This article aims to examine the role of the E-procurement forms in the six phases of the purchasing process. The paper starts with an introductory part about the purchasing process. Next, based on a literature review we selected and defined the most important forms of E-procurement. Furthermore, we develop a theoretical framework that suggests what form of E-procurement is best to use in every phase of the purchasing process. At the end of the paper we draw conclusions and we set some ground rules for managers regarding to the implementation of an E-procurement form.purchasing, E-procurement; management, supply chain management, optimization

Pop Sitar Corina

English

Research Papers in Economics

￿
687 
THE ROLE OF THE E-PROCUREMENT IN THE PURCHASING PROCESS 
 
Pop Sitar Corina  
Scholar of Romanian Academy Iasi Subsidiary 
 
This  article  aims  to  examine  the  role  of  the  E-procurement  forms  in  the  six  phases  of  the 
purchasing process. The paper starts with an introductory part about the purchasing process. 
Next, based on a literature review we selected and defined the most important forms of  E-
procurement. Furthermore, we develop a theoretical framework that suggests what form of E-
procurement is best to use in every phase of the purchasing process. At the end of the paper we 
draw conclusions and we set some ground rules for managers regarding to the implementation of 
an E-procurement form. 
Keywords: purchasing, E-procurement; management, supply chain management, optimization 
Coduri JEL: M15, 032 
 
1. Introduction 
It appears that during the past few years purchasing has begun to play an ever more important 
role in the strategy of the firm (Weele, 2010). In order to survive, managers have begun to rethink 
their  competitive  priorities  and  their  value  chain.  Increasing  numbers  of  organizations  have 
recognized that E-procurement holds the potential to transform their competitive performance for 
the better.  
E-procurement has made substantial technological advantages over the past few years and is 
expected to continue improving efficiency and productivity in the future. Lederer, Mirchandani 
and Sims (2001) proposed that an organization could use the E-procurement forms to create 
strategic  advantage  through  improved  customer  relationships  resulting  from  greater  business 
efficiency and better information access and flexibility. 
A large number of E-procurement applications are available on the market and it could be hard 
for companies to know what application to choose and implement. Companies may answer the 
following questions regarding E-procurement: 
-  if they should implement E-procurement? 
-  it is really beneficial for them to implement E-procurement? 
-  what is the impact of implementing a form of E-procurement over the company? 
-  which form should they choose? 
-  how they should use E-procurement in every phase of the purchasing process? 
The paper starts with an introductory part about the purchasing process. We provide several 
definitions of purchasing and we describe the phases of the purchasing process. Next, based on a 
literature review we present the main well known forms of E-procurement.  
Furthermore, we present a theoretical framework that indicates what form of E-procurement is 
best to use in each of the six phases of the purchasing process. At the end of the paper we draw 
conclusions and we present some guidelines for managers regarding to the implementation of E-
procurement. 
 
2. The purchasing process 
Over the time many definitions have been done for purchasing management. At the beginning, 
purchasing has been seen as an administrative and operational activity. Thus, it has been defined 
as follow as “buying the right materials, in the right quantity, at the right moment, at the right 
price and from the right supplier” (Heinritz, Farrwell and Smith 1986: 15). ￿
688 
Over the last decades, the definition of purchasing management became wider and purchasing 
has become a strategic activity for organizations. That is why it is defined as “the behavior of an 
organization towards its suppliers” (Gadde and Hakkansson, 1993: 8). 
Van Weele (2010) defines the purchasing process as obtaining from external sources all the 
goods and services that are needed for maintaining and developing direct and indirect production 
activities in the best conditions. The author divides the purchasing process in two parts: 
-tactical purchasing; 
-operational purchasing 
Each  of  this  parts  comprises  three  specific  phases,  resulting  the  following  six  phases  of 
purchasing process: 
1. Specification – this is the phase where all the needed materials and services for maintaining 
and developing direct and indirect production activities are identified. 
2. Selection of suppliers – this phase consists in identification, evaluation and selection between 
different suppliers. 
3. Contracting – in this phase the prices are negotiated and the contracts are concluded with the 
suppliers. 
4. Ordering – in this phase goods and services are ordered from the selected suppliers with whom 
contracts have been done before. 
5. Monitoring – this phase consists in tracking deliveries of goods and services that must be in 
accordance with those set in the contract. 
6. Evaluation – in this final phase, the analysis of the purchasing process is done. 
All of these phases are presented in the framework of the purchasing process (figure 1). 
 
                  Tactical purchasing                                    Operational purchasing 
 
 
 
 
Figure1. The framework of the purchasing process 
 
Source: Weele, A. J. van, Purchasing and supply chain management, Thomson Learning 
Business Press, London, 2010 
In our view, the purchasing process consists in exploration, discovery and exploitation of markets 
and organizations that provide resources to obtain and use products and services in the best 
conditions. 
 
3. E-procurement forms 
The  concept  of  E-procurement  has  many  different  meanings  ranging  from  shopping  on  the 
internet (through reverse auction) to collaborative initiatives taking place in virtual meetings. 
There are more definitions given to the E-procurement. Van Weele (2010) considers that “E-
procurement  includes  web  technology-based  purchasing  solutions  aimed  at  simplifying 
commercial transactions within and between organizations and information technology solutions 
for ordering, logistics and handling systems as well as for payment systems”. E-procurement is 
defined by de Boer, Harink, Heijboer (2002: 120) as “using Internet technology in the purchasing 
process”. 
A large number of E-procurement forms can be distinguished in the literature. In this article we 
choose to focus on the following forms of E-procurement (mentioned by Boer, Harink, Heijboer, 
2002): E-ordering, Web-based ERP, E-sourcing, E-tendering, E-reverse auction, E-informing.  
1. 
Specifi-
cation 
3. 
Contrac-
ting 
2. 
Selection 
furnizo
4. 
Ordering 
5. 
Monito-
ring 
6. 
Evalua-
tion ￿
689 
E-ordering 
E-ordering focus on the process of creating and approving purchasing requisitions, placing the 
orders and receiving the goods and services ordered using a software system based on internet 
technology. An E-catalog is used by all the employees from the organization for ordering items 
that are needed. In the case of E-ordering the goods and services ordered are non product related 
(indirect goods and services). 
Web-based ERP (Enterprise Resource Planning) 
Web-based ERP is similar with the E-ordering, the only difference is that in the case of web-
based ERP the goods and services ordered are product related. 
E-sourcing  
E-sourcing allows identifying new suppliers for a specific category of purchasing requirements 
using internet technologies across spatial boundaries. Most important benefits of E-sourcing are 
increased decision making flexibility and lower prices. 
E-tendering 
E-tendering  is  the  process  of  sending  RFI  (request  for  information)  and  RFP  (request  for 
proposal) to suppliers and receiving their response using internet technologies. Often e-tendering 
is supported by an e-tendering system that can analyze the responses received from the suppliers. 
E-reverse auction 
E-reverse auction enables the purchasing organization to buy goods and services needed from the 
supplier that has the lowest price or combination of lowest price and other conditions as well 
using internet technologies. 
E-informing 
E-informing does not involve transactions but it handles gathering and disseminating purchasing 
information both from the internal and external parties. 
 
4. The theoretical framework for the use of the E-procurements forms in the six phases of 
the purchasing process 
Because of the variety of the E-procurement forms available on the market it is difficult for 
organizations to know which one to choose and how is best to use them during the purchasing 
process. Based on the E-procurement forms and on the phases of the purchasing process that we 
have presented earlier in this article, we created a theoretical framework that indicates what E-
procurement form is best to use in each purchasing phase (see figure 2). 
 
   
Specification 
 
Selection 
 
Contracting 
 
Ordering 
 
Monitoring 
 
Evaluation 
 
E-ordering 
      * 
Cost savings 
Increased 
efficiency 
* 
Cost savings 
Increased 
efficiency 
* 
Cost savings 
Increased 
efficiency 
 
Web-based 
ERP 
      * 
Cost savings 
Increased 
efficiency 
* 
Cost savings 
Increased 
efficiency 
* 
Cost savings 
Increased 
efficiency 
 
E-sourcing  * 
Increased 
competitive 
force 
Cost savings 
         
 
E-tendering 
  * 
Time savings 
       ￿
690 
Less labor 
consuming 
 
E-reverse 
auction 
    * 
Cost savings 
Time savings 
     
 
E-informing  * 
Increased 
purchasing 
power 
Improved 
commercial 
relationships 
with suppliers 
Improved 
control over 
the 
purchasing 
process 
* 
Increased 
purchasing 
power 
Improved 
commercial 
relationships 
with suppliers 
Improved 
control over 
the 
purchasing 
process 
* 
Increased 
purchasing 
power 
Improved 
commercial 
relationships 
with suppliers 
Improved 
control over 
the 
purchasing 
process 
* 
Increased 
purchasing 
power 
Improved 
commercial 
relationships 
with suppliers 
Improved 
control over 
the 
purchasing 
process 
* 
Increased 
purchasing 
power 
Improved 
commercial 
relationships 
with suppliers 
Improved 
control over 
the 
purchasing 
process 
* 
Increased 
purchasing 
power 
Improved 
commercial 
relationships 
with suppliers 
Improved 
control over 
the 
purchasing 
process 
 
Figure 2: The theoretical framework for the use of E-procurement forms in the purchasing 
process 
 
As  you  can  see  in  this  framework  we  indicate  through  an  asterisk  in  which  phase  of  the 
purchasing process is best to use the E-procurement forms. Beside this, we mention the major 
benefits that an organization can achieve using each E-procurement form. 
So, for example, E-ordering and Web-based ERP can be best used in the last three phases of the 
purchasing process (operational purchasing) and they can provide cost savings and improved 
efficiency of the purchasing process. E-sourcing is best to be used in the specification phase and 
can offer to the organizations increased competitive force and cost savings. E-tendering can be 
used in the selection phase and the major benefits that can provide are: time savings and less 
labor consuming activities. E-reverse auction is best to be used in the contracting phase and can 
offer cost and time savings. The last form of E-procurement, E-informing may be used in all six 
phases of the purchasing process and can provide the following benefits: increased purchasing 
power,  improved  commercial  relationships  with the  suppliers  and  improved  control  over the 
purchasing process. 
 
5. Conclusions  
The framework that we presented in this paper is theoretical and it hasn’t been tested yet. We 
have  to  test  it  in  a  number  of  organizations  and  to  compare  the  practical  results  with  the 
theoretical ones. Based on the practical insights we will be able to draw conclusions and to 
improve the framework. 
The  theoretical  framework  can  be  used  by  managers  as  the  starting  point  in  the  process  of 
adopting  and  implementing  E-procurement  in  their  organizations.  Managers  have  to  analyze 
carefully what are the advantages that they can provide and what form of E-procurement is best 
to use in each phase of the purchasing process. They have to take into account also the main 
barriers that they have to overcome in the implementation process of the E-procurement. Only 
after this analysis they should decide if they will implement an E-procurement form and if yes 
what form to choose.  
References 
 
Books: 
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691 
1. Gadde, Lars Erik and Haakansson, Hakan. Professional purchasing. Routledge, London, 1993. 
2. Heinritz, Stuard, Farrwell, Paul and Smith, Clifton. Purchasing: principles and applications.   
    Prentice Hall, Englewoods Cliffs, 1986. 
3. Neef, Daniel.  E-procurement from strategy to implementation. Prentice Hall, 2001. 
    Weele, Arijan van. Purchasing Supply Chain management. 5
th revised edition, Cengage     
    Learning, London, 2010. 
 
Journals:  
 
1.Arbin,  Katerina.  “E-procurement  maturity  in  industry”.  Proceeding  of  the  11
th  IPSERA 
Conference, University of Twente, Enschede, (2002): 21-32. 
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Operational Efficiencies in Business-to-Business Marketing”. Journal of Business to Business 
Marketing, Vol. 11(1/2), (2004): 35-59.  
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„ACKNOWLEDGEMENT:  This  paper  was  made  within  “The  Knowledge  Based  Society 
Project”    supported  by  the  Sectoral  Operational  Programme  Human  Resources  Development 
(SOP HRD), financed from the European Social Fund and by the Romanian Government under 
the contract number POSDRU ID 56815." 
   

THE ROLE OF THE E-PROCUREMENT IN THE PURCHASING PROCESS

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THE ROLE OF THE E-PROCUREMENT IN THE PURCHASING PROCESS

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