| The IT strategy of an organization focuses on | | | | vendor is selected based on criteria such as |
| deploying IT systems and solutions to different | | | | conformance to specifications and past performance. |
| functions to capture the cost advantages enabled by | | | | This is followed by the physical delivery of goods, |
| those systems. Each function may have the authority | | | | inspection and finally the financial settlement. |
| to decide the areas to be automated in consultation | | | | Purchasing management software is a server based |
| with IT department. Alternatively, organizations may | | | | application that is accessed by the users through |
| deploy ERP based systems that encompasses the | | | | log-in passwords. It contains modules which manage |
| whole organization. | | | | proposals, contracts and purchase orders. It also |
| The role of purchasing is seen as the buyer of | | | | allows for electronic approval of purchase orders and |
| materials for the production, maintenance and utilities | | | | tracks the order till the financial settlement. The |
| function of a manufacturing organization and as a | | | | software can be integrated with back end systems |
| buyer of accessories and office supplies for other | | | | to have visibility of inventory, production scheduling |
| types of organizations. Purchasing is mostly a clerical | | | | and financial invoice clearance. The software can |
| activity driven by paper based processes and much | | | | track the performance of suppliers using metrics such |
| emphasis is placed on verbal negotiations for | | | | as on time delivery and goods returned. |
| bargaining of prices with suppliers. The traditional view | | | | A change from clerical to automation involves end |
| of purchasing is to squeeze every cent from the | | | | user identification with the system. Users have to be |
| seller. | | | | trained during the implementation of the software. |
| The major activities for purchasing are receipt of | | | | Purchasing management results in considerable saving |
| requirement proposal that initiates the purchasing | | | | in inventories and supplier satisfaction as this |
| cycle from the end user. The purchasing department | | | | eliminates paper based processes which have the |
| asks for requests for proposals from the prospective | | | | inherent disadvantage of losses of data. |
| sellers. After negotiation process, through which the | | | | |