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Exploring value: The myth of e-procurement in construction industry

Hong Kong, September 30, 2020 - The rapid evolution of information technology and its applications brings numerous opportunities in considering the impact of IT on purchasing and supply management. The utilization of e-procurement in other industrial sectors has been widespread, but it is considered a relatively new phenomenon in the construction segment. Regardless of the current strategy of a company, the overall consensus is that e-procurement technologies have become an important management tool to enhance the performance of supply chains.

In the past, IT adoption by the construction industry was comparatively complicated due to the unique project nature. Existing legacy systems built around production-related processes and procurement have to be integrated with various applications such as material requirement planning (MRP), project scheduling, inventory costing and performance reporting, while interacting with suppliers’ systems to automate the ordering process. Moving these technologies into the core business processes is still a challenging proposition for practitioners in the construction industry.

With technology advancement and improvement of business processes, e-procurement in the construction industry has drawn great attention and been adopted by an increasing number of enterprises. The benefits of e-procurement lead to a better ordering experience with procurement procedure automation, reducing the need for paper-based and human processes, thereby allowing procurement personnel to accomplish more strategic aspects such as contract negotiation. The following benefits can be seen:

  • Improvement in process quality
  • Reduction of procurement cost
  • Automation of pre-qualification submission and evaluation
  • Reduction in quotation request/ tender cycle time
  • Centralization of contract document storage

A well-established procurement platform allows enterprises to manage their project supply chain properly and effectively. It’s important to locate experienced suppliers who have project references in the field because it can help enterprises to set consistent benefit benchmarking associated with the conversion from a manual procurement process to an e-procurement process. Willing to change with innovation will be the paradigm shift of procurement in the construction industry.

Tommy Choi, Head of EPM, C&T Software

Mr. Tommy Choi specializes in deployment of Enterprise Procurement Management (EPM) systems with expertise in all-round process automation and professional advice on deployment to application aspects. He has over a decade of experience in industry-specific IT solutions and a proven track record of transforming procurement workflows with digital management for multinational enterprises.