A Hitchhiker’s Guide to e-Procurement: Terminology

Mostly Harmless, Part XXIV

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The first post of the series indicated that this brief guide will define what e-Procurement is, isn’t, and how it relates, or fails to relate, to e-Purchasing, EIPP, P2P, and e-Sourcing. Now that the basics of e-Procurement have been covered, this post will address the terminology before the series concludes.

EIPP stands for Electronic Invoice Presentation and Payment. It is not the same as e-Procurement because any system capable of accepting invoices, processing invoices, and queueing them up for payments can be labelled an EIPP system. Such a system does not need to support requisitions, purchase orders, or analysis, all key steps of the e-Procurement process.

P2P stands for Procure-to-Pay. By definition, such a system only needs to support core purchase order functionality, which lets the supplier know that goods and services are desired, invoice functionality, which lets the buyer know that the supplier has shipped and/or delivered the goods and payment is expected, and payment approval, which lets AP know it can queue a payment against an approved invoice. Like EIPP, such a system does not need to support requisitioning and the associated approval process, does not need to support goods receipt, and does not need to support analysis or tax reclamation. It may or may not include catalog support.

e-Sourcing stands for the electronic implementation of the strategic sourcing cycle, which starts with spend analysis, moves onto RFX and/or e-Auctions, then to optional decision optimization, and concludes with an award and contract. Such a solution does not need to contain any e-Procurement functionality whatsoever.

Then, there’s e-Purchasing , the doctor‘s personal pet peeve, as it has no well defined meaning outside of the UK public sector, where it is a hybrid of the core e-Negotiation technology of the e-Sourcing process, namely RFX and/or e-Auction, and the core capabilities of the e-Procurement cycle, namely requisitioning, approvals, purchase orders and SOWs, invoices, and e-Payments. When used by a vendor, it could refer to any combination of e-Procurement and e-Sourcing technology and such a solution should be reviewed with care.

Of course, many vendors will misuse all of these terms as well as e-Procurement, so one will have to review any shortlisted solutions with extreme care, but this is what the terms mean and why none are synonymous with e-Procurement.

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