E-Procurement Risk management and systems of electronic state procurements

e-Procurement - class software - the systems of electronic supply of the enterprises.

One of determinations which can be for the term "e-Procurement" - software technologies of control of purchases (deliveries) of materials/services with the best ratio price/quality in precisely specified terms.

Present assessment

According to expert community, as of April 28, 2014 the e-Procurement systems offer, generally functionality of quantitative analysis and audit of suppliers, separate opportunities of forecasting of unprofitable or improbable purchases at the level of separate transactions.

Implementation of functions is necessary for improvement of analytical opportunities of these systems regarding risk management:

• identification of the third parties having an impact on processes or effectiveness of purchases (the governments, associations, competitors, etc.),
• determination of the total cost of potential risk at the level of supply channels and certain suppliers,
• determination of the interdepartmental investments potentially capable (or not capable) to pay off.

The leading role in it, according to opinions of experts, belongs to "cloud" software which is capable to accumulate and catalog large volumes of data from various sources, to process, taking useful data. It can be automated control systems for warehouses or ports - they already have an acquired overview of practice of purchases. Not less important component of the e-Procurement systems which is connected with risk management - technologies of automated management of costs.

Market expectations

The e-Procurement systems should be able to prompt to purchasing department - where to find less expensive goods of acceptable quality, to make an investment strategy and to improve work with supply channels.

According to survey conducted by Spend Matters company there is an interrelation between use of specialized software and economy in the company. The organizations which noted serious cost reduction also stated - the most part of purchase transactions at them is automated.

According to Spend Matters, still big economy will manage to be received by means of accounting of the risk factors connected with purchase of certain goods from certain sources: it is possible to include in the equation of risks assessment factors:

• political and economic situation in the state where the goods are bought;
• technology of its production at certain suppliers (manually or automatically);
• social reputation of manufacturing company
• other aspects which are not connected, at first sight, with procurement process.

EY: Development of e-Procurement with Russia will be helped by growth of number of foreign suppliers

According to experts of EY, the period from 2015 to 2025 will become favorable for market development of consumer goods in Brazil, Russia, India, China and South Africa (so-called BRICS group) (these spring of 2014). Thanks to it in the countries of BRICS numerous foreign suppliers will open the representations that will result in need of maintaining financial purchasing transactions between the different states.

As a result, demand for new electronic trading systems will significantly increase in BRICS countries, including Russia, experts of EY consider. In particular, automated systems of a currency exchange and account management will be in demand, experts note.

Design of procurement process of goods in electronic form will significantly accelerate process of trade between distributors, suppliers of raw materials, a public sector and a retail segment at the international level. From the five of the countries of BRICS after all not Russia, but China will have the greatest economic influence, believe in EY. Respectively, producers of the e-Procurement systems should attend to that the software for state procurements considered standards of the Chinese industry.

Greg Pfahl, the representative of consulting Hein and Associates, noted that automation of purchases considerably reduces chances of the buyer to face fraud or to make a mistake in procurement process. What is more important, it also allows producers of goods quickly and to effectively trace the income. It also helps the organizations to resolve the difficult questions connected with orders and their payment.

For example, automation is useful in case of transactions with the postponed delivery. After conclusion of an agreement about sale the buyer can demand from the producer that that delivered goods in the specified date or to the specific client.

In difficult conditions of global economy each transaction should be monitored not to allow excessive costs and to avoid errors. It is simpler to make monitoring and registration of such procedures in electronic a type, the expert concludes.