The Strategic Role of E-Procurement in a Supply Chain

Vedmani Sharan, Vinod Kumar and Kamel Fantazy

Investment in e-procurement technologies has steadily increased in the past few years. Companies view these technologies as solutions to the problem of streamlining the procurement process. Most companies find it necessary to integrate e-procurement technologies with their supply-base due to a large number of suppliers, varying levels of capabilities and the importance of suppliers, constrained resources, and the need to integrate various levels of e-procurement systems. However, research in e-procurement lacks a systematic tool to help firms in deriving high strategic value of the e-procurement system. This paper fills this gap by developing a conceptual model of finding a link between e-procurement use and its strategic value. The model will provide purchasing and supply chain mangers with the strategic insight of e-procurement strategy that will assist them in optimally integrating their supply base by considering a variety of factors that include integration costs, purchase amounts, purchase order frequencies, in addition to other constraints.