The Surprising History of E-procurement Systems

The Surprising History of E-procurement Systems

The problem with all these exciting software innovations, is it’s sometimes challenging to work out when to jump. Jump too soon and you might be sitting at the front when the barriers come down. Jump too late… well let’s just say the ticket collector won’t need to spend the time checking your ticket.

In a world where disruption seems to have become the norm, informed decision making is crucial. That means it’s important to understand where the journey started. While the growing adoption of e-procurement systems might seem like a recent innovation, the truth is that the history of e-procurement stretches back further than you might think.

1980s

The first stirrings of e-procurement emerged in the 1980s, built on the back of Electronic Data Interchange (EDI) technology. This simple system created a computer-to-computer information exchange that could be used as a rudimentary e-procurement platform between companies.

The arguments made for use of EDI are some which might seem startlingly familiar still today: reduced manual workloads; lower operating costs; increased productivity; improved processes.

1990s

By the early 1990s software companies had begun to realise the potential of e-procurement systems, expanding capabilities to broaden the accessibility of such solutions. This was typically done through an online catalogue, with standardised items and unit prices listed by vendors which offered an e-procurement reference for customers.

As technology progressed, these catalogues slowly began to be pushed out by more advanced solutions. In the late 90s, software designers and companies began to create basic forerunners of the e-procurement systems we still see reflections of in the market today.

2000s

The early 2000s saw a huge growth in internet users, up to 738 million in 2000 from just 16 million five years before. This massive growth in internet use was reflected in business, and worked hand-in-hand with rapidly developing e-procurement systems to create increasingly connected and populated e-procurement platforms.

In 2002, Procurehere began its own journey, bringing the first Malaysian-born e-procurement solution to the market. This first system was built on the same foundations as today, offering a powerful opportunity to business through a simplified and user-friendly solution.

As e-procurement became more widespread with the growth of solutions entering the market, so too did analysis and recognition of its benefits. By 2005 e-procurement was a widely hailed business opportunity, with advocates again focussing on the potential of reduced costs, improved performance and increased business competitiveness.

2010s

By 2010 the growth in connectivity was unlocking even greater opportunity through e-procurement systems. The total global internet population had surpassed 2 billion, going on to reach the 3 billion mark less than five years later. This period also saw huge increases in global bandwidth, meaning faster connections that opened up even greater business opportunities.

This growth in connectivity provided an exciting new avenue for e-procurement systems, as platforms increasingly began to migrate to the cloud. Procurehere took its own journey into the cloud in 2017.

These remote access cloud-based solutions provided all the benefits of e-procurement without the costly IT infrastructure or significant upfront capital expenditure.  As on-premises enterprise solutions market share falls, the use of cloud-based software as a service(SAAS) is set to becoming a growing trend.

E-procurement systems today

E-procurement has travelled a long way since the EDI days of the 1980s. Some analysts put the current market value for e-procurement at around US$4billion, expected to reach US$6 billion by 2021.

While the platforms have evolved and migrated to the cloud, it’s fascinating to see that the arguments for adoption have remained largely the same through forty years of that evolution. E-procurement systems have almost four decades of history delivering improved performance, increased savings and better operations to businesses around the globe.

With almost forty years of arguments in its favour, e-procurement is a journey with a long history of demonstrating value. If you’re not quite on board yet, maybe it’s time you thought about buying that ticket?

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