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Topic 4 – E-Procurement Hypothesis: Organizations can reduce cost through e-procurement system. Impacts on Business Process Gebauer, et all (1998) describes procurement as one of the most important functions for both governmental and private sector business processes. Procurement is more than just purchasing goods and services. It includes all activities involved in obtaining, transporting and moving material towards the production process. Electronic procurement makes use of electronic commerce technologies, such as Electronic Data Interchange (EDI), e-mail, and electronic catalogues. Zenz and Thompson (1994) stated that most organizations spend at least one third of their overall budget on purchasing goods and services, procurement holds significant business value. Zenz and Thompson (1994) divided purchasing into 3 basic steps, Information, Negotiation, and Settlement.Emerging internet technologies are raising hopes of changing the picture of costly, time-consuming, and inefficient procurement processes by enabling major improvements in term of lower administrative overhead, better service quality, more timely location, and receiving of products, and increased flexibility (Gebauer, et all 1998) Internet can do a lot of savings from informational perspective. The use of search engines allowed very cheap search of potential suppliers. It also allows supplier to have cheap access to a very wide global customer base. Internet based catalogue allows buying organization to browse, search, and/or place orders online (Gebauer 1998). Purchasing through internet can be done at any time 24/7 as long as the server was on and running. This eases the process of global purchasing and reduces cost of sales expenses significantly. From the buyer perspective, they can get a faster reply and easier way of tracking orders, provided that such tracks are available from the website.
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