El Inc.'s new e-procurement solution gives the company a new competitive advantage. With El Inc.'s e-procurement, Marketplace, El Inc. has already gained 1200 procurement customers, 40% of which are live, up the end of this year. This is a number that other pure-play e-procurement vendors cannot match. El Inc. continues to grow in the CRM market. El Inc., along with other engineering services, including, had managed to win 17% of CRM market share, with Siebel dropping to 28% of the market.
"Electronic Procurement is defined as the act of placing an order over the Web. The source of the supply or good can be direct from a manufacturer through a trading network or through a Web-enabled distributor. The transaction must occur over the Web" (Escherich, 2003).
E-Procurement automates the transactional aspect of procurement allowing companies to focus on maximizing the value from supplier relationships. E-Commerce solutions are used to integrate procurement pay to business processes, allowing enterprise users to request and place orders, automating order fulfilment, order tracking, billing, invoicing, and cash outlay. The result is an enhancement of the transactional aspects of the procurement process to increase the efficiency of daily processing and transactions (Kyte, 2003).
Enhanced content management of non-catalog ID items reduces time requirements; common user interface allows users to easily navigate systems and eliminates the time associated with obsolete products and/or description.
System supports multiple payment methods than transactional functions, and once-manual payable and receivables tasks are handled electronically. E-Procurement package also provide catalogs content and a full set of procurement process functions, from requisition and order creation through receipt and payment. Finally E-Procurement achieves 8-10% in savings through a reduction in transaction time/costs (Hope-Ross, 2003):
Increased contract compliance and reduction of maverick spend
Streamlined sourcing processes and reduces transaction costs
Reduced number and complexity of supplier catalogs
Focused development with preferred suppliers
To conclude, by combining Strategic Sourcing with the technological capabilities of E-procurement, companies can achieve optimal results. Then it can result in savings of 18-25% (Kyte, 2003). With E-Procurement, strategic sourcing benefits are enhanced, providing the opportunity to effect a complete procurement transformation.
El Inc. plays a catch-up role in both the e-procurement management and engineering services market. The pure-play engineering services already gained a significant number of customers and the market share. With the advantage of being the leader in engineering services market and its large number old customers, El Inc. should grab the opportunity to catch up ...