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What is e-Procurement?

29 January 2018

5 minute read

What is e-Procurement?

Electronic procurement – or e-Procurement, as it’s more commonly known – is where an organisation uses the internet (or sometimes intranet) to procure the goods and services it needs to function. Paper-based processes are replaced with a fully electronic (and, ideally, automated) workflow that streamlines all aspects of the purchasing process.


Key to the efficiency of the e-Procurement process is the availability of a centrally-managed electronic catalogue. Users can conveniently browse or search the repository of approved products, and compare, select and order the items they need without buyer assistance. It’s as easy and intuitive as buying a book online. Approvals are also managed electronically, and can be automated based on pre-determined approval limits and other business rules.

The order is subsequently transmitted to the supplier. This may take place directly between business partners’ systems, but the simplest way to connect suppliers is through the open networks of e-Procurement or P2P providers. If a supplier is unable to receive structured data, such as XML files, the order can be sent by e-mail. Lastly, the e-Procurement system verifies receipt of goods or services, items are entered into inventory, and assets are tracked.

Catalogue content, contract management, negotiations and auctions can all be handled electronically. Spend and procurement processes can be tracked and monitored more easily with an electronic system.

The benefits of e-Procurement

Digitisation of paper-based processes eliminates a number of steps and accelerates workflows, reducing process costs by up to 70%. But cost savings are only the tip of the iceberg: shorter turnaround times from order to delivery and a straightforward, easy-to-use order process combine to reduce the barriers to using an e-Procurement system.

Only with 100% adoption – when all users are ordering through the system – can you enforce policies and maintain regulatory compliance, bring more spend under management, consolidate orders, and source goods and services at better prices from strategic suppliers. E-Procurement can put an end to maverick buying behaviour, and it’s also a crucial step towards fraud prevention, particularly if both procurement and invoicing processes are carried out electronically. A fully electronic P2P process relieves the purchasing organisation of routine tasks so they can focus on higher-value strategic initiatives.

Ultimately, purchasing stands to gain visibility into company-wide spend, which can be easily analysed by product category, vendor, order volume, cost centres, locations and more, providing a sound basis for defining the optimal sourcing strategy.

Learn how Basware can help you change spend behaviour for the better with an e-Procurement solution.  

If you want to discuss in more detail, you can reach us via our contact us form.