BUSINESS-TO-BUSINESS E-PROCUREMENT Page 51 of 51
Businessto business e-procurement: Success Factors and Challenges toImplementation in China
Theworld is tremendously growing into a global village and thus the needto fill the existing gap contributed by distance and oversea joints.As a result any business that has the thirst to survive and grow mustutilize internet-based technology. The technology has to be appliedacross all sections of the company to link up with far ends. Due tothat, there is need for the companies to understand the rightapproach to undertake. This study helps the business entities inchina understand the right processes to engage in. the challenges arehighlighted and possible ways of overcoming them as well proposed.E-procurement helps firms save on and increase effectiveness duringtheir operations. It is applicable in purchasing operationalmaterials, maintenance, making sales and administrative processes.E-Procurement is more than just a scheme for effecting purchasesonline. Some firms implement e-procurement and do well while othersdo not succeed. This study was conducted to establish the elementsthat enable companies succeed when using e-procurement. It also aimedat identification of challenges that companies encounter whenimplementing e-procurement. The study was carried out by assessingcompanies that bears Chinese originality.
Chapter 1.0 Introduction 4
1.1 Research Title 4
1.2 Purpose of Research 5
1.3 Objectives 6
1.4 Scope 8
1.5 Disclaimer 9
Chapter 2.0 Literature Review 10
2.1 Background Information 10
2.2 E-Procurement 12
2.3 Advantages 16
2.4 Selection 17
2.5 Adoption Problems 19
Chapter 3.0 Research Methodology 20
3.1 Data Collection 21
3.2 Data Analysis 22
3.3 Proposed Research Strategy 24
3.4 Credibility of the Study 25
Chapter 4.0 Results and Analysis 27
4.1 Success Factors 27
4.1.1 Application of E-Procurement Technologies 27
4.1.2 Factor Analysis on the Implementation of E-Procurement 28
4.1.3 Factor Analysis on the Application of E-Procurement for 30
Selecting Supplier 30
4.2 Challenges 32
Chapter 5.0 Discussion 37
5.1 Logistic Regression Analysis 40
5.2 What to consider 44
Chapter 6.0 Recommendations and Conclusion 47
6.1 Recommendations 47
6.2 Conclusion 48
Chapter1.0 Introduction1.1Research Title
Thetopic under this study is business-to-business (B2B) e-procurement:success factors and challenges to implementation in china (Braim,2006). Businesses to business transactions are increasinglydominating the commerce industry. Procurement is the main pillar thatis driving this aspect thus the need to have a deeper understandinginto these elements. China being among the leading countries globallyin development is the best destination for exploitation of thistitle. It has high population and technological advancement that isbeing transferred overseas. It is necessary to have the knowledgeabout the factors accelerating this trend. Some aspects hinder theperformance of e-procurement. However, it is necessary for one tounderstand the success factors first so that the company is preparedon the installation process. Necessary as well is to get the ideaabout the challenges that this practice can encounter. The challengesare combined with elements that are against the success ofe-procurement. They are possible aspects that are responsible for thefailure of this process where business-to-business transfer isapplicable. Most importantly is to know how to overcome thechallenges when implementing the e-procurement process. Business tobusiness transaction involves exchange of products, information andservices among and between firms rather than between firms andconsumers. It employs more technology and internet based approacheshence the term e-procurement. E-procurement involves transfer ofactivities through electronically controlled medium (Steingold,2011). Business to business activities are the emerging and growingtrends in trade hence the need to analyze the perspectives. It is thebest medium that businesses are utilizing to expand and operateappropriately in markets far away from their home countries. Chinahas been the leading in contracting with business entities away fromtheir home continent thus making the most appropriate country forstudy.
1.2Purpose of Research
Variousmedia channels are available for business firms to use when carryingout its activities with its customers. The customers can be othercompanies, government or individual consumers. In all these transferscommunication and information delivery is a very important element.In the modern world internet is substituting all other form ofcommunication and business transaction activities. Networking systemsthrough electronic data interchange and business resource planningare the essential aspects of this new modes. E-procurement is makingit easier and faster to make purchases and effect sale supplies asrequired (Dimitri, Piga & Spagnolo, 2006). The supply chaintherefore should be analyzed well to understand how e-procurement iseffective. The aim of this research is to provide insight into intendmanagement of e-tendering, vendor practices, e auctioning andcatalogue management. It as well provides information aboutintegration of purchase orders, e-invoicing, shipping notice, orderstatus, e-payments and management of contracts. The information issupposed to add value to the supply chain and administrativeprocesses as far as decision making is concerned. The informationalso avails the guidelines of conducting business using electronictechnical formats. The findings of this study are beneficial to boththe purchaser and supplier. It is effective for efficiency andeffectiveness required to enhance business activities in china. Thecompanies are therefore well equipped with necessary components forefficiency and effectiveness. By so doing the firms in china will beable to take the leading role on the global scale. The results arethus important for helping these firms develop their own businesscases and propel their agendas. The ultimate benefit for thecompanies is to reduce operational costs and risks and maximize onthe accrued revenue (Singh, 2010). Most importantly is the fact thatthe information will enable the companies establishing healthyrelationships with other operators in the industry.
Thisresearch study has various anticipations that are important inanswering pending questions within the area of application. Major aimof this cram was to identify the task played by e-procurement inbusiness development. Subsequently there is also call for toascertaining the degree and brunt of this aspect to supplementaryquarters of the cutback. This will be pulled off by appraising howbusiness entities in china has full-fledged above era chiefly atepoch whilst they adjoin worth to their actions bound for otherbusinesses. Exploring existing discernment about e-procurement isfurthermore solitary of the objectives accomplished by this delveinto. The information to execute this objective will be arrivedsubsequent to grilling of the business culture. Identifying factorsaffecting e-procurement join the intention sort of this revise. To dothis objective the do research panel ties to the running modusoperandi of companies. Recruits as well as verdict creator areevaluated with inscrutability to circumvent any persecution.Exploring the probability for e-procurement related overhaul eminenceis also top on the list. The cram what`s more hub on detection of thefissure flanked by the acuity and outlook of as far as e-procurementconcepts are concerned. This objective is content past a crossinspection of what the business psyche in china comprehend v theglobal understanding of the concept. Thorough study and provision ofappropriate recommendations about underlying truth on e-procurementis as well necessary (Graham, Manikas & Folinas, 2013).
Otherpurposes of this study are to establish how companies in chinaappreciate the facts about e-procurement. This helps the researchteam formulate the knowledge about the chances and opportunity fore-procurement in china. It states the gap existing aboute-procurement in china and avail the necessary information. The studyalso wants to establish the skills necessary for e-procurement to besuccessful. Achieving this objective is essential to enable companiesin china acquiring the right personnel for the competitive globalmarket. The study as well needs to provide facts about e-procurementand clear the existing myths about the same aspect. The information nis useful for decision makers when providing leadership to thoseunder them. There is as well need to provide guidance of harmonizingand integrating the elements of e-procurement. It is necessary tohelp companies operate within the acceptable code of conduct. Theyhave to adhere to government requirements and watch out for rights ofother parties. The information targets at providing sense for thecompany to see the importance of investing in e-procurement (Laudon &Traver, n.d.). They are also guided on the steps and right approachesprocedure for international markets through electronic channels. Thecompany will as well be equipped with available options aboute-procurement in china and how they are operational.
Thescope of the research study was restricted to methods explained inchapter three of this literature. It is restricted to thebusiness-to-business transactions pertaining e-procurement. Theresults are only best applicable for the case of supply chainmanagement, procurement and logistics. The research is also limitedgeographically to china (Thai, 2009). However, the information isuseful for any other company across the world especially if hasdeveloped interest in china based investments. The information isrelevant for application by firms in china and other firms away fromchina but want to transact with firms within china. The informationis equally relevant for companies that are of Chinese origin but theyare established outside china. The study explores both qualitativeand quantitative research methodologies. The findings and analysis isuseful for practical application rather than their theoreticalrepresentation. The results and analyzed data can be used practicallyto guide and provide a way for stages necessary for corporateimplementation of efforts of e-procurement. The research teamunderstands that e-procurement is still an infant state of businessand thus need for the right direction (Pani & Agrahari, 2007). Itis as well essential for building the knowledge body for academicuse. However, reproduction of this information is not permitted untila clear consent is obtained from the concerned authority.
Thestudy did not involve all companies in china but relied on randomsampling for effective generalization of outcomes and avoiding theerrors. The representative sample was picked on voluntary basis ofthe firms that showed interest to participate in the study. It wasvoluntary so that the information gained is not biased. This alsohelped obtained information in a more effective way without any formof manipulations. Also important to understand is the fact that thisis a research paper. The delve into panel had to stomach by the steerconvention and doctrine in the firms principally those whichadministrate the employees’ moral code and values. Conducting theresearch within the companies enables the research team to be exposedto the right personnel for participation devoid of leading towhichever nuisance. Since there will be no agenda amendment in thecompanies under study, it is too easier to dig up acquiescence fromthe board. The habitual courses in the companies in the authenticinstant of delve into in addition avails restructured information apropos the actions (Rai & Rai, 2010).
Theexamination was conducted after acquisition of appropriateauthorization and endorsement from the supervisors. All data andinformation enclosed in this research testimony is presented aftercomprehensively reviewing and taking into consideration all issuespertinent to copyright, patent rights and plagiarism. The researchteam has written this account with the purpose of not only beingextensive but also the most applicable and reliable information. Therespondents and all research participants were approached aftergetting approval from the necessary authoritative organs and theresearch supervisor. The research team has taken intense care to lookafter and preserve the identities and delicate information of allresearch participants. Any information and data obtained fromresearch participants is presented in this writing after gaining thepermission from the participants under personal consent. Allaccomplice and respondents were loomed subsequent to go-ahead fromthe headship and their personage deliberate say-so. The personalityand security of the respondents was the foremost vicinity ofapprehension that delve into squad had to survey. Therefore aptprocedures were installed to guarantee discretion and contentment ofthe respondents. The do research team has taken great concern incarrying out the research and preparation the research information.For this reason, the report can be utilized even where makingimportant decisions is required. This statement however is just beingdistributed with the single intention for adding on the knowledgebody of research. This research cram investigates the hit featuresand the defy associated with the execution of e-procurement.E-procurement has been perceived as one and only program thatpromises to bring considerable savings to the firm. It should neverbe resold, loaned out, rented out or redistributed for personal orcommercial benefits without considering prior permission from thesupervisor and research team (Roberts, 2009).
Chapter2.0 Literature Review2.1Background Information
Chinahas depicted the potential of growing tremendously and steadily overthe years reaching out for the global world. The trend has beenevident through china’s ability to win contracts in other countriesfar away from its mother continent. Due to the above there is needfor the Chinese business community to incorporate technology in itsculture. The companies are able to be awarded credibility oninternational scale through other businesses in the respectivecountries. There is no way a business firm is going to tap theopportunities for the reasonable market without collaborating withother firms away from home. Through these business-to-businessrelationships Chinese enterprises have gained advantage even overchild business in their own countries. The firms are now growingwings and expanding without even establishing external branchesoutside china. There has been an increasing thirst for otherbusinesses in other countries especially from United States tounderstand the propel element that is spearheading this growth. As aresult, research approach has been considered the best entry pointfor enquiry and preparation n of this vital information. Thisresearch is no exception but instead it claims it origin from thisaspect. Some business cultures around the world have shown greatpartnership interest with Chinese based businesses. However, there isgreat gap on how these firms can achieve due to the missinginformation especially a far as the supply chain is concerned. It isa must for a firm to have the capability to manage appropriately itssupply in order to operate on the international scale. E-procurementhas proved to be among the leading elements that increases thecompany effectiveness and efficiency for its supply chain management(Alexander B. Sideridis, 2010).
Becauseof the important role played by e-procurement in valued addition onthe supply chain our team finds it necessary to confirm underlyingknowledge basic (BOONE, 2012). This research has been motivated bythe knowledge gained as far as e-procurement is viewed on the globalmarket. The information links the growing business-to-businessenvironment to Chinese enterprises and emphasis indicates thate-procurement is behind all this success. There are however, claimsthat implementation of e-procurement is not a walk over per-pet andthus necessitates for a well-developed information base. Not allChinese enterprises are performing well and a good number of them donot even have the idea of how to break through. This report thusprovides hope for such companies to see the light on the globalmarket. The huge population in china is just enough for these firmsto utilize e-procurement when delivering their products, services andinformation. The best approach is through a business-to-businessrelationship as opposed to the more costly business to consumerapproach. Business to consumer model is effective for firms that areoperating on small scale thus serving only a fraction of thepopulation. Such like firms are not even having the ambition ofgrowing and going globally. Use of technology especially the internetplatform is the most effective way for firms to carry out theiroperations. E-procurement involves entire use of internet andelectronic based channels in effecting transactions and informationdelivery. However, only proper application can enable the firmachieve and enjoy the benefits associated with this component inbusiness. Care should be taken so that the right information isobtained and appropriate procedures applied. Availing thisinformation has been the core motivation for conducting this researchstudy and preparation of the report.
E-procurementinvolves to the acquiring and paying for goods and services on largescale for organizations (Turban et al., 2006). Procurement isnormally a representative of the prevalent expenditure on items in acompany’s cost structure. According to the Aberdeen Group (2001),circumlocutory procurement and the culture of paying for maintenance,repair, and operations (MRO) supplies that are not directly caught upin the fabrication course of action normally add up to 30 to 60percent of the company’s entirety expenditures. The biggerpercentage is channeled towards office equipment, personal computers,nonmanufacturing items, etc. Furthermore, business buyers have apropensity of wasting time on non-value adding operations like entryof data, correction of boo-boo in red tape, expedite deliverance,formalities, unravel eminence tribulations unnecessary rules andregulations, and the so-called official procedures (Turbanet al.,2006). A good and reasonable integer of current drivers enclosesprompted concerns in discovering customs of tumbling overheads in thecommercial milieu. Amongst them is the recessionary drift that weighdown the United States economy after 2001just after china showed anaggressive ability to take over the global scene. There is thus needfor firms to resolve and subscribe to the draw on of internet-facilitated tools to comprehend and attain supply chain managementefficiencies. This avails the chance to the firm to have acompetitive advantage that has a specific center of attention onprocurement. The company also is able to carry out its mandate thatcalls for business to enhance their aptitude to account on earningsand operating fixed cost in order to grant greater lucidity intotheir fiscal activities. Even though the execution of e-procurementinventiveness is not that novel in china, there is existing interestin perceptive of issues caught up in its achievement, especially in aweb-enabled environment.
Ingeneral terms, it come into view that e-procurement in china istranquil in its near beginning arena of espousal in the businessglobe. An up to date cram of expenditure scrutiny carry out of 157companies discovered that merely hardly any of them justly recognizeand appreciate how greatly they pay out, on which goods, and in themidst of which purveyor. Around eighty percent of the cram partakersacknowledged that payments scrutiny is dreadfully imperative andcritical to their success, yet only almost half of them had anyproper official spending analysis tool installed and utilized. Latestresearch into auto dealers in china divulge that eighty-five percentof the cram accomplices have anticipations to endow at their presentor advanced echelon in novel software to computerize the procurementcourse (Canbolat, 2005). A previous industry cram pointed out thatonly eight to ten percent of the prevalent 5,000 businesses containan e-procurement structure in consigns. Other current researchstudies show problem-solving tendency on how the pioneering firms aregoing on with their e-procurement inventiveness. Extensive researchstudies display two categories of e-procurement adopters: solitaryfaction of company experimentation with compound elucidation andanother set that entrust lonely to a single sort of technology. Alsoaccording to the cram, adherent businesses appreciate the educationthey gain as of their added audacious complementary companies thatinvent amid novel e-procurement technologies. The results alsodisplays hopeful gestures of wider acceptance of e-procurement asmore businesses come to the fore with their revolutionary dischargepractices making more companies to take internet-enabled supply chainmanagement schemes more gravely. In the meantime, in a meadow cram ofbusiness purveyor and its purchaser, it was established that a sellercould gain strategic reimbursement when the core customer companysets in motion the e-procurement system while the supplier-tradingpartner improves the system’s aptitude in response. It was alsoestablished that purveyor-trading cohorts with highly developedhi-tech competence can considerably add to the remuneration of anarray dispensation scheme mutually to them and to the clientele.
Inthe current world economy, the business environment is continuouslygrowing competitive. This has prompted the need for organizations ofall forms and dimensions to try and use their abilities and assetsproperly to boost productivity. In a company set up, manufacturersand their supply chain partnerships must have a secure affiliation inorder to realize mutual paybacks. In this stare, advancement ofinformation technology, through the Internet permits the mentionedplayers to have successful communications. This is only possiblethrough the deliberation of the incorporated business’s informationtechnology (IT) infrastructure (Córdoba-Pachón and Ochoa-Arias,2010). Also the supply chain can be supervised from top to bottomusing the e-business activities. In this reverence, one of theimperative activities associated with e-business is e-procurementwhich helps supply chain team devise right ways of management. Theconventional business approach indicates that procurement involves aseries of communication means. They facilitate procurementprogressions among the different parties engaged. In this view, theprocurement procedure is not only the acquisition of substantialproducts and services but also involves the alignment of purchasingstrategy. For almost a decade, back-end procurement course of actionshas been changed into a tactical resource. Now, procurement is notonly as a premeditated module in the value chain, but it also servesas the main driver in the extensive supply chain. This is due to thefact that there is emphasis on time to the marketplace, product value based antagonism, customer improbability and the need to perk up the bottom-line expenditure.
Asregards technology progress, e-procurement has changed into theincorporation of electronic technologies to make more efficientprocurement actions of an organization. This has made some businessentities to define e-procurement as the process of paying forcorporal products or services electronically as a fundamental part ofthe general tactical procurement plan incorporated in thecontemporary business setting. These plans takes account of but notrestricted to strategic resources or supplier rationalization. Itmakes use of high percentage the supply chain automation and theability to get engaged with one or more market places. The purchasedcommodities can be operational resources or production resources(Heizer and Render, 2014).
Todepict its correspondence to other e-commerce activities,e-procurement has had rapid growth in the commencement of the 20thcentury. E-procurement was considered as an electronic bustle in the area of business with a lot of advantages (Kajan, Dorloffand Bedini, 2012). The most noteworthy one was the diminution ofcorporal products and services buying costs. Investigations byTomorrow first avails three indispensable repayments of e-procurementhighlighted as enhanced resource handling, value addition throughleveraging, and elimination of nonconformist purchasing. For the caseof expenditure cutback based on e-procurement processes all expensesof purchased corporeal products and services, ordering charge andholding price are reduced. This is also coupled with lower rates of gaining access to the information technologies linked to the Internet-based purchasing. Implementing this can have momentousadvantages like lower obstruction for market entry, price lucidityand better-opened opportunities to stay away from eccentricpurchasing. Also it facilitates ability to use preferred suppliernetworks and achieve better sense of balance of power between sellersand buyers. Summarization of the most important e-procurement rewardscan be listed as follows: reduction of sales cost price, reducedmanagement and paperwork costs, lessening of order succession timecost, enhanced supplier and customer bond. Also there is loweredtransaction cost, lowered inventory costs, increased supply chainmanagement and productivity, enhanced inventory management, shorterprocurement phase times and accurate decision making process.Importantly also is to note improved market intelligence, pricesimplicity, efficiency and effectiveness in business processes andreduced errors (Lewis-Faupel et al., n.d.).
Procurementis normally one of the prime expense investments in a business’cost configuration which gives it a chance to hold a considerablemanipulation on company’s general performance (Mora-Monge, 2010).Businesses are aware that procurement commotion is an imperativeaction in all companies whether civic, hush-hush or legislative.Procurement administrators are continuously seeking for resolutionsto lessen the escalating procurement expenditure as presented byassociated processes, risks and reliability. The answer to quenchthis thirst is possible through automation of the supply chain. Thereare various confederacies for e-procurement, but the universalelement to everyone is that e-procurement entails of diverserelevance. The vital diversity of e-procurement in contrast toconventional procurement is that it permits personage staff to orderwares and services frankly from their personal PCs during thenetwork. A hefty numeral of dissimilar relevance and schemes ofe-procurement are acknowledged in the writing which divides it intosix varieties namely: – e-MRO, web-based ERP, e-sourcing,e-tendering, e-reverse auctioning and e-informing. E-MRO solutionpass on to the method of generating and appreciating purchasecommandeer making procure orders and getting circuitous merchandiseand services by use of a software scheme pedestal on the Internettechnology. The solutions can comprise of accessible functions withinsystems like SAP, or completely sovereign solutions incorporated intoERP applications (Pani and Agrahari, 2007). This solution allowsemployees to pay for commodities from favorable purveyor catalogs,while taking into custody the spending statistics in the route. Whenthe procurement process has been conducted the elucidation willrobotically offer direction to the workers’ choice of goods throughthe compulsory endorsement route and modus operandi Some researchfindings describe e-procurement system as a Web-based punter tomaître d` appliance utilized to substitute the labor-intensiveprocurement method. In simple terms, e-procurement is simply thepurchase of merchandise and services via the web.
E-procurementelucidations envelop three most important procurement quartersprocurement connections, procurement administration and souk creation(Slater, 2007). It also affects four key running procurement actions,which includes: probing of commodities and services, dispensation oforders, screen controlling and dexterity of germane information. Onthe shopper’s side the e-procurement solution is normally coupledto other on hand information organisms like ERP. This enablescorporation to control the significant endeavor statistics that isavailable on these structures. On the dealer’s elevation, theelucidation is more often allied to their order effecting structureor merchandise catalogs on their website. Procurement supplies can bealienated into two different classes namely unswerving andcircumlocutory. Undeviating resources are elements used in thebuilt-up progression and they are correlated to the fabrication ofcompleted wares. On the other hand, indirect equipment relates to theresources that do not upshot openly in refined produce. Archetypaltortuous buying engrosses bureau goods and furnishings, traveling,insurances, workstation hardware and software, telecommunications,and onslaught resources. Tortuous supplies are also extensivelyreferred in the writing as maintenance, repair and operation (MRO)and non-product related (NPR) resources. Most firms executinge-procurement elucidation begin their programs with the acquisitionof circumlocutory wares (Wireman, 2008). The distinctivecharacteristics allied to indirect purchases are as follows: theyconsist of a broad assortment of merchandise and services that areoften obtained from an yet superior numeral of merchant. They areusually time overwhelming because they entails non-standardizedsubstances that are normally obtained in smaller orders. They depictelevated end user participation in the calculated purchasing stageswhich means that circumlocutory buying seizes consign nearly theentire over the firm. In entirety a batch of cash is drawn in duringcircumlocutory procure and they draw a lower consideration fromexecutive. Owing to the unstable uniqueness of buying circuitousresources, consumers often have to expend a lot of moment commercewith any single transaction. This translate into confer with dealers,changing the buy requests to pay for orders, managing reservation andmaking there is the accurate allotment of invoices established. Thisenormous outfitted workload consumes occasion and derives bargainhunter into neglecting more premeditated errands (Wisner, Tan andKeong Leong, 2012).
Researchhas discovered seven main factors that are used by firms to selectsuppliers from international market. They affect the way firmsperceive and incorporate e-procurement into their operation systems.These aspects are economic terms, quality reassurance, apparent risks, service recital, buyer-supplier affiliation, cultural and communication hurdle and trade constraint. Other studies exposedmanagement competence, production aptitude and flexibility, designand technological potential, financial stability, knowledge andexperience, geological location and electronic operations as some ofthe imperative factors which control the firms when selecting theirproviders. The advancement in technology allows purchasing employeesto examine the product’s purchase outline and in turn smoothens theprogress of supplier negotiations. According to Kar (2009), it ismore important to source from more than a single supplier because onedealer may not have the entire necessary technical competency toprovide for all the prerequisite of the firms. Therefore, gettingseveral suppliers may help fulfill the needs of the company. Angelesand Nath (2007) analyzed the decisive factors behind e-procurementprocess. They established some success factors like limiting thenumber of suppliers, fusing purveyor and indenture and relatingfavored and premeditated purveyor in preparation for e-procurement.These success factors presents a comprehensible signal that loweringthe probable number of suppliers who applied for a tender to thenumber of promising suppliers who would truly be more appropriate in the supplier prequalification step would play animperative task in the triumph of an e-procurement implementationprogression. The procurement aspect is lone of the mainly significantroute of a business and it normally differs between companiesdepending on the bustle, epoch and dealings with purveyor (Trkman &McCormack 2010). A fundamental procurement route starts with thespecifying the need and ends with a resolution and compensation.E-procurement structure should have the supremacy to alter thepurchasing procedure as it has an upshot on every the stepladder wellknown. E-procurement fetch a propos significant simplifications ofthe outfitted workload for bargain hunter by decentralizing the setprocurement method. It consequently improves the efficacy andcompetence of the acquisition procedure and enables bargain hunterhub on more premeditated errands. When corporation are espousee-procurement elucidation individual has to recall that managerialrevolutionize and method upgrading can often convey superior nest eggthan accomplishment of a trouble-free technology (Trkman andMcCormack 2010).
Chapter3.0 Research Methodology
Saunderset al. (2009), the philosophy adopted for the research carriessignificant assumptions relating to the method in which the canvasser view the human race and it determines the manner in which oneunderpins the research strategy and methods. It is thereforevital for value of business and management that researchers are awareof theoretical and philosophical commitments. It is important toappreciate that the method used during the do research strategypreference has immense brunt on making them comprehend what they arelooking into Pragmatism is by instinct alluring because it preventsthe researcher from engaging in whatever they perceive to ratherfutile debatesabout concepts like truth and reality. Theresearcher has to study what pleases him and is of value as far asone is concerned. This study thus focuses on different ways deemed appropriate by the research team and the results are used in customs that can carry about affirmative penalty within your worth structure. In this case the research team affirmed that research statement is the most essential determinant ofepistemology, ontology and axiology. They thus suggested dubiously to facilitate both an optimistic or interpretive viewpoint is adopted hence using the criterion for applying expediency as the philosophy. This philosophical thought is foundon (6 and Bellamy, 2012)’s description of expediency in ontology,epistemology, axiology and statistics anthology modus operandipositions. Deduction approach process was used and it entailed:construction of a supposition commencing the theory, articulation of the supposition in a manner that illustrates a link connecting two specific concepts or variables. Also the approachinvolved testing the operational hypothesis, exploration of theoperational hypothesis (which will either confirm the theory ormodify the theory) and modification of the theory in the light offindings.
The sources for data of this research proposal are interviews, pertinent written work and documents availed by the selectedcompanies. There are two main classes of data namely primary andsecondary basing on the collection period (Creswell and Plano Clark,2007). The primary data are those being composed for the firstinstance. Unswerving exploitation of mutually qualitative andquantitative explore methodologies facilitate the research squadacquire prime data. Primary data engross the information composedstraight as of the turf. It echoes the literal present stipulation ofthe cram aspects. In this study cram interrogations, focus groupingdebate and undefined inquiry were used as qualitative technique togather data. These tactics typically employ a minute figure ofrespondents since of the procedure of engaging frankly with the delveinto group. Approaches worn to amass prime data rally round thecanvasser identify with how supplementary populace distinguishcentral aspects. Primary data compilation is explorative by sceneryand permits the pollster personally spot the original legitimacy onthe opinion. One can consequently discover the drift and predict theprobable line of attack to go there after. Secondary data are thosethat have previously been collected and documented by someone else.They have already been conceded through statistical processes.Secondary data is obtained by appraisal of by now available works ofcram and documented knowledge notion. The delve into squad has to getacquiescence from the conscientious clout accordingly to theinformation is consume in the explore statement. Care should be takenso to facilitate sincerity of the information is not subjected toqualm. Though appear to encompass approach from verified particulars,it is intricate to rely on it. Steadfastness is usually tricky sincethe information do not embody the contemporary circumstances as theymaterialize in the meadow. It is as sound at era unfeasible tounearth the awfully unambiguous information a propos the conceptionof cram. There is as a consequence call for to in a minute instituteaffairs and anticipations. This rallies round to spawn a connectionflanked by the up to date state of affairs and what is thought tohave been a propos at that instant of delve into. It is conversely,vital as it grant insight a propos how verve makeover captureconsigns.
Dataanalysis entails examination, categorization, tabulation, testing, and otherwise recombination of both quantitative and qualitative outcomes to deal with the initial suggestions of the study. There are three sort of qualitative psychoanalysis practice which includes summarizing (condensation) denotationcategorization (grouping) of connotation and configuration (ordering) of implication through use of narratives. It isnecessary and essential to figure out the divergence betweenqualitative and quantitative for clear distinction. There are fivespecific techniques for analyzing qualitatively obtained data. Theseare pattern harmonizing, clarification and justification, time-seriespsychiatry, common sense replica and cross-case fusion. Underdeductive advancement, for developing a hypothetical and evocativeframework it needs to categorize the major variables, elements,themes and factors in the delve into venture and the anticipated or implicit relations between them. In the report,based on unruffled data from pragmatic study and literature as wellas from consultation with-in crate psychotherapy will be applied. And then by putting side by side the data between and among the casecompanies with the hypothesis, they are accessible and thepsychoanalysis of with-in case analysis, a traverse case analysis ismade to binary substantiate the results.
Datawas analyzed through statistical analysis like descriptive analysis,factor analysis and logistic regression analysis (Ketchen and Bergh,2006). Descriptive analysis was effective for to describing the summary of the business culture in china and the relevance ofe-procurement technologies among companies. Factor analysis wasutilized to disclose the hidden factors that manipulate the applianceof e-procurement in selecting suppliers. Logistic regression analysiswas appropriate for predicting a distinct conclusion from a set ofvariables that maybe continuous, application of e-Procurementtechnologies for Selecting Suppliers of firms in china a separatedichotomous, and a mix of any of these. It was done to establish whether the e-procurement users have the purpose to amplify the utilization of e-procurement in chosing dealers or otherwise andto comprehend the affiliation between the factors identified amongthe e-procurement users. Logistic regression produces thecoefficients of a formula to predict a logit revolution of theprobability of occurrence of the characteristic of interest asfollows: – logit (p) = b 0+ b1X1+ b2X2+ b3X3+ …… + bkXk whereby,p is the probability of presence of the characteristic of interest.The findings of the research questions will be presented after theanalysis.
3.3Proposed Research Strategy
Thecram will take up in cooperation qualitative and quantitiesmethodologies. Secondary data is indispensable so to facilitate thedo research panel put on a guideline of what is projected. It awardsthe boulevard plot that steer the extra component of the do researchprogression. It is achieved during review feedback form, appraise ofpre-existing data and funnel lessons as quantitative approaches.Primary data is fetched and painstaking as the most appositeinformation for decision-making practice. SERVQUAL (RATER) is themost effectual mechanism worn to gauge data (Single, Peg Boyle). Itis used as a eminence management scaffold that was urbanized in mid1980s for overhaul segment industries. The delve into chose thisimpend since it clearly highlights foremost apparatus. It initiallyutilized ten rudiments of service quality but presently they weremerged to five. It delivers facet a propos reliability, tangibles,assurance responsiveness and empathy thus creating the acronym RATER.Due to this technique the opinion poll is obligatory to computepurchaser outlook of service quality. It also guages the customer’sacuity of services received.
3.4Credibility of the Study
Reliabilityand validity are two most accredited criterion used for testing andassessing the dimensions of variables and quality of data relevancefor both quantitative and qualitative research. Reliability represent the scope to which the data collection system andanalysis process will provide consistent results. Reliabilitytherefore is the word used for consistency or repeatability overtime. There are four threats to reliability which the research teamwas much aware about and devised ways to handle them. These are:participant error, subject bias, observer error and observer bias.The research team also utilized three approaches to assessreliability when comparing the collected data with other alreadyexisting data from various sources. These are test re-test, internalconsistency and alternative form. For guaranteed high reliability,the research team uses the identical guidelines for getting data.According to Greener (2008), there are three major approaches for categorization of legitimacy in delve into crams. They are‘face validity’, ‘construct validity’ and ‘internalvalidity’. Face validity helps the non-researcher or layperson toappreciate that this is valid method of researching the stated aboutproblem and it makes sense of a methodology. It is necessary tomotivate participant in surveys and interviews or the whole researchdesign. Construct validity is a n assortment of ideas and it stipulates that the method used must be in reality measure what the researcher think it measures. It is vitalpredominantly in questionnaires which are not interviewedface-to-face and done by post or email. This so because there is noopportunity to clarify the denotation of the question and for this attimes respondents can get the wrong idea of a question and answers ina different way that was not desired (Sapsford and Jupp, 2006).Internal validity refers to causality which implies that is there exists any connection of two different factors.
Inbusiness based research it is easy to make assumptions about a factor or an ‘independent variable’ that is causing aneffect or ‘dependent variable’. The researcher therefore needs toask and understand what are other factors affecting this outcome.Another type of validity discussed every now and then is external validity also known as generalize-ability and it can generalize the findings of the study to other context. The research team use plentiful sources of evidence to collect data, some ofwhich are interviews, books and websites and the MRO procurement data in China (Vogt, 2010). Also all data are joinedtogether to construct the empirical findings. Stronger informants appraises and draft a case study report used to hold up the construct validity of this paper. The construct validity issustained by piloting many interviews with employees in varyingpositions of the various companies. We have performed personalinterviews and for the help of face-to-face interview, theprobability of correcting information and the understanding wasincreased. Some generalization has been done by doing multiple-casestudy analysis. Apart from that, the generalizations of this document can also be realized by referring to and confirming the earlier theory within the MRO procurement.
Chapter4.0 Results and Analysis4.1Success Factors4.1.1Application of E-Procurement Technologies
Fromthe responses, the results in table 3 revealed that 49.5 percent didnot utilize e-procurement in their firms (non-users) while 50.5percent were known as the users of e-procurement. The four maintrendy e-procurement tools for procurement actions used bye-procurement users were accountable as follows: e-sourcing 55.2percent, web-based ERP 46.9 percent, e-informing 41.7 percent, ande-tendering 40.6 percent. The use of E-MRO and web-based EDIrepresented about 33.3 percent and 32.3 percent correspondingly.E-reverse auction just represented a very small portion of allresponses by the companies with only 9.4 percent of them admitting tohave used the technology (Fortino and Palau, 2012).
Table1 Application of e-procurement technologies
Types of e-procurement
4.1.2Factor Analysis on the Implementation of E-ProcurementTechnologies
Pertinentstatements were solicited to the e-procurement users and then theywere compared to the discernment of e-procurement execution factorsamongst the users. In order to settle on the momentous factorscontributing to the performance of e-procurement, an exploratoryfactor analysis (EFA) was carried out. Principle component analysis(PCA) was conducted to explore and establish the validity of theitems under study. The outcomes indicated that the KMO rate is 0.842while the Bartlett’s test of sphericity is noteworthy at the level0.000. Due to this, it is possible to conclude that the data issuitable for PCA (Khachidze, 2012). Factor loadings higher than 0.50are assumed to be reliable. As a result, a factor loading of 0.50 wasset as the cut-off point and the total variance explained was 65.876%as the moderate limit. This factor solution in the data diminutionefforts is accompanied with 34.124% of information loses. Each of thethree identified factors was briefly reviewed and tagged.
Firstfactor was tagged selection efficiency because all causativevariables put emphasis on alleged payback linked to the efficiencyand effectiveness of choosing the right suppliers and resources forthe users. The first factor consists of seven important factorloadings, all of which were completely interrelated and the Eigenvalues were 6.588. The entire variance elucidated was 32.939% whereasthe most greatly correlated variable was decreased time spent onmaterial purchasing. This was followed by augment in the number ofsuppliers who are attracted in making a transaction. Appropriatemeans for decide on suppliers of main and common purchased productsor services was also a contributor. Therefore, the responses deducethat one of the major concern when a company wants to put intooperation an e-procurement process is selection efficiency.
Secondfactor was management efficiency which involved eight considerablevariables with Eigen values of 3.795. The variables that are relevantto management efficiency were reduced working and inventory expenses,better decision-making process, advanced management information,developed market intelligence, augmented company’s image in themarket, condensed staffing stages in procurement process, cut downpurchasing processes, and reduced expenditure of purchasing resourceswhich was stated by 18.975 percent of the variance in the data. Inview of the fact that all of the items were apprehensive with theenhancement of management process for the procurement actions onecould thus articulate that the management efficiency could contributea significantly as an inspiring factor in the accomplishment of e-procurement technologies by a businesses in china (Shin, 2005).
ThirdFactor identified was security and legal environment which entails offive variables with an Eigen values of 2.793. The five variables thatare pertinent to security and legal environment were prospective lossof proprietary and private information, lack of universally acceptedstandard, amplified business transparency and data reliability,internet security apprehension, and legal authenticity concerns. Thewhole variance explained by this factor was 13.963% thus it wasrecapitulated that the security and legal environment possibly willalso participate as most motivator factor in the execution ofe-procurement technologies by businesses in china. Given that all ofthe three established factors have now received suitable tags, it isessential to test their reliability via Cronbach’s alpha. The alphaintegers for e-procurement execution factor created were 0.953,0.859, and 0.889 in that order. This points out that all of thefactors generated from the analysis were reliable. This is becausethey hold an alpha value of higher than 0.70 and indicating asatisfactory internal reliability. These three notable factors wereincorporated in the logistic regression as independent variables.
4.1.3Factor Analysis on the Application of E-Procurement forSelectingSupplier
Aninvestigative factor analysis using most important mechanisms withvarimax rotation was performed to recognize the underlyingencouraging factors in the use of e-procurement for choosingsuppliers. Necessary statements were subjected to the e-procurementusers and then linked to the users’ point of view about the use ofe-procurement for selecting suppliers. The KMO analysis of 0.871 andBartlett’s test of 0.000 were considerable and the variables werevalid for supplementary analysis (Khosrow-Pour, 2013). The use of theScreed plot and a assessment of the Eigen values had acknowledgedfour factors from the 17 variables while the factor loadings biggerthan 0.50 were considered reliable. The total variance achieved fromthe analysis was 79.483% and factor solution in the data fall effortsgoes with 20.517% of information lose.
Thefirst factor 1 in the analysis was dubbed commitment covers eightsignificant factor loadings all of which were optimisticallyinterrelated and its Eigen values were 6.895 which led to a 40.560%of variance value in the data. The three variables that are wellcorrelated were it helps in enhancing supplier’s compliance totake part company’s new product development and value analysis0.892. It was followed by assisting in maintaining a verified trackrecord of suppliers 0.869 and then aids in conserving the long-termconnections with established suppliers 0.867. Given that all thecausative variables insisted on the commitment of the suppliers tothe company, it is possible to conclude that commitment was one ofthe factors that could add to the use of e-procurement for selectingsuppliers in a business.
Thesecond factor was quality and it combines five variables. They areassisting in receiving innovative suppliers 0.939, facilitatingsearching of ethical suppliers 0.906, availing suppliers who arecommitted to quality 0.886, helping in maintaining the references andreputation of suppliers 0.854 and helps in availing up-to-datesuppliers’ information 0.832. The causal variable Eigen values is3.754 which assumed a 22.085% of the variance in the data. Thisfactor was considered because all five variables connected to thecompany’s premeditated decision to search for extremely competentand high quality suppliers.
Thethird factor was cost because all of the variables in this factorcenters sturdily on issues involving to the costs allied toprocurement activities. The variables were reduced costs thatrelates with purchase of resources 0.895 and helps in probingsuppliers who could offer lithe contract terms and condition 0.882.The Eigen value for cost is 1.812 and the variance took about 10.663%of the data (Rendon, 2005). The factor corresponds to the intentionof businesses to trim down their expenses towards procurementactivities. As a result, one can possibly conclude that costs mayhave a say to the execution of e-procurement in selecting suppliersby a firm.
Thefourth factor 4 was delivery acceleration which carries’s twovariables namely helps in search of flexible suppliers with theability to act in response to unanticipated demand 0.874 andfacilitates the search of suppliers who fulfill delivery due dates0.846. The factor Eigen values was 1.050 and the variance availed a6.175% of the data. The name was selected because all of thevariables in it were connected with the delivery obligation insearching for suppliers using e-procurement technologies. Therefore,the conclusion is that delivery acceleration is one of the factorsthat can contribute towards the implementation of e-procurementtechnologies to select prospective suppliers for a firm. Reliabilitytest was done using Cronbach’s alpha to the four derivative factorsand the alpha integers for internal factors outcomes were commitment(0.955), cost (0.938), quality (0.799), and delivery acceleration(0.777) correspondingly. The four consequential factors from thissection were integrated in the logistic regression as independentvariables.
Thechallenges of computerization amid the key actions in the procurementdivision will hold back the adoption of e-procurement system.Participants were questioned to point out the extent to which theyapproved subsequent statements with reference to the challenges ofadopting e-procurement using a five Likert scale (1= very greatextent 2 = great extent 3 = medium extent 4= small extent and 5=very small extent) (Kock, 2008).
Table 2 Challenges of adopting e-procurement
E-Procurement Adoption Challenges
Making equipment compatible is expensive
Lack of regular use by employees
High costs of e-procurement adoption
Lack of finances
Old IT equipment that needs overhaul
Resistance to change
Lack of e-procurement implementation capacity by small suppliers
Lack of internet access by small suppliers
Lack of company board approval
Lack of managerial support
Asobtained in the tabulated results it is evident that large-scalemanufacturing firms in china were to a great extent (mean ≤2.99, with a significant standard deviation) faced with the various challenges in adopting e-procurement systems. Thisconsequently avails a translation that large-scale manufacturingfirms in china need to move towards a more tactical view ofe-procurement adoption in order to put together diverse systems andapplications resourcefully throughout the organization. These aspectscan be summarized and explained fewer than three major umbrellachallenges (Lee, 2009).
Challengefactor 1: inadequate and inappropriateness of system amalgamation andstandardization of issues. This aspect takes into consideration ahorde of e-procurement systems maturity challenges that mayultimately confront the firm. Generally, e-procurement systems arecomparatively recent progressions in the business relevance area andit is not strange to come across a poor benchmarked reference models.This is more prone in companies that are just commencing the learningprocess of these systems’ functionalities and application withintheir management structures. As a result a back-end combination ofissues that arises from this state of affairs is the lack of a “baseinfrastructure” to gather transaction data from more than onesingle e-commerce application. There is thus need for the businessrun multiple systems simultaneously which translates into highcompatibility expenses. On the other hand, even if this baseinfrastructure subsists it would still be hard to scrutinize andestablish data management principles and controlling. An additionalchallenge is software immaturity, which is most likely true but moreof the slighter knowledge dealers in the marketplace and to a partialextent, of the key players. These chief players form the foundationalbase of firms that are the trailblazers in when it comes to productdefinition. Contrasting to its more grown-up equivalent enterpriseresource planning (ERP), some e-procurement packages may not have keycomponents like invoicing, disbursement, resolution, validation,safety measures, and consolidation of general ledger and invoicingsystems.
Non-globalunrelated solutions may not be competent to manage the complexitiesof special geographical limits, currencies, tax structures, amongothers (Préteux, Vaucelle and Ben Henda, 2008). Another executionissue is the absence of data interchange standards for e-procurementsystems. Business managers should be responsive to the maturityaspects surrounding the standards constructing businesses and holdsup their efforts towards developing universal data switch overstandards, in particular those based on extensible markup language(XML). Another item in this issue is the fiscal penalty of notoffering consideration to concealed costs of execution that can movestealthily up on the company and wreck its well-intentioned efforts.Hidden overheads casing include things as implementation, systemsamalgamation, content aggregation and validation, directory andexploration engine protection, transaction supervision, supplierenablement, end user guidance, business process re-engineering andadministration. The totaling of these elements can very without doubtsurpass software licensing and maintenance costs by up to five to tentimes. Companies should stipulate for more cost lucidity when tradingwith software merchants and service providers with vigilance inquestioning reference firms that have in the past launched similare-procurement projects.
Challengefactor 2: immaturity of e-procurement-based market services coupledwith end user resistance. This challenging element covers theimmaturity of suppliers of e-procurement services, poor preparationof among some suppliers that a buyer company may be transacting withand resistance of a company’s end users to erudition of severale-procurement systems. Immature marketplace service providers may nothave the adequate capital necessary to provide an all-inclusive suiteof services to its members. Consulting services for more multifariousand advanced e-procurement implementations may fall short ofprospects. Leading-edge companies are more adapted to educating theirconsultants while minor firms may require a more directiveassistance. What`s more, immature service pricing models thatdiscourage the growth of their clientele saddle a number of softwarevendors and marketplace service dealers. Subsequently, there’s theimmaturity of some suppliers that a buyer business deals with. Eventhough a good number of tier-one suppliers are in all probabilitytechnologically complicated, the core firm and channel master maypossibly still have to be geared up to underwrite the overheads ofbringing its number one suppliers up to par when it comes to veryexplicit e-procurement implementation requirements. Suppliers must tolearn how to produce catalog content, process and develop electronicpurchase orders, utilize invoicing mechanisms along with other tasks.Another related challenge is resistance of internal end-users tolearn how to apply multiple e-procurement systems, particularly whenthe company is still supporting other big and challenging means ofpurchasing like the use of procurement cards and expense submissions.Companies should support learning culture directed towardsunderstanding and appreciating new e-procurement systems. Thoroughtraining and educational conferences with end users, employees andreward programs availed by installing easy-to-use and seductivedesktop purchasing systems are necessary. The purchase practiceshould be basically effortless so that personnel in the company arecapable of focusing on more extensive and value addingresponsibilities that are more significant to their occupationaldescriptions (Piaggesi, Sund and Castelnovo, 2011).
Challengefactor 3: maverick buying and complicatedness in integratinge-commerce with other systems. This factor involves the challenges inaltering purchasing related behaviors of human resources and puttogether e-commerce transactions with those of other e-procurementsystems. Maverick buying and purchasing with exclusion of formallydefinite processes on the part of end users employees even after thee-procurement solution has been entirely executed has confirmed to bedifficult to do away with. Therefore, selling the reimbursements ofnew e-procurement systems to end-users, making them responsible forsavings they claim to achieve in alliance with business cost savingstarget. Also there is need for demonstrating how e-procurementsystems will enable them arrives at such targets through exhaustiveend user training and educational programs come into view to be thebest solutions to this problem. The company as well needs to lookforward to potential problems when expend data from e-commerce-drivendealings need to be siphoned off and collective linked with otherpurchasing-related operations according to the data composed fromother systems. This is estimated to be not as much of of an issue asthe company builds its e-procurement schemes upon a reverberative androbust “base infrastructure” that can serve up as a convergencepoint for procurement data starting from diverse sources (Valverdeand Talla, 2012).
Thischapter goes over the main points of the research study that sums upits most imperative findings that presents some inferences forfurther research. It adds to the knowledge of how can e-procurementpurveyors can make it more eye-catching for companies in china.Despite the fact that the remuneration of e-procurement encompassbroadly explained in the scholarly written prose, there are immobileimportant matter that companies in china necessitate triumphing overprior to the reimbursement of e-procurement can be realized. Someacademic works presents five dynamic that prevent companies in chinafrom take on e-procurement when acquisition of circuitous materials(Blanchard, 2010). These are: – consistency topic and need ofsuppleness, insufficiency of wherewithal, lower deal degree dealerpersonal portals and amalgamation issues. The domino effects of thisresearch study are a bit in streak with prior research works on thesubject of e-procurement and its problems. Pro e-procurementsolutions en route for be triumphant, merchants have to establishways of slackening the problems plus making the execution course ofaction smoother for businesses. Some companies interviewed, avowedthat e-procurement solutions for circumlocutory purchase were not yeton the stage they expected. They as well commented that the solutionsare still evolving and particularly in china they are just onlyapproaching the markets and transforming into industry awareness(Smock, Rudzki and Rogers, 2007).
Ifsolution dealers can build up gear for making the combination of theelucidation to both, purchaser’s IT communications and to sellers’communications easier, it may perhaps also have an effect to thequandary factors linked to buying businesses and suppliers(Publishing, 2014). Those challenges are inflexible for theelucidation purveyor to affect unswervingly, bar whilst theelucidation is made simple to make use of and put together, theycould be pretentious as well. It is necessary for businesses in chinato accept the fact that implementation of an e-procurementelucidation is not as easy as scores of businesses suppose. Firmsimplementing e-procurement must without any doubt be aware of thereason of launching such a related system. This comprises a cautiousanalysis in relation to how e-procurement processes will impinge on afirm, its stratagem and into which vicinity it will get monetary andnon-financial reimbursements. The drivers and quandary factorspropelling for espouse e-procurement expertise differs among andbetween companies. To do well in e-procurement execution there is aseven-step roadmap for business managers to make use of. It beginswith amplification of aspiration and locks of hair with the learningof solutions by the end-users. According to the instigators all ofthe seven steps should be covered comprehensively in order tocopiously be successful in e-procurement implementation as explainedbelow (Canbolat, 2005).
a)Elucidate your target: Businesses should ensure that the quandaryand goal is well described and tacit. As a procurement director youneed to solicit yourself what the operations you are wearisome toperk up and whether the goals have been visibly distinct and presentpossible reach-ability.
b)Erect a route inspection: subsequent to scenery the end it isnecessary to evaluate the up to date procurement development. It isnecessary to know anywhere you are now in array to get in touch withtomorrow’s anticipations. Businesses should foremost agree on whatbreed of purchase is the elucidation besieged to shore up:undeviating or circuitous in order to take in highest chargecommencing an e-procurement initiative. The entire procure route mustbe assessed to resolve if it requires to be re-engineered.
c)Craft a commerce crate for e-procurement: locale up a commercecasing for e-procurement execution can be constructive, as itmilitary the corporation to thoroughly scrutinize the businessenvironment (Pomazalova, 2013). There has been a quandary indetermining the rate of IT reserves and in developing a trade folderfor such stash. This draw from the reality that, in many incidencesthe reimbursements on or after realize an e-procurement elucidationare vague and non-financial hence some conventional bookkeepingbased-methods like ROI are not proficient to incarcerate them.
d)Extend purveyor assimilation matrix: with no purveyor assuranceand participation, the e-procurement scheme is a waste of time.Companies should devise a supplier assimilation matrix that helpssettle on the type of relationship that is best for individualdealers. Engaging purveyor in institute e-procurement operation isessential, seeing as it also has a momentous impact on supplier’sIT communications and stratagem. Desert the role of purveyor incompany’s e-procurement exploitation may result into malfunction ofthe intact venture.
e)First-rate e-procurement relevance: There is an assortment ofvarying e-procurement applications for businesses to pick from. Byclassifying the goods and services pay for firms can with no troubledecide on the necessary procurement stratagem and e-procurementrelevance. There are four queries which managers should reflect on inorder to identify the correct relevance for their corporation asfollows will it sustain my procurement practice? Does it influencemy supplementary appliance stash? Will it toil faultlessly withsupplementary appliance? Is it extend-able?
f) Amalgamation is the lot: assimilate the e-procurement elucidationwith dealer’s and firm’s accessible back-office scheme is themainly essential mania in e-procurement achievement (Muneesh Kumar.and Sareen, 2011). Amalgamation with company’s financial scheme hasa nonstop bang on the stage of practice nest egg and it is animperative determinant in choosing the application.
g)Educate, teach, and instruct: Re-designing the procurementprocedure and controlling punter conduct towards the new-fangledmeasures and business regulations is the lone of the most decisivedynamic in a thriving e-procurement discharge. Modification tends tocause opposition and administrator should pact amid it by converseand heartening staff to conform with the novel guiding principle.Availing in sequence a propos their spending to staff eggs on them totake tenure of savings targets with the use of re-engineeredprocurement processes.
5.1Logistic Regression Analysis
Logisticregression analysis of our findings was performed in order to knowthe bond between the factors established among the users ofe-procurement (96 users) (Chopra and Meindl, 2007). The dependentvariable assumes the value of one if the participants revealed thatthey have the objective of boosting the use of e-procurement and avalue of zero if they reported otherwise. The values for theindependent variables were the factor gains from the factor analysison the execution of e-procurement technologies and the application ofe-procurement in choosing suppliers amongst e-procurement users. Theoutcomes of the logit model are shown based on the logisticregression analysis where six variables were considered to beappreciably correlated with the dependent variable. The variableswere selection efficiency, management efficiency, security and legalenvironment, commitment, cost, delivery and quality. Based on the logit replica, all of the factors apart from managementefficiency were highly momentous. The noteworthy factors wereselection efficiency p = 0.002, security and legal environment p =0.027, commitment p = 0.001, cost p = 0.004, delivery p = 0.001, andquality p = 0.034. From this outputs, it is indicated that an augmentin the selection efficiency factor boosts the adoption ofe-procurement by 5.850 times. The result was expected due to theavailable information in the existing knowledge body that when acompany utilized e-procurement it led to a raise in theeffectiveness and competence of suppliers and resources selection inthe firm (Mora-Monge, 2010). The firm will be optimistic to amplifythe use of e-procurement to make sure the effectiveness andefficiency of procurement activities in the firms.
Inaddition, any enhancement in security and legal environment aspectswill leads to a raise in e-procurement utilization by 3.077 times.This is owing to the piece of information that with a boost in thesecurity and legal environment, the company will on the larger extentbe expected to amplify the performance level of e-procurement, thussetting up trust between the companies and the dealers. This possiblywill lead to the institution of a long-term rapports and potential future business schedule (Graham, Manikas and Folinas,2013). For commitment factor, any augmentation in this factor willraise the probability of e-procurement adoption by 5.788 times.Commitment by the providers to go on with the application ofe-procurement will help firms to further initiate strategies incaptivating the advantages of e-procurement in the future. A parallelfinding was found in Hawking et al. (2004) that an excellentcommitment through enhanced communication with the suppliers leads tosuperior quality of the supplies. Based on the logit mock-up,amplification in the delivery factor will enhance the likelihood ofthe adopting e-procurement in the midst of the users by 5.558 times.The result revealed that the explicit condition by the company interms of delivery must be fulfilled in order to guarantee theeffectiveness of e-procurement application in the business.
Theuppermost likelihood for an augmentation in e-procurement applicationwas affected by the cost factor. An escalation in the cost factorwill cause a raise in e-procurement application by 7.396 times. Thisdepicts the consequences of cost factor in making it certain that theeffectiveness of e-procurement utilization in the firms is costdependant. Reduction in costs by using e-procurement will lead toprivileged profit for the company and thus they will be for the mostpart likely to install strategies to turn into a more highlydeveloped user of e-procurement in the upcoming days. From thelogistic regression analysis, the outcomes exposed that quality wasthe factor which has a connection with the e-procurement adoption. Ittestifies that a boost in the quality factor will raise thelikelihood of a company to amplify the application of e-procurementby 3.141 times. This is in consistency with findings in Hawking etal. (2004), Kalakota et al.(2001), Martin (2008), McIntosh and Sloan(2001), Minahan and Degan (2001) and Ribeiro (2001) that quality canbe improved through amplified competition, benchmarking the market intelligence, through visibility in the supply chain,efficiency, and superior communication.
Table3 Relationship between implementation and supplierselection factors with respondents’ intention to increase theapplication of e-procurement
Security and legal environment
-2log likelihood = 51.880, Percentage of correct prediction = 86.5%,Note: *significant at 5% level of significance
Theresults from this study avails a deeper appreciative aspect of thefactors connected with the use of e-procurement in businessenterprises in china (Harland, Nassimbeni and Schneller, 2013). Withthe prospective benefits that e-procurement technology holds, it hasattracted many companies to gradually apply e-procurement in theirbuying activities and supplier selection. In this research study,commitment, quality, cost and delivery acceleration were discoveredas significant factors which predisposed firms to select theirpotential suppliers. The results as well depicted that selectionefficiency, security and legal environment, commitment, deliveryacceleration, cost and quality as the factors correlated to thegrowing interest among firms to increase the utilization ofe-procurement. With these results, companies could have comprehensiveinformation on how to institute a strong and close association withtheir suppliers. They are also able to develop and install aggressivestrategies in order to perk up their competitiveness level in themarket.
Thisresearch study entails three contributions to the existing researchand academic knowledge bodies as far as e-procurement is concerned(Khachidze, 2012). First, this study avails helpful inputs on thecurrent scenario of business culture in china with reference to theuse of highly developed internet technologies. Secondly, it adds tothe knowledge base of e-procurement utilization mainly in theagriculture sector amongst agro-based SMEs supply chain players.Finally, it supports the perception that e-procurement has optimisticeffects on online activities in the agriculture sector amongagro-based SMEs. The stipulation from this study is that unremittingefforts are required from firms’ supply chain players towards theuse of sophisticated technologies in order to prop up the Chinesegovernment’s goal of mounting the agriculture sector as the thirdengine of economic growth. A dynamic use of e-procurement andstronger sustainability from the top management by availing asatisfactory e-procurement resource to be used by businesses are someof the major actions that have to be taken up by the firms. Thefollowing is an illustration of what Chinese business environmenthave achieved over time as far as e-procurement is concerned.
Table4 Achievement of businesses in e-procurement
Area of potential savings in e-procurement supply chain
6.0 to 13.5%
Savings from supply duplication management of demand for supplies improved stocking Savings from consolidated purchasing, group
purchasing, paperless order management Savings from consolidation of supplier base, and improved paperless order with specification
Saving from improved use of delivery capacity
and other service enhancements
Savings from automated point-of-service
distribution just-in-time and continuous
2.0 to 4.0%
2.5 to 4.0%
0.5 to 2.0%
0.5 to 2.0%
0.5 to 1.5%
5.2What to consider
Asestablished in the assessment of previous e-procurement writings,espouse e-procurement elucidation can provide considerable outlayhoard and other remuneration, but it is better to accept the factthat there are risks that procurement managers have to seize intoversion when allowing for e-procurement espousal (Lan and Unhelkar,2006). Making the procurement program more resourceful plus quickercan be fulfilled amid the apple of e-procurement elucidation.Nevertheless, this necessitates that the execution practice ought tobe planned plus strategized scrupulously in tidy to lower the effectsof the defy and menace that businesses valor visage. Whilstcircuitous pay for can at times description pro a gigantic part offirm’s general expenditure it is essential to as well these procureare performed following the corporation guiding principle anddirectives. Via e-procurement merely for circuitous acquire in thestart can serve as the springboard for businesses before shiftinginto an all-inclusive e-procurement process which also engrossesdirect purchases. There are four major risks that company managersmust be aware of when making decisions to incorporate e-procurementactions within their supply chain management (Telli Yamamoto, 2010).
a)Interior commerce jeopardy: Businesses need to be cautious whilstassimilate e-procurement machinery amid supplementary trade relevancelike accounting, accounts payable, human wherewithal and currencyrunning. Most firms already have devoted greatly in thesesupplementary systems plus the incorporation of e-procurement oughtto come as slickly as doable, or else it can put in danger thesteadfastness of clerical information.
b)Peripheral industry menace: e-procurement elucidation call for tobe proficient to work together amid purveyor IT communications. Proe-procurement elucidation to be victorious purveyor obligation beeasily reached throughout the Internet and endow with catalogs tosuit the desires of their clientele. In several gear purveyor valorbe short of the assets to congregate the load of consumers in catalogbudding and revision. Business also should build up apparatus thatgive the bargain hunter pledge that latest purveyor convene theprospects and principles concerning to purveyor eminence, service anddeliverance aptitude.
c)Technology peril: most businesses are not sure whiche-procurement elucidation superlative fits the precise requirementsof their corporation (Monczka et al., 2010). The be deficient in ofextensively established principles blocks the amalgamation of variouse-procurement elucidation athwart the supply chain. The researchteams maintain that devoid of proper time-honored principles forcryptogram, technological, and route qualifications, espousal ofe-procurement technologies will persist to be dawdling and will notbe up to snuff to convey the pledge reimbursement.
d)E-procurement route menace: This jeopardy recount to thesanctuary and run of the e-procurement procedure itself. Such topiccan be related to, for paradigm records safekeeping and swindledeterrence e.g. phony outlet, sham proffer etc.
Chapter6.0 Recommendations and Conclusion6.1Recommendations
Thisstudy recommends that future research should hub on first obtainingthe responses on the use of e-procurement technologies fromsuppliers’ point of view. Secondly, to investigate which of thefactors will focus towards advancing the effectiveness and efficiencyof procurement actions using e-procurement technologies in theagriculture sector. Being aware of the e-procurement factors andchallenges will aid the agricultural players in partaking moreenthusiastically in online transactions. This study only incorporateda few number of corporation and simply from the Finnish souk TheFinnish bazaar for e-procurement elucidation are still comparativelyinfantile and thus one may necessitate integrating some mature firmsfrom supplementary realm as well and enlarging the taster range inarray to search out extra global perspective based information apropos the tribulations related to e-procurement. Upcoming delve intomay well moreover look into the elucidation vendors’ viewpointhooked on the delve into and do some contrast flanked by merchant andbargain hunter views. There is furthermore an option to cram businessthat have lucratively put into practice e-procurement and scrutinizethe tribulations they have had throughout the discharge period. Adifferent delve into course possibly will be purveyor point of viewand their enthusiasm to take on these technologies and the troublesmerchant may encounter when their bargain hunter are espousee-procurement elucidation It will as well be significant to carry outa study to find out the reasons why some companies have notintegrated all the procurement activities in e-procurement.
Intimes of economic improbability and slow-growing revenues, plummetingthe cost base of a firm is the vital gauge that can best develop thebottom line. For a classic business firm, a 5% decrease in purchasingexpenditure can raise the bottom line up to as much as a 30% increasein sales. ‘Indirect’ goods and services spend represent a vastopportunity. Benchmarks indicates that on average 36% oforganizations’ peripheral used is on indirect goods and services,which incorporates office tools, stationery, printing, maintananceand repair supplies, IT resources, travel, staff contract,consultancy and contractors. Over the past few years copious Internetenabled applications have been devised to assist firms enjoyprocurement savings and e-Procurement programs have been as integralto organizations’ procurement strategies to reach these costreductions. E-Procurement is often perceived as the least perilouse-Business scheme: the quantified benefits of e-Procurement are welldocumented and it can be exported in non-competitive areas of thebusiness, where the business penalties of doing ineffective trialsare minimal. At the time e-Procurement solutions market matures it isalso starting to put forward e-Procurement of more multifariousproducts and services, and ‘Directs’ or ‘Goods for Resale’.The procurement of non-production goods and services is hardly evercomputerized and controlled efficiently. E-Procurement of theseindirect supplies avails a quick, low risk opportunity to delivere-Commerce capability into the firm, improve service to end-users andsave money savings which go straight to the lower line and repeatyear in year out. E-Procurement, on the other hand is more thane-enabling a purchasing liaison with low value suppliers. Selectingthe correct solution has become difficult, and implementing itinvolves reassessing some fundamental business processes.
Apparently,implementing a successful e-procurement requires the manager to befamiliar with pertinent Critical Success Factors (CSFs) and possiblechallenges to the mentioned action. One has to appreciate the factthat CSFs may ensure successful e-procurement implementation and a apprehension of the expected profits. Businesses must thinkabout the CSFs that might be present in e-procurement implementationand discover the generations of the CSFs in terms of industry goal,industry position and environmental, temporal and managerial sourcesto be in charge of them during implementation and lead them tosuccess. The rationale of this paper was to identify the mostimportant CSFs and challenges linked to e-procurement in china basedon both conceptual model and theoretical framework. It establishedsuccess factors to be selection efficiency, security and legalenvironment, commitment, delivery acceleration, cost and quality. Thechallenges on the other hand are maverick buying immaturity ofe-procurement and inappropriateness of system amalgamation andstandardization of issues. The findings are reliable and can beutilized in major decision-making processes. It is also essential tounderstand that the findings are universal and thus can be related toany other country.
6,P. and Bellamy, C. (2012). Principlesof methodology.London: SAGE.
AlexanderB. Sideridis, C. (2010). NextGeneration Society. Technological and Legal Issues.Springer Berlin Heidelberg.
Blanchard,D. (2010). Supplychain management best practices.Hoboken, N.J.: John Wiley & Sons.
BOONE,L. (2012). Contemporarymarketing, 2013 update.[s.l.]: Cengage learning custom p.
Braim,S. (2006). Procurementtransformation.[Tokyo, Japan]: Asian Development Bank Institute.
Canbolat,M. (2005). Supplierselection in E-procurement using fuzzy analytic hierarchy process.
Chopra,S. and Meindl, P. (2007). Supplychain management.Upper Saddle River, N.J.: Pearson Prentice Hall.
Córdoba-Pachón,J. and Ochoa-Arias, A. (2010). Systemsthinking and e-participation.Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey,Pennsylvania, 17033, USA).
Creswell,J. and Plano Clark, V. (2007). Designingand conducting mixed methods research.Thousand Oaks, Calif.: SAGE Publications.
Dimitri,N., Piga, G., & Spagnolo, G. (2006). Handbookof procurement.Cambridge, UK: Cambridge University Press.
Fortino,G. and Palau, C. (2012). Nextgeneration content delivery infrastructures.Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey,Pennsylvania, 17033, USA).
Graham,D., Manikas, I. and Folinas, D. (2013). E-logisticsand e-supply chain management.Hershey: Business Science Reference.
Harland,C., Nassimbeni, G. and Schneller, E. (2013). TheSAGE handbook of strategic supply management.London: SAGE.
Heizer,J. and Render, B. (2014). Operationsmanagement.Boston: Prentice Hall.
Kajan,E., Dorloff, F. and Bedini, I. (2012). Handbookof research on e-business standards and protocols.Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey,Pennsylvania, 17033, USA).
Ketchen,D. and Bergh, D. (2006). Researchmethodology in strategy and management.Amsterdam: Elsevier JAI.
Khachidze,V. (2012). Contemporaryresearch on E-business technology and strategy.Berlin: Springer.
Khosrow-Pour,M. (2013). E-commercefor organizational development and competitive advantage.Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey,Pennsylvania, 17033, USA).
Kock,N. (2008). Encyclopediaof e-collaboration.Hershey, PA: Information Science Reference.
Lacka,E., Chan, H. and Yip, N. (2014). E-commercePlatform Acceptance.Dordrecht: Springer.
Lan,Y. and Unhelkar, B. (2006). Globalintegrated supply chain systems.Hershey, PA: Idea Group Pub.
Laudon,K., & Traver, C. E-commerce.
Lee,I. (2007). E-businessinnovation and process management.Hershey, PA: CyberTech Pub.
Lee,I. (2009). Selectedreadings on information technology and business systems management.Hershey: Information Science Reference.
Lewis-Faupel,S., Neggers, Y., Olken, B. and Pande, R. (n.d.). Canelectronic procurement improve infrastructure provision?.
Monczka,R., Handfield, R., Giunipero, L., Patterson, J. and Waters, D.(2010). Purchasingand supply chain management.Hampshire: South-Western.
Mora-Monge,C. (2010). TheImpact of Electronic Commerce on the Supply Chain.Bradford: Emerald Group Pub.
MuneeshKumar., and Sareen, M. (2011). Trustand technology in B2B e-commerce.Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey,Pennsylvania, 17033, USA).
Pani,A. and Agrahari, A. (2007). E-procurementin emerging economies.Hershey: Idea Group Pub.
Piaggesi,D., Sund, K. and Castelnovo, W. (2011). Globalstrategy and practice of e-governance.Hershey, PA: Information Science Reference.
Pomazalova,N. (2013). Publicsector transformation processes and internet public procurement.Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey,Pennsylvania, 17033, USA).
Préteux,F., Vaucelle, A. and Ben Henda, M. (2008). MPEGstandards.Évry: Télécom & Management SudParis.
Publishing,O. (2014). OECDPublic Governance Reviews.Paris: OECD Publishing.
Rai,U., & Rai, S. (2010). Businesscommunication.Mumbai: Himalaya Pub. House.
Rendon,R. (2005). Commoditysourcing stratiegies.Monterey, Calif.: Graduate School of Business & Public Policy,Naval Postgraduate School.
Roberts,D. (2009). Mergers& acquisitions.Hoboken, N.J.: John Wiley & Sons.
Sapsford,R. and Jupp, V. (2006). Datacollection and analysis.London: SAGE Publications in association with the Open University.
Shin,N. (2005). Strategiesfor generating e-business returns on investment.Hershey, PA: Idea Group.
Singh,A. (2010). Businessand contract law.London: Thorogood.
Slater,P. (2007). Smartinventory solutions.New York: Industrial Press.
Smock,D., Rudzki, R. and Rogers, S. (2007). On-demandsupply management.Ft. Lauderdale, FL: J. Ross Pub.
Steingold,F. (2011). Thecomplete guide to buying a business.Berkeley, CA: Nolo.
TelliYamamoto, G. (2010). Mobilizedmarketing and the consumer.Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey,Pennsylvania, 17033, USA).
Thai,K. (2009). Internationalhandbook of public procurement.Boca Raton, FL: CRC Press.
Trkman,P. and McCormack, K. (n.d.). Estimatingthe benefits and risks of implementing e-procurement.
Turban,E. (2006). Electroniccommerce 2006.Upper Saddle River, NJ: Pearson Prentice Hall.
Turban,E. and Turban, E. (2006). Informationtechnology for management.Hoboken, NJ: J. Wiley & Sons.
Valverde,R. and Talla, M. (2012). Informationsystems reengineering for modern business systems.Hershey, Pa.: IGI Global (701 E. Chocolate Avenue, Hershey,Pennsylvania, 17033, USA).
Vogt,W. (2010). Datacollection.Los Angeles: SAGE.
Wireman,T. (2008). MROinventory and purchasing.New York, NY: Industrial Press.
Wisner,J., Tan, K. and Keong Leong, G. (2012). Principlesof supply chain management.Mason: South-Western.