During the e-boom of the 1990s, academics, consultants, executives and investors alike claimed that e-procurement, and its increasingly central role in supply-chain management, would revolutionize how future business-to-business practices would take place: Efficiencies would be improved and procurement costs reduced; the flow of information along the supply chain enhanced; strategic partnerships between networks of firms deepened. Many predictions about the wide-ranging impact of these transformations proved to be exaggerated. However, it would be unwise to dismiss all this excitement as just smoke and mirrors, because the rise of e-technologies, in fact, has resulted in considerable changes for corporate supply-chain strategies and practices over the past five years.
The widespread adoption of enterprise-resource planning systems, spurred by the Y2K threat, provided a fertile platform for e-procurement growth. The ability to use ERP systems to capture data on companywide spending related to suppliers allowed companies to segment their supply base and separate strategic sourcing from tactical supply. The e-bust of 2000 did instill caution in those advocating for the expanded use of e-procurement; nonetheless, even today, when asked about their future plans, chief purchasing officers point to a diverse set of e-procurement initiatives, ranging from e-sourcing to purchasing process automation to expanded use of reverse auctions (Johnson and Leenders, 2004). So, where should management allocate limited resources? And how are managers to discern promise from pitfall and... To read the complete article, login or sign-up using the form below.
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