“For most companies, the ‘nirvana' of seamless online sourcing has yet to become a reality.” (Ross Tieman 2004). In fact since the last decade internet has became a major tool of our life, as well as in business. It appeared at the same time when global sourcing had begun to be generalized in more and more firms. A lot of new words appeared, such as “e-business”, “e-sourcing”, “e-economy” or “ICT alias information and communication technology”. The business world changed, and so did its tools, due to the growth of the internet, and globalization.
However, the question that emerges is, is the Internet really a wonderful tool? Global sourcing is a means whereby the firm becomes global in its strategy, and thus implements cost-saving, and finds the best offer for itself. Online sourcing is the process of sourcing via the internet. Have the business tools changed? What are the benefits of online sourcing? What is the role of the internet in global sourcing? In the first part of this document we will explain the growth of the internet, and its role in global sourcing. Then in the second part, we will research the benefits of online sourcing. To conclude, we will assess the statement of Ross Tieman.
In the last twenty years, the internet has grown steadily, and it appears today, like a multifunctional tool! In 2007, 61 per cent of the households had access to the internet in Great Britain (it is 36 per cent in more than 2002) and in 2006, 60 per cent of the users surfed the web every day, according to Great Britain's Online Statistics. In the European Union, 40 per cent of households had internet access at home in 2006. The Netherland has the biggest record, with 80 per cent of its households possessing internet access, as opposed to 8 per cent for Bulgaria's households (Eurostat 2007).
In fact internet permits people, not only to communicate with people everywhere in the world, but also to apply for jobs, find any information, buy goods as well as prepare travel itineraries, manage bank accounts, compare prices directly, and so on. The Internet has thus become an essential element of our life; not only in our private life but also in the world of business.
[...] In addition, the online global sourcing is less expensive, and thus more accessible for all firms, even if they are small and have a small budget. The fourth advantage is that of time. If a new supplier or customer has to be found in a hurry, internet helps a company save time. No more a long plane journeys or foreign trips are required to negotiate the contract. In addition, it enhances efficiency and productivity. The fifth advantage is that the department of buying obtains a better vision of the global market, which it needs so it can choose its supplier after looking at the different prices existing on this market. [...]
[...] Trust is an important factor in international global sourcing, and cannot be obtained only with the internet (David Tucker, Laurie Jones, 2000). Thus, a company usually forms a selection of some suppliers, and then goes to meet them to be sure, not only of the quality of the firm and all they can offer, but also the quality of products ordered, the staff regulation inside the firm (for example, do children work in this firm) etc. Thus the company can check if this new supplier corresponds to its ethics. [...]
[...] What is the role of the internet in international global sourcing? Global sourcing could not be as global as it is, without the internet. In fact when a firm chooses a new strategy like global sourcing, it is because it wants to save money and make more profits. Two choices can be chosen. In the first one, the firm asks its staff to look for new suppliers around the world, to go to their premises, and meet some future suppliers. [...]
[...] The first is the rapidity with which a firm can find new suppliers or customers, to be in touch with them, to negotiate, to receive quotation, etc. This rapidity is obtained only due to the internet, and for some companies, from global sourcing software which uses internet services! The second advantage is the ease with which all these different stages can be executed. The whole process can be done from office. The only thing the staff need, is a computer with internet access, maybe a webcam and of course some knowledge about the subject! [...]
[...] Nowadays almost all companies have a global sourcing network, due to all the advantages which this permits them to have, but the companies still face some difficulties such as that of trust, different cultures, or the need for a budget to invest in these products to stay competitive with the big firms. The biggest firms have more power than the little suppliers. In fact, they do not really have a choice to use or ignore these types of tools. The role of the internet is thus really important now in business life, but always cannot appear as sufficient. [...]
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