Chapter 10. Assessing the Pros and Cons of E-Procurement

Objective

Although there are many strong arguments in favor of adopting an e-procurement strategy, a successful enterprise-wide initiative is not without its challenges:

  • For buyers, e-procurement can mean lower transaction costs, faster ordering, a greater choice of suppliers, and less maverick buying.

  • For sellers, e-procurement can help to expand sales, reduce operating costs, and improve performance.

  • But there are significant difficulties to be addressed in e-procurement projects, including system-to-system integration issues, cost concerns, security issues, new buyer-seller relationships, and a multitude of change management issues.


Whatever the difficulties in developing a strategy, in predicting marketplace changes, and in dealing with significant levels of internal change, when it comes to implementing e-procurement initiatives there are still some notable successes. But most organizations have only just begun to examine their e-business strategies, and have a long struggle ahead. So what are the pros and cons of the situation?

It is estimated that nearly 75% of e-business company initiatives (these include e-commerce projects) will fail within the next two years.


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