What Are E-Procurement & E-Marketplaces?

What Are E-Procurement & E-Marketplaces?
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  • 0:03 Procurement
  • 0:35 E-Procurement
  • 2:23 What Is an E-Marketplace?
  • 4:10 Lesson Summary
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Instructor: Elizabeth Wamicha

Elizabeth teaches undergraduate courses in Business and Information Technology for the last 7 years. She is currently on course to completing a Doctorate in Information Systems

Procurement is part of the traditional business process, but procurement options have changed. This lesson examines two fundamental concepts found in the area of electronic business: e-procurement and e-marketplace.

Procurement

John, a bakery owner, would like to buy a week's supply of milk. Traditionally, he would have to reach out to different milk suppliers to procure that milk either by phone, catalogue, or by visiting supply shops.

Procurement involves the trade of goods or services between businesses (business to business - as in the case of John); between businesses and consumers (business to consumer); and between businesses and governments (business to government). But, a faster way of procuring has been established that is more efficient and convenient.

E-Procurement

E-procurement (electronic procurement) refers to buying and selling goods or services using an online platform. For example, John could just go online to search suppliers and order his milk that way. Technologies that make up the e-procurement process include:

  • E-informing: in most cases, e-informing is not part of the larger set of e-procurement process. However, it does provide an important contribution to e-procurement. E-informing would involve John gathering as much information as possible about milk suppliers using the Internet.

  • Vendor management: John would then come up with an list of suppliers. This would then help the process of selecting the best possible supplier.

  • Catalogue management: this ensures that whatever products or supplies are purchased fit into the quality and usability requirements specified by the user. John would therefore have to tell his potential suppliers what quality of milk he would like. Suppliers would then have to fit into these special requirements.

  • E-invoicing: this involves the exchange of invoicing information between the John and the best supplier.

  • E-payment: Using the seller's available payment information to make the payment. John would enter his credit card information online to pay his supplier.

John has just finished e-tendering, an entire tendering process done online. John places an advertisement for a milk supplier online, gets a response, and gives all the required information on an online form to place a purchase order.

E-procurement is very popular in the public sector, so much so that many governments have incorporated it into their already existing e-government initiatives. Governments have done this in order to ensure more effective and efficient delivery of services and products to their citizens.

What Is an E-Marketplace?

E-procurement is often done on e-marketplaces. An e-marketplace is a web-based environment that allows buyers and sellers to assemble and do business online.

It's the electronic version of going to market. But instead of going to a certain part of town and walking among the shops, a person can go online and browse websites that offer goods for sale by a number of online merchants. An e-marketplace is an important vehicle for promoting e-commerce. E-marketplaces can be of the following types:

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