E-procurement (electronic procurement, sometimes also known as supplier exchange) is the business-to-

business or business-to-consumer or business-to-government purchase and sale of supplies, work, and services
through the Internet as well as other information and networking systems, such as electronic data interchange
and enterprise resource planning.[1] Procurement involves the process of selecting vendors, establishing payment
terms, strategic vetting, selection, the negotiation of contracts and actual purchasing of goods.

The e-procurement value chain consists of indent management, e-Informing, e-Tendering, e-Auctioning, vendor
management, catalogue management, Purchase Order Integration, Order Status, Ship Notice, e-invoicing, e-
payment, and contract management.

Procurement: is concerned with acquiring (procuring) all of the goods, services and work that is vital to an
organization. Procurement is, essentially, the overarching or umbrella term within which purchasing can be
found.

The process of purchasing these good and services is known as the Procure-To-Pay Cycle. The entire Procure-
To-Pay Cycle can be an involved process with numerous steps:

Identification of Requirement
Authorization of Purchase Request
Approval of Purchase Request
Procurement
Identification of Suppliers
InquiriesReceipt of the Quotation
Negotiation
Selection of the Vendor
Purchase Order Acknowledgement
Advance Shipment Notice
Goods Receipt
Invoice Recording
3 Way Match
Payment to Supplier

Purchasing is a subset of procurement. Purchasing generally refers simply to buying goods or services.
Purchasing often includes receiving and payment as well.

Within the overarching Procure-To-Pay Cycle, the steps specifically related to purchasing are:

Purchase Order Acknowledgement

Advance Shipment Notice
Goods Receipt
Invoice Recording
3 Way Match
Payment to Supplier

Unlike the entire Procure-To-Pay Cycle, the steps explicitly related to purchasing should not be tailored to suit
the size and scope of each individual business. These are fundamental steps of good purchasing and should be
employed routinely as a best practice in all businesses.

Conclusion
Procurement deals with the sourcing activities, negotiation and strategic selection of goods and services that are usually
of importance to an organization. Purchasing is the process of how goods and services are ordered. Purchasing can
usually be described as the transactional function of procurement for goods or services.

Types of e-commerce:

The two types of e-commerce are as follows:

i. Buy side e-commerce:

Buy side e- commerce refers to

transactions to procure resources
needed by an organisation from its
suppliers.
They basically indicate using
communications technology to
support the upstream supply chain
from procurement to inbound
logistics.
They are e-commerce transactions between a purchasing organization and it suppliers, possibly through
intermediaries.
Example: E-business application developed by Shell Chemicals is an excellent example for buy side e-
commerce. Prior to the development of this application, there was a danger that Shells customers might
run out of an essential chemical and eventually revenues would be lost. Hence, this application helped
them to manage their customers inventory based on data shared by its customers about their usage and
forecast demand for chemicals. Advantages of using this application include:
o Reduces the need for excess inventory storage.
o Quick availability of product when required
o Transaction costs like invoices and data entry is reduced.
o Order processing overhead is reduced.

ii.Sell side e-commerce:

Sell side e-commerce refers to transactions involved with selling products to an organisations customer.
They doesnt only involve selling products such as books and CDs online, but also involves using
internet technologies to market services using a range of techniques.
It is useful to consider the four main types of online presence for sell side e-commerce which are as
follows:
o Transactional e-commerce sites: These enable purchase of product online. The main business
contribution of the site is through sale of these products.
o Services-oriented relationship-building websites: Provide information to stimulate and build
relationship. Products are not available for purchase online. Information is provided through
website and e-newsletters to inform purchase decisions. The main business contribution is
through encouraging offline sales and generating enquiries or leads from potential customers.
o Brand-building sites: Provide an experience to support the brand. Products are not typically
available for online purchase. Their main focus is to support the brand by developing an online
experience of the brand.
o Portal or Media sites: Provide information or news about a range of topics. Portal refers to
gateway of information. This is information both on the site and through links to other sites.
 o Example: Example of sell side e-commerce include Retail sites (like Amazon), online banking
services (like HSBC), Portals (like Yahoo) etc.

iii.Marketplace based e-commerce:

An online marketplace (or online e-commerce marketplace) is a type of e-commerce site where product
and inventory information is provided by multiple third parties, whereas transactions are processed by
the marketplace operator.
Typically, they are intermediaries that are part of reintermediation. (Please refer the concept of
reintermediation from chapter 2 Q6).
Example of marketplace based e-commerce includes Chemdex, VerticalNet etc.
Advantages of this type of e-commerce to buyers include:
o Simplicity
o Choice of suppliers, products and prices are wide.
o Terms and conditions are often unified.
o Whereas disadvantages include:
o Difficult to select between vertical and horizontal market place.
o Poor purchase controls.
o Uncertainty on service levels from unfamiliar suppliers.
o Integration with ERP is poor/
o Some marketplaces may go beyond procurement to offer a range of services that integrate the
supply chain. These market places are called metamediaries
Procurement Services Provider

A Procurement Service Provider, or PSP, is a third party organization or consultant which is used to supplement
internal procurement departments. PSP's have their own staffing which assist in a variety of tasks for their
clients. These tasks include: strategic planning, implementing best practices, supplier rationalization, supplier
collaboration, strategic sourcing and negotiation.

"Enterprises utilizing PSP's have been able to improve spending coverage, reduce costs for goods and services,
employ industry best practices, leverage the latest procurement technologies, and streamline source-to-pay
processes - all without taking on the risks and assets required to achieve such results."

Catalogue integration

n integrated, feature-rich module that helps streamline the eProcurement process by offering a defined set of
products (the catalogue) for purchase. NexCatalogue allows you to offer a simple, easy-to-use ecommerce-style
shopping model to your users.

NexCatalogue provides quick, easy ordering from updated product data. Users can search or browse the entire
approved product list and view product details, images and even 3D images. Procurement can be streamlined by
grouping related products or creating approved lists.

E-Procurement Integration
If your company has made the decision to drive purchasing through your internal e-procurement system, you
will benefit from the extensive experience HP has in integrating with the leading vendors such as Ariba, SAP or
Oracle.

Many of our global customers are already accessing their customized HP product catalog from their desktops,
making the purchasing process more efficient. As the leading integrated procurement IT supplier, HP can
provide your company with the benefit of our proven and standardized methodology.

This guide provides you with further details on our deployment process and the benefits you will receive
through HP.com Business to Business Integration.