For over several years now, the process of sales operations has changed immensely. It is one of the sole reasons for the emergence of eCommerce. The advancement of technology has consolidated back-end processes of purchasing, and we can witness the changing models and concepts in the digital world.
The B2B business transactions in the digitized world have been known by several names, including eCommerce, ERP, PIM eProcurement, Punchouts, etc. All these technical words have created a lot of confusion in the minds of businesses. Similar to these words, there is a long-term battle between the eCommerce system and the eProcurement systems.
People are wondering whether there is a difference between the two or they are the two sides of the same coin. Do you feel the same? Don’t fret! We will burst your cloud of confusion with the in-depth comparison between the two terms: eCommerce and eProcurement systems.
What is an eCommerce System?
If you want to know what exactly eCommerce systems mean, you need to look at the brands that have positioned themselves as one of the best in the online market due to the way they manage businesses through digital platforms. Amazon, Flipkart, eBay, Shopify, and Myntra are some of the significant examples.
Theoretically, an eCommerce system, also known as an electronic commerce system, is a process of selling and buying products or services through an electronic medium. It allows the business to function without any barrier of distance and time.
With the days passing by, cloud-based eCommerce platforms are gaining popularity due to lower maintenance costs and reduced complexity. At present, it has become the most preferable solution in the market.
How Does an Ecommerce System Work?
eCommerce is similar to the retail business. The only difference is that eCommerce systems work digitally.
The eCommerce system operates through sequential steps, using website coding, database, and third-party payment processors like payment gateway. It functions on secured SSL and provides encryption on all data.
An eCommerce system works over a 100 percent computerized network. Following are some of the elements necessary for the working of the eCommerce businesses:
- Electronic media is necessary to access electronic commerce.
- A cloud-based server is required to store all customer-related information.
- The Order Processing software ensures that all the products required by the customer are in stock.
- The Payment System is essential to enable various payment methods on the website. It notifies both the buyer and seller once the payment is confirmed.
- The Merchant System authorizes the transaction and notifies the web server once the payment is confirmed.
Therefore, the above points contribute to the mechanism of eCommerce systems.
What is an eProcurement System?
eProcurement systems, on the other hand, are intuitively 50 percent of the eCommerce system. Simply put, eProcurement refers to the purchase of goods and services using the purchase as the acquisition method using electronic media. The fundamental objective of eProcurement is paperless purchasing, i.e., elimination of paperwork in the process of requisition, purchase order, solicitation, delivery, invoice, and payment.
eProcurement differs from the eCommerce system as it leverages the closed system of the supplier that is generally available for registered users. With proper implementation, eProcurement unfastens the chain of communication between the company and the supplier through the creation of direct links and interaction facilitation like emails, bids, and purchase orders.
How Does an eProcurement System Work?
eProcurement is an essential system of trading activities across the internet. It digitizes the activities of faxing physical order forms or searching through price lists and paper catalogs. The B2B businesses entirely depend on eProcurement systems for conducting research, shopping for products or services, and making the purchase process more efficient.
The eProcurement software offers multiple benefits to the suppliers and businesses. It makes the requisition and payment process effortless, thereby minimizing the cost per transaction. It streamlines the process of purchasing and offers better expenditure management in the space of eCommerce.
In the eProcurement system, the customer joins the process at the request of the buyer. It creates more transparency as the buyers can negotiate prices in a better way and regulate direct purchases to selected vendors. The system minimizes frauds and errors so that all the functions of the business, like purchasing and accounting, are operated more efficiently.
Solving the Feud: eCommerce vs. eProcurement Systems
In any business transaction, the buyers and the sellers work towards a common goal, i.e., to ensure sales while their needs are different. If there is more complexity in the transaction process, the difference between the needs of the buyers and sellers increases even more.
Hence, they integrate two different systems to manage and digitize their workflow. eCommerce solution caters to the sellers while eProcurement looks after the needs of the buyer. You cannot interchangeably use any of the systems.
In the B2B eCommerce system, CPQ, RFQ, QTC, return processing, invoice management, and payment processing are done effectively. On the other hand, eProcurement also offers the additional benefits of requisition and purchase order management.
Therefore, both systems are equally essential for a smooth flow of business transactions.
Advantages of eCommerce and eProcurement Integration
The sellers in certain industries are unable to provide adequate products to the B2B and B2G customers. They need to keep a track of purchase requirements that differ from customer to customer. The customers generally conduct their purchase research at this point using eProcurement systems, hence drawing Punchout catalogs from the sellers.
This way, it becomes necessary for the seller to integrate the eProcurement and eCommerce system for a quick and efficient process of purchasing. The buyers develop a long relationship with the sellers that board their eProcurement systems.
Through this integration, both the buyers and sellers can reach their goals without any hassle. The buyer can leverage their eProcurement system to proceed with the purchase process on the eCommerce website of the sellers. On the contrary, the seller uses other technologies to understand and sell their products or services.
Integration of the data between the eCommerce solution and eProcurement system allows for consistent and transparent purchase orders, inventory data, shipping, payment, and invoicing information.
Need of eProcurement in B2B eCommerce
In B2B businesses, the buyers refer to the employees who generally make purchases on behalf of the businesses. The eCommerce platform eases out the entire process for them.
But, how do they see their purchase experience on the eProcurement system? They start the research about their selected vendors on the solution.
They will further evaluate the offerings of products and prices (technically, the data pulled out from the eCommerce systems). After selecting all the purchase items, they will be transferred to the eProcurement solution for all the necessary purchase approval. After the approval has been made, the data transfers again to the eCommerce system.
The B2B businesses look forward to shortening and automating the purchase cycles with an eProcurement system. With the integration of eProcurement in B2B eCommerce, the shopping experience of the buyer is enhanced, and the seller enjoys a competitive advantage in the market.
After an in-depth evaluation of both eCommerce and eProcurement systems, we can conclude that both the solutions are two sides of the same coin. The former is perfect for the functioning of the sellers, while the latter caters to the needs of the B2B buyer. An integration of both platforms helps businesses to automate the process of purchasing efficiently.