• Chapter One: An Overview to E-commerce

• Introduction of e-commerce
• Origin of e-commerce
• Definition of e-commerce
• E-business vs. e-commerce
• Unique features of Electronic Commerce
• Comparison of traditional commerce and e-
commerce
• Advantages and disadvantage of e-commerce
 Introduction of E-Commerce

• Recently most commercial transactions still

take place through conventional channels,
rising numbers of consumers and businesses
are using the Internet for electronic commerce
• To sum up E-commerce is the use of the
Internet and the Web to transact business
 Origin Of E-Commerce

• E-commerce applications began in the early

1970s with such innovations as electronic
transfer of funds.
• The early years of e-commerce were a period
of explosive growth and extraordinary
innovation, beginning in 1995 with the first
widespread use of the Web to advertise
products.
• The phenomenon of e-commerce is so broad that a
multidisciplinary perspective is required. There are two primary
approaches to e-commerce: technical and behavioral.
• Technical Approaches- Computer scientists are interested in e-
commerce as an exemplary application of Internet technology.
They are concerned with the development of computer
hardware, software, and telecommunications systems, as well as
standards, and database design and operation.
• Behavioral Approaches- In the behavioral area, information
systems researchers are primarily interested in e-commerce
because of its implications for firm and industry value chains,
industry structure, and corporate strategy. Economists have
focused on consumer behavior at Web sites, pricing of digital
goods, and on the unique features of digital electronic markets.
 – Definition of e-commerce
• Electronic commerce (e-commerce) is often
thought simply to refer to buying and selling using
the Internet; people immediately think of
consumer retail purchases from companies such
as Amazon.
• E-commerce is the exchange of information across
electronic networks, at any stage in the supply
chain, whether within an organization, between
businesses, between businesses and consumers, or
between the public and private sector, whether
paid or unpaid.(Cabinet Office, 1999
 – E-Business Vs E-commerce
• E-commerce: is more specific than e-business.
• Internet and other technologies now help
companies carry on their business faster, more
accurately and over a range of time and space.
• E-business: includes all electronic–based
information exchanges within or between
companies and customers. In contrast e-
commerce involves buying and selling processes
supported by electronic means, primarily the
Internet.
• E-markets are market-spaces rather than
physical marketplaces. Sellers use e-markets to
offer their products and services online.
• Buyers use them to search for information,
identify what they want, and place orders using
credit or other means of electronic payment. Is
the online transaction of business, featuring
linked computer systems of the vendor, host,
and buyer? Electronic transactions involve the
transfer of ownership or rights to use a good or
service.
Unique Features of E-Commerce

• E-commerce has seven unique characteristics that

distinguish from the traditional business transaction.
• A. Ubiquity
• it is available just about everywhere, at all times.
• B. Global Reach
• E-commerce technology permits commercial
transactions to cross cultural and national
boundaries far more conveniently and cost-
effectively than in traditional commerce
• C. Universal Standards
• The technicalstandards of the Internet is Universal .
• D. Richness
• E. Interactivity
• The possibleexception of the telephone, e-
commerce technologies allow for
interactivity,meaning they enable two-way
communication between merchant and consumer.
• F. Information Density
• The Internet and the Web vastly increase
information density—the total amount and
quality of information available to all market
participants, consumers, and merchants alike.
 G. Personalization/Customization
• E-commerce technologies permit
personalization: merchants can target
theirmarketing messages to specific individuals
by adjusting the message to a person’sname,
interests, and past purchases.
• The technology also permits customization—
changing the delivered product or service
based on a user’s preferences or prior behavior.
 Comparison of Traditional Commerce and E-Commerce

• In e-commerce there may be no physical store, and in most

cases the buyer and seller do not see each other.
• The Web and telecommunications technologies play a major
role, in e-commerce.
• Although the goals and objectives of both e-commerce and
traditional commerce are the same—selling products and
services to generate profits—they do it quite differently.
• Traditional commerce presents product information by using
magazines,
• . On the other hand, e-commerce presents by using web sites
and online
• Traditional commerce communicates by regular mail,
phone yet e-commerce by e-mail. Traditional
commerce checks product availability by phone, and
letter.
• However, e-commerce checks by e-mail, web sites,
and internal networks.
• Traditional commerce generates orders and invoices
by printed forms but e-commerce by e-mail, and web
sites.
• Traditional commerce gets product
acknowledgments by phone and.
• On the other hand, e-commerce gets by e-mail, web
sites,
 Advantages and disadvantage of E-Commerce
• Advantages of E-Commerce
• Some advantages that can be achieved from e-commerce
include:
 Being able to conduct business 24 x 7 x 365: E-commerce
systems can operate all day every day.
 Access the global market place: The Internet spans the world,
and it is possible to do business with any business or person who
is connected to the Internet.
 Speed: Electronic communications allow messages to traverse
the world almost instantaneously. There is no need to wait weeks
 Market space: The market in which web-based businesses
operate is the global market.
 Opportunity to reduce costs: The Internet makes it very easy to
'shop around' for products and services that may be cheaper or
more effective than we might otherwise settle for.
• Computer platform-independent: 'Many, if not most, computers have the
ability to communicate via the Internet independent of operating systems
and hardware
• Efficient applications development environment: - 'In many respects,
applications can be more efficiently developed and distributed because the
can be built without regard to the customer's or the business partner's
technology platform. Application updates do not have to be manually
installed on computers. Rather, Internet-related technologies provide this
capability inherently through automatic deployment of software updates'
(Gascoyne & Ozcubukcu, 1997:87).
• Allowing customer self service and 'customer outsourcing': People can
interact with businesses at any hour of the day that it is convenient to them,
• Stepping beyond borders to a global view: Using aspects of e-commerce
technology can mean your business can source and use products and
services provided by other businesses in other countries. This seems
obvious enough to say, but people do not always consider the implications
of e-commerce.
• For example, in many ways it can be easier and cheaper to host and operate
some e-commerce activities outside Australia
 Disadvantages and limitations of E-commerce

• Some disadvantages and constraints of e-commerce include the

following.
• Time for delivery of physical products: It is possible to visit a local music
store and walk out with a compact disc or a bookstore and leave with a
book. E-commerce is often used to buy goods that are not available
locally from businesses all over the world, meaning that physical goods
need to be delivered, which takes time and costs money. In some cases
there are ways around this, for example, with electronic files of the music
or books being accessed across the Internet, but then these are not
physical goods.
• Physical product, supplier & delivery uncertainty: When you walk out of
a shop with an item, it's yours. You have it; you know what it is, where it
is and how it looks. In some respects e-commerce purchases are made on
trust.
• Privacy, security, payment, identity, and contract: Many issues arise -
privacy of information, security of that information and payment details,
whether or not payment details (eg credit card details) will be misused,
identity theft, contract, and, whether we have one or not, what laws and
• Perishable goods:
• Forget about ordering a single ice cream from a shop in Rome! Though specialized or
refrigerated transport can be used, goods bought and sold via the Internet tend to be durable
and non-perishable: they need to survive the trip from the supplier to the purchasing business or
consumer.
• This shifts the bias for perishable and/or non-durable goods back towards traditional supply
chain arrangements, or towards relatively more local e-commerce-based purchases, sales and
distribution.
• In contrast, durable goods can be traded from almost anyone to almost anyone else, sparking
competition for lower prices.
• In some cases this leads to disintermediation in which intermediary people and businesses are
bypassed by consumers and by other businesses that are seeking to purchase more directly from
manufacturers.
• Limited and selected sensory information:
• The Internet is an effective conduit for visual and auditory information: seeing pictures, hearing
sounds and reading text. However it does not allow full scope for our senses: we can see
pictures of the flowers,
• Returning goods: Returning goods online can be an area of difficulty. The uncertainties
surrounding the initial payment and delivery of goods can be exacerbated in this process.
• Will the goods get back to their source?
• Who pays for the return postage?
• Will the refund be paid? Will I be left with nothing?
• How long will it take
• Defined services & the unexpected:
E-commerce is an effective means for managing the transaction of
known and established services, that is, things that are everyday. It is not
suitable for dealing with the new or unexpected. For example, a
transport company used to dealing with simple packages being asked if it
can transport a hippopotamus. Such requests need human intervention
to investigate and resolve.
• Personal service:
Although some human interaction can be facilitated via the web, e-
commerce cannot provide the richness of interaction provided by
personal service. For most businesses, e-commerce methods provide the
equivalent of an information-rich counter attendant rather than a
salesperson.
• Size and number of transactions:
E-commerce is most often conducted using credit card facilities for
payments, and as a result very small and very large transactions tend not
to be conducted online. The size of transactions is also impacted by the
 Chapter Two
Technology in E-procurement

• Origins of the Internet and New Uses for the Internet

• The Internet, Intranets, Extranets and the World Wide
Web
• Internet Protocols
• Web Page Request and Delivery Protocols
• Electronic Mail Protocols
• Markup Languages and the Web
• Markup Languages
• Hypertext Markup Language
• Extensible Markup Language (XML)
• HTML and XML Editors
• Electronic data interchange (EDI)
. Origins of the Internet and New Uses for the Internet

• The first recorded description of the social

interactions that could be enabled through
networking was a series of memos written by
J.C.R. Licklider of MIT in August 1962
discussing his “Galactic Network” concept.
• He envisioned a globally interconnected set of
computers through which everyone could
quickly access data and programs from any
site. In spirit, the concept was very much like
the Internet of today.
 The Internet, Intranets, Extranets and the World Wide Web

• The Internet
• Internet is a worldwide network of computer networks
built on common standards. We can also defined internet
as "A collection of interconnected networks using the
Internet Protocol which allows them to function as a single,
large virtual network."Created in the late 1960s to connect
a small number of mainframe computers and their users.
• Intranets
Organizations can use Internet networking standards
and Web technology to create private networks called
intranets. Intranet is an internal organizational
network that provides access to data across the
enterprise.
 Extranets
• An extranet is a collaborative network that uses
internet technology to link businesses with their
suppliers, customers or other businesses that share
common goals.
• Extranets are usually linked to business intranets
where information is either accessible through a
password system or through links that are established
collaboratively.
 Table 2.1. Overview: Internet, Intranet, and Extranet

Network type Typical users Types of access Information

Internet Any individual with dial-up access or Unlimited, public; no General, public and
LAN restrictions advertisement

Intranet Authorized employees only Private and restricted Specific, corporate and
proprietary

Extranet Authorized groups from collaborating Private and outside authorized shared in authorized
companies partners collaborating groups
The World Wide Web

• The World Wide Web (the Web) is the most popular

service that runs on the Internet infrastructure.
• It is a system with universally accepted standards for
storing, retrieving, formatting, and displaying
information using client/server architecture.
• The Web was invented in the period from 1989 to
1991 by Dr. Tim Berners-Lee and his associates at the
European Particle Physics Laboratory.
• As mentioned the Web was developed in the early
1990s and hence is of much more recent vintage than
the Internet.
 The WWW is an application of Internet
• The World-Wide Web (WWW) is a service, an
application of Internet.
• It is based on the Internet infrastructure.
• So the WWW is newer than the Internet.
Internet Protocols
•

• The Internet protocols are the world’s most

popular open-system (nonproprietary) protocol
suite because they can be used to communicate
across any set of interconnected networks and are
equally well suited for LAN (Local area network)
and WAN{ wide area network) communications.
• The Internet protocols consist of a suite of
communication protocols, of which the two best
known are the Transmission Control Protocol (TCP)
and the Internet Protocol (IP). The Internet
protocol suite not only includes lower-layer
protocols (such as TCP and IP), but it also specifies
common applications such as electronic mail,
terminal emulation, and file transfer.
• Internet protocols were first developed in the mid-
1970s, when the Defense Advanced Research
Projects Agency (DARPA) became interested in
establishing a packet-switched network that would
facilitate communication between dissimilar
computer systems at research institutions.
 Purpose of the Internet Protocol

 The IP protocol defines the basic unit of data

transfer (IP datagram)
 IP software performs the routing function
 IP includes a set of rules that embody the idea
of unreliable packet delivery:
 How hosts and routers should process packets
 How and when error messages should be
generated
 The conditions under which packets can be
discarded.
 Web Page Request and Delivery Protocols

• A web page (or webpage) is a web document that is suitable for

the World Wide Web and the web browser.
• A web browser displays a web page on a monitor or
mobile device. The web page is what displays, but the term also
refers to a computer file, usually written in HTML or comparable
markup language, whose main distinction is to provide
hypertext that will navigate to other web pages via links.
• Web page - A Web page is a simple text file that contains not
only text, but also a set of HTML tags that describe how the text
should be formatted when a browser displays it on the screen.
• The tags are simple instructions that tell the Web browser how
the page should look when it is displayed.
• The tags tell the browser to do things like change the font size or
color, or arrange things in columns.
• The Web browser interprets these tags to decide how to format
the text onto the screen.
 Electronic Mail Protocol

• The birth of electronic mail (email) occurred in the early 1960s.

The mailbox was a file in a user's home directory that was
readable only by that user.
• The first network transfer of an electronic mail message file
took place in 1971 when a computer engineer named Ray
Tomlinson sent a test message between two machines
• Email protocols are the languages and rules that email servers
and clients use to communicate with each other and manage
incoming and outgoing mail.
• Electronic mail is the transmission of messages over
communications networks.
 Mail Transport Protocols

• Mail delivery from a client application to the server,

and from an originating server to the destination
server, is handled by the Simple Mail Transfer
Protocol (SMTP).
• Simple Mail Transfer Protocol (SMTP)
• The primary purpose of SMTP is to transfer email
between mail servers. However, it is critical for email
clients as well.
• To send email, the client sends the message to an
outgoing mail server, which in turn contacts the
destination mail server for delivery.
• For this reason, it is necessary to specify an SMTP
server when configuring an email client.
Mail Access Protocols
• There are two primary protocols used by email client applications to
retrieve email from mail servers:
 the Post Office Protocol (POP) and
 the Internet Message Access Protocol (IMAP).
• Both of these protocols require connecting clients to authenticate
using a username and password. By default, passwords for both
protocols are passed over the network.
Post Office Protocol (POP)
• POP server, email messages are downloaded by email client
applications.
• Most POP email clients can delete the message on the email server
after it has been successfully transferred, however this setting usually
can be changed.

• POP is fully compatible with important Internet messaging standards,

such as Multipurpose Internet Mail Extensions (MIME), which allow
for email attachments.
 Markup Languages and the Web
Markup Languages

• In 1986 the Standard Generalized Markup Language (SGML)

became an international standard for defining descriptions of
the structure and content of different types of electronic
documents.
• SGML, the "mother tongue" of HTML and XML, is used for
describing thousands of different document types in many fields
of human activity, from transcription of ancient Sumerian tablets
to the technical documentation for steel bombers, and from
patient's clinical records to musical notations.
• Markup languages are designed for the processing, definition
and presentation of text.
• The language specifies code for formatting, both the layout and
style, within a text file. The code used to specify the formatting
is called tags.
 What is a Markup Language?
• A markup language is a computer language that uses
tags to define elements within a document. Most
markup languages are human readable because the
annotations are written in a way to distinguish them
from the text.
• There are many different markup languages. This site
focuses on HTML and XML, but there are lots of other
markup languages. And there are three that you should
be aware of if you are doing web design or
development: HTML, XML, and XHTML
 Hyper Text Markup Language (HTML)

• Hyper Text Markup Language is a languagefor

specifying how text and graphics appear on a
web page. When you visit a web site (e.g.,
www.google.com) your web browser retrieves
the HTML web page and renders it.
• Hypertext Transfer Protocol (HTTP). HTTP is the
communications standard used to transfer pages on
the Web.
• For example, when you type a Web address in your
browser such as www.sec.gov, your browser sends an
HTTP request to the sec.gov server requesting the
home page of sec.gov.
 Extensible Markup Language (XML)

• Extensible Markup Language is not a Web page format description

languagelike HTML. Instead,
• XML describes the contents of Web pages (including business
documents designed for use on the Web) by applying identifying tags
or contextual labelsto the data in Web documents.
• For example, a travel agency Web page with airline names and flight
times would use hidden XML tags like “airline name” and “flight
time” to categorize each of the airline flight times on that page.

• Or product inventory data available at a Web site could be labeled

with tags like “brand,” “price,” and “size.” By classifying data in this
way,
• XML makes Web site information much more
 searchable,
 easier to sort, and

• XML is a language for documents identifying
structured data in a quite simple way.
Structured data includes both content (e.g.,
words, pictures).
Electronic Data Interchange
• The broadest definition of electronic data
interchange (EDI) is the exchange of
information between two difference computer
systems.
 Chapter Three: Business Models for E-
commerce
 Business to Business (B2B)
 Business to Consumer (B2C)
 Consumer to Business (C2B)
 Consumer to Consumer (C2C)
 Business to Government (B2G)
3.1. Overview of E-Commerce Business Model
 A business model is the methods of doing
business by which a company can sustain itself,
that is, generate revenue.
 The business model spells out how a company
makes money by specifying where it is positioned
in the value chain.
 Some models are quite simple.
 A company produces goods or services and sells it
to customers.
 If all goes well, the revenues from sales exceed
the cost of operation and the company realizes
profit.
 business model
• A business model can be defined as architecture for product,
service, and information flow, including a description of business
players, their role
• Key Elements of a Business Model
A successful business model effectively addresses eight key elements:
• Value proposition
 It answers the question “why should customer buy products and
services from a given firm?
 In other words, how a company's product or service fulfills the
needs of customers is typically addressed by value proposition. s,
and revenue sources.
• Revenue model
• Refers to how the company plans to make money from its
operations. Revenue model describes how the firm will earn
revenue, generate profits, and produce a superior return on
invested capital.
 Types of revenue model
• Advertising revenue model (ARM)
• Web site that offers content, services and/or products also provides
a forum for advertisements and receives fees from advertisers.
Example: Yahoo.com
• Subscription fee revenue model (SFRM)
• Web site that offers users content or services charges a subscription fee
for access to some or all of its offerings. Example: Consumer Reports
Online.
• Transaction fee revenue model (TFRM)
• Company that receives a fee for enabling or executing a
transaction.Examples:eBay.com and E-Trade.com.
• Sales revenue model (SRM)
• Company derives revenue by selling goods, information, or services to
customers
• Market Opportunity-
 Refers to a company’s intended market space and the overall potential
financial opportunities available to the firm in that market space. Market
space: the area of actual or potential commercial value in which a company
intends to operate is what a market opportunity means.
 Realistic market opportunity is defined by revenue potential in each of
market niches in which company hopes to compete.
Competitive Environment
The direct and indirect competitors doing business in the same market space,
including how many there are and how profitable they are, i.e. it refers to the
other companies selling similar products and operating in the same market
space.
Competitive environment is influenced by:
 how many competitors are active.
 how large their operations are.
 what is the market share for each competitor.
 how profitable these firms are
 how they price their products.
 Includes both direct competitors and indirect competitors
 Competitive Advantage
• Achieved when a firm can produce a superior
product and/or bring product to market at a lower
price than most, or all, of competitors.
• Types of competitive advantage include:
• First mover advantage—results from a firm being
first into a marketplace. What does this firm has
competitive advantage over its successors?
• Unfair competitive advantage—occurs when one
firm develops an advantage based on a factor that
other firms cannot purchase.
• Second mover advantage –results form a firm being
second into a market place.
 Market Strategy

• A plan that details how a company intends to enter a new

market and attract customers. It also deals to all marketing
mix strategies: product, price, place and promotion.
• Organizational Development
• The process of defining all the functions within a business
and the skills necessary to perform each job, as well as the
process of recruiting and hiring strong employees.
• Describes how the company will organize the work that
needs to be accomplished.
• Work is typically divided into various way
 Functional departments and respective employees are
assigned accordingly.
 Move from generalists to specialists as the company grows.
 Management Team
 The group of individuals retained to guide the company's
growth and expansion.
 Employees of the company responsible for making the
business model work.
 Strong management team gives instant credibility to
outside investors
• 3.2. Types of E-Commerce business Models
• There are a variety of different types of e-commerce
modek
• These are.
• 3.2.1. Business-to-business (B2B) models for E-
Commerce
• Business-to-business (B2B) applies to businesses buying
from and selling to each other over the Internet.
 3.2.3. Consumer-to-Business (C2B)

• Consumer-to-business (C2B) applies to any

consumer that sells a product or service to a
business over the Internet.
• One example of this e-business model is
Priceline.com where bidders (or customers)
set their prices for items such as airline tickets
or hotel rooms, and a seller decides whether
to supply them.
 3.2.4. C2C (Consumer-to-Consumer)
 C2C means that online visitors increasingly create
product information, not just consume it.
 They join Internet interest groups to share
information, so that "word of web" is joining
"word of mouth" as an important buying
influence.
 Words about good companies travel fast; and
words about bad companies travel even faster.
EBay is a person-to-person online trading
community with more than 23 million registered
users.
• 3.2.5. Business to Government (B2G)
• G2C (government to citizen) eGovernment is
a form of external eGovernment since it is
particularly involved in supporting the
customer chain of the government body. Since
the major stakeholder involved is the citizen,
many of the so-called customer chain issues in
eBusiness travel over into G2C eGovernment.
• G2B (government to business) eGovernment concerns
electronic enablement of the relation-ships between
government bodies and the private sector. One of the major
forms of such relationships involves management of the supply
chain.
• Hence, many of such supply chain issues are held to be similar in
nature to eBusiness issues in this area.
• However, many features of the context of public sector
procurement shape the relevance of technological solutions in
this area.
• For example, a number of G2B portals have been built around Europe in an
attempt not only to improve the efficiency of government procurement but
also to enable the private sector greater access to public sector contracts.
• Much of eGovernment success is based on delivering what has been referred
to as joined-up government. This is the key issue for G2G eGovernment, the
use of eGovernment to support intra-government cooperation and
collaboration.
 Chapter Four
Concepts of E-Procurement

Learning Objective
• After successfully completing this chapter, students should be able
to:
 Define of Electronic procurement
 Mention the Objectives of e-Procurement
 Elements of E-procurement
 Analyze the Public E-procurement
 Describe E-procurement Systems
 Identify the benefits and risks of e-procurement
 4.2. What is e- procurement?

 The terms ‘purchasing’ and ‘procurement’ are sometimes

used interchangeably, but as Kalakota and Robinson (2000)
point out, ‘procurement’ generally has a broader meaning.
 ‘Procurement’ refers to all activities involved with
obtaining items from a supplier; this includes purchasing,
but also inbound logistics such as transportation, goods-in
and warehousing before the item is used.

Definition ofElectronic procurement (e-procurement)

• Is the electronic integration w/c manage all procurement

activities including purchase requesition in term of
authorization,ordering, delivery and payment between a
purchaser and a supplier.
• E-procurement should be directed at improving
performance for each of the ‘five rights of purchasing’
(Baily et al., 1994), which are sourcing items:
 At the right price
 Delivered at the right time
 Of the right quality
 Of the right quantity
 From the right source.
• E-procurement is not new; there have been many
attempts to automate the process of procurement for
the buyer using electronic procurement systems (EPS),
workflow systems and links with suppliers through EDI
these involved online entry, authorization and placing of
orders using a combination of data entry forms, scanned
documents and E-mail based workflow
 4.3. E-procurement Overview
• E-procurement is the term used to describe the use of electronic
methods, typically over the Internet to conduct transactions between
awarding authorities and suppliers
• Why E-Procurement?
• Efficiency (fast and effective communication);
• More competition (cross-border competition!);
• More transparency, more fairness (everything happens on-line);
• Harmonized processes ;
• Savings on process costs and time; and
• Value for money
• Objectives of e-Procurement
• • • To enhance transparency, monitoring and control in procurement
process;
• • To bring in economies of scale through aggregation of demand;
• • To reduce cost of doing business for both government and suppliers;and
• • To establish level playing field and “fair” competitive platform for the;
suppliers
 E-procurement tools
 E-sourcing tool is used to identify potential suppliers
during the selection phase.
 E-tendering tool is used to send out tenders with
procurement requirements, supply schedule,
contracting terms, etc.
 E-auctioning tools bring together potential supplier
identified during selection phase under one umbrella to
undertake auctioning process.
 E-auctioning tools operate under two separate
mechanism, upward price mechanism for selling
organization and downward price mechanism for the
buying organization.
 Elements of E-procurement
• E-procurement consists of the following general types:
• Web-based enterprise resource planning (ERP).
Creating and approving purchasing requisitions and
placing purchase orders and receiving goods and
services by using a software system based on Internet
technology
• Electronic maintenance, repair and overhaul (e-MRO).
Similar to Web-based ERP, but goods and services
ordered are non-product-related MRO supplies
• E-sourcing. Identifying new suppliers for a specific
category of purchasing requirements using Internet
technology
• E-tendering. Sending requests for information
and prices to suppliers and receiving the
responses of suppliers using Internet
technology
• E-reverse auctioning. Using Internet
technology to buy goods and services from a
number of known or unknown suppliers
• E-informing. Gathering and distributing
purchasing information from and to internal
and external parties using Internet technology
 E-procurement Systems
• "A good e-procurement system helps a firm organize its interactions with
its most crucial suppliers. It provides those who use it with a set of built-in
monitoring tools to help control costs and assure maximum supplier
performance.
• 4.7. Public E-procurement: The concept of public procurement
Most purchases in public sector institutions require a bureaucratic procedure
to be followed. The majority of items are bought on requisition.
• Public Procurement can be defined as the procurement of goods, works
and services by all Govt. Ministries, Departments, Agencies, Statutory
Corporations and Public Sector Undertakings in the Centre and the States,
Municipal Corporations and other local bodies and even by private Public
Sector Undertakings providing public services on monopoly basis.
• Public procurement is only an extension of the personal procurement by
two key words i.e. transparency and fairness. When we take up any
construction work for ourselves or make personal purchases or hire of any
services, we always try to ensure that we get the value for money, good
quality product and timely delivery
 . BENEFITS OF E-PROCUREMENT

•
• Most of these benefits can be grouped in three
major areas, namely;
• Higher Productivity
• Cost Reduction
• Economic Development
 Disadvantages of E-procurement

 Human or system errors in orders

 Software and systems that don't meet
companies' needs
 Lack of vendor support for e-commerce
 Inadequate search capabilities
 Tendency to use one e-procurement system or
process (e.g., reverse auctions) for all areas
 Training costs is high
 Advantages of E-procurement
 Improved management information across all
areas of purchasing
 Improved transparency
 Budget visibility and control
 Supplier bills paid on time
 Reduction in paperwork and duplicated
records
• Advantages of E-procurement
• Faster procurement
• Improved methods of spending and
performance measurement and analysis
• Lower marketing costs