It is estimated that the invisibility of the supply chain generates between 20 and 40% more inventories. Invisibility comes from time lags and miscommunication. Advanced technologies enable real-time communication through document exchange and allow for many communications.
Ecommerce platforms started with business-to-consumer sales. Characteristics of business-to-business transactions, such as multiple decision-making, have hampered the progress of B2B e-commerce platforms. The need to save costs has forced companies to look at the opportunities offered by the Internet. Many large corporations have begun to formulate e-procurement strategies, just as corporations developed strategies for Internet presence.
E-procurement strategies include category selection to gain online supplier access to the portal and supplier selection. The category selection decides which items will be purchased online. The selection of the provider decides the access to the infrastructure and the nature of the access to the providers and the platform on which the technology must be hosted. The eProcurement software is a web-based interface that is open source or proprietary and integrates email, ERP, and legacy company and vendor systems.
E-procurement software has functions for receiving proposals, evaluating proposals, generating and tracking purchase orders, and processing invoices. In addition to these features, the menu has an eMarketplace, where sellers can auction items. This is called a reverse auction, where you bid for the lowest price. The advantage of the reverse auction is that many sellers can participate in it; The lowest price can be obtained compared to conventional purchase prices. Electronic procurement allows suppliers to manage customer inventory by having access to inventory data.
An e-procurement suite comes with a supplier relationship management suite, in which suppliers and the company communicate using email and other technologies. Providers can access the web-based software using their own login passwords. Connectivity to legacy systems would require a long-term commitment from the vendors and the business. Many small and medium-sized companies, which are the suppliers to large companies, lack web experience, which explains the lack of penetration of B2B commerce compared to B2C commerce.