e-Business defined procurement

Solution Preview

1. Define procurement and explain why operating resource procurement is a top management issue.

Procurement is defined as the procedure by which goods and services required by a production process or project is obtained. This included the developing the method for procurement, the preparation of contracts, selection and acquisition of suppliers, and management of contracts.

The operating resource procurement is a top management issue because these purchases contribute to meeting business objectives. Moreover, direct insight into the operating resource purchases is required to improve efficiency and improve cost-saving strategies.

2. Explain why operating resource procurement processes equates to controlled chaos.

The operating resource procurement process equates to controlled chaos because these purchases are mainly of routine nature. For instance operating resource purchase items include office supplies, computer peripheral purchases, computer consumable purchases and other similar items. The purchase of these items is outside the company's normal purchase process. The chaos occurs because the company does not know what exactly was purchased nor does it know how those purchases directly helped the project or business objectives. In other words even though between 8 and 30 percent of the company's money is spent on operating resource purchases, the company does not know where the money is spent or get control of the procurement process.

3. Discuss the key differences between buy-side and sell-side applications.

The key differences between buy-side and sell-side applications is that buy side applications analyze the inventory levels, if programmed they send orders to suppliers when the reordering levels are reached, they record the arrival of purchases, record and match the purchase order with the purchased items received, it also matches the purchase order with the invoice details when the invoice arrives. On the other hand the sell-side application matches the customer order with delivery details, checks approval for credit sales, prepares sales invoice, monitors the outstanding payments of each customer and generates reminders for payments when required.

The fundamental difference between buy-side and sell-side applications is that buy-side application is focused on the suppliers and incoming resources. It is also called the supply chain. The sell-side application is focused on the customer.

4. Define buy-side e-procurement, requisitioning, opportunities, applications, solutions, and integration issues.

The buy side to e-procurement is the use of electronic systems to purchase goods, works and services. It is also used to process payment from third parties. Buy side requisitioning refers to a request for goods and services in a formal written manner on a pre-printed form. An opportunity is a favorable combination of availability of goods and services at attractive prices. Buy-side application, have a ...