What is e-procurement?

E-procurement is the process by which businesses purchase products and services from other businesses over the Internet. It’s an advancement on traditional procurement, which has a long-standing history of relying on manual and paper-based approaches to connect businesses with suppliers that offer goods and services for their operations. 

Businesses can leverage e-procurement to automate laborious, time-consuming tasks while maintaining operational accuracy. With it, companies can increase their workflow efficiency, save money, and improve data security within one easy-to-navigate solution. 

How does e-procurement work? 

Traditional procurement methods rely on paper-based workflows to manage contracts and acquire goods or services, but they often struggle to keep up with dynamic industries and support businesses that want to scale their operations. 

However, with modern e-procurement technology, companies of all sizes can experience operational efficiency, risk reduction, and more across the entire procurement process. Here’s how:

Vendor selection

E-sourcing (when buyers collect and narrow their list of prospective suppliers) is the first step in the e-procurement process. Throughout this stage, e-procurement challenges the standard pen and paper vetting process. 

A digital solution helps stakeholders identify and evaluate potential vendors so they only seek bids from the most compatible options. They can also easily manage a digital auction, or e-auction, during which suppliers and buyers bid for the best deals on services and materials. A more efficient process means buyers reach contract negotiation faster. 

Contract negotiation

After completing their short list of prospective vendors, companies accept supplier bids—a step many organizations call e-tendering. 

An e-procurement solution houses all communication and documentation that buyers and suppliers exchange. It also places each vendor side-by-side for a straightforward comparison of their bids and proposed contract terms.

Because e-procurement tools grant companies full transparency when comparing suppliers, they can leverage one vendor’s bid to negotiate for a more favorable contract with another. Negotiations continue until both parties agree on contract terms, rates, and duration. 

Goods or services purchasing

The next step of the e-procurement workflow is e-ordering. During this phase, the company purchases goods or services from the supplier’s online catalog. 

E-procurement automation is an asset during this stage—it relieves bottlenecks from manual approvals. Companies use an electronic data interchange to facilitate automations that approve purchase requisitions, send purchase orders to suppliers, and match vendor invoices to orders. The result is efficient workflows with minimal risk of error. 

Supplier management

Finally, companies must monitor suppliers for contract compliance and assess the ongoing risk of working with them. But manual vendor audits are time-consuming and prone to error, especially if a business has multiple supplier contracts to coordinate. 

E-procurement allows companies to conduct these supplier check-ins automatically and thoroughly. Buyers can assess if current suppliers are still in their company’s best interest to work with and gather in-depth insight from comprehensive supplier management, which allows them to stay agile and competitive. 

What are the benefits of e-procurement?

Companies that implement e-procurement workflows effectively can leverage them to drive business growth, along with these other benefits that span their entire operations:

Increased efficiency

E-procurement accelerates an organization’s internal operations through digital workflows and automations. This increased efficiency and accuracy saves organizations valuable time and energy, granting them more working capital they can reinvest in other parts of the business.

Enhanced purchasing visibility 

E-procurement gives organizations a big-picture view of their purchasing data. These metrics allow them to uncover opportunities to save money—like consolidating similar orders from different teams across the organization—and maximize each dollar they spend.

Strengthened supplier connections

E-procurement solutions have a foundational role in helping companies build quality vendor relationships. Fast, reliable processes boost a supplier’s confidence in an organization, while strong vendor connections reduce risk and set the stage for more profitable contracts. 

The challenges of e-procurement 

While e-procurement has strong advantages, implementing a new electronic procurement process can present unique challenges that companies should consider before making a final decision: 

Tech dependency

E-procurement is a tech-based solution. If technology fails, it can lead to issues with processes and due diligence. When investing in an e-procurement solution, choose one with a global reputation for stability and security to minimize risk.

Potential for bottlenecks

Robust e-procurement tools offer a variety of customization options that generate large sums of data. Trying to analyze and understand all this information may overwhelm a company’s approval and verification process. As a result, the entire process can slow down, leading to wasted time and money. 

Complexity and integration

Implementing new electronic procurement business processes requires time and patience. Additionally, not all systems are compatible with each other. Choose a solution that integrates with a wide range of procurement tools.

Who is e-procurement for? 

Organizations of all sizes and sectors can enjoy the benefits of implementing e-procurement—but the following industries may see the greatest rewards come from it:

Healthcare and nonprofits

Healthcare is the largest area of all public procurement spending, according to the Organization for Economic Cooperation and Development. Because of this, it’s crucial that healthcare and nonprofit organizations have procurement processes that can support their needs.

E-procurement helps healthcare and nonprofit leaders accelerate sourcing, access more supply options, improve transparency, and reduce administrative burden while remaining compliant with tight industry regulations.

In recent years, the procurement process has grown even more complex with the shift to remote work—administrators now need access to procurement solutions from outside of the office. E-procurement helps with this by allowing healthcare and nonprofit leaders to efficiently coordinate procurement from anywhere.

These are among the top procurement priorities for healthcare and nonprofit companies:

• Simplify vendor sourcing and management to foster long-term relationships
• Extend networking systems to mitigate risk from supply chain disruptions
• Improve operational workflows for greater efficiency while maintaining spend control
• Make impactful data-driven decisions that guide buying and budgeting to boost financial viability

Government agencies

Many government agencies navigate complex regulations in procurement. The US government, for example, speeds up their procurement process using a “three bids and a buy” rule—departments make a purchase decision after reviewing three bids from prospective suppliers. 

To streamline this process, e-procurement enables buyers to view and compare potential bids and filter by certification status. This allows agencies of all sizes to find a broader range of suppliers for increased cost savings while remaining compliant.

These are the top four procurement priorities for government agencies:

• Increase purchase visibility, make tax-exempt purchases, and manage permissions without unnecessary hurdles
• Use competitive comparison shopping to review items side-by-side and make educated, cost-effective decisions 
• Support local businesses by easily discovering and purchasing their goods or services on one intuitive solution
• Increase supplier diversification to support a risk management strategy and build resilience against supply chain disruptions

Manufacturing and industrial

Companies in manufacturing and industrial industries often face regulatory and supply chain challenges. Whether they’re purchasing raw materials or machinery, buyers must optimize their spending to preserve their bottom line. It’s usually more financially advantageous to order in bulk, so companies need vendors that can accommodate this. 

By optimizing their procurement processes, manufacturing and industrial companies can meet customer demand, side-step potential supply interruptions, and drive revenue to bolster their on-hand capital. 

Here are some of the leading procurement priorities for manufacturing and industrial companies:

• Keep up with shifting consumer behaviors through comprehensive purchasing and performance data to stay competitive and innovative 
• Track changes to global and domestic supply chain regulations and make data-driven decisions to manage risk
• Build strong supplier relationships to speed up processes, cut costs, and open doors for more favorable future contracts
• Gain purchasing visibility to accurately place bulk orders for discounted prices without racking up holding costs

Education (K–12 and higher ed) 

E-procurement for education opens doors to increased time and cost savings. Education buyers gain greater purchasing visibility, which allows them to control costs and stay within their budget. 

Automated procurement workflows also empower teachers, staff, and administrators to get the supplies they need to facilitate their students’ education without navigating complex requisition requirements.

These are some of the top procurement opportunities in education: 

• Get supplies faster and stretch budgets further with exclusive pricing and quantity discounts
• Save administrators time by setting spending limits to reduce the risk of maverick spend and implementing category restrictions to remain compliant
• Empower faculty and staff with user-friendly online buying and effortless purchase requisition approval workflows
• Get a big-picture view of spend across an organization and use real-time reporting tools to optimize cash flow
• Meet responsible purchasing goals by strategically sourcing products with sustainability certifications and from local businesses

Travel and hospitality

Organizations in travel and hospitality must stay one step ahead of guests, anticipating their needs and responding to industry trends. A centralized e-procurement solution ensures that these companies have efficient, agile means to acquire the goods and services they need to serve their customers and predict guests’ desires. 

Increasingly more customers want to see more eco-friendly practices, so organizations need to consider how their operations impact the environment and develop strategies to make their business more sustainable—including which suppliers they use to source goods.

Here are some of the leading procurement concerns for the travel and hospitality industry:

• Maintain enough working capital to offset financial losses due to economic shifts or industry disruptions
• Uncover opportunities to adopt more sustainable business practices and connect with vendors that have environmentally conscious values
• Reduce rogue spending by analyzing spend data and creating more transparent internal policies and procedures
• Establish financial and cybersecurity measures that protect sensitive company and guest data
• Build quality relationships with reliable suppliers who enable companies to serve guests’ needs in creative, innovative ways

Commercial businesses 

With traditional procurement methods, it’s harder for commercial business buyers to make purchases based on accurate data and with proper insight into supplier options. Additionally, commercial businesses range from clothing stores to coffee shops, so they each face unique challenges. Yet, e-procurement is a solution for all. 

Say a restaurant needs to accurately order stock to avoid waste but also wants to work with sustainable suppliers. Buyers require an in-depth view of their internal processes to optimally time their orders alongside a detailed comparison of suppliers, so they can source one with values that align with their own. E-procurement solutions empower buyers to make critical data-driven decisions that ultimately help them better serve customers and drive revenue.

These are among the leading procurement priorities for commercial businesses:

• Identify opportunities for cost savings through improved spending visibility in one intuitive interface
• Uncover and compare alternative products and suppliers to improve supply chain management and reduce risk
• Build a list of pre-vetted suppliers and delivery options for bulk purchases so companies can meet growing demand and attract new customers
• Get competitive pricing and comprehensive vendor selection by sourcing bids and using supplier performance data to negotiate favorable contracts

Types of e-procurement software 

Today’s procurement strategies involve more than simply cutting costs. Companies must seek out new opportunities to run efficient operations, boost supplier relationships, and navigate economic volatility. To accomplish this, companies can either select a comprehensive e-procurement solution or opt for individual applications.

These are the most common types of e-procurement software:

• Spend management
• Online supplier bidding
• Contract lifecycle management
• Accounts payable and invoicing
• Vendor management
• Warehousing or inventory

Companies that opt for single-purpose e-procurement tools are more likely to overpay for software or pay for duplicate functionality. The alternative is source-to-pay or procure-to-pay software, which is an end-to-end solution that removes the risk of overpaying on software or creating unnecessarily complex workflows.

E-procurement best practices

Successful e-procurement software adoption relies on a company’s ability to implement the following best practices:

• Leverage automation to streamline processes
• Perform regular spend analysis
• Determine which stakeholders are responsible for each stage of the process
• Integrate the e-procurement solution with existing systems
• Conduct software audits and make adjustments to ensure accuracy
• Opt for a user-friendly e-procurement software for smooth adoption
• Ensure company-wide visibility into the entire process

2025 State of Procurement Data Report: A deep dive into the state of global procurement

Our research found that while optimizing costs and increasing efficiency remain high priorities for procurement, purchasing in line with organizational values continues to grow in importance.

Business buyers continue to prefer omnichannel—and, in some cases, online-only—engagements with suppliers. According to HAQM Business’ 2025 State of Procurement Data Report: 

• 32 percent of procurement decision-makers report supply chain disruption or delays as the leading risk to their operations for 2025
• 23 percent of respondents cited reduced spending as the area they want their organizations to prioritize over the next year
• 47 percent of the decision-makers say that operational efficiency and complexity pose the greatest challenges to their procurement workflows
• 17 percent of procurement senior leaders cite suppliers without the ability to support digital procurement as a common external challenge to operations

Explore integrations with HAQM Business 

HAQM Business’ e-procurement solutions and partner integrations encourage streamlined purchasing and are easy to set up and use. Companies have several options for how to connect their procurement systems to HAQM Business—and buyers and procurement teams will instantly feel the benefits of a more efficient workflow.