The Benefits of E-Procurement and E-Commerce in Business
In the last few years, the
practices of e-procurement and e-commerce have changed the
course of businesses everywhere. Not long ago, the purchasing
of supplies, services and merchandise was exclusively
accomplished through phone calls, catalog orders, and personal
sales visits. Online purchasing options, however, have opened
up many new choices for companies as well as customers. At
this point in time, one can buy almost anything
Obviously, every company must
make purchases. E-procurement, or the process of supplier
exchange, provides a way for businesses to reduce costs and
find significant savings.
A purchase that is not made
online usually must pass through many hands in order to be
approved, documented, filed, etc. The obvious result is a
longer waiting period for ordered materials. Because of the
complications of manually processing purchase orders and other
paperwork, switching to online business transactions can
reduce both the cost and time spent on the ordering process.
Rather than using their workdays to print, fax, or mail
documents, purchasers can use this saved time to create and
maintain business relationships with suppliers.
For businesses wishing to sell
products, e-commerce can be an excellent way to save large
amounts of money. It has long been known that customers often
appreciate the flexibility of being able to shop from home.
Catalogues, flyers, and postage, however, can become very
expensive ways to conduct business. A company that is able to
provide online shopping alternatives for its customers will
have a high advantage in reduced expenses.
Offering products and services
online also eliminates or cuts down many of the costs involved
with customer service and care. Traditionally, many orders
have been placed and received by phone. Transactions made
online save expenses, both in phone charges and in the amount
of employees needed to answer the phone.
Many times, companies also send
follow up emails to their customers. This is another way to
keep in contact and have positive interaction without needing
to employ many customer service representatives.
Additionally, much more information is available to customers
online. This information includes things like the status of a
person’s order, a list of frequently asked questions, or
shipment tracking. All of these things can be relayed through
email, again, saving the sales company a lot of unnecessary
expense in the way of customer service telephone calls.
Customers who shop online can
search a website’s catalog for exactly what they need.
There is much more information
available to them than what would be able to fit in a
traditional paper catalog. E-commerce also enables a business
to make more sales offers to its purchasers. By listing
related available items for customers, or showing items that
others have purchased in conjunction with the item being
bought, a company is much more likely to reap additional sales
without much effort.
Another advantage of e-commerce
is the opportunity for customers to shop over a longer period
of time, if they prefer. They can make decisions and fill
their online “shopping carts” without actually purchasing
anything until they know exactly what they want. For a
customer, this is a valuable benefit, although this could also
be a potential downfall to companies due to price
comparisons. One thing to note, however, is that E-commerce
usually cuts costs in such drastic ways that online companies
are able to sell their products at much lower prices than they
would otherwise be able to offer.
However, it is important to note
that the Internet will never be able to create the same social
appeal as a physical store. For some people, shopping in a
face-to-face environment is important, but for others, the
idea of shopping in anonymity can actually be more appealing.
Those who prefer a personal and social shopping experience may
still find the low prices and convenience of online shopping
The world of e-commerce is not
without its challenges. One aspect of business that may prove
difficult is finding ways to actually direct people to a
company’s site, and causing them to want to return. Also, it
can sometimes be a challenge to stand out from other
competitors. As the Internet opens up new opportunities that
can be taken advantage of by anyone, this in turn creates more
fierce competition for an online business.
the unique challenges that online commerce can pose, it still
seems to be a viable alternative to the former, more expensive
model of conducting business. In order to keep current with
the rapidly changing times, it would be advantageous for any
company to consider taking their business to the online world.