E-Procurement: E-Sourcing and E-Tendering by Carla Casas and Alba Castanyer

In this post we want to talk about two types of E-Procurement: E-Sourcing and E-Tendering.

E-Sourcing consists in using Internet to find suppliers. In the case of a new product, companies can use Internet to look for the best supplier that can provide the required materials. There are even companies specialized in E-Sourcing.

For the buyer, the benefits of E-Sourcing are clear: it allows the company to discriminate between suppliers and find the one that best fits the needs. However, what are the benefits for the supplier?

Unparalleled competitive intelligence: the first advantage is that suppliers can see how potential buyers compare them to the competition. In this way, they can see their weaknesses and strengths and use this data to improve.
Level playing field: it allows suppliers to see the potential deals with other companies. In this way, suppliers save time having to bid for a buyer and can see all the bids in a transparent and fair manner. They can see themselves in the ranking of the bidding, and if the bid is low, they can understand why they are on the bottom of the ranking and why they don’t get the buyer.
Increased trust and improved relationships: the software is the one doing the price negotiation. Hence, suppliers don’t get the feeling that they gave up more than necessary as the prices are driven by the market.
Save time: the supplier avoids having to formulate a response and wait for the buyer to analyze and respond eMails, as this may take a lot of time.
More business opportunities: companies dedicated to e-sourcing provide more events than traditional ones. Suppliers can participate in these events to find new business opportunities.

We found an example of a company dedicated to E-Sourcing called Coupa. This company provides procurement software systems that facilitate the purchasing of goods and services for the company. This software saves employees time at the time of negotiating with suppliers and in looking for the right information.

E-tendering takes place once the companies have already found the providers that fit best. It includes processing the information and quotation requests done through internet. Where all documents are exchanged in electronic format, this way reducing transaction costs between organization and suppliers.

In e-tendering systems bid documents can be published and downloaded online, bid responses can be signed online, bid submission payments, evaluations and awards can also be done through the net. Thus, nowadays many companies have an internet based procurement process, which enables organizations to be more efficient. As paper based procedures are reduced or eliminated, information exchange is easier and faster.

An interesting example of e-tendering is TED e-tendering. It is an e-procurement platform which provides free access to call for tenders published by EU institutions, agencies and other bodies. This platform is also synchronized with TED e notices and TED website.