how does e procurement enhance strategic performance
TRANSCRIPT
How Does E-procurement Enhance Strategic Performance?
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INTRODUCTION
• The procurement process has shown slow traditional and manual procedures and even slower systematic processes for handling procurement transactions. E-procurement has had an important role in B2B commerce. Web-enabled E-commerce has motivated inter-organizational coordination which has resulted in transaction cost savings and competitive sourcing opportunities (for buyer organization).
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• Relation between E-procurement and performance• A paradigm shift has been observed in the way firms interact with their
suppliers since the advent of E-business. Apparently, continuous improvements in internet technology provide an opportunity to make procurement for goods and services more transparent, easy and efficient.
• As organizations seek to enhance market efficiencies, six forms of E-procurement applications have been noted: E-sourcing, E-informing, E-tendering, E-reverse auctions, E-MRO and web based enterprise resource planning.
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• E-commerce tools provide the opportunity to enhance two major elements of procurement process: Communication aspects; and Transaction aspects. Surveys have confirmed that E-commerce platforms and IT solutions have had an influence on procurement related processes. Such as:
• Cost reduction• Reduction in purchasing cycle• Reduction in number of suppliers• Increase in number of products supplied by main suppliers• Inventory savings• Increase in internal customer service levels.
• Strategic Performance Measurement:• Strategic performance measurement is nothing but a set of casually linked non-
financial and financial objectives and goals designed to align managers’ actions with the firms’ strategy.
• Proponents of strategic performance measurement defines two general approaches: Measurement diversity and Contingency approach.
• Measurement diversity enhances the economic performance since the managers place emphasis on a broad set of financial and non-financial performance measures.
• A contingency approach can also improve the economic performance as measurement gap between the firms’ strategic priorities and measurement practices are minimized.
• E-procurement Strategy• Some researchers have found positive changes in relationships as a result of E-
procurement, but in other cases new technology could be seen as the source of additional risk for suppliers. Major issues such as transparency and lack of trust between companies have been observed.
• Strategic Typology• The strategy literature is stuffed with typologies, research methodologies, thesis
and theories on the strategy performance relationship. In such unsettled external environment, along with the market competition and more discerning customers, it is a necessity for the organizations that they constantly keep re-appraising their competitive actions.
• Prospectors are characterized by being highly innovative and bringing new changes to their industries.
• Defenders find and seek for niche areas in the stable product domains with the overall emphasis on efficiency.
• Analysers are caught between a prospector and a defender strategy. • Reactors tend to be out-performed by prospectors, defenders, and analysers as
they lack a consistent strategy to react to environmental pressures as they arise.
• Strategic IT Capability• Strategic capabilities are defined as the complex bundles of accumulated
knowledge and skills that encourages firms to coordinate activities and make use of their assets.
• An organizations ability to apply and use its capabilities in the form of knowledge resource to execute important activities is viewed as a source of competitive advantage.
• Growth in organization’s level of strategic IT capability, will have a positive impact on the e-procurement-strategic performance relationship.
• Organizational Alignment• In this era, internet equipped B2B E-procurement encourage inter-
organizational coordination which results in transaction cost savings and competitive sourcing opportunities for the buyer firm. Despite of high demand and supply-side economics, E-procurement is capable of supporting increased and more complex coordination.
• Firms are investing significant amounts in their E-businesses and IT.
• Advancement in procurement technologies create the opportunities for new forms of works such as collapsing boundaries between suppliers and customers make it imperative for management to identify the key processes and attributes required to get a competitive advantage.
• Conclusion• Creation of connecting dots between a strategic performance system and E-
procurement give the possibility to measure and analyse as well the E-procurement benefits not only on an operation level but also to observe the E-procurement impact on strategic performance.
• Strategic performance includes metrics and factors related to the customer needs and satisfaction along with the inclusion of customer perspective into the procurement process.
• Alignment helps companies to successfully implement the advantages of E-procurement technology and in return achieve a strategic advantage in the operating market.
CormSquare is cloud based procurement platform targeted for small and medium enterprises (SMEs) and bulk purchases. CormSquare is native end-to-end procurement software with private market. CormSquare automates procurement process, greatly reducing time. It also helps find right suppliers at lower price. CormSquare saves procurement cost and ease of procurement.
www.cormsqaure.com
Our Customer Relationship Officers (CROs) can assist you with finding suppliers, supplier competency assessment and supplier audit. Based on your requirement, our relationship officers can find local, national or global suppliers.Our Customer Relationship Officers (CROs) can assist in raising RFQs, RFIs, receiving quotes, compare technical and commercial quotes, purchase order management, delivery/document tracking and payable processing.Our Customer Relationship Officers (CROs) can analyses your procurement data and provide actionable intelligence.
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www.cormsquare.com
• Assisted Purchase – buyer receives customized quote from cormsquare’s procurement professionals.
• End to End E-Procurement Suite on cloud, that helps buyers in managing enterprise purchase.
• Seamless Responsive Interface which works across devices. • Digital B2B Store front for supplier with digital catalogue, ePayment and
eProcurement Services • Mini CRM Tools and Digital promotion assistance to our stakeholders. • Collaboration with supplier to assist in Customer acquisition, engagement. • Helping manufacturing and Buyers to master the transformation of their business.
Contact Us
Contact: +91 9108992330, 080- 4165 5407 080- 4204 9707
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Regional Office #131, 2nd Floor, 7th Main, JayaNagar 4th Block, bangalore – 560011.
www.cormsquare.com
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