What mode of e-business procurement should be chosen?
The procurement model that a company selects needs to
complement the strategic importance of the project and the in-house
availability of resources to develop such solutions. four different procurement
Businesses that enter into partnerships generally seek a
partner (consultant or service provider) who can supply the expertise they lack
to develop the new information system. However, most SMEs prefer to hire
freelance programmers, because a partnership arrangement with a consulting firm
is often expensive and time-consuming.
In the preservation model of procurement, the e-business
system is developed entirely in-house. This model is usually adopted by
businesses that have the internal skills to carry out the e-business project on
their own. In addition, firms that select this model generally place a high
strategic value on the project.
When the strategic value and expertise of in-house resources
are low, outsourcing is a logical solution. This was the case for Polar Plastic
and GLP Hi-Tech, who contracted out their e-business development to external
In the recovery procurement model, there are two approaches
that can be followed: The first is to share development costs among several
companies. Despite the obvious economic benefit of this approach. The second
approach is to market the application developed by the company,