25-01-2013, 03:04 PM
E-Procurement System Challenges And Design: An UML Approach
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Abstract:
Procurement is a complicated andvital process that affects the existence of any company and
involved in information and money exchange among different entities in a supply chain. Coordinating
and managing the supply process of different departments of a company are the main responsibilities
of a procurement department and are achieved by cooperating different suppliers. However, recent
advancements in internet technologies can be employed to facilitate procurement processes and make
them more efficient in order to increase the productivity, profitability, and agility of an organization.
Portals, as an internet based technology, can be used in procurement process to implement a
sophisticated solution to overcomeprocurement challenges especially issues that are related to auctions.
This solution offers new, low cost, and effective methods for carrying out B2B procurement that will
not only facilitate the procurement processes and auctions, but increases the revenue of an organization.
In this work, a conceptual design for an e-procurement portal with concentration on auctions is
presented. The design is developed for a Telecommunication company and some of the system
functionalities are illustrated by unified modeling language (UML) diagrams. Finally, by exploiting
experts’ opinions, it is shown that the design can be implementedin order to improve procurement
processes and auctions.
INTRODUCTION
Recently, the emergence of new technologies and significant alterations in global markets made supply
chain management more important. To stay competitive, companies need to efficiently manage their supply
chain with exploiting new web-based technologies. The purchase of goods and services, as one of main task of a
supply chain,that is needed to serve customer at real time is an important issue in any organization and needs at
least half of companies’ revenue (M. Chen and M.J. Meixell, 2003; W.J. Markham, 1999). Thus, sourcing is one
of the main tasks in companies which new technologies are employed to facilitate. Systematic and spot sourcing
of goods and services are two main strategies in marketplaces for corporates and businesses. Systematic
sourcing is a long-term relationship with qualified suppliers. Therefore, pre-negotiation and long-term contracts
are the main parts of it. Spot sourcing is usually applied in procuring immediate needs andcredibility of a
supplier is not as important as it is in systematic sourcing (D. Chaffey, 2007; M. Singh and D. Thomson, 2002).
E-procurement is a main technology that has been developed and employed in some companies to facilitate
sourcing and procurement. E-procurement has become an indispensable tool for automating procurement in a
physically distributed enterprise environment. It is important not only for global operations, but also for
domestic operations, as well. According to Chaffey,“E-procurement is the electronic integration and
management of all procurement activities including purchase request authorization, ordering, delivery and
payment between a purchaser and a supplier” (D. Chaffey, 2007; M. Singh and D. Thomson, 2002). Eprocurement
is a business to business e-commerce and can be defined as applying electronic systems in
procurement processes. Moreover, e-procurement provides a fair and transparent environment for auctions and
enables auction managers to easily handle auction issues. In fact, managing an auction process by this system,
decreases paperwork and increases efficiency. Communication channels, process of receiving auction
proposals,proposal evaluation process, and auction closing and openingprocesses should be considered in order
to switch from traditional auction process to electronic and web-based systems.
Literature Review:
Traditional procurement systemhas not been efficient; lack of prompt information and complicated
processes resulting in wasted time and money. To overcome these problems, an e-procurementsystem can be
used as a remedy by facilitating processes, providing timely and related information, and improving
coordination and collaboration.Hence, e-procurement can lead to huge savings and higher productivity and
efficiency (A. Gunasekaram, 2009; V. Tatsis, 2006).
As mentioned, e-procurement is a web-based and technology-based solution thatfacilitates sourcingin
companies. It has theability to transform the purchasing process because it pervadesall of the identified steps. In
literature, e-procurement isdefined in a way to include e-design at the specificationdevelopment stage of the
purchasing process, ending withthe supply manager’s evaluation and rating of suppliers. At the early stages,
internet technologies can be a helpful tool in the process of supplier selection too.This process that is called esourcing
starts with prequalification of suppliers through the construction of a comprehensive request for
proposals and ends with the selection of final supplier. For example, FreeMarkets, a pioneer in on-line sourcing
through the reverse auction process, is emerging as a leader in this area of e-procurement (W. Presutti, 2003).
Moreover, the e-procurement system opens doors to purchasing networks for suppliers and buyers, expands the
selection of products, and makes information more easily obtainable. e-Procurement also links a vast network of
connections, and makes searching and contacting much more convenient (Y. Yu, 2008).
E-procurement Systems:
We have reviewed the different procurement systems across the world such as Korean on-line eprocurement
system (KONEPS), Global (Telekom) procurement portal, Egyptian Government procurement
portal, and Canadian Biddingo e-procurement portal to understand the available standards and solutions for eprocurement
portals. is categorizing the ideas and functionalities of an e-procurement portal based on our
evaluation.
System Main Entities:
To identify and illustrate the main entities of the system, class diagram is used. A class diagram is a static
diagram that is used to describe the structure of a system by showing classes, their attributes, their methods, and
the relationships between the classes (C. Larman, 2001). The main classes in the e-procurement portal system
are auction, bid, order, supplier, procurement manager, and auction manager. Each of them has some
responsibilities and associations to other classes. Auction manager is responsible for handling issues related to
auction and has direct relationship to auction class. Supplier as a main user is connected to many main classes
such as offer, catalogue, and contract.
Conclusion:
In this paper we analyzed a procurement system and documented the business logic. We evaluated the role
of users concisely and provided a portal based e-procurement solution and designed the needed components.
Using UML, different behaviors and states of the system and their interactions are shown. Finally we developed
some of the main interfaces of the system and design the connections of the menu and other pages. Validation of
the system was the last step of our design which was done by an expert validation method. Based on expert
validation result and due to the availability of required tools and information for the procurement management
in the designed system, we believe that organizations can manage procurement process more effectively and
avoid unnecessary burdens which reduce their productivity.