chap 07: e-procurement
TRANSCRIPT
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Slide 7.1
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
CHAPTER 7E-PROCUREMENT
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Slide 7.2
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Learning outcomes Identify the benefits and risks of
e-procurement Analyze procurement methods to
evaluate cost savings Assess different options for integration of
organizations’ information systems withe-procurement suppliers.
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Slide 7.3
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Management issues What benefits and risks are associated
withe-procurement?
Which method(s) of e-procurement should we adopt?
What organizational and technical issues are involved in introducing e-procurement?
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Slide 7.4
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
How important is procurement?
We estimate that for every dollar a company earns in revenue, 50 cents to 55 cents is spent on indirect goods and services – things like office supplies and computer equipment.That half dollar represents an opportunity: By driving costs out of the purchasing process, companies can increase profits without having to sell more goods. Hildebrand (2002)
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Slide 7.5
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
What is e-procurement?
The electronic integration and management of all procurement activities including purchase request, authorization, ordering, delivery and payment between a purchaser and a supplier
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Slide 7.6
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
The 5 rights of E-procurement
at the right price delivered at the right time are of the right quality of the right quantity from the right source.
Baily et al., 1994
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Figure 7.1 Key procurement activities within an organization
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Figure 7.2 Electronic procurement systemSource: Tranmit plc
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Slide 7.9
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Types of procurement
Production-related procurement Non-production related procurement
How items are bought: Systematic sourcing Spot sourcing
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Slide 7.10
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Drives of e-procurement
Cost reduction Enhanced budgetary control Elimination of administrative errors Increasing buyer’s productivity Improving information management Improving the payment process
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Slide 7.11
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Risks and impact of e-procurement Organizational risks
Need to redeploy staff Technology risks
Integration with existing financial systems
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Slide 7.12
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Implementing e-procurement Stock control system CD/web-based catalogue E-mail/workflow system Order-entry on web site Accounting systems ERP systems
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Figure 7.3 Use of different information systems for different aspects of thefulfilment cycle
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Figure 7.4 E-mail notification of requisition approvalSource: Tranmit plc
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Figure 7.5 Document management software for reconciling supplier invoice with purchase order dataSource: Tranmit plc
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Figure 7.6 The three main e-procurement model alternatives for buyers
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Table 7.6 Assessment of the procurement model alternatives for buyers
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Figure 7.7 Integration between e-procurement systems and catalogue data
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Figure 7.8 An online catalogue of items for purchaseSource: Tranmit plc
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Figure 7.9 Ford supplier portal provided by CovisintSource: Covisint.com
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Figure 7.10 Supplier Route to Government Portal (www.supply2.gov.uk)
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Slide 7.22
Dave Chaffey, E-Business and E-Commerce Management, 3rd Edition © Marketing Insights Ltd 2007
Government marketplace exchanges
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Table 7.7 Types of B2B marketplaces identified by Kaplan and Sawhney (2000)with examplesSource: Adapted and reprinted by permission of Harvard Business Review from table on p. 99 from ‘E-hubs: the new B2B marketplaces,’ by Kaplan, S. and Sawhney, M., in Harvard Business Review, May–June 2000. Copyright © 2000 by the Harvard Business School Publishing Corporation, all rights reserved
Types of marketplace