Slide 7 1 Chapter 7 EProcurement David Chaffey

Slide 7. 1 Chapter 7 E-Procurement David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 2 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 with e-procurement suppliers. David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 3 Management Issues • What benefits and risks are associated with e-procurement? • Which method(s) of e-procurement should we adopt? • What organizational and technical issues are involved in introducing e-procurement? David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 4 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) David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 5 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 David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 6 Figure 7. 1 Key procurement activities within an organization David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 7 Table 7. 1 Process flow analysis for traditional procurement (typical cycle time, 51⁄2 days) David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 8 Table 7. 2 Process flow analysis for new procurement (typical cycle time, 11⁄2 days) David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 9 Figure 7. 3 Use of different information systems for different aspects of the fulfilment cycle David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 10 Figure 7. 4 The three main e-procurement model alternatives for buyers David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 11 Figure 7. 5 Integration between e-procurement systems and catalogue data David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 12 Figure 7. 6 Jack Ma, CEO Alibaba. com Source: FT. com David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012

Slide 7. 13 Figure 7. 7 Supplier route to government portal Source: www. supply 2. gov. uk David Chaffey, E-Business & E-Commerce Management, 5 th Edition, © Marketing Insights Limited 2012