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