Page 293 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation

Notes Areas

In international business today, IT finds maximum utility in the following areas:
1. Electronic procurement
2. Electronic marketing
3. Electronic logistics

A modern competitive enterprise seeks to hold an edge over the market. IT helps provide this
competitive advantage through its various applications tools. By adapting these tools in various
areas of business, the organization can gain many advantages in terms of accessibility to a
customer or supplier in any part of the world, speed of operations, reduction in manpower, etc.
due to the reach of the internet it is possible to conduct buying and selling transactions irrespective
of geographical location. Internet banking helps in the speedy execution of payments and
settlement of accounts. A website can be a virtual showroom, where products can be displayed,
demonstrated and sold. Such a website can also provide various after-sales service tips and
suggestions, launch discussions forums, ask for customer feedback and educate the customer.

Did u know? IT application such as Electronic Data Interchange (EDI) has also enabled
logistics operations to be paperless.

14.1 Electronic Procurement

Electronic Procurement (also known as e-procurement) is a way of using the Internet to make it
easier, faster and less expensive for businesses to purchase the goods and services they require.
While e-procurement is a general term that covers a wide assortment of techniques, such as
reverse auctions, its overall goal is to streamline the purchasing process so businesses can focus
more management time on earning revenue and serving customers.

Implementing an electronic procurement system offers a company many benefits. For example,
if an employee needed to purchase a laptop computer for a business trip, he may at one time
have been told to visit the local business supply store and charge the purchase to the company
account. He may have been given a spending limit or may have been required to bring back a
receipt for his purchase; however, those rules were not easy to enforce or to keep track of. He
could purchase a top of the line laptop more for personal use than for business, but it would be
the company that would foot the bill.
With electronic procurement, those types of situations are much less likely to occur. For one
thing, all purchases are easier to track because they are done over the Internet and the company’s
managers can easily see who made which purchases without having to wait to receive a monthly
revolving credit statement. Furthermore, many companies incorporate product specifications
into their e-procurement systems, so an employee wanting a laptop might only be able to
purchase a certain brand with specific features, memory capacity and software.

Also, e-procurement saves time. Buyers do not need to leave their desks or make phone calls to
suppliers in order to place orders; they simply go through the Internet. And, because suppliers
receive the order almost immediately, they can also fulfill and ship it much faster than with the
traditional procurement methods.
Although the benefits of e-procurement are plentiful, there are obstacles that can arise in
implementing this type of process. The biggest pitfall is treating all areas of procurement and all
products the same. The reality is that what may work for one good or service may simply not
work for all of them, so successful e-procurement systems use a number of different techniques.

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