Internet-based procurement in medium-sized businesses

MODERN PURCHASING WITH INTERNET-BASED PROCUREMENT IN MEDIUM-SIZED BUSINESSES

ESPECIALLY IN ECONOMICALLY DIFFICULT TIMES, COSTS ARE SCRUTINIZED AND THE NEED FOR EACH PROCUREMENT IS CLOSELY EXAMINED. SLUMPED SALES ARE FORCING COMPANIES TO CUT COSTS AND OPTIMIZE PROCESSES. THIS IS WHERE THE INTERNET OPENS UP NEW AVENUES:

With a balanced reorganization and the introduction of a modern purchasing system, the profit contribution of purchasing to the company's success can be significantly increased.
In traditional purchasing, employees oversee the entire procurement process, from analyzing potential suppliers to placing orders and approving invoices. As a result, purchasers generate enormous procurement and process costs through no fault of their own. A first optimization step here would be to use the potential of reorganization to achieve a much better purchasing result with the same use of resources.
Special online procurement portals can contribute optimization potential from the IT side. For example, new suppliers can be searched for on the Internet. As a rule, this research leads to supraregional suppliers being considered as alternatives to the existing supply partners.
In the future, the activity of purchasing will be increasingly divided into a strategic and an operational part of procurement. In the strategic part the buyer defines the goals and negotiates the conditions; this part ends thus already some steps before the actual order. If however a buyer for the transcription of an internal requirement request for a firmly negotiated article creates an order, it is no longer only a service provider of the specialized department, but additionally its "typewriter" - a purely operational activity. It would be better, if the requesting departments have the possibility of creating certain orders without assistance of the purchase. This requirement can be met by a procurement portal.
Three models for procurement portals
What can such a procurement portal look like in concrete terms? Should the company operate the portal itself? Are there employees who can fill the role of strategic purchaser, or is external support brought into the company? Consultants and software providers can help to determine whether a company's own procurement portal should be introduced. However, the company should first clarify the desired use and the expected scope in advance of the selection. Alternatively, external service providers also offer the organization of B2B business between purchaser and supplier. Their portals are usually limited to standardizable, precisely described products and thus fulfill more the function of a marketplace.
Another alternative that should be mentioned is the procurement platform used jointly across company boundaries. Here, legally independent companies organize "lead buyer purchasing" by mutual agreement, through which an increase in procurement competence in selected product groups, holistic volume bundling and, if possible, product range streamlining are to be achieved.
Tapping potential, leveraging synergies

The last alternative described, a free purchasing association, is still rarely practiced at present. On the purchasing side, a major obstacle is certainly the lack of openness and the absence of a leading figure who organizes and implements the purchasing association. Umbrella organizations, professional associations or chambers of commerce could act as guides here. In conclusion, it remains to be said that the possibilities offered by the Internet and the exchange of information across locations in particular can open up potential and generate synergies that enable purchasing at better conditions with lower process costs. However, these possibilities of modern purchasing can only be realized if people are prepared to manage resources jointly across company boundaries and to optimize them for the benefit of the companies involved.

Joachim Braun, Managing Director jb-x business solutions GmbH

(published in "Niederbayerische Wirtschaft Januar 2010")