E-Procurement is primarily the electronic tendering and procurement of goods and services. The Internet has enabled large companies or even government authorities to implement some form of e-procurement on the Web. An example is the US Department of Defense (www.dod.org) and the Singapore Ministry of Defense (www.mips.mindef.gov.sg) which has set up an E-procurement site to enable various supplies to tender for the provision of different products and services required by these organisation.
E-procurement has enabled organisations to reduce cost in the procurement process through automated tender processing and more cost-effective offers. For the organisations, further benefits of E-procurement are in having a wider choice of suppliers which is expected to lead to lower cost, better quality, improved delivery and reduced cost of procurement (e.g. tender specifications can be downloaded electronically by tenderers instead of being mailed by post). For the suppliers, the benefits are in more tendering opportunities, possibly on a global basis, lower cost of submitting a tender and possibly tendering in parts which may be better suited for smaller enterprises.
E-Procurement
E-Auction
Electronic auctions offer an electronic implementation of the bidding mechanism available at traditional auctions. Products displayed may be presented through multimedia presentations and E-auction sites may also offer integration of the bidding process with contracting, payments and delivery.
E-auction operators sources of income are normally through transaction fees and advertising also provide value-added services e.g. guarantee of quality of goods purchased over the E-auction site.
Due to the efficient technology of the Internet and the lower infrastructure cost, small quantities of low value products can also be sold through E-auction. Buyers will benefits from competitive pricing and smaller quantity whilst sellers may benefit from the lower sales overheads and better utilisation of production capacity.
One example of an E-auction site is E-bay (www.ebay.com) which started in 1998 and now has almost 1.1 million visitors a day. It is by far the most successful E-auction site today although many more are coming up. It has recently moved into auctioning art, antiques and collectibles by buying the third-largest auction house in America, Butterfield & Butterfield.
