Estimating the Benefits and Risks of Implementing E-Procurement

Author

Trkman, Peter ; McCormack, Kevin

Author_Institution

Fac. of Econ., Univ. of Ljubljana, Ljubljana, Slovenia

Volume

57

Issue

2

fYear

2010

fDate

5/1/2010 12:00:00 AM

Firstpage

338

Lastpage

349

Abstract

In recent years, organizations have invested heavily in e-procurement technology solutions. However, an estimation of the value of the technology-enabled procurement process is often lacking. Our paper presents a rigorous methodological approach to the analysis of e-procurement benefits. Business process simulations are used to analyze the benefits of both technological and organizational changes related to e-procurement. The approach enables an estimation of both the average and variability of procurement costs and benefits, workload, and lead times. In addition, the approach enables optimization of a procurement strategy (e.g., approval levels). Finally, an innovative approach to estimation of value at risk is shown.

Keywords

corporate modelling; electronic commerce; procurement; risk analysis; business process simulations; e-procurement benefits; e-procurement costs; lead times; organizational changes; procurement strategy; technology-enabled procurement process; value-at-risk estimation; workload; Analytical models; Companies; Costs; Design automation; Electronic mail; Helium; Procurement; Reactive power; Technology management; Web and internet services; Business process modeling; e-procurement; methodological approach; procure-to-pay (P2P) process; simulations; value at risk (VaR);

fLanguage

English

Journal_Title

Engineering Management, IEEE Transactions on

Publisher

ieee

ISSN

0018-9391

Type

jour

DOI

10.1109/TEM.2009.2033046

Filename

5332319