Examination of benefits of using IT Software in value added elements in supplier procurement - Essay Example

A shorter purchasing cycle to maintain lower inventory levels and respond more quickly to stock-outs is the core business value through e-procurement. Along with some strategical challenges on implementation, study observed standardization and internationalization of problems as few limitations of the technology integration with e-procurement. In the late 1990s, big corporations managed their supply chains with a combination of paper, faxes, e-mail, and proprietary electronic data interchange networks.

But these systems provided opportunities for errors. Executives responsible for maintaining an unceasing flow of supplies to keep production lines running and distant field operations on schedule were at the mercy of primitive purchasing processes that were beyond their control. Though they could select from a host of qualified suppliers, they didnt have the most convenient ways to find the perfect supplier with exactly the right product at just the right price. Alternatively, it could take days or weeks to have the requisitions signed by executives who spend most of their time on the road.

A critical pre-requisite for success in digital economy is the implementation of an integrated value chain that extends across - and beyond - the enterprise. The term "extended enterprise" represents a new concept that a company is made up not just of its employees, its board members, and executives, but also its business partners, its suppliers, and its customers. The notion of extended enterprise includes many different arrangements such as virtual integration, outsourcing, distribution agreements, collaborative marketing, R&D program partnerships, alliances, joint ventures, preferred suppliers, and customer partnership.

Enterprises that have global operations or need to deal with a multitude of suppliers are finding that e-procurement has