After a webinar last week, I was asked this question, so I thought I'd put my response out to the rest of this community:
Unfortunately the term eProcurement is much like the word “cat” – do you mean a cute 6 pound tabby, or a 500 lb lion. When asked if you want a cat at your house, it’s pretty important to know what is meant, and the same goes for “eProcurement”. eProcurement is a broad-reaching term that, in its most general sense, can be applied to any way of communicating electronically during the procurement process. In its most rudimentary form, this can be the use of emails or embedded forms, while something slightly more advanced might be EDI. To further complicate matters, different people define “procurement” as different things. Some think about this as simply the ordering of products, while others may look at just the process from PO through approval.
However, if we are to ask what is world-class eProcurement, the kind that delivers nearly 3x the savings of even average peers (much less compared to some of the lagging definitions above), then it is a completely different story. World class eProcurement is one which has ties to all of the key processes affecting procurement, from sourcing to settle, visibility and process improvement, managing all areas of spend, and expertise to drive adoption and maximize compliance while allowing for the necessary growth and flexibility of today’s successful companies. It is one which can be deployed so as to deliver savings rapidly, and which continues to improve through best practice integration. It allows for easy, electronic interfacing and collaboration between key parties at each step of the process, with the necessary controls in place to ensure compliance, not just with processes, but with legal and regulatory requirements as well. Finally, it is deployed in a fashion that allows essential consideration of the IT other resources needed to maintain currency, not just of code, but also of all the data (contracts, products, etc) that are needed for effective procurement.
So, when someone says they do eProcurement, I always try to ask what they mean so I know if I’m dealing with a tabby cat or a lion. What do you think? What does you or your company consider eProcurement?