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Int. J. Production Economics 113 (2008) 159175

www.elsevier.com/locate/ijpe

Adoption of e-procurement in Hong Kong:

An empirical research
Angappa Gunasekarana, Eric W.T. Ngaib,
a

Department of Management, Charlton College of Business, University of Massachusetts-Dartmouth, 285 Old Westport Road,
North Dartmouth, MA 02747-2300, USA
b
Department of Management and Marketing, The Hong Kong Polytechnic University, Hong Hum, Kowloon, Hong Kong
Received 6 March 2006; accepted 15 April 2007
Available online 24 July 2007

Abstract
For the past 5 years, a large number of procurement articles have appeared in the literature. E-procurement solutions
make purchasing activities more effective in terms of both time and cost. E-procurement is changing the way businesses
purchase goods. Since most products and services are procured using electronic data interchange and the Internet, the
application of e-procurement is inevitable in both manufacturing and services. There are limited empirical studies in the
literature on the adoption of e-procurement in a country, that is, at the macro-level. Nevertheless, such a study will help
companies in other countries to develop policies, strategies, and procedures to implement e-procurement. Understanding
the importance of such a study, we have conducted a questionnaire-based survey about the adoption of e-procurement in
Hong Kong. The main objective of this study is to identify the perceived critical success factors and perceived barriers
regarding the implementation of e-procurement. A conceptual framework has been developed for the adoption of
e-procurement, and this subsequently has been tested with data collected from companies in Hong Kong. Also, this study
examines the current status of e-procurement adoption in Hong Kong. Finally, a framework is proposed based on the
conceptual and empirical analysis for the adoption of e-procurement. The results indicate that educating companies in
both long- and short-term benets would encourage the application of e-procurement. Some critical success factors include
adequate nancial support, availability of interoperability and standards with traditional communication systems, top
management support and commitment, understanding the priorities of the company, and having suitable security systems.
r 2007 Elsevier B.V. All rights reserved.
Keywords: E-procurement adoption; Empirical analysis; Framework

1. Introduction
The emergence of Internet technologies has farreaching ramications on the way business is
Corresponding author. Tel.: +852 2766 7296;
fax: +852 2765 0611.
E-mail address: mswtngai@inet.polyu.edu.hk (E.W.T. Ngai).

conducted. Kheng and Al-Hawamdeh (2002) explore the role of business-to-business (B2B) electronic commerce (e-commerce), with an emphasis on
electronic procurement (e-procurement) among
companies in Singapore. Their study examines the
impact of Internet-based technology on the buyer
side of the procurement function, how e-procurement is helping organizations to enhance their

0925-5273/$ - see front matter r 2007 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2007.04.012

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A. Gunasekaran, E.W.T. Ngai / Int. J. Production Economics 113 (2008) 159175

competitiveness and the challenges to its adoption.

In e-procurement, buyer software enables users to
automate transactions and focus on the buying
organizations activities, such as order placement,
catalog management, payment, reporting, and so on
(Rajkumar, 2001). E-procurement systems generally
must be capable of integrating multiple supplier
catalogs into an aggregated, buyer-managed view of
the catalog. They enable review of product purchase
patterns and deliver knowledge that can be used to
facilitate supplier negotiations. These systems enable purchasing to automate most of the transaction
processing, as well as to reduce cycle times, limit
reductions in off-catalog buying, and free purchasing to focus more on activities such as strategic
sourcing.
E-business is the process whereby Internet technology is used to simplify certain company processes, improve productivity, and increase
efciency. It allows companies to easily communicate with their suppliers, buyers, and customers,
to integrate back-ofce systems with those used
for transactions, to accurately transmit information,
and to carry out data analysis in order to increase
their competitiveness (Muffatto and Payaro, 2004).
E-procurement strategies are emerging as a
powerful means of attaining the goal of cost
reduction and productivity enhancement. For example, Digital Buyer, a solution developed by Agile
Software, offers a comprehensive enterprise application suite for Internet-based sourcing and supply
chain optimization. By facilitating quotes and order
transactions, it helps manufacturers speed up new
product introduction to boost product revenue and
enhance customer satisfaction, while at the same
time cutting direct material costs to improve prots
(Peleg et al., 2002). Many other online exchanges
that focus on connecting buyers with potential
sellers for the exchange of direct materials, such as
www.insurance.com (insurance policies), www.bridgepath.com (IT contract stafng), and www.noosh.com (printing services), report substantial cost
savings that their customers have realized by using
their services (Peleg et al., 2002).
Cagno et al. (2004) examine the state-of-the art
and development prospects of using e-procurement
for projects related to the engineering and contracting (E&C) sector in Italy, through the results of a
study carried out during 20012002 in collaboration
with ANIMP (Italian Association of Industrial Plan
Engineering). The study was concerned with SMEs,
which account for about 75% of the revenue

generated in Italy. Engineering and contracting

companies spend between 60% and 70% of their
revenue on procurement (98%) of project materials.
According to the Business Internet Consortium,
members of which include more than 20 of the
worlds leading high-tech companies, including
Microsoft, IBM, Intel, by 2010, B2B e-commerce
could affect up to 30 percent of US gross national
product (GNP) (Enos, 2000). Iresearch (ChinaByte, 2005), a professional market research company in China, estimates that the B2B market will
approach $8.3 trillion, with the whole e-commerce
market projected to reach approximately $8.8
trillion by 2007. E-procurement methods could: (1)
reduce the paperwork and cycle times, (2) enable the
direct and indirect procurement of goods and
services, (3) enable collaboration with suppliers,
and (4) reduce the total cost of procurement.
E-procurement has been introduced as a way to
achieve better, more cost-effective procurement
systems to solve many administrative problems in
the public sector (Moon, 2005). Davila et al. (2003)
suggest that e-procurement technologies will become an important part of supply chain management and that the rate of adoption will accelerate as
aggressive adopters share their experiences. The
advantages of e-procurement include: (i) reducing
administrative costs, (ii) shortening the order
fulllment cycle time, (iii) lowering inventory levels,
(iv) lowering the prices paid for goods, and (v)
preparing organizations for increased technological
collaboration and planning with business partners
(Croom, 2000; Roche, 2001).
E-procurement solutions, the Internet technology
platforms, and services that make corporate purchasing activities more efcient and cost effective
are moving from the early adopter age to rapid
adoption by mainstream companies. Panayiotou et
al. (2004) argue that government can also inuence
uptake of e-commerce through its own transactions
with business and achieve ow-through effects to
inuence the environment in which B2B transactions take place (Robinson et al., 2005).
Proponents of e-procurement argue that it helps
governments save money and provides a more
accountable, more effective, and faster way to
manage procurement. Moon (2005) suggests that
the potential benets of e-procurement are the
following: (1) lowered transaction costs; (2) faster
ordering; (3) wider vendor choices; (4) standardized,
more efcient procurement processes; (5) greater
control over procurement spending and better

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employee compliance; (6) more accessible Internet

alternatives for buyers; (7) less paperwork and fewer
repetitious administrative procedures; and (8) reengineered procurement work ows (Bendoly and
Schoenherr, 2005).
According to Subramaniam and Shaw (2004),
large organizations spend 1430% of their revenue
on procurement of non-production goods and
services, such as ofce equipment, supplies, computers, travel, and entertainment. B2B e-commerce is
projected to grow to $7 trillion in 2006 (Jupiter
Research at www.jup.com). Organizations are uncertain of realizing these benets for themselves at
the ground level, and therefore the e-procurement
research needs to expand to overcome this.
As indicated earlier, the literature available on
e-procurement discusses its benets and barriers
against its adoption. There are some case studies on
this subject, but few empirical studies on e-procurement adoption. Realizing the importance of
e-procurement and its scope in organizational
competitiveness, this paper presents the results of
an empirical study that was conducted to study in
detail the implications of barriers and critical
success factors for e-procurement adoption. The
results obtained and subsequent analyses are
reported below.
2. E-procurement
Traditionally, procurement has involved a number of communication mediums to facilitate procurement processes between the various parties.
These have included the use of mail, phone, fax,
EDI, and, more recently, email and the Internet.
E-procurement has evolved into the use of electronic technologies to streamline and enable the
procurement activities of an organization (Hawking
et al., 2004).
E-procurement is not new; there have been a
number of attempts to automate the procurement
process for buyers by using electronic procurement
systems, workow systems, and EDI. As there is no
universal denition for e-procurement, we have
chosen some from the literature. The following
offers a number of denitions of e-procurement.
E-procurement is dened as a comprehensive
process in which organizations use IT systems to
establish agreements for the acquisition of products
or services (contracting) or purchase products or
services in exchange for payment (purchasing).
E-procurement employs various elements, including

161

electronic ordering, Internet bidding, purchasing

cards, reverse auctions, and integrated automatic
procurement systems (Moon, 2005).
E-procurement can be dened as the process of
electronically purchasing the goods and services needed
for an organizations operation. It offers a real-time
platform for conducting business, while providing a
signicant opportunity to cut costs, increase organizational effectiveness, and improve customer service.
E-procurement offers promising opportunities as
regards the efciency, transparency, and the opening
up of public procurement, ensuring that public
contracts are awarded to the bidder offering best value
for money (Oliveira and Amorim, 2001).
An e-procurement technology is dened as any
technology designed to facilitate the acquisition of
goods by a commercial or a government organization over the Internet. E-procurement technologiesincluding e-procurement software, B2B
market exchanges, and purchasing consortiaare
focused on automating workows, consolidating
and leveraging organizational spending power, and
identifying new sourcing opportunities through the
Internet (Davila et al., 2003).
Raghavan and Prabhu (2004, p. 732) resort to the
CIPSs denition of e-procurement, which is the
electronic acquisition of goods and services including all processes from the identication of a need to
purchase of products, to the payment for these
purchases, including post-contract/payment activities such as contract management, supplier management and development.
E-sourcing includes forward and reverse electronic auctions, and online bidding and tendering,
which are also referred to as electronic requests for
quotations or proposals (eRFx) (Johnson and
Klassen, 2005), in particular, electronic reverse
auctions, in which online sellers compete to offer a
product to a single buyer at the lowest possible price
(Germer et al., 2004).
E-procurement is changing the way businesses
purchase goods. Most e-procurement activities of
companies are conned to non-production areas such
as maintenance, repair, and operating supplies (MRO)
goods (Rajkumar, 2001). E-procurement allows aidfunded buyers to compare quickly, easily, and cheaply
processes, specications, and delivery dates from
suppliers worldwide. E-procurement can cover many
ways of using the Internet, including (Cater, 2001):

company web sites with catalogs of products,

perhaps with online purchase;

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aid agency web sites with tenders inviting

company bids via online forms or emails;
web portals or exchanges that create markets
by bringing buyers, sellers or both together;
circulating information by email to potential
buyers or suppliers.

Reviewing the background of e-procurement

shows that a company may not be able to achieve
an integrated supply chain without the application
of e-procurement. Therefore, e-procurement adoption issues pose a great challenge in achieving the
full potential of supply chain management. In this
paper, we will address the critical issues regarding
the barriers and success factors in the adoption of eprocurement.
3. Adoption of e-procurement
The purchasing function has undergone a transformation from being more of a clerical function to
a managerial function, which has a strategic focus
on improving the organizational competitive position of companies. IT has been a key enabler in
purchasings evolution into a more strategic business function, by reducing the time taken to
complete mundane tasks and allowing purchasing
agents to focus on more value-added activities
(Rajkumar, 2001).
MacManus (2002) examined the slow implementation rate of public e-procurement systems. In a
related research, 85% of the 2001 NIGP survey
respondents mention time savings, while 75% cite
reduction in costs. Similar results came up in
Forrester Research, Inc.s survey of 35 state and
local government purchasing directors. Respondents
claimed that, by using the Internet to purchase, 54%
lowered paper/printing costs, 49% saved postage/
mailing costs, and 43% experienced quicker response/turnaround time (Sharrard, 2001, p. 5).
Reddick (2004) demonstrates an e-government growth model as a way of modeling the
development of e-procurement. The results of the
e-procurement model indicated positive support
for electronic procurement on state management
capacity and IT management capacity, indicating that high-performing management is critical
for e-procurement development.
Knudsen (2003) presents a framework for assessing alignment between corporate strategy, procurement strategy, and purchasing tools. The
framework is used for assessing the strategic origin

of the following e-procurement applications: esourcing, e-tendering, e-informing, e-reversed auctions, e-MRO, Web-based enterprise resource planning, and e-collaboration. The results indicate that
e-procurement tools are fully viable for creating
monopoly rents, moderately viable for creating
Ricardian rents, and only somewhat viable for
creating entrepreneurial rents. This indicates the
importance of e-procurement tools in the successful
application of e-procurement.
Moon (2005) examines which e-procurement
tools state governments are using as well as
exploring what factors affect the adoption of these
tools. This study conrms that simple innovations
are more rapidly diffused than those that are
technically or legally complex. State governments
that are more likely to adopt e-procurement tools
tend to be larger, managerially innovative, and to
have a strong centralized procurement ofce. Overall, e-procurement is promising technology, but
managerial and technical challenges still remain.
This highlights the importance of the adoption
issues of e-procurement. E-procurement adoption
issues have two dimensions: (i) behavioral control
and (ii) process control. However, they are interdependent with behavior issues, including things
such as perceived understanding of the benets and
barriers, while process issues include things such as
critical success factors and performance assessment
of the adoption.
Hawking et al. (2004) have identied the following as barriers against the adoption of e-procurement based on an empirical research conducted in
Australia: (a) security of transactions, (b) lack of
supplier e-procurement solutions, (c) high cost of
technology, (d) lack of a legal framework, (e) lack of
technical expertise, (f) lack of e-procurement knowledge, (g) no real business benets being identied,
(h) lack of data exchange standards, and (i) lack of
business relationships with suppliers.
Considering the need for developing a framework
for the adoption of e-procurement, we have developed a theoretical framework using behavioral
perspectives (perceived by the people in organizations) only. The details of the framework are
discussed in the following section.
4. A theoretical framework for the adoption of eprocurement
In this section, we have made an attempt to
develop a theoretical framework for the adoption of

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e-procurement in an organization. This framework

(see Fig. 1) is based on a literature survey and some
reported cases and empirical studies. The building
blocks of e-procurement adoption are: (1) perceived
benets of e-procurement, (2) perceived barriers
of e-procurement, (3) critical success factors of
e-procurement adoption, and (4) perceived organizational performance with e-procurement. This
framework, as presented in Fig. 1, has been used
to study the status of the adoption of e-procurement
in Hong Kong industries. The details of the framework are discussed below.
4.1. Perceived benefits of e-procurement
The perceived benets of e-procurement as seen
by companies have tremendous implications
whether one goes for the technology or not. In
many cases, the real benets including strategic
impact, intangibles, and non-nancial outcomes are
not spelt out, resulting in companies not recognizing
the true value of e-procurement in the supply chain
and in turn helping to provide the best possible
customer service.
Peleg et al. (2002) study three possible strategies a
company might choose to follow, namely (1)
strategic partnership, in which a company signs a
long-term contract with a single supplier, so that
future prices are known in advance; (2) online
search, in which the Internet is used for selecting the
supplier with whom an order will be placed. Unit
price in this case is assumed to be random, but its

distribution is known in advance, and it is assumed

to be a function of the number of suppliers
contacted for a price quote; and (3) a combined
strategy, under which a supplier is used as a longterm partner, but a second source might be chosen
through the Internet (Peleg et al., 2002).
Attaran (2001) classies e-procurement benets
into three different categories: (1) strategic, which
concerns organizational changes and market advantage; (2) opportunity, which is mainly related to
improved and explored relations with present or
even new suppliers; and (3) operational, which
means cheaper and more efcient purchasing
processes. Roche (2001) emphasizes the benets
coming from immediate availability of information,
paperless processes, and supply chain integration.
The adaptors of e-procurement systems worldwide, such as Cisco, Chevron, and Eastman
Chemicals, have demonstrated substantial improvements in several ways. The benets of e-procurement should include improved control of vendor
relationships, accurate order fulllment processes,
improved effectiveness of the purchasing process,
achievement of higher service levels, reduced prices
from the key suppliers, reduced inventory-carrying
costs, and reduction of the order cycle (Panayiotou
et al., 2004).
4.2. Perceived barriers to e-procurement
The successful adoption of e-procurement depends on the barriers present in the system.

Perceived Benefits of
E-Procurement

Perceived Barriers to
E-Procurement
Implementation

163

Implementation of
E-Procurement

Critical Success
Factors in
E-Procurement

Organizational
Performance with
E-Procurement
Fig. 1. Theoretical framework for the implementation of e-procurement.

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Identifying the barriers themselves is part of the

major managerial function in developing the right
pathway for the adoption of e-procurement. The
barriers could stem from infrastructure, strategy,
people, culture, etc.
Liao et al. (2003) highlight the problems associated with procurement: untrue oor prices,
improper alteration supplements, improper procedures in awarding contracts, information leaks,
taking bribes and improper benets for some
favored companies, and careless supervision and
resource distribution. Behavioral and political
dimensions have a great inuence in dening the
procurement process and its effectiveness. In many
cases, the communication has been distorted by the
individuals to pursue their own interests in the
organization. E-procurement will facilitate shared
information and hence open communication, and
there will be fewer behavioral and political impacts.
Some of the perceived barriers one should include
against adopting e-procurement are insufcient
resources, lack of motivation of people, resistance
to new technology, lack of top management
support, etc.
4.3. Critical success factors in e-procurement
The factors that are critical to the successful
adoption of e-procurement have to be identied
based on previous experience, the literature available, seminars, etc., with the objective of determining the CSFs for the adoption of e-procurement.
This could be even dened as the best practices for
the successful adoption of the e-procurement
system.
In e-procurement systems, critical success factors
should include efcient processes without excessive
idle times, existence of monitoring and evaluation
systems that permit the continuous improvement of
the process, and adequate training of the employees
in order to enable them take advantage of the new
system (Panayiotou et al., 2004).
According to Kim and Shunk (2004), e-commerce
is not something that can be instantly plugged into
by an existing workplace, and implementing
e-procurement is not a simple matter. Its introduction will require changes, updates, replacements,
and adaptations throughout the infrastructure.
Successful e-procurement is more concerned with
the fundamental procurement aspects than with the
electronic aspects. Plans for new ways of doing
business, particularly when expressed using techno-

logical jargon, are generally not well received. It

may need changes in the way people work, as well as
in the strategies of the organization.
4.4. Perceived organizational performance of eprocurement
Optimum organizational performance is the key
objective of any organization. Therefore, any
change in the process or technology should have
a positive impact on a companys performance.
E-procurement does have some implications for
process improvement but more important is how
this improvement, affects organizational performance in both nancial and non-nancial terms.
E-procurement has several advantages (Raghavan and Prabhu, 2004): reduced overall procurement costs compared with current traditional
methods, shorter-order processing and fulllment
cycles, reduction in administrative costs, improved
strategic sourcing, and reduced inventory costs.
Fu et al. (2004) present an implementation of an
e-procurement model. The following are the critical
success factors in the successful implementation of
e-commerce: feasible measures, step-by-step transformation, promotion incentives, government support, commitment of top management, and system
operation and maintenance mechanisms. Once the
strategy was clearly set up, the top management
team took the lead in mapping out an implementation plan and a complete set of measures. The
enterprise also provided sufcient incentives to
suppliers and made good use of the external
resources to promote the project.
In Section 5, the details of the research questions
and methodology are discussed.
5. Research questions and methodology
The research questions were based on the abovementioned barriers and critical success factors,
together with perceived organizational performance
with e-procurement. The following research questions were posed:





What are the major perceived barriers to the

adoption of e-procurement in Hong Kong?
What are the critical success factors in the
adoption of e-procurement in Hong Kong?
What are the major perceived benets to
organizational performance of e-procurement in
Hong Kong?

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The purpose of this study is to understand the

importance of e-procurement in Hong Kong and
help develop pertinent hypotheses for further
research. This effort starts with reviewing the
background to the application of e-procurement,
which is then followed by various denitions of
e-procurement. Subsequently, we review the literature available on the adoption of e-procurement
with the objective of developing a theoretical
framework for determining the barriers against,
and critical success factors for the successful adoption of e-procurement. The proposed framework is
then validated with the help of empirical data
collected from Hong Kong industries. Finally,
based on the empirical results and analysis, we develop a framework for the adoption of e-procurement.
Specic questionnaire items were developed to
collect data relevant to the objectives of the study,
as well as descriptive information. The questions
were fundamentally structured to gauge the approaches organizations were taking in several key
functions of e-procurement, in particular with
regard to the issue of potential barriers to e-procurement in Hong Kong. The survey instrument was
developed using standard techniques including
reliability analysis. To ensure content validity, a
thorough survey of the relevant literature was
undertaken related to procurement to gain an
understanding of the important aspects of each
major construct and its components, and to ensure
that no important dimensions were neglected.
The derived questionnaire was then pilot tested
with 40 postgraduate students studying part-time
for an MBA at The Hong Kong Polytechnic
University before being sent out. The feedback
from pilot testing was used in rening the format of
the questionnaire and the addition, removal and
rephrasing of several items. The study employed a
cross-sectional eld study survey method, using selfadministered questionnaires mailed to key informants in 276 randomly selected companies drawn
from those companies publicly listed on the Hong
Kong Stock Exchange and other selected companies
listed in the Business Directory (2001). To protect
the respondents, they were promised complete
anonymity and informed that only aggregate
information on participants would be made public.
A self-addressed, stamped envelope was provided
for questionnaires returned directly to the authors.
This survey did not intend to concentrate on any
particular industry sector. A response of 78 replies
to the survey was received, this being a rate of

165

28.2%. Data analysis of the respondents of 74 valid

responses received was carried out using SPSS
software package.
6. Empirical results and analysis
In this section, the results of the empirical
analysis are discussed with the objective of developing a framework for the adoption of e-procurement. Table 1 presents the prole of the respondent
organizations. An employee prole of the respondent organizations is presented in Table 2. The
number of employees in the procurement or
purchasing department is presented in Table 3.
About 35% of the respondents believe that
e-procurement is important and 42% believe it is
important to a certain extent. The rest believe
e-procurement is not important. This indicates
about 77% of the companies believe that e-procurement is important (see Table 4). In Table 5, the
history of e-procurement adoption is presented. It
appears that about 79% of the companies have
not implemented e-procurement systems. The
rest have implemented one over the past 14 years.
E-procurement models such as business-to-employee (B2E) requisitioning applications, corporate
procurement portals and EDI networks, trading
exchanges storefront, and automated requisition
processes have been used. About 17.5% indicated

Table 1
Prole of the respondent organizations
Frequency

Percentage

Organizations operation
Hong Kong only
Hong Kong and Mainland China
International

3
20
53

3.9
26.3
69.7

Total

76

100.0

Industry type
Manufacturing
Financial & Banking service
Wholesales, retail, import & export
Transport, storage & communication
Hotel, restaurant & tourism
Construction, mining
Utilities
Media
Textile
Aircraft Maintenance

18
15
14
15
1
2
4
2
4
1

23.7
19.7
18.4
19.7
1.3
2.6
5.3
2.6
5.3
1.3

Total

76

100.0

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A. Gunasekaran, E.W.T. Ngai / Int. J. Production Economics 113 (2008) 159175

Table 2
Employee prole of the respondent organizations
Frequency

Table 3
Number of employees in the procurement/purchasing department
Percentage

Number of employees in Hong Kong

Below 50
50199
200499
500999
10005000
Over 5000

18
16
9
9
15
9

23.7
21.1
11.8
11.8
19.7
11.8

Total

76

100.0

Number of employees in the purchasing department

15
16
610
7
1115
1
415
23
Total

34.0
14.9
2.1
48.9

47

100.0

35

66.0

15.1

6
4

11.3
7.5

Total

53

100.0

Age
o25 years old
2530 years old
3140 years old
440 years old

5
26
25
11

7.5
38.8
37.3
16.4

Total

67

100.0

Education level
Post-secondary certicate/diploma
Bachelors degree
Masters degree or above

3
39
24

4.5
59.1
36.4

Total

66

100.0

Year of full-time working experience

Less than 3 years
36 years
710 years
1114 years
More than 14 years

5
19
17
6
17

7.8
29.7
26.6
9.4
26.6

Total

64

100.0

Job position
President/Director/General
Manager/Senior Executive
IT Manager/Programmer/System
Analyst
Procurement Ofcer
Engineer

that they have used one for industrial consortiums

and collaborative supply chain (see Table 6).
Table 7 indicates that e-procurement has been
primarily used for supporting communication with
suppliers, electronic ordering, gathering information, order status control, providing e-catalogs, and
searching for suppliers. Table 8 indicates that 90%

Frequency

Percentage

o2
25
610
1115
415

29
15
7
1
24

38.2
19.7
9.2
1.3
31.6

Total

74

100.0

Table 4
Important of the Internet in procurement
Frequency

Percentage

Extremely important
Important
Important to a certain extent
Unimportant
Extremely unimportant

10
16
31
13
4

13.5
21.6
41.9
17.6
5.4

Total

72

100.0

Table 5
History of e-procurement implementation
Frequency
Not yet implemented
o1 year
12 year (s%)
34 years
44 years

60
4
7
3
2

Total

76

Percentage
78.9
5.3
9.2
3.9
2.6
100

Table 6
E-procurement models used/that will be used in respondents
organizations
Frequency

Percentage

B2E requisitioning applications

Corporate procurement portals
EDI networks
Industrial consortiums
Trading exchanges storefront
Automated requisition process
Collaborative supply chain

9
12
10
4
8
8
6

15.8
21.1
17.5
7.0
14.0
14.0
10.5

Total

57

100.0

of the respondents said that they use e-procurement

for purchasing (a) ram materials, (b) ofce products, and (c) maintenance items. Most respondents

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167

Table 7
Use of e-procurement in supporting procurement activities
Frequency
1.
2.
3.
4.
5.
6.
7.
8.

Percentage

Communication with suppliers

Electronic ordering
Gathering information
Order status control
Presentation of the procurement/ purchasing department
Provision of catalogs
Searching for suppliers
For internal user registration

14
15
18
16
4
11
11
1

15.6
16.7
20.0
17.8
4.4
12.2
12.2
1.1

Total

90

100.0

Table 8
Products purchased through the Internet
Frequency
Raw materials
Ofce products
Maintenance items
Electrical Equipment

8
13
10
3

Total

34

Percentage
23.5
38.2
29.4
8.8
100

indicate the following as the reasons for not

implementing e-procurement in their organizations:
(1) customers are satised with current practices,
(2) a lack of adequate resources, (3) too costly
to implement, (4) it not being perceived as an
advantage at all, (5) security concerns and immature
technology, and (6) inadequate knowledge in implementing an e-procurement system (see Table 9).
Croom and Johnston (2003) address issues relating to the impact of e-business developments
on internal customer service with a focus on
e-procurement introduction. The e-procurement
process is the basis for one of the primary
internal-customer-provider interfaces and the paper
presents a valid and useful domain of study in
internal customer service. They focus their analysis
on three e-procurement-related issues: (1) the
impact of e-procurement adoption, (2) implications
of e-procurement adoption for process compliance,
and (3) consequences of internal customer satisfaction for e-procurement adoption.

to go for e-procurement. Based on the analysis of the

results presented in Table 10, we can easily conclude
that the companies (about 85% of them) feel that
adoption of e-procurement will signicantly contribute to: improvements in efciency, achieving supply
chain management, increased customer satisfaction,
reduction in operational tasks, reduction in processing time, and reduction in transactions costs. Overall, there is a strong positive view from the respondent
companies about e-procurement outcomes such as
increases in efciency, achieving supply chain management, increased customer service levels, and
reduction in processing time. However, respondent
companies are not optimistic about benets such as
better utilization of staff, improving existing markets,
improving relationships with partners and suppliers,
increasing market share, reducing inventory levels,
reducing maverick buying, and increasing support for
environmental issues.
Under competitive pressure to leverage, Web
technology and derive strategic advantages for their
rms, B2B managers face the challenges of convincing
the participating users and top management of the
value of the Web (Subramaniam and Shaw, 2004). The
value-creating potential of e-procurement has signicant implications for the industrial marketer. Industrial
marketers need to understand the value-creating
benets that are driving their customers or potential
customers to aggressively exploit the advantages of the
Internet in adopting e-procurement strategies. The
move away from the transaction focuses of more
traditional purchasing has profound implications for
the industrial marketer (Presutti, 2003).

6.1. Perceived benefits of e-procurement adoption

6.2. Perceived barriers to e-procurement adoption
A companys perception about the benets of
e-procurement plays a major role in the successful
adoption of e-procurement, starting with the decision

The behavioral issues of clients or companies

regarding the adoption of e-procurement have a

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168

Table 9
Reason for not implementing e-procurement systems in organization
Frequency
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

Customers are satised with current practices

Immaturity of technology
Existing e-procurement systems are incompatible with ERP systems
Inadequate knowledge in implementing an e-procurement systems
Lack of adequate resources
Not perceived as an advantage at all
Security concerns
Too difcult to implement
Too costly to implement
No need
Company policy

Percentage

28
12
3
10
15
15
15
5
15
3
3

Total

22.6
9.7
2.4
8.1
12.1
12.1
12.1
4.0
12.1
2.4
2.4

124

100

Table 10
Mean rating of perceived benets to e-procurement implementation

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.

Better utilization of staff

Efciencies increment
Help to achieve supply chain
management
Improved existing markets
Improved relationships with partners
and suppliers
Increased customer service levels
Increased customer satisfaction
Increased market share
Reduction in inventory levels
Reduction in maverick (noncontractual%) buying
Reduction in operational tasks
Reduction in processing time
Reduction in transaction costs
Support for environmental issues

Mean

S.D.

Not been
realized

Somewhat
realized

Just to
begin to
realized

Realized

Fully
realized

3.3
3.5
3.5

1.1
1.0
1.0

4 (5.8%)
1 (1.5%)
2 (2.9%)

11 (15.9%)
9 (13.2%)
7 (10.3%)

19 (27.5%)
25 (36.8%)
24 (35.3%)

28 (40.6%)
22 (32.3%)
25 (36.8%)

7 (10.2%)
11 (16.2%)
10 (14.7%)

3.0
3.3

1.0
1.1

5 (7.3%)
4 (5.8%)

17 (24.6%)
10 (14.5%)

21 (30.4%)
23 (33.3%)

22 (31.9%)
22 (31.9%)

4 (5.8%)
10 (14.5%)

3.5
3.4
3.0
3.3
3.1

1.0
1.0
1.1
1.0
1.1

4
4
7
4
6

(5.9%)
(5.9%)
(10.3%)
(5.8%)
(8.7%)

4
3
13
11
9

(5.9%)
(4.4%)
(19.1%)
(16%)
(13.0%)

23
26
27
24
34

(33.8%)
(38.2%)
(39.7%)
(34.8%)
(49.3%)

29
30
15
23
15

(42.6%)
(44.1%)
(22.1%)
(33.3%)
(21.8%)

8
5
6
7
5

(11.8%)
(7.4%)
(8.8%)
(10.1%)
(7.2%)

3.2
3.6
3.4
3.2

1.1
1.0
0.8
1.0

3
1
1
6

(4.3%)
(1.5%)
(1.5%)
(8.7%)

10
9
7
9

(14.5%)
(13.0%)
(10.1%)
(13.0%)

30
17
31
28

(43.5%)
(24.6%)
(44.9%)
(40.6%)

20
34
24
21

(29.0%)
(49.3%)
(34.8%)
(30.4%)

6
8
6
5

(8.7%)
(11.6%)
(8.7%)
(7.3%)

tremendous inuence on its success. The companies

were asked what the factors were, if any that
prevented them from the adoption of e-procurement
(see the results of Table 11). Many companies
claimed not to have any experience or knowledge of
e-procurement. However, the fear of changing to a
new system was rated as the main impediment
against the adoption of e-procurement by about
40% of the respondent companies, while 28.6% said
that this was not the case. The majority (about
38.5%) of the respondents believed immaturity of
technology was not the cause for not implementing

e-procurement. They were evenly divided (about

32% each) about whether or not incompatibility
with ERP systems was a barrier for the adoption of
e-procurement.
The majority of the companies believe that
barriers include insufcient nancial support, lack
of interoperability and standards with traditional
communication, lack of skill and knowledge in
e-procurement, lack of top management support
and commitment, and it not being the top initiative
or top priority of the company and security
concerns. However, (i) insufcient nancial support,

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169

Table 11
Mean rating of perceived barriers to e-procurement implementation

1.
2.
3.
4.
5.

6.
7.
8.
9.

Fear of change to a new

system
Immaturity of technology
Incompatibility with ERP
systems
Insufcient nancial support
Lack of interoperability and
standards with traditional
communication systems
Lack of skill and knowledge
in e-procurement
Lack of top management
support and commitment
Not the top initiative or
priority of the company
Security concerns

Mean

S.D.

Strongly
disagree

3.0

1.2

5 (14.3%)

2.9
3.1

1.1
1.0

3.2
3.3

Disagree

Uncertain

Agree

Strongly
agree

5 (14.3%)

11 (31.4%)

10 (28.6%)

4 (11.4%)

8 (11.4%)
3 (4.3%)

19 (27.1%)
19 (27.1%)

23 (32.9%)
25 (35.7%)

14 (20%)
16 (22.9%)

6 (8.6%)
7 (10%)

1.1
1.0

6 (8.6%)
1 (1.5%)

11 (15.7%)
17 (24.6%)

24 (34.3%)
20 (29%)

19 (27.1%)
25 (36.2%)

10 (14.3%)
6 (8.7%)

3.1

1.0

4 (5.8%)

13 (18.8%)

28 (40.6%)

20 (29%)

4 (5.8%)

3.2

1.1

5 (7.2%)

12 (17.4%)

24 (34.8%)

22 (31.9%)

6 (8.7%)

3.6

1.0

6 (17.6%)

9 (26.5%)

11 (32.4%)

8 (23.5%)

3.1

1.1

5 (7.2%)

14 (20.3%)

24 (34.8%)

18 (26.1%)

8 (11.6%)

(ii) lack of interoperability and standards with

traditional communication systems, (iii) lack of
top management support and commitment, (iv) it
not being the top initiative or priority of the
company, and (v) security concern seem to be the
major barriers for the lack of e-procurement
implementation.

ment: (i) clear accountability with purchasing and

organizing structural changes, (ii) information
systems specialists with skills in the Internet,
(iii) streamlined approval and workow systems
(business process reengineering), and (iv) top
management involvement and support.

6.3. Critical success factors for e-procurement

adoption

6.4. Perceived organizational performance with eprocurement adoption

Many companies have some form of e-procurement applications in their organizations. The
companies were asked what they saw as being
critical success factors, based on their experience,
for the successful adoption of e-procurement (see
Table 12). The majority (over 60% of the respondents) saw the following as being critical success
factors for the adoption of e-procurement: (1)
centralized control and management of e-procurement initiatives, (2) communication between participants, (3) clear accountability with purchasing and
organizing structural changes, (4) information
systems specialists with skills in the Internet and
WWW, (5) streamlined approval and workow
systems, and (6) top management involvement and
support.
The following critical factors have been viewed as
the most important of all (about 70% of the respondents) for the successful adoption of e-procure-

Perceived organizational performance changes

with e-procurement adoption is a signicant issue
while implementing e-procurement. There are ve
perceived organizational performance changes with
e-procurement adoption: (i) successful e-procurement adoption can improve short-term organizational performance, (ii) successful e-procurement
adoption can improve long-term organizational
performance, (iii) successful e-procurement adoption can improve cost performance in an organization, (iv) successful e-procurement adoption can
improve an organizations competitiveness, and (v)
successful e-procurement adoption can improve
strategic alliances and networking (see Table 13).
The majority of the respondents feel that successful
e-procurement adoption can improve: (i) long-term
organizational performance, (ii) cost performance in
an organization, (iii) an organizations competitiveness, and (iv) strategic alliances and networking.

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Table 12
Mean rating of CSFs to e-procurement implementation

1.

2.
3.
4.

5.
6.
7.

8.
9.
10.
11.

Centralized control and

management of eprocurement initiatives
Communication between
participants
Clear and achievable
implementation phase
Clear accountability with
purchasing and organizing
structural change
Close collaboration with
suppliers
Content management
(catalog management %)
Information systems
specialists with skills in the
Internet
Involvement of stakeholders
Streamlined approval and
workow systems
The use of prototype
Top management
involvement and support

Mean

S.D.

Strongly
disagree

3.7

1.0

2 (3.0%)

3.7

0.9

3.7

Disagree

Uncertain

Agree

Strongly
agree

6 (9.0%)

14 (20.9%)

32 (47.7%)

13 (19.4%)

1 (1.5%)

4 (5.9%)

21 (30.9%)

32 (47.0%)

10 (14.7%)

0.9

6 (9.0%)

23 (34.3%)

23 (34.3%)

15 (22.4%)

4.1

0.5

3 (8.6%)

25 (71.4%)

7 (20.0%)

3.6

0.9

1 (1.5%)

6 (8.8%)

22 (32.3%)

28 (41.2%)

11 (16.2%)

3.6

0.8

1 (1.5%)

3 (4.4%)

26 (38.2%)

32 (47.1%)

6 (8.8%)

3.7

0.8

3 (8.6%)

8 (22.8%)

19 (54.3%)

5 (14.3%)

3.4
4.1

0.9
0.6

1 (1.5%)

7 (10.3%)

29 (42.6%)
6 (17.1%)

23 (33.8%)
21 (60%)

8 (11.8%)
8 (22.9%)

3.3
3.8

0.9
1.0

1 (1.5%)
1 (1.5%)

11 (16.2%)
5 (7.4%)

27 (39.7%)
17 (25.4%)

25 (36.7%)
26 (38.8%)

4 (5.9%)
18 (26.9%)

Strongly
agree

Table 13
Perceived organizational performance with e-procurement implementation

1.

2.

3.

4.

5.

Successful e-procurement
implementation can improve shortterm organizational performance
Successful e-procurement
implementation can improve longterm organizational performance
Successful e-procurement
implementation can improve cost
performance in organization
Successful e-procurement
implementation can improve
organization competitiveness
Successful e-procurement
implementation can improve
strategic alliance and networking

Mean

S.D.

Strongly
disagree

Disagree

Uncertain

Agree

3.2

0.80

2 (2.9%)

9 (13.0%)

34 (49.3%)

22 (31.9%)

2 (2.9%)

3.8

0.85

1 (1.5%)

3 (4.3%)

19 (27.5%)

34 (49.3%)

12 (17.4%)

3.6

0.82

2 (2.9%)

2 (2.9%)

24 (35.3%)

34 (50%)

6 (8.9%)

3.5

0.88

1 (1.5%)

7 (10.1%)

23 (33.3%)

31 (44.9%)

7 (10.2%)

3.4

0.92

3 (4.4%)

5 (7.2%)

25 (36.2%)

30 (43.5%)

6 (8.7%)

Factors (2)(4) as shown in Table 13 have been

highly rated as important by the majority of the
respondents, with a mean weight of 3.4 and above.
Based on these analyses and theoretical framework,
a more practical and rened framework is developed and presented in Section 7.

7. A framework for the adoption of e-procurement

The generic framework presented is based on the
initial framework presented in Section 5 and on the
outcome of empirical research. Also, evidence from
the literature has been employed to develop a more

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practical framework for the adoption of e-procurement. It should be noted that some articles
appearing in the literature do discuss various issues
related to the adoption of e-procurement. We will
discuss some of them as background information
for the developed framework.
Kothari et al. (2005) attempted to study the
adoption of the e-procurement concept by hotels
purchasing departments in the Philadelphia area.
They attempted to address two important issues
related to supply chain management by hotels
in Philadelphia: (1) the costs and benets of
e-procurement adoption as perceived by the hotels
purchase decision makers, and (2) the current or
planned adoption of e-procurement as described by
the participant hotels. Chang et al. (2004) describe
the issues and design principles of an e-procurement
system. They explain the overall development
processes that include generic procurement processes, data entities used in the system, functional
diagram, and technical architecture as a guideline
for e-procurement system development. They suggest a 5-step adoption framework:







Analyze business processes (how goods are

purchased?)
Collect business requirements
Synchronize data and business processes with
suppliers
Map software functions with current practices
Determine deliverables and measures for evaluation

For a rm to realize the maximum value-creating

benets from an e-procurement strategy, the purchasing process must be evaluated to determine if it needs
to be re-engineered. A rm cannot succeed in eprocurement if it has little history of cross-functional
collaboration and early supplier involvement, and the
collaborative potential of the e-design component of
an e-procurement strategy. There is a need for a
transformation in the corporate culture as well as a
re-engineering of the specication development process. Moreover, if there are redundancies in the
requisition approval process, those redundancies need
to be eliminated before applying an e-procurement
solution (Presutti, 2003). The rst major step in
purchasing is supplier rating and selection, which
needs to be integrated with e-procurement.
The details of the framework developed for the
implementation of e-procurement are presented in
Table 14.

171

7.1. The benefits of e-procurement and its strategic

impact
The tremendous potential of e-procurement has
stimulated major enterprise resource planning
(ERP) software providers to add e-procurement
capabilities to their systems. For example, Oracle
Corporation has developed its procure-to-pay
solution that automates the complete procurement cycle. Its features include spending analysis,

Table 14
Implementation framework for e-procurement
Building blocks of eprocurement
implementation

Strategies/methods/tools/
technologies

Perceived benets

Explain the strategic impact of eprocurement on organizational

performance, provide adequate
nancial and technical resources,
increase the awareness and
understanding of the benets both
in long and short terms, and invest
in knowledge and expertize about eprocurement.
Provide nancial support through
strategic alliances, consortiums of
companies, develop standards and
systems for facilitating effective
interoperability with traditional
communication systems, increase
the awareness of top management in
order to obtain support and
commitment for the implementation
of e-procurement, demonstrate the
importance of e-procurement and
high leverage opportunities both in
short and long terms, and develop
application software for assuring
security of the data.
Business process reengineering to
assure a streamlined procurement
process, train and educate IT
engineers and hire skilled IT people,
and a team consists of participation
from top management.
Establish suitable performance
measures and metrics for the
justication and evaluation of eprocurement; consider strategic,
tactical and operational
performance measures and metrics,
nancial and non-nancial
performance measures and tangibles
and intangibles performance
measures.

Perceived barriers

Critical success factors

Organizational
performance

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strategic sourcing, supplier collaboration, desktop

requisitioning, and electronic invoicing and payment. Similarly, ERP provider SAP offers its
mySAP E-procurement solution in partnership with
Commerce One Corporation (Presutti, 2003).
Presutti (2003) lists the benets of e-procurement,
which include reduction in labor costs and errors,
material cost reduction by strategic purchasing,
enabling rms more efciently and accurately to
capture and aggregate how much they are spending
corporate-wide in various purchased product areas,
and having an overall impact on a rms asset base.
The main reasons for not adopting e-procurement
include: (i) customers being satised with current
purchasing practices and systems, (ii) a lack of
adequate resources including nancial and technical
resources, (iii) a lack of awareness and understanding of the benets of e-procurement, (iv) a lack
of availability of technology and affordability,
and (v) a lack of knowledge and expertise about
e-procurement. Knowledge about e-procurement
and its benets in both long and short terms
(operational, tactical, and strategic) will positively
encourage rms to implement e-procurement.
Companies should be convinced about the benets
of e-procurement, including cost reduction, increased customer satisfaction, improvements in
efciency, reduction in operational tasks, reduction
in processing time, reduction in transaction costs,
increases in organizational competitiveness, supply
chain integration, etc. It is important to explain the
strategic and long-term benets of e-procurement to
be successful in business.
Therefore, it is most important that senior
managers in particular are truly aware of the
benets of e-procurement. Many managers do not
see the intangible and strategic benets of adopting
e-procurement. If they look at only the nancial and
short-term benets, many may decide not to go for
adopting e-procurement. However, this will endanger the long-term survival of their companies for not
keeping up with the competition and new technologies. Suitable workshops and seminars should be
arranged wherein the senior managers should
participate to learn more about the pros and cons
of e-procurement. Also, managers should have the
cost of not adopting e-procurement explained to
them. In any event, frequent meetings and focus
group meetings of senior managers should occur on
the adoption of new technologies.
ERP systems and those that support enterprisewide business activities such as e-procurement

represent complex socio-technical change. These

systems need to be integrated with a diverse range of
existing technologies, infrastructures, policies, and
practices of multiple stakeholders both within and
beyond the organization (Williams and Hardy,
2005).
7.2. Barriers against the adoption of e-procurement
For the successful adoption of e-procurement,
companies have to look at the major barriers or
impediments. The barriers could be related to: (i)
people, (ii) the organization, and (iii) technology.
First of all, companies have to determine their
requirements (in terms of changes to people,
organization, and technology) for the successful
adoption of e-procurement. Then they need to look
at the current status of business processes including
people and infrastructure and identify the changes
required to facilitate the adoption of e-procurement.
Peleg et al. (2002) have developed a better
understanding of the conditions under which eprocurement strategies are most cost effective. To
do that, they study three possible strategies a
company might choose to follow, namely (1)
strategic partnership, in which a company signs a
long-term contract with a single supplier, so that
future prices are known in advance; (2) online
search, in which the Internet is used for electing the
supplier with whom an order will be placed (Unit
price in this case is assumed to be random, but its
distribution is known in advance, and is assumed to
be a function of the number of suppliers contacted
for a price quote.); and (3) a combined strategy,
under which a supplier is used as a long-term
partner, but a second source might be chosen
through the Internet (Peleg et al., 2002).
Most critical barriers against the successful
adoption of e-procurement are: (i) lack of nancial
support, (ii) lack of interoperability and standards
with traditional communication systems, (iii) lack of
top management support and commitment, (iv) it
not being a priority of the company, and (v) lack of
data security. The nancial barriers can be overcome by suitable strategic alliances, being part of
consortiums, and getting support from the government. Developing standards and systems for facilitating effective interoperability with traditional
communication systems will help the adoption of
e-procurement fairly well with minimum investment
and changes to the business processes through reengineering. Increasing the awareness of e-procure-

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ment and its benets in both short and long terms

can eliminate some of the barriers. Developing
security systems may encourage the stakeholders in
e-procurement systems to develop condence in the
system to the extent they are prepared to exchange
goods and payments.
7.3. Most important factors that will influence the
successful adoption and application of e-procurement
In the literature, the critical success factors for
any change process either to business or to
technology have been widely studied. These factors
are primarily based on experience and research. The
so-called CSFs can be useful for companies to
follow when adopting a technology or method of
production. One may list commonly used CSFs for
the adoption of a new technology or process, but
the questions here are what are the key CSFs
regarding the technology or processes involved in
the adoption of e-procurement. This depends upon
the individual organizations characteristics and its
absorption capability of e-procurement technology.
The critical factors for the successful adoption of
e-procurement include: (i) clear accountability with
purchasing and organizing structural change, (ii)
information systems specialists with skills in the
Internet, (iii) streamlined approval and workow
systems (business process re-engineering), and (iv)
top management involvement and support. It is a
necessity to re-engineer the purchasing/supply chain
process with the objective of streamlining the
functions of procurement. This will help to automate the process using e-procurement. Training and
education in new procurement processes and
technology are essential to ensure the successful
adoption of e-procurement. Senior managers should
be a part of the e-procurement team and perhaps
even the e-procurement champions. Moreover,
suitably trained IT people are essential for the
success of e-procurement adoption.
7.4. Impact on organizational performance
Many companies fail to see the real impact of eprocurement on organizational performance. It has
both long- and short-term impacts on organizational performance. These include things such as
rate of return on investment, payback period, prot,
annual revenue, etc. Also, e-procurement adoption
indicates to what extent a company has advanced in
technology and hence streamlined its supply chain

173

process in order to assure exible and responsive

products and services in a cost-effective manner.
E-procurement not only results in process efciency
but also provides higher leverage opportunities in
areas such as reduced cost, increased utilization of
resources for productive purposes, new technology,
new products, new processes, and new markets.
Therefore, it is important to consider the key
organizational performance in order to justify the
investment in e-procurement technology or systems.
The following are the critical success factors in
e-procurement (Vaidya et al., 2004; Leipold et al.,
2004): (1) end-users uptake and training, (2)
supplier adoption, (3) business case and project
management, (4) system integration, (5) security
and authentication, (6) re-engineering the process,
(7) performance measurement, (8) top management
support, (9) change management, (10) e-procurement adoption strategy, and (11) technology standards.
For the adoption of e-procurement, communication and sponsorship measures have to be sustained
in order to improve peoples awareness of eprocurement aims and opportunities, in particular
electronic catalogs. A feasible scheme could include
meetings, training sessions for purchasing operators, circular letters, and dedicated mailboxes
(Barbieri and Zanoni, 2005). The purchasing
process involves four stages or functions: (i) request
for supply, (ii) supplier search, (iii) supplier selection, and (iv) order fulllment, invoice payment and
possible claims (Caridi et al., 2004; Croom and
Brandon-Jones, 2005).
Suitable justication schema or frameworks need
to be developed with the objective of evaluating the
impact of adoption of e-procurement on a companys performance. For this, suitable performance
measures and metrics need to be established
incorporating both costs and benets. Also, the
risks involved for not investing in e-procurement,
such as the opportunities lost in terms of both
productivity and competitiveness, need to be
assessed. Performance measures at three key levels
of decision making such as at strategic, tactical, and
operational levels should be considered, including
nancial and non-nancial and tangibles and
intangibles.
8. Concluding remarks
E-procurement has become an important enabler
for achieving a exible and responsive supply chain.

ARTICLE IN PRESS
174

A. Gunasekaran, E.W.T. Ngai / Int. J. Production Economics 113 (2008) 159175

Dells build-to-order supply chain system primarily

hinges on their e-procurement system. Considering
the importance of the globalization of manufacturing and services, Internet-based procurement systems are of paramount importance in achieving a
well-integrated global supply chain with the objective of reaching the market as quickly as possible
with the right products and services in the most
cost-effective manner. An attempt has been made
in this paper to study the potential barriers to
e-procurement implementation. Also, some of the
critical success factors have been identied for the
successful adoption of e-procurement. However,
this study has its own limitations like any other
study that looks at some cross-parameters or factor
issues. The data were collected cross-sectionally
from Hong Kong, and while they are useful in
understanding the adoption of e-procurement, the
perceived barriers and critical successful factors will
continue to evolve and change in a longitudinal
sense. It will be useful to conduct a longitudinal
study to measure the mentioned factors.
The research model developed here identies a
few important building blocks in e-procurement
adoption. There are other blocks, identied by other
studies, which could be included in the model.
Further research could include these building blocks
and develop a more comprehensive model.
The study can be expanded to include some crosscountry and industry factors that will inuence the
implementation of e-procurement. The following
questions still need to be investigated in detail with
suitable multiple case studies and empirical research
(Carayannis and Popescu, 2005; Berlak and Weber,
2004):







Barriers to greater open competition, transparency, disclosure of information, and accountability

Main costs and factors of e-procurement
Startup cost compared with the operation cost
Overall benet ratio of e-procurement process
Direct, indirect, and strategic benets of e-procurement.

Besides the above-mentioned issues, further studies could be considered to:

assess the potential risks and impacts involved

with e-procurement before adoption (Reduced
staff time due to implementing e-procurement
may cause redeployment or reduce manpower.

Adoption of e-procurement may require suppliers to bid on their business that overcome of fears
of trust may need for suppliers,)
better understand the technical issues of integration/interfacing with the legacy systems or
existing ERP system via a middleware system
(It will be a challenge for the integration or
replacement of existing purchasing systems with
a variety of supplier/buyer systems.)

Acknowledgments
The authors are most grateful to two anonymous
reviewers for their constructive comments on the
earlier version of the paper, which helped to
improve the presentation of the paper considerably.
The authors are thankful to Miss H. Lau for helping
in the collection of data for this research study.
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