e-procurement of goods and services

Group-8
Sharmistha sarkhel Ekta garg Meet dhedia Pramugdha anand Surojit mukherjee

Introduction
E-Procurement means procurement of goods and services online using the internet.
Beauty of todays Internet Applications is that they are much more scalable, to the size of any business. Ideally it covers the full life cycle of procurement.

The intention is to automate , possibly , the entire procurement process, along with tender bid submission and payments by suppliers, in an online web-based real-time environment. E-Procurement could resolve many of the constraints/delays of traditional procurement.

Complete e-Procurement cycle

Reporting Enable Payment

Content Content

Intranet

Internet

Receiving

360 Degrees of Potential Savings

User Profile

Requisition Process

Online Tracking

Workflow Approval

Objectives of e-Procurement
Reduce cycle times of procurement. Increase supplier access to ensure wider participation. Reduce costs of procurement through competitive bidding and Reverse Auctioning. Remove cartelisation by supplier groups (Reverse Auctioning). Increase visibility for effective decision making. Increase transparency. Almost complete elimination of paperwork, for speedy and efficient functioning

How e- Procurement works

The buying process usually starts with selecting your supplier . Selecting the best supplier globally. For purchase order requests, it can be automated and linked to the selected products. The purchase order processing and submission to the supplier, can be completed over the Web. Follow-up , tracking of the orders, including the fulfillment, delivery, receipt and payment, can be done through Web applications,

Features of an e-Procurement Platform

E-procurement platforms have a full range of features. Research Manage vendors

Create authorizations/approval routing

Request quotes and bids Make purchases Check order status Handle receivables

Features of an e-Procurement Platform contd.

Important sell-side capabilities that will attract vendors include: Manage buyers Manage catalogs Promote products and services Respond to quotes and bids . Accept orders

Technology Solutions
Use of new tools and applications. Require one ore more servers. Needs to be reliable, scalable, secure, accessible and manageable. Permanent and high-speed Internet connection. Protected from unwanted visitors. Setup controlled and safe network through Virtual Private Network

Access and participate to E-market places relevant to your area of business.

Choosing the Right eProcurement Partner

Essential characteristics for an e-procurement partner include: B2B knowledge Successful business model. Proven track record Plan for growth and support of e-procurement solution. B2B marketplace interaction Broad value-added services

Willingness to make e-procurement platform successful

Superior customer service Strong partnerships

Benefits of e-Procurement
Benefits to Buyers Reduction in Procurement & Contracts cycle time.

Cost Reduction.
Efficient & streamlined Procurement Processes.

New Supplier Discovery.

Close Monitoring of Activities/ Vendor Performance.

Rich MIS and Analytics.

New Improved Image.

Standardized formats and Uniform tendering practices.

Benefits to Suppliers
Increased visibility/ Less artificial barriers. Increased business opportunities. Greater degree of transparency. Cycle time reduction in participation and award of Contract. Supplier Enablement and Ease of Participation.

Modes of e-Procurement
Electronic procurement activities could be effected by:-

e-Tendering

e-AuctioningReverse Auctions
e-Catalogue based buying/e-Ordering

E-tendering

e-Tendering System encompasses:

The creation of and approval of purchase requisitions. Publication of Invitation to Tender (ITT). Expression of interest (EOI). EOI management. Pre-qualification and selection of vendors. Publication of tender documents.

Bid submission.
Opening bids and bid evaluation. Placement of contract within a secure environment.

e-Auctioning/reverse auction?
The traditional auction is a Forward Auction It normally involves a seller offering an item for sale. Thus price is driven up.
In a Reverse auction, multiple sellers of a product vie for the business of a single buyer therefore the price is driven down. There are 3-4 flavours of reverse auction are called as,

English Auction
Dutch Auction

Sealed Bid Auction etc.

E-auctioning/reverse auction

Applicability of Online Reverse Auctions

Reverse auction works best when Items have well defined specifications and universally accepted standards. Established qualified base of vendors.

Suitable for High value, large volume goods.

Periodic rate contracts for above item types.

Often used along with Tendering for efficient price discovery .

Applicable for Technically Pre-qualified/ short listed vendors only.

E-0rdering/catalogue

e-Catalogue based Buying/e-ordering

It is the obvious prevalent mode for small procurements by individuals. It has many obvious advantages, particularly if such an Online Procurement Hub (Portal) is created for use of government agencies. Such a Hub would hold and manage electronic supplier-catalogues of goods & services, with minimum possible prices affordable by them.

 Secure transactions would be enabled by the Hub and exchanged electronically between buying agencies and suppliers. Though success of such a venture mainly depends upon a large enough size of participants like: 1. 2. It is superior to buyer & suppliers establishing direct link. Suppliers need to maintain / update only on e-catalogue on the Hub and establish only one interface to sell to many buyers. It could be highly useful for all the routine small item purchase of government agencies and even be used for bigger items.

3.

E-PAYMENT
It has been in operations since 1960s and have been expanding rapidly. It was first electronic based payment system. An electronic fund transfer is a financial application of EDI. To use EFT to clear payments and settle accounts. A landmark came in this direction with the development of digital currency10. The nature of digital currency or electronic money mirrors that of paper money as a means of payment. As such, digital currency payment systems have the same advantages as paper currency .

E-payment

TYPES OF E-PAYMENT

Companies shifted to eprocurement

FORD
E-PROCUREMENT TECHNOLOGIES PVT. LTD IBM LABINAL DGS&D

E-PROCUREMENT IN DGS&D

Directorate General of Supplies & Disposals (DGS&D)

Presently under Ministry of Commerce & Industry, Govt. of India.
Inducted engineers through UPSC in Group-A cadres of Indian Supply Service (ISS) and Indian Inspection Service (IIS) in 1961.

Purchase directorates (14) organized commodity wise to facilitate maintenance of data, market intelligence, technological advancement in product and processes.
Quality Assurance offices located near users and industry to facilitate quick response and interaction. Technical and multi-disciplinary workforce expert professional field of Public Procurement.

DGS&D- ROLE
DGS&D is presently engaged in diversified activities like

Facilitates over 10,000 bidders including 2600 DGS&D registered suppliers. Pre-despatch inspection against DGS&D contracts and direct orders on request. Formulate procurement policies and procedures. Cargo clearance at major ports.

Provide consultancy in the procurement management.

Nodal agency to provide and implement e-procurement platform. Provides single point contact for vendors and Govt users for procurement of commonly used Goods.

POTENTIAL LIST OF SERVICES BY DGS&D

Registration of firms

Pre-bid conference Framing technical particulars Tendering/Bidding and bid evaluation

Award of Contracts/ Rate Contracts/Supply Orders

Inspection, delivery and receipts of Goods Payments Quality audit MIS reporting

Vigilance

E-PROCUREMENT WEB BASED FRAMEWORK IN DGS&D

E-INVITATION

E-BIDDING
E-EVALUATION E- PAYMENTS

List of 7 Certifying authorities

Safescript Ltd, Chennai

NIC, New Delhi

Institute for Development and Research in Banking Technology, Hyderabad (IDRBT). TCS, Mumbai. MTNL, Delhi. Customs and Central Excise, New Delhi. N Code Solutions (Division of Gujarat Narmada Valley Fertilizer

DGS&D as leader in e-procurement

DGS&D started use of Computers in their procurement activities in 1992.

With the IT Act 2000,DGS&D first time successfully achieved the e-bidding and placed in-house e-module in operation in 2002-03. from 2006, DGS&D has switched over to e-procurement DGS&D has been nominated to cater to the implementation of eprocurement in all Central/State Governments DGS&D has a fully functional and tested e-platform providing end to end solution for e-procurement. DGS&D has already received many requests for e-procurement platform. MOUs have been/being signed for using DGS&D e-procurement platform with NCT for Commonwealth games, Indian Navy etc.

CONCLUSION
Requires

dedicated planning and some investments.

It help to better manage suppliers Reduces procurement costs. It helps to manage changes in company culture, organization and processes. E-Procurement will improve your overall business performance. It can benefit business of all sizes.

Thank you