The process of buying in goods or services from an external provider

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INTRODUCTION TO PROCUREMENT:

The process of buying in goods or services from an external provider covers everything from determining the need for new goods to buying, delivering and storing them.

Procurement can also be simply defined as the process in which goods or goods are bought when prices are low. Procurement is profitable if the goods are bought in bulk. E-procurement is another method in which the electronic media is used for acquiring or purchasing goods. Selecting the product is processed electronically, from the search for the right bidder to the delivery and payoff. The procurement procedure may differ according to the product and the uses of the product. Healthcare equipment needs to be efficient and reliable, and the procurement process is carried out particularly in order to avoid the purchase of faulty apparatus. The important element about the procurement includes the amount of product to be bought. This is important because the amounts of goods bought are the wrong way round proportional to their cost.

The synonyms for procurement, which are gain, purchase, buy, and acquire, can throw light on the meaning of procurement. The process of procurement may differ from company to company, and a government institution may have a slightly different procurement process compared to a private company. (Alison Cole, 2010). 

When bidding for a public sector contract you'll probably have to go through an official procurement process with a set timetable. The more the contract is worth; the more time taking the process is likely to be. Once you have identified a impending contract, assess whether your business can carry it out - and whether it makes financial sense to do so. Contact the significant organisation for more information on what the contract involves. Some contracts involve a official Expression of Interest a pre-qualification stage used to identify realistic candidates for the contract. You may be asked for information about the financial position of your business and details of your experience and references. (Business link, 2010). 

E-Procurement:

E-Procurement is the big business to business (B2B) purchasing of goods and services through the Internet. E-procurement can be an invaluable tool for enterprise experiencing technical hitches in their supply chain. If purchase orders are not being processed in a timely fashion and delivery dates are not being met through manual purchasing methods, e-Procurement can be extremely useful in reforming the procurement process. Without a regular and reliable supply of raw materials the manufacturing process will come grinding to a halt, leading certainly too missed delivery dates and a backlog of orders. It is vital, then, to ensure that the process of procurement is as efficient and dependable as possible. (Best price computers, 2010). 

ORGANIZATIONAL PROCUREMENT:

The highly prioritized agenda of the World Trade Organisation (WTO) is the privatisation of education, health, welfare, social housing and transport. The WTO's aim is to extend the free market in the provision of traditional public services. Governments in Europe and the US link the extension of trade in public services to economic success, and with the backing of powerful medico-pharmaceutical, insurance, and service corporations, the race is on to capture the share of gross domestic product that governments at present spend on public services. They will open domestic European services and familial markets to global struggle by government procurement agreements, dispute settlement procedures, and the investment rules of global economic institutions. The UK has already set up the compulsory mechanisms: the introduction of private-sector accounting rules to public services; the funding of public sector investment via private-public partnerships or the private finance initiative; and the change to capitation funding streams, which allows the substitution of private for public funds and military. We explain the implications of these changes for European public-health-care systems and the threat they pose to universal coverage, commonality through risk-pooling, equity, wide-ranging care, and democratic responsibility. (David Price, 1999). 

The WTO proposes to use a reformed government procurement agreement as the chief mechanism for aperture public services to the private sector. Government procurement rules supply the legal and dictatorial framework within which public bodies' contract for goods, services, and savings funds. This procedure opens up domestic services and markets to international competition. The prominent European Union reform proposals focus on "unlocking new potential markets" by extension of private firms' involvement with public services and by creation of contracting rules to ensure "acceptable returns for investors". (European Commission, 1996).

The WTO is stage-managing a new privatisation prize at Seattle. international and multinational corporations, including the pharmaceutical, insurance, and service sectors, are lining up to capture the chunks of gross domestic product that governments at present spend on public services such as education and health. The long practice of European welfare states based on solidarity through community risk-pooling and publicly responsible services is being dismantled. The US and European Union governments are persistently backing this project in the interests of their business corporations. But the stabbing on our hospitals and schools and public-service infrastructure depends ultimately on a swear from one government to another to enlarge private markets. Such promises can be kept only if domestic opponent to privatisation is held in check. We need to continuously reassert the principles and values on which European health-care systems are based and defy the WTO agenda. (David Price, 1999). 

SYSTEM PROCUREMENT:

System procurement is the set of actions involved in deciding what system should be bought, choosing a contractor for the system and leasing a contract for the supply of the system. It can be as simple as looking up a catalogue to choose a PC or may be an exercise which lasts months or years to choose and secure a large, complex computer-based system.

All decisions regarding purchase include some factors such as delivery and handling, marginal benefit, and price fluctuations. Generally it involves making decisions regarding buying under the where the product is unavailable. (J. W. E. Masterman, 2002)

Considerable savings can be made and costs can be reduced which makes authors suppose procurement to be a strategic issue. There was a 19% difference in the probability of a company becoming successful. Out of them, 13% of the companies reduced the cost of their goods and services were able to maintain a higher profit. Procurement is the best method of reducing costs and escalating the quality of service however, there are risks involved with respect to procurement. There is a report that general performance of e-procurement in UK and all through Europe is quite low and less than 20% of the big companies adopt this technology. Lack of faith in trading partners and security concerns was one of the reasons that business owners were not keen on taking that risk. (Kluge, 1997)

FORMAL PROCUREMENT:

In business terms the formal processes are recognised as the rational construct that was handled based on some rules and was operated through some regulations and programs. The formal processes are the default governing structure of most large companies established in 19th century. It evaluates performance by numbers. Formal processes in an IT evaluation essentially involve the systematic use of data and logical processes keeping in mind, constraints present.

Managerial:

The management can choose one of three organizational structures to follow in their projects. These are the Pure, Functional and Matrix configuration. Pure Project: This structure is the self-contained autonomous unit, the strengths of which are speed and flexibility. Here the project manager enjoys full authority over the project and team members have to report to one boss only. One main drawback of this structure is that since the resources are not being shared across the organization there will be duplication of resources and wastage. The second type of structure is the practical where one department services the needs of the entire organization. For example the Research and Development department takes care of the R & D of the entire product range of the organization. This structure gives the members to work on many projects simultaneously and widens their horizon. However this creates the need of reporting to multiple bosses and thus creates trouble for the members. 

Matrix structure is a mix between practical and pure projects. Here each project utilizes people from different practical areas. The project manager decides what task is to be done and at what time whereas the practical head determines the people who will work on the project. One main negative aspect here is that a person has two bosses and very often it creates a doubt in the mind of the person as to whose orders have to be followed. (Manshu & Dr. J.S. Donald, 2010).

Economic:

Modern economics seems to have been condensed to finance. To see the variation, compare "Maximizing profits" with "Keeping within budget". Both are to do with money. But when maximizing profits the importance is on a figure reducing economics to the quantitative aspect. Economics is sometimes seen as the science of supply and demand, production and spending. This is a misconception since it contains no concept of responsible stinginess. If Dooyeweerd is right in proposing that stinginess the kernel of this aspect then such a conception should lead to harm.

Example:

Let us think about how privacy concerns enter this very basic transaction. Suppose the seller has many different kinds of apples (Jonathan, Macintosh, Red Delicious, etc.) The buyer is willing to pay at most r to purchase a Jonathan, and 0 to purchase any other kind of apple. In this transaction the buyer would want the seller to know certain things about him, but not others. In particular, the buyer would like the seller to know what it is that he wants, namely a Jonathan apple. This helps the buyer reduce his search costs since the seller can immediately offer him the appropriate product. The operation is made more efficient if detailed information about the consumer's tastes is available to the seller. On the other hand, the buyer will in general not want the seller to know r, the maximum price that he is willing to pay for the item being sold. If this information were available to the seller, the seller would price the product at the buyer's maximum enthusiasm to pay, and the buyer would receive no surplus from the transaction. Roughly speaking the buyer wants the seller to know his tastes about which products he may be interested in buying; but he doesn't want the seller to know how much he is willing to pay for those products. (Hal R. Varian, 1996).

Engineering:

In very big businesses and the agencies related to public sector, have a very good management of information assets which is a key to their effectiveness and quality services. The recent advances in the technology for the deployment of information services have enabled cost effective switch over of data between the organisations. It is becoming very difficult for the organisations to purchase or exploit their own information assets for marketing purposes. Public agencies have been collaborating with biggest producers of information. (Wang, R., Strong, D.).

Recent years has seen an upsurge in interest in fuel cells for a range of applications, including transport and smaller scale static power. This interest has been largely generated by the breakthroughs made in the submission of solid polymer electrolyte fuel cells. This activity has mainly been directed at the use of hydrogen as the clean source of fuel. The use of hydrogen brings with it issues regarding the appropriate and safe transportation and storage of the fuel and several methods have been advocated and are being researched and developed.

The use of electro catalytic combustion of the methanol in the carbon dioxide methanol vapour is an option which is at least electrochemically viable. This may lead to a system design which uses both liquid feed and vapour feed cells. At the moment, many questions remain unreciprocated as to the design and optimisation of DMFC stack systems until performance data is obtained on large scale cells. However, it should also be noted that many of the problems associated with the anode side of the DMFC are duplicated with the cathode side as long as the problem of methanol crossover exists. (K. Scott, 1999)

INFORMAL PROCUREMENT:

These processes deal with all the human aspects of the company like the values, behaviours, myths and cultural norms. It is an undeniable emotionally resonant force. Even most of the managers recognise the informal processes within a company can create effects that seem like magic, more likely in situations like transformation. These processes are done without really following any kind of rules and regulations.

Social Shaping of Technology:

The social shaping of technology (SST) approach to analysing technological development lends itself to an understanding of the comparatively negotiated, heterogeneous, and local character of technologies, politicising the mediated nature of sociotechnical change. Here, conditions of actor prior arrangement lie at the heart of analysing technology in social context that is, the occasions, strategies, and scope of authority that are afforded different actors, by way of how particular problems come to be defined and resolved. In this paper we examine the framing of a number of concrete technology assessments (TAs) from Denmark, from the realms of general TA and health knowledge assessment (HTA). Our examination of the TA initiative is directed towards the relatively open-ended and consequently explorative and qualitative stance that SST takes in characterising the boundaries between the technical and the social. The paper goes on to discuss a possible place of ethical inquiry in TA, based on the understanding of scientific development that SST affords. In the reflexive approach to addressing technologys relation to society, technology no longer maintains an across the world reducible character in time or in social space. Through the possibility of analytically and practically opening up for otherwise seemingly locked actor-positions SST gives room for a more differentiated questioning and treatment of ethical issues in which technology may be implicated. (Christian Clausen & Yutaka Yoshinaka, 2004).

Micro Politics:

(Iannaccone, 1975) was the first to coin the phrase micropolitics of education, which he described as the politics that takes place in and around schools. The focus of micropolitics was on "the crossing point and political ideologies of social systems of teachers, administrators, and students within school buildings". Other researchers have since defined micro politics as the tactical use of power by individuals and groups in organizations to achieve preferred outcome (Bacharach & Lawler, 1980). Still other researchers included concepts from the political science literature as a means of organizational analysis such as polity, power, influence, power allocation of scarce yet valued resources, dominant coalitions, etc. As the population becomes more varied and resources more limited, people with different values and ideologies find themselves scramble for these limited yet valuable resources. Micropolitics are often the currency through which these scare resources are obtained.

Example:

At the start of their career, most primary teachers in Flanders (Belgium) get a temporary job as a classroom teacher, with the full responsibility for a group of pupils. At the same time they also face the confront of finding and negotiating a place of their own in the school's existing organisation. The important actors in this organisation are the principal, the teacher-colleagues, the parents and the school board members (Gold, 1996). They all have certain normative ideas about good teaching and how they are to be achieving in practice. The school as an organisation lives by certain traditions and habits, or more or less subtle power relations between school members, with different interests. In other words, the beginning teacher is confronting with a micro-political reality in his/her job situation. Many observed: "The classroom everyday jobs facing the inductees had less to do with teaching children and more to do with juggling the multiple demands of a functioning institution"

Boundaries:

In earlier times, the focus of software was more on systems development in-house to suit the needs of a company's business / functional requirements. This was deemed necessary not only because it was important to have the buy-in from the staff but also because they would be the one handling the system. Hence their inputs were deemed valuable from the perspective of enhancing the value of the software. The focus has shifted from a specific user to a market. In modern times, with the advent of packaged systems, this need seems to have completely vanished. Developers develop products for a market and not for an end user. Hence interaction with buyers is also through surrogate means like trade shows etc. and in other times through countless mediators like front-desk personnel, customer care agents etc. Developers develop products for a market and not for an end user. From the perspective of the buyer firm, requirement seems to have shifted from the actual end user to the senior leadership with the leadership representing the end user and dictating the needs of the firm. (Howard, 2004)

Additionally, boundaries in a firm also stem from gender differences or ethnographic differences within an organization. For instance, power politics that exist in organizations between a women and a more male dominated section of the firm can influence the final outcome of an evaluation decision. A similar situation can arise due to the presence of various ethnic groups within an organization. In such cases, as is evident, the choice of technology doesn't remain restricted to the purely technical reasons but spills over to a more socio-political power play within groups in the firm. (Howard, 2004)

TENSION - FORMAL & INFORMAL PROCUREMENT:

The issue of linkage between the formal and informal financial sectors has recently gained much attention in the literature n the development finance. Policy makers in developing countries have considered these linkages seriously, and in some cases, have implemented schemes for promoting such linkages. An analysis of a particular linkage between traders and banking institutions, and its potential effects on allocative efficiency and welfare of small farmers is very important here.

This power gain between the two processes is evident in all aspect of running a business in all departments. The buying and valuating of the IT systems have another additional twist. Formal and informal processes in IT procurement arise primarily from the dual nature of software package. The testing has important welfare implications. In world where in formal lenders are competitive in the myopic sense, the indirect route of expanding formal credit to informal financial intermediaries may increase the competition among such type of intermediaries, leading eventually to greater availability of credit for the small borrowers. Since this is called as tension between formal and informal processes, it is part of our every existence and no doubt where ever we go and whatever we do our choices, actions, decisions will always reflect this tension within us. The organisations which we create and run and which becomes a mini society will also reflect this tension. One set of system lies stress on process diagram, forms and check lists, proper announcement methods, that is the more mechanical or un-human aspects of running a business. The other tries to draw the actors away from these and relies on such human aspect as power, feelings, politics, emotions etc.

CONCLUSION:

The procurement is a process that is carried out by almost every company and individual for its own personal gain or for profits, which involves buying of commodities by choosing the appropriate bidder. Firms that sustain high performance over time know how to mobilize their informal organizations while maintaining their formal structures. Each can run in sync with the other, although the right balance of formal and informal measures would different depending on the company. Balancing formal and informal measures can lead to a successful pursuit of higher performance. The balancing nature has to be maintained. The political issues should not go to a great extent because these issues may degrade the reputation of the organisation. Each and every individual have to understand the importance of being together and everyone has to keep things as simple as possible.

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