Information and Communication tools have impacted the business landscape in a major way. The integration of technology, internet, and business tools is leading to the development of some creative solutions to age-old problems. Given this breakneck pace of development, businesses are increasingly engaging in collaborative endeavors to accelerate their growth. Furthermore, ICT tools have also made the procurement processes of the business world more efficient than they ever were. More specifically, online tenders have paved the way for a cost-effective, timely, and easy-to-implement procurement model.
What is E-Tendering?
E-Tendering is the new-age procurement mechanism that helps organizations in facilitating procurement operations over the internet. All the stages linked with tendering reach completion within this construct. Just like the traditional model of tendering, e-tendering facilitates a competitive environment that allows companies to choose suitable vendors via the thorough evaluation of acquired bids. It shares many similarities with the paper-based model of procurement. However, the similarities are not what make this mechanism interesting. How online tendering differs from traditional tendering gives birth to several distinct advantages. Let’s discuss those benefits in detail:-
- The Financial Advantage:- Online procurement solutions offer a financial advantage to their paper-based counterparts in numerous ways. For starters, a digitally-implemented procurement process eliminates the need for paperwork. Reduced paperwork leads to fewer hours spent by the procurement team on crafting documents like the RFP. The time saved by expediting operational pace ultimately leads to savings. If you objectively assess the costs linked with the traditional model of tendering, you’ll find out that it is not a timid affair. The resources spent on procurement processes are not always necessary either. Minor projects do not require companies to send out RFPs to a list of vendors. Basic market research can also yield similar results in such situations.
- Implementation of Readily Accessible Communication Channels:- The submission of a tender application can often be a cumbersome task for tenderers. Even with the online mode of procurement, the time-intensive nature of sending out proposals remains the same. However, an e-tender allows vendors to ask questions at a much faster rate when compared to the case of a paper-based tender. This readily available communication channel also enables buyers to pass on necessary instructions as and when required. In the case of multi-tiered tendering, this proves to be quite useful. When companies have to select the winning tenderer after a series of eliminations, a communication-heavy approach to the selection process can help foster long-lasting work relationships.
- Creation of Wider Application Pools:- Since it is extremely easy for tenderers to keep a track of new collaboration opportunities with online procurement systems, buyers gain access to a wider pool of applications. Thus, an online tender application leads to the creation of a procurement environment that takes the competitive nature of tendering to another level. In other words, online tenders make suppliers go the extra mile to beat competitors. Furthermore, an e-tender doesn’t create a wider application pool at the cost of the competency of bids. The greater number of applications emerge as a result of the size of the online procurement system’s user-base. The increased number of applicants also goes through a similar set of checks of balances that applicants in a traditional tendering environment would have undergone.
- Facilitation of International Collaborations:- The traditional model of tendering is limited in scope when geographical factors are taken into consideration. However, submitting a tender application online is not bound by any such limitations. At the end of the day, both tenderers and buyers can make the most of this opportunity. From the buyer’s perspective, international collaboration can lead to competent project completion at cheaper prices. From the tenderer’s perspective, an international contract can be financially as well as generally beneficial. It can help service-based companies tap international markets, and expand their operations. Likewise, buyers also gain access to international business relationships. This not only helps the business ecosystem to develop from an economic perspective but also helps it go through cultural development. At the end of the day, international collaborations take the concept of globalization further.
- The Analytical Advantage:- When companies make use of online tenders, all of their procurement-related data stays preserved. In other words, companies gain access to a set of analytics that helps in finding out growth opportunities. For instance, companies can leverage this information to avoid making mistakes in the tendering process itself. Moreover, the analytics facilitated in e-tendering help companies to keep a proper track of their finances. Since every penny is accounted for on the online procurement system, companies can identify the true operational cost of tendering. The same is not facilitated in the traditional tendering model. Since the paper-based procurement system involves certain ambiguous costs, it gets difficult to create an accurate estimate of the total spend on procurement processes. For instance, the cost linked with printing paperwork is not an easy variable to narrow down.
Online tendering automates many of the tasks linked with procurement processes. This automation helps companies in saving time and financial resources. Furthermore, the ease-of-use integral to online tendering systems make it easy for enterprises to meet multiple procurement needs at once. However, despite the above-mentioned advantages that e-procurement offers, it is not a perfect system. The privacy concerns linked with an e-tender can prove to be fatal for business organizations. Even if companies design their own online procurement mechanisms, the risk of a data-breach always looms their heads. But, these risks do not outweigh the advantages that online procurement mediums offer. Moreover, as time goes by, these systems will become safer. The fact that even government entities are switching to online procurement systems is proof of the fact that they are worth the risk. Moreover, taking calculated risks is an essential element of the business world. It can never be truly eliminated.