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There are four main models of e-procurement systems:
-- Buyer-centric, such as reverse auctions and buyer-established catalogs populated by supplier-contributed items
-- Supplier-centric, such as supplier-established electronic catalogs and forward auctions
-- E-marketplaces, often established by industry consortiums (e.g. Covisint in the automotive industry) or vendors, such as VerticalNet
-- Collaborative applications aimed at supply-chain integration
The three main types of procurement systems are catalogs and auctions, some discussed above, and requests-for-quotations (RFQs). Catalogs can be buyer- or seller-driven. Buyer catalogs provide more control for the buyer but are more difficult to get started and manage, and require close participation with suppliers. Supplier catalogs are easier for the suppliers and quicker, but do not provide any standardization for the customer. There are several types of auctions, but forward (ascending-price) and reverse (descending-price, e.g. PriceLine) are the best known. RFQs lend themselves more to the collaborative model and are often part of a larger negotiation process.
Integration with overall business systems is an important issue with any e-business strategy, and e-procurement is no different. If your company has back-end ERP systems, they can serve as the target for integration. Companies often start with batch-file updates, since they are easier and less expensive, but companies should consider moving to real-time systems if the business requires more timely data reporting.
I highly recommend contacting the Petroleum Industry Data Exchange or PIDX, www.pidx.org, for guidance in your industry on this and related e-business topics.
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