E-Procurement
Definition
The use of electronic platforms to run purchasing processes, including requisitions, approvals, catalogs, purchase orders, and invoice matching, in a single digital workflow.
In Practice
E-procurement digitizes the procure-to-pay cycle. Employees shop approved catalogs or punch out to supplier webshops, requisitions route automatically for approval, POs transmit electronically to suppliers, and invoices match against POs and receipts without manual keying. Related tools cover e-sourcing (electronic RFQs, RFPs, and reverse auctions) and supplier portals for order confirmations and shipment notices.
The benefits compound: transaction costs drop sharply, cycle times shrink from days to minutes, contract prices are enforced automatically because the catalog carries the negotiated price, and every purchase generates clean data for spend analysis. Crucially, making the compliant channel the most convenient channel is the single most effective cure for maverick spend.
Example: a company implements an e-procurement suite with punch-out catalogs for its top 30 suppliers. PO processing cost falls from 60 to 12 dollars, on-contract spend rises from 55 to 88 percent, and buyers stop keying orders and start managing categories.
Related Terms
An internal request asking the procurement team to buy specific goods or services, which must typically be approved before it is converted into a purchase order.
Maverick SpendPurchases made outside approved procurement channels or negotiated contracts, typically without a purchase order or authorized supplier.
Purchase OrderA legally binding commercial document a buyer issues to a supplier specifying the items, quantities, prices, delivery dates, and terms of a purchase.
Tail SpendThe large number of low-value, infrequent purchases that collectively make up a small share of total spend but a large share of suppliers and transactions.