information is centralized and can be made available to management, stakeholders, shareholders or the public, as appropriate.

E-Procurement in Government Agency Purchasing

Government agencies were among the first organizations to implement e-procurement, which offers a quick ramp-up, along with benefits such as spend savings, a one-stop, seamless system, and transparency in the purchasing of goods and services.

E-procurement makes every detail of government purchasing, contracts and vendor relationships available to the public, such as:

• Current and past procurements and contracts, as well as possible future procurements
• Detailed information on rules, processes, and standards driving each procurement
• Bidding opportunities and statewide contracts
• Information on vendor names, items procured, prices paid and the purchasing agency
• Metrics and sorting such as purchases by an agency, top 20 vendors and top 20 commodities purchased

North Carolina uses e-procurement to aggregate purchases among agencies and negotiates better pricing. Its e-procurement website gives suppliers statewide equal access to government bid opportunities. Users have easy access to all state contracts, pre-authorized contract catalogs, electronic response to pricing requests and a more streamlined requisition process.

The state of Virginia’s e-procurement web portal offers procurement professionals and suppliers a streamlined, step-by-step process to conduct business with the state. An automated ticker continuously updates the number of orders and dollars spent, along with the agencies, localities, and vendors involved. The site includes nearly 1,000 approved vendor catalogs, as well.

The state’s e-procurement process is available for local governments, schools and other public bodies. The site has a list of future procurements planned by state agencies and colleges.

E-Procurement Software

A number of developers offer e-procurement software products designed to help companies improve productivity and reduce costs. Features vary among providers, but most include inventory tracking, supplier management, order fulfillment, and document management.

In addition to general e-procurement software, there are software products tailored to retail, 3PL and warehouse management.

Procurement Jobs Outlook

While new technologies and e-procurement software have the potential to streamline processes and improve efficiencies, they are also leading to more automation of procurement and purchasing tasks.

The U.S. Bureau of Labor Statistics projects a seven percent decline in the overall employment of procurement specialists, purchasing managers, buyers and agents from 2019 to 2029, stating: “As procurement technology continues to improve, less complex procurement functions, such as finding suppliers or processing purchase orders, will likely be automated. In addition…organizations may outsource these functions in order to focus on more complex or strategic procurement tasks and to reduce costs.”*   

See how MSU’s Supply Chain Management Certificate Programs can help to strengthen your procurement skills and knowledge.

*National long-term projections may not reflect local and/or short-term economic or job conditions and do not guarantee actual job growth. Information provided is not intended to represent a complete list of hiring companies or job titles, and degree program options do not guarantee career or salary outcomes. Students should conduct independent research on specific employment information.