HYDERABAD: In its bid to increase the use and adoption of technology, the state government of Andhra Pradesh has issued orders for implementation of e-procurement within four state departments. This move is being seen by many as a part of its ongoing initiatives to improve transactional effectiveness and sustain effective tendering processes.

Four major departments undergoing e-procurement in a big way are - Andhra Pradesh Technology Services (APTS), Andhra Pradesh state Road Transport Corporation (APSRTC), Commissionerate of Tenders (CoT) (covering irrigation and command area development department, and roads & buildings department) and AP Health medical Housing & Infrastructure Development Corporation (APHMHIDC).

E-procurement would be followed in irrigation and R&B departments on a pilot basis and the project would cost around Rs one crore. The state government in its order GO MS Number 2, Information technology & Communication department has stated that all the existing rules applicable to the processing of conventional tenders are applicable to the bids to be secured through e-procurement process.

The government has also mentioned that any tender for an engineering work or procurement of goods and services worth Rs 1 crore or above by the CoT shall be taken up only via the e-procurement propelled process. This is surely a sign that government is encouraging the effective use of IT and technology for day to day processes and procedures.

"The government has decided that e-procurement processes and procedures would stand valid for procurement of goods and services, and also for awarding of contracts for engineering, IT and other related projects," said a high ranking official associated with the e-procurement projects.

The e-procurement initiative has been developed, operated and maintained by Commerce1 India and the information technology act, 2000 already provides legal recognition for transactions carried out by means of electronic data and other means of electronic communication.

E-procurement is the way through which eventually all companies would buy goods and services. Top companies are already adopting e-procurement because of the proven financial returns. And e-procurement is the obvious place to start in implementing e-commerce -- it is low-risk and brings high returns on investment.

Most organizations can save money by adopting a purchasing strategy. E-procurement uses web communications to help deliver that strategy. "E-procurement can bring better and faster service to end-users of goods and services. It will cut costs for both buyers and sellers by automating purchase and sales processes and by reducing buying outside preferred supplier agreements," the official added.

For the first time it is possible to centralize all purchasing data economically to help make better buying decisions and build strategic relationships with suppliers. Web communications also encourage collaboration right across the supply chain.
Most e-procurement projects would concentrate on the initial process benefits from e-enabling transactions and will progress to the higher level benefits in time. However, in some sectors with complex and fragmented supply chains, benefits would come more from focusing on the implementation of e-procurement for e-strategic sourcing and collaboration.

It is debatable whether genuine and comprehensive Internet-based electronic procurement systems yet exist. What certainly do exist, however, are electronic purchasing systems where the processes of requisitioning are carried out electronically. Procurement is very much more than simply purchasing, however, and many of these further requirements have yet to be met satisfactorily and at reasonable cost.

Two striking characteristics of the growth of electronic business and associated global trading have been the fudging of clear demarcation lines between traditional processes extending through even to overall company activities and, secondly, the growth in the practice of partnering and forming alliances, often on a short-term ad hoc basis.

E-procurement is no different and a number of models are developing, instances of which are challenging earlier ways of doing business. With its encouraging policies of e-procurement initiative, AP government has shown that it does means business when it comes to e-governance.