E-procurement

There are seven main ways of implementing IT in the procurement process:

• Web-based ERP (Enterprise Resource Planning): Creating and approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology.
• e-MRO (Maintenance, Repair and Overhaul): The same as web-based ERP except that the goods and services ordered are non-product related MRO supplies.
• e-sourcing: Identifying new suppliers for a specific category of purchasing requirements using Internet technology.
• e-tendering: Sending requests for information and prices to suppliers and receiving the responses of suppliers using Internet technology.
• e-reverse auctioning: Using Internet technology to buy goods and services from a number of known or unknown suppliers.
• e-informing: Gathering and distributing purchasing information both from and to internal and external parties using Internet technology.
• e-marketsites: Expands on Web-based ERP to open up value chains. Buying communities can access preferred suppliers' products and services, add to shopping carts, create requisition, seek approval, receipt purchase orders and process electronic invoices with integration to suppliers' supply chains and buyers' financial systems.

WoU could use e-sourcing to identify new suppliers for wines, thus hopefully increase choice offered to customers. E-sourcing would also be beneficial to potential suppliers due to providing exposure to their wine products to the UK market ie would be a win – win situation.

A study by Aberdeen group (Aberdeen group) has concluded some of the steps for successfully utilising E-sourcing. Some of their strategies include:

• Adopt and validate best-in-class strategic sourcing procedures before investing in e-sourcing technologies.
• Ensure proper executive and stakeholder support for sourcing and dedicate a manager to champion the program.
• Develop systems and competencies to make total spending analysis an efficient and repeatable process.

Another solution for the Wines of Uruguay would be to have a rapid ERP deployment. The advantages earned by this implementation would be:

• Quick integration in the whole process.
• Less time needed to fulfil the implementation.
• No disruption in the procurement process
• Lower cost during the deployment of the system

But there are also some disadvantages in choosing this kind of ERP deployment:

• Difficulty to customize completely the system to match with the needs of the company
• The procurement process must be understood in order for the implementation to be effective.
• Might be a preparation cost.
• The time frame for an ERP could be limited as new needs for the company arise.

Such procedures may be out of scope for Wines Of Uruguay due to high cost, however by understanding them from an early stage, the company can be structured in a way that would help its expansion and growth in the future.

Taken from Wikipedia and

Ravi Kalakota, Marcia Robinson (2000) e-Business: Roadmap to Success Massachusetts: Addison Wesley

http://www.aberdeen.com/summary/report/other/bp-esourcing.asp