Consumers need to organize and send purchase orders to suppliers for procurement purposes. Procurement is a process in which a buyer makes sure that a purchase order for a particular supplier is accurate and authorized. The organization and procurement of purchase orders are especially necessary for large retailers, wholesalers, manufacturers, and electronic companies who buy many different types of items from many different suppliers. Manufacturers need to replenish their parts in stock to keep up with their production schedule. Grocery retailers need to replenish their perishable items in a supermarket. Electronic companies need to buy parts for their newly designed products. Wholesalers need to purchase large quantities of goods from many different manufacturers. Furthermore, regular consumers who often shop over the Internet for discounted products from different suppliers also need to organize their purchasing records. All of these consumers can make use of a software program to organize and send purchase orders to suppliers so that billing statements are generated accurately and purchased items are received on schedule.
This procurement process is very important because it is costly for both consumers and suppliers if purchase orders are missing and get sent to the wrong consumers or if purchases are unauthorized. It takes time and money to tract down missing purchase orders and correct inaccurate billing statements. Suppliers may loose customers if the procurement is not accurate. On the other hand, consumers such as grocery stores, retailers, wholesalers, and manufacturers may loose profits without accurate procurement because they have business schedules that depend upon the delivery of the purchased items. Therefore, consumers and suppliers need a software program which can help them in the organization and procurement of purchase orders.
This need is especially felt by both consumers and suppliers as the electronic commerce activities increase. In the recent years, the number of on-line consumers and suppliers has increased. An online or an electronic consumer is a consumer who purchases items over the Internet or the World Wide Web (www). On-line purchasing becomes a convenient, cost effective, and timesaving method of buying. Over the Internet, consumers can examine and select items that they want to purchase by interacting with web pages such as clicking and dragging items into an electronic shopping cart. The suppliers of the selected-and-purchased items then send these consumers a billing statement. On-line market is also a good method for suppliers to commercialize their products. It is economical and convenient for suppliers to post their catalogs online to advertise their products. Consequently, as the electronic commerce activities increase, the demand for a procurement software program also increases.
The boom of electronic commerce has brought about many software programs to assist buyers and suppliers in different phases of purchasing and procurement processes. However, software programs that currently exist in the market are often not compatible to one another because they are designed by different software firms for a particular type of electronic commerce and for a particular phase in the electronic purchasing process. For example, one software company creates software for an electronic commerce web page, but another company could create software for the procurement application. The first software program is not likely to understand the codes and variables in another company's software. When incompatible software programs do not understand one another, they would likely cause errors in the billing statements and other costly discrepancies in the electronic commerce. Thus, there exists a need for a dynamic procurement software program that can work well with other software programs.
Stand-alone software program can help consumers in the organization but not in the online procurement of the purchase orders. There exist many stand-alone or computer network software applications to help consumers in dealing with the organization of their purchase orders. Consumers may use these software applications to fill out purchase orders and send to suppliers via electronic mail (email) for procurement. For example, the relational databases such as Access, File Maker, etc., enable users to create their own purchasing categories, headers. These software users can sort purchasing records and calculate total payment due to each supplier. In order to use the relational database, consumers have to painstakingly enter each item, each supplier, currency, address, etc. Sometimes, the number of records can reach to tens of thousands. It is very time-consuming and tedious to use these databases. For instance, consumers have to learn how to create headers, items, suppliers, etc., and learn how to sort, classify information. When their purchasing needs change, these consumers have to change the configuration of their databases. Furthermore, some relational databases cannot handle electronic commerce issues. These relational databases are not designed to work compatibly with other commercial web pages to automatically enter purchasing items into the database. These relational databases are designed to solve off-line organization problems wherein users have thousands of records and want to enter, and organize the information. Therefore, many relational databases cannot handle online purchase where a consumer sends and receives purchase orders to suppliers for billing and for procurement.
There exists other software to assist online consumers in solving procurement problems but they are not generally adaptable to consumers' changing purchasing needs. This software can help consumers to place an order, receive a bill, and make payments in many online purchasing situations. However, this software does not allow consumers to change the configuration to meet with their changing purchasing needs. Consumers can only handle and sort data in a certain headers, and predefined categories, etc. Consumers cannot always change the features of the software to fit their changing needs. For example, an antiques dealer who recently finds new antique sources overseas needs to reclassify its purchase orders and method of shipment because the consumer now has to pay in different currency and ship to a different location. Furthermore, different consumers have different types of purchasing. An electronic manufacturer has different ways to manage its purchasing as well as their payment methods. A grocery retailer may need different purchasing categories to classify his or her purchasing. Existing software does not provide flexibility to buyers in the face of the above problems. For instance, a consumer would need to change the headers and sort categories in each program at installation time to fit their needs; and they then need to compile their program again. Compiling a software program takes specialized engineering training and is very time-consuming. Moreover, many software programs offer configuration that cannot be altered at all. As mentioned above, these programs are often not compatible with other existing programs, causing tremendous problems in the procurement process. Therefore, existing software programs for procurement cannot adapt to consumers' needs.