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Application of E-Procurement

E-procurement applications can be classified as follows: 

1) Requisitioning Applications: Requisitioning applications simplify the process of purchasing by allowing authorized buyers/employees to perform all the purchasing activities from their desktops. These applications integrate the firms' systems with the systems of the suppliers. With such software, users get product information from customized electronic catalogs that list selected suppliers; the purchase request is routed internally for approval before it becomes an order sent to the supplier. For this, the firm's intranet and the suppliers' e-commerce sites are linked up. Ariba, Tranmit and Commerce One are some of the companies that provide e-procurement applications. 

2) Centralized Procurement Management Applications (CPMAS): While requisition applications facilitate the automation of various purchasing functions, CPMAS enable procurement managers to effectively manage the procurement process by analyzing vast amounts of transactional data. They aid purchase professionals in carrying out spend analysis.

Spend analysis and planning provides information such as: what products did the firm buy; from whom and in what quantity did it buy; and what is the spending with each supplier, etc. Such information helps in taking decisions relating to purchase and supplier management. These applications also help in aggregating multiple supplier catalogues into a single centralized catalog. 

CPMAS have four functionalities: 
i) Data Collection: CPMAS collect and maintain data on various purchasing activities. This data includes actual spending against budgeted spending, spending according to the geographical area, spending for each supplier, spending pending approvals, past spending data for week, month and quarter, items received, compliance of supplier regarding on- time delivery, etc. 

ii) Multi-dimensional Analysis: Multi-dimensional analysis enables procurement professionals to better understand the pattern procurement spending, in the light of the firm's requirements and market conditions.

iii) Supply Management Decisions: Using this module, a firm can take various decisions relating to supplier management. With this module, the buyer can decide on the products to be included in the catalog, products that need to be removed from the catalog, products whose purchases must be curtailed, products whose prices must be re-negotiated with the suppliers, etc. 

iv) Configuration of Spending Controls: Using this module, the firm can configure the spending controls based on the above analysis. It can make real time changes to catalogs and workflow, so that the spending pattern is in line with the spending and business objectives. 

3) Supplier Applications: Supplier applications or sell side applications help manufacturers and distributors to sell their products over the web. Using these applications, firms can build storefronts and online marketplaces on the Internet.

There are various forms of sell side applications that are used in the industry like: 
 
i) Supplier Storefront: Similar to B2C retailing sites, these sites contain a single supplier catalogue hosted on a website which is accessed by buyer organizations. A good B2B site offers customization features for each customer, such as customer specific product catalogs, contract pricing and tailor made electronic invoice delivery and reporting facilities.
 
ii) Exchanges and Auction Marketplaces: Exchanges and auction market places are portals where different firms can obtain information and also buy and sell products. The purpose of these marketplaces is to reduce costs through aggregating buying power, bring about better collaboration between firms of a particular sector and provide a platform to those companies which cannot take advantages of the benefits of e- procurement on their own.

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