“A Study of E-Procurement Practices in Selected Thesis by Prakash Patel ( 119997392022).pdf · I...

“A Study of E-Procurement Practices in Selected

Organizations in Gujarat”

A Thesis submitted to Gujarat Technological University

for the Award of

Doctor of Philosophy

in

Management

By

Prakashkumar Hasmukhbhai Patel

Enrollment No. 119997392022

Under supervision of

Dr. Satendra Kumar

GUJARAT TECHNOLOGICAL UNIVERSITY

AHMEDABAD

May – 2017

i

DECLARATION

I declare that the thesis entitled “A Study of E-Procurement Practices in Selected

Organizations in Gujarat” submitted by me for the degree of Doctor of Philosophy is the

record of research work carried out by me during the period from July 2011 to December

2016 under the supervision of Dr. Satendra Kumar and this has not formed the basis for

the award of any degree, diploma, associateship, fellowship, titles in this or any other

University or other institution of higher learning.

I further declare that the material obtained from other sources has been duly

acknowledged in the thesis. I shall be solely responsible for any plagiarism or other

irregularities, if noticed in the thesis.

Signature of the Research Scholar:.................................. Date:.......................

Name of Research Scholar: Prakashkumar Hasmukhbhai Patel

Place: Vadodara

ii

CERTIFICATE

I certify that the work incorporated in the thesis “A Study of E-Procurement

Practices in Selected Organizations in Gujarat” submitted by Shri. Prakashkumar

Hasmukhbhai Patel was carried out by the candidate under my supervision/guidance.

To the best of my knowledge:

(i) The candidate has not submitted the same research work to any other institution for

any degree/diploma, Associateship, Fellowship or other similar titles

(ii) The thesis submitted is a record of original research work done by the Research

Scholar during the period of study under my supervision, and

(iii) The thesis represents independent research work on the part of the Research

Scholar.

Signature of Supervisor: ……………………………… Date: ………………

Name of Supervisor: Dr. Satendra Kumar

Place: Vadodara

iii

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Place: Vadodara

vi

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vii

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viii

Thesis Approval Form

The viva-voce of the PhD Thesis submitted by Shri. Prakashkumar Hasmukhbhai Patel,

Enrollment No. 119997392022, entitled “A Study of E-Procurement Practices in

Selected Organizations in Gujarat” was conducted on …………………….…………

(day and date) at Gujarat Technological University.

(Please tick any one of the following option)

The performance of the candidate was satisfactory. We recommend that he/she be

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ABSTRACT

Background: Electronic business and electronic procurement are rapidly gaining global

attraction. Business done through internet provides major cost-saving, enhances efficiency

and results in increased productivity. India faces major traditional and cultural barriers in

adapting E-Business. This is mostly due to traditional mentality of doing business which is

greatly based on personal trust, historical credits and greatly traditional business practices.

E-Procurement involves electronic data transmits to support Operational, Tactical and

Strategic Procurement.

Aim: Today many companies use E-Procurement as a strategic tool to compete with

others. The aim of the present research arises from the fact that a lot of businesses are still

relying on the traditional procurement and literature has provided limited result on e-

procurement practices in India. Hence, the purpose of this research is to study the E-

Procurement practices in selected industrial manufacturing organizations in Gujarat.

Manufacturing sector has a greater propensity to adopt technologies such as E-

Procurement1.

Research Design: In general, the research designs used by researchers may be exploratory,

descriptive and causal. This research is based on newness of the technology involved.

Search of the literature with reference to India has provided limited research. So, the

descriptive research adopted a quantitative methodology with a questionnaire instrument

being employed to investigate various E-Procurement practices within a sample of those

manufacturing firms which used E-Procurement. Data was collected from 72

Manufacturing Industrial Units from Gujarat which includes South, North, Central Gujarat

and Saurashtra region. Data was collected by Non-probability Convenience Sampling

technique. The sampling unit is an Executive and Managers concerned with E-Procurement

activities of an organization.

Data Analysis: Researcher has used Descriptive Statistics and Inferential Statistics.

Statistical tools used in the present research study pertaining to Descriptive Analysis are:

1 Paul O., et al, (2008), “The development of E-Procurement within the ICT manufacturing Industry in

Ireland”, Management Decision, Emerald Insight, Vol.46, Issue 3, pp: 481 -500. Retrieved from

www.emeraldinsight.com/0025-1747.htm.

http://www.emeraldinsight.com/0025-1747.htm

x

Frequency Distributions and Cross Tabulation and pertaining to the Inferential Analysis:

Exploratory Factor Analysis, Kruskal Wallis and Chi-square Analysis. The linkages

between E-Procurement practices and the types of Industry, Size of the company (which is

further classified based on Investment in plant machinery and based on the number of

employees), and Ownership of the company were examined through Kruskal Wallis Test,

and Chi-square Analysis. Throughout the analysis, acceptance and rejection of hypotheses

was done at the confidence interval of 95%. (5% of level of significance).

Conclusion: The study found the significant difference in procurement practices across

Industry, Size of the firm and Ownership of the firm. It also described the difficulties faced

in E-Procurement implementation, procurement objectives, reasons that have led to the

implementation of E-Procurement, Information Technology (IT) tools used and preferred

for Procurement, Information Technology (IT) solution used for operative order

processing, Number of supplier with whom business documents were exchanged by means

of EDI/Web EDI, Methods used to exchange electronic business documents with suppliers,

Extent of Information Technology (IT) tools used in E-Procurement, further up gradation

of IT to support the procurement process.

Keywords: Procurement, Information Technology (IT), E-Procurement, Enterprise

Resources Planning (ERP), SAP, EDI, Web-EDI

xi

Acknowledgement

Many people have helped me in my PhD journey; I wish to express my sincere gratitude to

those individuals who have supported me throughout my journey of the doctoral research.

First, my deep appreciation goes to my supervisor, guide and mentor Dr. Satendra

Kumar, Professor and Head, Research Centre, C K Shah Vijapurwala Institute of

Management, Vadodara, whose valuable advice has enabled me to complete my doctoral

research in time. His unwavering commitment to excellence is visible at all times itself is

constantly challenging me to think, that has resulted in a dissertation for which I can be

proud. He has always encouraged me to be a better researcher, writer and thinker.

The completion of the doctoral work could not have been possible without flawless support

and guidance of the DPC (Doctoral Progress Committee) Members: Dr. Rajesh Khajuria,

Director, C K Shah Vijapurwala Institute of Management, Vadodara, and Dr. Kiran Joshi,

Former Professor, M S Patel Institute of Management, M S University, Vadodara. I

heartily thank my foreign co supervisor Prof. Dr. Samo Bobek, Head of Department of e-

business, University of Maribor, Maribor, Slovenia, for his timely and constant insights.

I heartily thank to Dr. Nilay Yajnik, Professor & Chairman, Information Systems Area,

Narsee Monjee Institute of Management Studies, Mumbai, Dr.Yashwant Sadashiv Patil,

Associate Professor & Head, Centre for Information Technology, Vaikunth Mehta

National Institute of Co-operative Management, Pune, Dr. Dhaval Maheta and Dr.

Hitesh Parmar, Assistant Professor, Department of Business and Industrial Management,

VNSGU, Surat for their assistance and help, I also appreciate the work of all the

researchers whose work helped me to understand my field of research and contribute to it

in however small manner possible.

I express my gratitude to my PhD batch mates and peer; Ms. Rnajita Benarji, Mrs. Preeti

Singhal, Mrs. Savitha K and Mr. Sameer Rohadia, who motivated and helped me

during the PhD journey, I would like to thank all the Faculties of C K Shah Vijapurwala

Institute of Management, Vadodara; Dr. Kerav Pandya, Dr. Kunjal Sinha, and Admin

Staff; Mr. Hitesh Thakkar, Mr. Chetan Patel, Mr. Keval Patel, Mr. Amit Dave, Mrs.

xii

Anjali Bhadsavle, Ms. Nusrat Campwala, Ms. Reshma Mulye, and Students for their

help and support throughout this endeavour. My special thanks to our Director, Dr.

Rajesh Khajuria, who has always allowed me to make use of the institute resources.

I also acknowledge the entire team of Gujarat Technological University (GTU) Ph.D

Section for their assistance and Support. I am very grateful to the people who have

contributed either directly or indirectly in the research progress.

Lastly, journey of the doctoral research could not have reached to its destination without

the support of My Mom, Dad, Sister, Brother and my wife Komal. This thesis is

dedicated to them for their constant source of love, concern, support and strength. My In-

Laws have also added aid to me throughout this endeavour. I have to give a special

mention to the little angel of my life, my daughter - Tanishi whose unconditional love has

always been a motivation for me.

Prakashkumar Hasmukhbhai Patel

xiii

Table of Content

CHAPTER 1: Introduction, Definition of Terms and Structure of Thesis

1.0 Brief description on the state of the art of the research topic 1

1.1 Definition of important terminologies 3

1.1.1 Procurement 3

1.1.2 Major function of Procurement 3

1.1.3 E-Procurement 4

1.1.4 The History 4

1.1.5 Procurement process / steps 6

1.1.6 E-Procurement process / steps 7

1.1.7 Forms of E-Procurement 8

1.1.8 E-Procurement tools and applications 9

1.1.9 Electronic Systems to support procurement 10

1.1.10 Internet to support procurement 10

1.2 Industry Classification 11

1.2.1 Micro, Small and Medium enterprise classification 12

1.2.2 Ownership patterns of MSMEs 13

1.3 Structure of the Thesis 14

CHAPTER 2 Review of Literature

2.0 Introduction 15

2.1 Concept of Procurement 16

2.1.1 Challenges faced by procurement managers 17

2.2 Information Technology 17

2.3 Concept of an E-Procurement 19

2.3.1 Public E-Procurement 20

2.4 The History/ Trends of E-Procurement 21

2.4.1 E-Procurement trends in Global marketplace 21

2.4.2 E-Procurement trends in Private sector 22

2.4.3 E-Procurement trends in Government sector 23

2.5 Procurement Procedure 23

2.6 Roadmap for E-Procurement implementation 25

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2.7 Form / Types of E-Procurement 26

2.8 Technology requirements for participation in E-Procurement 26

2.9 Implementation of E-Procurement 27

2.9.1 Implementation of E-Procurement by Government agencies / solution 29

2.10 Benefits (Drivers) to implementation of E-Procurement 30

2.10.1 Key business value findings 33

2.11 Challenges and Risks (Barriers) to implementation of E-Procurement 36

2.11.1 Challenges of E-Procurement implementation in the Government sector 37

2.12 Critical Success Factors (CSFs) of adoption of E-Procurement 38

2.13 Factors that affect E-Procurement adoption 40

2.14 E-Procurement Architecture 43

2.15 E-Procurement System / E- Procurement methods 44

2.16 Integrated Procurement solutions 47

2.16.1 Impact of size of the firm on the adoption of E-Procurement application 51

2.17 E-Procurement Tool 51

2.18 Impact of E-Procurement on organizational performance 54

2.18.1 Impact of E-Procurement on organizational performance 54

2.18.2 Impact of E-Procurement on supply chain performance 56

2.18.3 Impact of E-Procurement on corruption practices 57

2.18.4 Impact of E-Procurement technologies on procurement practices and

procurement performance 58

2.19 Development of research model or conceptual model 59

2.19.1 To predict and understand an intention to use E-Procurement technology 59

2.19.2 When and How benchmarking applies to technology adoption 60

2.19.3 E-Procurement adoption behaviour by small- to medium-sized enterprises 60

2.20 Identifying best practices in E-Procurement 70

CHAPTER 3 Research Methodologies

3.0 Introduction 76

3.1 Definition of the Problem 76

3.2 Research Objectives 77

3.3 Research Questions 77

3.4 Research Hypothesis 78

3.5 Scope of the Work 79

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3.6 Research Design 79

3.7 Area of Study 80

3.8 Sample Design 80

3.8.1 Sample Unit 80

3.8.2 Sampling Method 80

3.8.3 Sample Size 81

3.9 Sources of data 81

3.10 Planning of data collection 82

3.11 Data collection instrument & scaling technique 82

3.12 Pilot Study 84

3.12.1 Reliability of the research instrument 84

3.13 Research Ethics 86

CHAPTER 4 Data Analysis and Major Findings

4.0 Introduction 87

4.1 Descriptive Statistics 89

4.1.1 Frequency Distribution 89

4.1.1.1 Classification of Companies (Industry) 89

4.1.1.2 Classification of Companies (Investment in plant machinery) 90

4.1.1.3 Classification of Companies (Number of Employees) 90

4.1.1.4 Classification of Companies (Ownership Form) 90

4.1.1.5 Importance of the Procurement objectives 91

4.1.1.6 Extent to which IT is used to carry out the procurement functions 92

4.1.1.7 Reasons that has led to the implementation of e-procurement 92

4.1.1.8 Information Technology (IT) Tools used for procurement 93

4.1.1.9 IT Solution used for operative order processing 94

4.1.1.10 IT Tools preferred to fulfil industrial procurement expectations 95

4.1.1.11 No. of Supplier with whom business document exchanged by means of

Electronic Data Interchange (EDI) / WEB EDI from last Six Months 96

4.1.1.12 Electronic documents exchanged with Suppliers more often 96

4.1.1.13 Methods used in the exchange of the electronic business documents 97

4.1.1.14 Difficulties faced in E-Procurement implementation 97

4.1.1.15 Who initiate and drives the up-gradation of IT for Procurement 99

4.1.1.16 Up-gradation of IT to support the strategic procurement process 99

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4.1.1.17 Up-gradation of IT to support the operative procurement process 100

4.1.2 Cross Tabulation 101

4.1.2.1 Types of industry and Extent to which IT used to carry out the procurement

functions successfully 101

4.1.2.2 Ownership of company and Extent to which IT used to carry out

procurement functions successfully 104

4.1.2.3 Size of the company (investment) and Extent to which IT used to carry out


4.1.2.4 Size of the company (employees) and Extent to which IT used to carry out


4.1.2.5 Types of industry and IT solutions used for operative order processing 108

4.1.2.6 Ownership of the firm and IT solutions used for operative order processing

111

4.1.2.7 Size of the company (investment) and IT solutions used for operative order

processing 112

4.1.2.8 Size of the company (employees) and IT solutions used for operative order

processing 114

4.1.2.9 Types of industry and Number of supplier with whom business document

exchanged by means of EDI / WEB EDI from last six months 115

4.1.2.10 Ownership of the firms and Number of supplier with whom business

document exchanged by means of EDI / WEB EDI from last six months 119

4.1.2.11 Size of the firms (investment) and Number of supplier with whom business


4.1.2.12 Size of the firms (employees) and Number of supplier with whom business


4.1.2.13 Types of industry and Electronic documents exchanged 124

4.1.2.14 Ownership of the firm and electronic documents exchanged 127

4.1.2.15 Sizes of the firm (investment) and Electronic documents exchanged 128

4.1.2.16 Size of the firms (employees) and Electronic documents exchanged 130

4.1.2.17 Types of industry and methods the electronic documents exchanged 131

4.1.2.18 Ownerships of the firm and Methods the electronic documents exchanged

134

4.1.2.19 Size of the company (investment) and Methods the electronic documents

exchanged 136

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4.1.2.20 Size of the company (employees) and Methods the electronic documents

exchanged 138

4.1.2.21 Types of industry and Initiative / drive for the up-gradation of it for

procurement 139

4.1.2.22 Ownerships of the firm and Initiative / drive for the up-gradation of it for

procurement 141

4.1.2.23 Sizes of the firm (investment) and Initiative / drive for the up-gradation of

it for procurement 143

4.1.2.24 Sizes of the firm (based on number of employees) and Initiative / drive for

the up-gradation of it for procurement 144

4.2 Inferential Statistics 145

4.2.1 Krushkal Wallis Test 145

4.2.1.1 Difficulties faced in e-procurement implementation across Industry 146

4.2.1.2 Difficulties faced in e-procurement implementation across Size of the firm

149

4.2.1.3 Procurement objectives across Industry 151

4.2.1.4 Procurement objectives (summated variables) across Size of the firm

(investment) 155

4.2.1.5 Procurement objectives across Size of the firm (investment) 157

4.2.1.6 Procurement objectives across Size of the firm (employees) 159

4.2.1.7 Procurement objectives across Ownership of the firm 161

4.2.1.8 Reasons for adopting e-procurement across Industry 164

4.2.1.9 Reasons for adopting e-procurement across the Size of firm (investment)

167

4.2.1.10 Reasons for adopting e-procurement across the Size of firm (investment)

170

4.2.1.11 Further up gradation of it to support the procurement process (summated

response) across the size of the firm 172

4.2.1.12 Further up gradation of it to support the procurement process across the

size of the firm (investment) 173

4.2.1.13 Further up-gradation of IT to support the procurement process across

Ownership of the firm 176

4.2.1.14 IT tools used for E-Procurement across Industry 179

4.2.1.15 IT tools used for E-Procurement across Size of the firm (Investment) 182

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4.2.1.16 IT tools used for E-Procurement across Size of the firm (Employees) 184

4.2.1.17 IT tools used for E-Procurement across Ownership of the firm 186

4.2.1.18 IT tools preferred for E-Procurement across Industry 188

4.2.1.19 IT tools preferred for E-Procurement across the Size of firm 192

4.2.1.20 IT tools preferred for E-Procurement across the Size of firm (Employees)

194

4.2.2 Factor Analysis 196

4.2.2.1 Difficulties faced in E-Procurement implementation 196

4.2.2.2 Reasons that led to the implementation of E-Procurement 200

4.2.3 Chi-Square Analysis 204

4.2.3.1 Size of the firm (employees) and IT solutions used for operative order

processing 204

4.2.3.2 Sizes of firm (employees) and Method used to exchange the electronic

business documents with suppliers 206

CHAPTER 5 Summary of Major Findings, Limitations and Scope for Future

Research

5.0 Introduction 209

5.1 Conclusions - Major Findings 209

5.2 Limitations of the Study 223

5.3 Scope for Future Research 224

List of Reference 225

List of Appendices 241

Appendix A: Questionnaire 241

Appendix B: List of Publication 248

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List of Abbreviation

B2B Business to Business

B2C Business to Consumer

B2G Business to Government

BU Business Unit

CGEC Consortium for Global Electronic Commerce

CIPS Chartered Institute of Procurement and Supply

CRM Customer Relation Management

CSF Critical Success Factors

ECM Electronic Catalogue Management

EDI Electronic Data Interchange

EFT Electronic Funds Transfer

EOF Electronic Order Fulfilment

EPQ E-Procurement Quality

EPS Electronic Procurement System

ERA Electronic Reverse Auctions

e-RFP Electronic Request for Proposal

ERP Enterprise Resource Planning

ESM Enterprise Spend Management

HRM Human Resources Management

ICT Information and Communication Technology

IT Information Technology

LTMA Land Transport Management Act

MRO Maintenance Repair & Operations

MRP Material Requirement Planning

NeGP National e-Governance Project

NZTA NZ Transport Agency

OECD Organisation for Economic Co-operation and Development

ORA Online Reverse Auction

ORM Operating resource management

PC Personal Computer

PEPPOL Pan-European Public Procurement On-Line

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PFMR Public Financial Reform Management

R&D Research and Development

RFI Request for Information

RFID Radio Frequency Identification

RFQ Request for Quotation

RFT Request for Tender

RICS Royal Institute of Chartered Surveyors

ROP Request for Proposal

RTP Requisition to Pay

SAP Systems, Applications, Products

SCM Supply Chain Management

SN Subjective Norm

SPSS Statistical Package for the Social Sciences

SRM Supplier Relationship Management

TAM Technology Acceptance Model

TCO Total Cost of Ownership

TPB Theory of Planned Behaviour

UN United Nations

VMS Vendor Management System

WAN Wide Area Network

WEB-EDI Web Enabled Electronic Data Interchange

WWW World Wide Web

XML Extensible Mark-up Language

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List of Figures

1. FIGURE 1.1: The historic context of E-Procurement 5

2. FIGURE 1.2: How the E-Procurement process works 8

3. FIGURE 1.3: Classification of Indian Industry 11

4. FIGURE 1.4: Schematic structure of the Thesis 14

5. FIGURE 2.1: Savings due to E-Procurement implementation 35

6. FIGURE 4.1: Cross Tabulation: types of Industry – Extent to which IT used to carry

out the Procurement functions successfully 103

7. FIGURE 4.2: Cross Tabulation: Ownership of the Company – Extent to which IT used

to carry out the Procurement functions successfully 105

8. FIGURE 4.3: Cross Tabulation: Size of the Company (Investment) – Extent to which

IT used to carry out Procurement functions 106

9. FIGURE 4.4: Cross Tabulation: Size of the Company (Employees) – Extent to which

IT used to carry out Procurement functions 108

10. FIGURE 4.5: Cross Tabulation: Types of Industry – No. of suppliers with whom

business document exchanged by means of EDI / WEN EDI from last six months 118

11. FIGURE 4.6: Cross Tabulation: Ownership of the firms – No. of suppliers with whom

business document exchanged by means of EDI / WEB EDI 120

12. FIGURE 4.7: Cross Tabulation: Size of the firms (Investment) –No. of suppliers with

whom business document exchanged by means Of EDI / WEB EDI 122

13. FIGURE 4.8: Cross Tabulation: Size of the firms (Employees) –No. of suppliers with

whom business document exchanged by means Of EDI / WEB EDI 124

14. FIGURE 4.9: Chi-Square Test: Size of the Company (employees) - IT solutions used

for operative order processing 206

15. FIGURE 4.10: Chi-Square Test: Size of the Company (employees) - Method used to

exchange the electronic business documents with suppliers 207

xxii

List of Tables

1. TABLE 1.1: Micro, Small and Medium enterprises as defined in India 12

2. TABLE 1.2: Micro, Small and Medium enterprises as defined in Europe 13

3. TABLE 2.1: Comparative study of major articles/ research papers/ thesis/ books

included in the chapter 61

4. TABLE 2.2: Best Practices in E-Procurement 71

5. TABLE 3.1: Sample Profile 81

6. TABLE 3.2: Reliability Test Result 85

7. TABLE 4.1: Achievements with Respect to Objectives 88

8. TABLE 4.2: Classification of Companies based on types of Industry 89

9. TABLE 4.3: Classification of Companies (based on Investment) 90

10. TABLE 4.4: Classification of Companies (based on Employees) 90

11. TABLE 4.5: Classification of Companies (based on Ownership form) 90

12. TABLE 4.6: Classification of importance of Procurement objectives 91

13. TABLE 4.7: Extent to which Information Technology (IT) used to carry out the

Procurement Functions successfully 92

14. TABLE 4.8: Reason that has led to implementation of E-Procurement 92

15. TABLE 4.9: Information Technology (IT) tools used for Procurement 93

16. TABLE 4.10: IT solution used for operative order processing 94

17. TABLE 4.11: Preferred IT tools to fulfil industrial procurement expectations 95

18. TABLE 4.12: No. of supplier with whom business document exchanged by means of

EDI / WEB EDI form last six Months 96

19. TABLE 4.13 : Eelectronic documents exchanged with suppliers more often 96

20. TABLE 4.14: Methods used to exchange electronic business documents with suppliers

97

21. TABLE 4.15: Difficulties faced in E-Procurement implementation 97

22. TABLE 4.16: Who initiate/drives the up-gradation of IT for procurement 99

23. TABLE 4.17: Further up-gradation of IT to support strategic procurement process 99

24. TABLE 4.18: Further up-gradation of IT to support the operative procurement process

100

25. TABLE 4.19 : Cross Tabulation: Industry – Extent to which IT used to carry out the


xxiii

26. TABLE 4.20: Cross Tabulation: Ownership of the Company – Extent to which IT

used to carry out procurement functions successfully 104

27. TABLE 4.21: Cross Tabulation: Size of the Company (Investment) – Extent to which

IT used to carry out the procurement functions successfully 105

28. TABLE 4.22: Cross Tabulation: Size of the Company (Employees) – Extent to which

IT used to carry out the procurement functions successfully 107

29. TABLE 4.23: Cross Tabulation: Types of Industry –IT Solutions used for operative

order processing 108

30. TABLE 4.24: Cross Tabulation: Ownership of the Firm –IT Solutions used for

operative order processing 110

31. TABLE 4.25: Cross Tabulation: Size of the Company (Investment) - IT Solutions used


32. TABLE 4.26: Cross Tabulation: Size of the Company (Employees) –IT Solutions used


33. TABLE 4.27: Cross Tabulation: Types of Industry – No. of Suppliers with whom

business document exchanged by means of EDI / WEN EDI from last six months 115

34. TABLE 4.28: Cross Tabulation: Ownership of the Firms – No. of suppliers with

whom business document exchanged by means of EDI / WEB EDI 119

35. Table 4.29: Cross Tabulation: Size of the Firm (Investment) – No. of suppliers with


36. TABLE 4.30: Cross Tabulation: Size of the Firm (Employees) – No. of suppliers with


37. TABLE 4.31: Cross Tabulation: Types of Industry – Electronic documents exchanged

with suppliers more often 124

38. TABLE 4.32: Cross Tabulation: Ownership of the Firm – Electronic documents

exchanged with suppliers more often 127

39. TABLE 4.33: Cross Tabulation: Size of the Firms (Investment) – Electronic

documents exchanged with suppliers more often 128

40. TABLE 4.34: Cross Tabulation: Size of the Firms (Employees) – Electronic

documents exchanged with suppliers more often 130

41. TABLE 4.35: Cross Tabulation: Types of Industry – Methods of electronic business

documents exchanged with suppliers 131

42. TABLE 4.36: Cross Tabulation: Ownerships of the Firm – Methods of electronic

business documents exchanged with suppliers 134

xxiv

43. TABLE 4.37: Cross Tabulation: Size of the Company (Investment) – Methods the

electronic business documents exchanged with suppliers 136

44. TABLE 4.38: Cross Tabulation: Size of the Company (Employees) – Methods the

electronic business documents exchanged with suppliers 138

45. TABLE 4.39: Cross Tabulation: Industry and initiative / drive for the up gradation of

IT for procurement 139

46. TABLE 4.40: Cross Tabulation: Ownerships of the firm and initiative/ drive for the up

gradation of IT for procurement 141

47. TABLE 4.41: Cross Tabulation: Size of the firm (Investment) and initiative/ drive for

the up gradation of IT for procurement 143

48. TABLE 4.42: Cross Tabulation: Size of the firm (Employees) and the initiative/ drive

for the up gradation of IT for procurement 144

49. TABLE 4.43: Kruskal-Wallis Test (Statistics): Difficulties faced in E-Procurement

implementation – Types of Industry 146

50. TABLE 4.44: Kruskal-Wallis Test (Ranks): Difficulties faced in E-Procurement

implementation - Types Industry 147

51. TABLE 4.45: Kruskal-Wallis Test (Statistics): Difficulties faced in E-Procurement

implementation – Size of the Firm (Investment) 149

52. TABLE 4.46: Kruskal-Wallis Test (Ranks): Difficulties faced in E-Procurement

implementation – Size of the Firm (Investment) 150

53. TABLE 4.47: Kruskal-Wallis Test (Statistics): Procurement objectives – Types of

Industry 151

54. TABLE 4.48: Kruskal-Wallis Test (Ranks): Procurement objectives – Types of

Industry 152

55. TABLE 4.49: Kruskal-Wallis Test: Procurement objectives (Summated Variables) –

Size of the Firm (Investment) 155

56. TABLE 4.50: Kruskal-Wallis Test (Ranks): Procurement objectives (Summated

Variables) – Size of the Firm (Investment) 156

57. TABLE 4.51: Kruskal-Wallis Test (Statistics): Procurement objectives (Summated

Variables) – Size of the Firm (Investment) 156

58. TABLE 4.52: Kruskal-Wallis Test (Statistics): Procurement objectives – Size of the

Firm (Investment) 157

59. TABLE 4.53 Kruskal-Wallis Test (Ranks): Procurement objectives – Size of the Firm

(Investment) 157

xxv

60. TABLE 4.54: Kruskal-Wallis Test (Statistics): Procurement objectives – Size of the

Firm (Employees) 159

61. TABLE 4.55: Kruskal-Wallis Test (Ranks): Procurement objectives – Size of the Firm

(Employees) 160

62. TABLE 4.56:Kruskal-Wallis Test (Statistics): Procurement objectives – Ownership of

the Firm 162

63. TABLE 4.57: Kruskal-Wallis Test (Ranks): Procurement objectives – Ownership of

the Firm 162

64. TABLE 4.58: Kruskal-Wallis Test (Statistics): Reasons for adopting E-Procurement –

Types of Industry 164

65. TABLE 4.59: Kruskal-Wallis Test (Ranks): Reasons for adopting E-Procurement –


66. TABLE 4.60 : Kruskal-Wallis Test (Statistics): Reasons for adopting E-Procurement –




68. TABLE 4.62: Kruskal-Wallis Test (Statistics): Reasons for adopting E-Procurement –

Size of the Firm (Employees) 170


Size of the Firm (Employees) 171

70. TABLE 4.64: Descriptive statistics of up-gradation of IT to support the procurement

process 172

71. TABLE 4.65: Kruskal-Wallis Test (Ranks): Up-gradation of IT to support the

procurement process – Size of the Firm (Investment) 173

72. TABLE 4.66: Kruskal-Wallis Test (Statics): Up- gradation of IT to support the


73. TABLE 4.67: Kruskal-Wallis Test (Statistics): Up-gradation of IT to support the


74. TABLE 4.68: Kruskal-Wallis Test (Ranks): Up-gradation of IT to support the


75. TABLE 4.69: Kruskal-Wallis Test (Statistics): Up-gradation o IT to support the

procurement process – Ownership of the Firm 176

76. TABLE 4.70: Kruskal-Wallis Test (Ranks): Up-gradation o IT to support the

procurement process – Ownership of the Firm 177

xxvi

77. TABLE 4.71: Kruskal-Wallis Test (Statics): IT tools used for E-Procurement – Types

of Industry 179

78. TABLE 4.72: Kruskal-Wallis Test (Ranks): IT tools used for E-Procurement – Types

of Industry 179

79. TABLE 4.73: Kruskal-Wallis Test (Statistics): IT tools used for E-Procurement – Size

of the Firm (Investment) 182

80. TABLE 4.74: Kruskal-Wallis Test (Ranks): IT tools used for E-Procurement – Size of

the Firm (Investment) 183

81. TABLE 4.75: Kruskal-Wallis Test (Statics): IT tools used for E-Procurement – Size of

the Firm (Employees) 184

82. TABLE 4.76: Kruskal-Wallis Test (Ranks): IT tools used for E-Procurement – Size of

the Firm (Employees) 185

83. TABLE 4.77: Kruskal-Wallis Test (Statistics): IT tools used for E-Procurement –

Ownership of The Firm 186

84. TABLE 4.78: Kruskal-Wallis Test (Ranks): IT tools used for E-Procurement –

Ownership of The Firm 187

85. TABLE 4.79: Kruskal-Wallis Test (Statistics): IT tools preferred for E-Procurement –


86. TABLE 4.80: Kruskal-Wallis Test (Ranks): IT tools preferred for E-Procurement –


87. TABLE 4.81 : Kruskal-Wallis Test (Statistics): IT tools preferred for E-Procurement –

Size of Firm (Investment) 192


Size of Firm (Investment) 193

89. TABLE 4.83: Kruskal-Wallis Test (Statistics): IT tools preferred for E-Procurement –

Size of Firm (Employees) 194


Size of Firm (Employees) 195

91. TABLE 4.85: Factor Analysis (KMO & Bartlett‟s Test) - Difficulties faced in E-

Procurement implementation 197

92. TABLE 4.86: Factor Analysis (Communalities) - Difficulties faced in E-Procurement

implementation 197

93. TABLE 4.87: Factor Analysis (Variance) - Difficulties faced in E-Procurement

implementation 198

xxvii

94. TABLE 4.88: Factor Analysis (Rotated Component) - Difficulties faced in E-

Procurement implementation 199

95. TABLE 4.89: Factor Analysis (KMO And Bartlett's Test) - Reasons that led to the

implementation of E-Procurement 200

96. TABLE 4.90: Factor Analysis (Communalities) – Reasons that led to the


97. TABLE 4.91: Factor Analysis (Variance) - Reasons that led to the implementation of

E-Procurement 201

98. TABLE 4.92: Factor Analysis (Rotated Component) - Reasons that led to the


99. TABLE 4.93: Cross Tabulation: Size of the Company (Employees) - IT solutions used


100. TABLE 4.94: Chi-Square Test: Size of the Company (Employees) - IT solutions used


101. TABLE 4.95: Cross Tabulation: Size of the Company (Employees) - Method used to


102. TABLE 4.96: Chi-Square Tests: Size of the Company (Employees) - Method used to


xxviii

Terminology

Procurement terms

Agency2: Ministry of Government, Department etc

Offer: Tender, Proposal, Bid, and Submission etc.

RFx1: A generic term use for RFQ, EOI, ROI, RFP or RFT

Supplier1: Vendor, Seller, Contractor, Potential Supplier etc.

Tender1: A generic term use to describe making an approach to market („Going out to

tender‟)

Classification of goods

Direct goods2: Material goods which flow directly into the production processes of the

company (raw materials, partially-/ finished products, merchandise, etc.).

Indirect goods2: Material goods which are used to carry out the work processes of the

company (working materials, office supplies, tools, products used for maintenance, etc.).

Services2: External services required by the company in order to carry out work processes

(consulting, advertising, maintenance, travel services, temporary work, etc)

Investment goods2: Capital goods which the company needs in order to carry out work

processes.

Information technology terms

P-cards1: P-card is a form of company charge card, similar to a credit card. The card is

preloaded for each user with financial limits and specific suppliers in accordance with the

agencies procurement policy. P-cards streamline high volume, low cost transactions,

reduce administration and provide centralised spend data.

Business Software3: Umbrella term for all kinds of software use in business. It includes

ERP systems as well as E-Business software.

2

“Mastering Procurement”, A structured approach to strategic procurement, A guide for government

agencies, March 2011, from http://www.procurement.govt.nz/procurement/pdf

library/agencies/GUIDEMasteringProcurement.pdf dated 01.01.2014

http://www.procurement.govt.nz/procurement/pdf%20library/agencies/GUIDEMasteringProcurement.pdf

http://www.procurement.govt.nz/procurement/pdf%20library/agencies/GUIDEMasteringProcurement.pdf

xxix

E-Business2: Support of relationships and processes of a company with its business

partners, customers and employees by electronic means.

E-Procurement2: Support of a company‟s relationships and processes with its suppliers by

electronic means.

Electronic Data Interchange (EDI) 2

: Completely automatic exchange of structured

information between the IT systems of two different institutions.

Information technology (IT) 2

: All hardware, software and networks used in the company.

Radio Frequency Identification (RFID) 2

: A radio identification system that reads and

saves data using a transponder without physical or visual contact. The transponder can be

attached to objects which can be identified by the data saved on them.

Supplier Relationship Management (SRM) 2

: Concept for comprehensive support of

relationships and processes with suppliers.

Supply Chain Management (SCM) 2

: Integrated management of the complete value chain

from purchasing via processing, selling, disposal to recycling.

WebEDI2: Web Electronic Data Interchange: Procedure to receive or send structured

messages via a web based interface (browser) to connect business partners who have no

EDI infrastructure.

Enterprise Resources Planning (ERP) systems: ERP systems are management

information systems that integrate and automate many of the business practices associated

with the operations of a company or organization. ERP systems typically handle the

manufacturing, logistics and distribution, inventory, shipping, invoicing, and accounting

for a company or organization. ERPs help in the control of many business activities, like

sales, delivery, billing, production, procurement, inventory management, and human

resources management.

Electronic mail (e-mail): Email is an Internet based application through which electronic

messages are exchanged between people.

Extensible Mark-up Language (XML): XML is used to allow for the easy interchange of

documents on the World Wide Web.

World Wide Web (WWW): The WWW is a major service on the Internet. The World Wide

Web is made up of "Web servers" that store and disseminate "Web pages," which are

3 Tanner, C., Wolfle, R., and Quade, M. (2006), “The role of information technology in procurement in the

Top 200 companies in Switzerland”, University of Applied Sciences North-western Switzerland – FHNW

dated 01.01.2014 from http://www.fhnw.ch/wirtschaft/iwi/kompetenzschwerpunkte/e-

business/projekte/dateien/fhnw-report-it-in-procurement-2006

http://www.fhnw.ch/wirtschaft/iwi/kompetenzschwerpunkte/e-business/projekte/dateien/fhnw-report-it-in-procurement-2006


xxx

"rich" documents that contain text, graphics, animations and videos to anyone with an

Internet connection.

E-Procurement Tool Characteristics

Buying / RTP Application (Buy Side E-Procurement)4: An application hosted by the

buying firm to allow users to search for their Products, Place and Track Orders Receive

and Pay for Purchases.

Supplier Catalogues Sites (Sell Side E-Procurement) 3

: Website hosted by an Individual

firm which displays its Product range in an Electronic catalogues. It‟s allows customers to

Order Online, Usually Using Point and click system, Linked to Shopping Basket, Check

Out etc.

Electronic Marketplaces (Many to Many E-Procurement) 3

: It is a Web portals offer

which offers an online store for buyers and suppliers to conduct transactions.

Reverse Auctions (Buyer Controlled Online Tenders)3: Online, real time bidding events

where buyers offer a contract to specified suppliers, who make reducing bids in order to

gain the business. The winner in principle is the lowest bidder, although a range of criteria

may be used to award the contract. Terms and conditions for the event are specified by the

buying firm.

Electronic Sourcing: It supports the specification phase of the procurement. It can be used

to prequalify suppliers. It also identifies suppliers that can be used in the selection phase.

Electronic Tendering: It supports the selection stage and acts as a communication

platform between the procuring firm and suppliers.

Electronic Auctioning: It supports the contract stage. It can facilitate the closing of a deal

with suppliers if they agree with price. It operates with an upward or down ward price

mechanism. Upward mechanism for selling organization and downward price mechanism

for the buying organization.

Electronic Ordering: It is the process of creating and approving procurement requisitions,

placing orders, receiving goods and service ordered.

4 Smart, A., (2009), “The Role of E-Procurement in Purchasing Management”, School of Management,

Cranfield university, International Journal of Logistics: Research and Applications, (PhD Thesis) from

https://dspace.lib.cranfield.ac.uk/bitstream/1826/5761/1/Alan_Smart_Thesis_2010.pdf


xxxi

Electronic-RFX (Buyer Analysis Support) 3

: A suite of applications which support buyer

analysis of supply markets and suppliers. Includes search tools, supplier rating and scoring

systems, bid analysis tools, evaluation techniques.

xxxii

List of Appendices

Appendix A: Questionnaire

Appendix B: List of Publication

Introduction, Definition of Terms and

Structure of Thesis

1

CHAPTER 1


Structure of Thesis

1.0 Brief Description on the State of the Art of the Research Topic

Procurement is the process of acquiring, buying goods, services or works from an external

source, often via a tendering or bid process5

.The procurement management process

involves managing the ordering, receipt, review and approval of items from suppliers.

Procurement activities are divided in to two different categories direct and indirect based

on the consumption purpose. Direct Procurements affects the production process of

manufacturing firms. It encompasses all items that are part of finished products, such as

raw materials, components and parts. In contrast, indirect procurement activities concern

operating resources that a company purchases to enable its operations. It comprises of a

vast variety of goods and services, ranging from standardized low value items like office

supplies and machine lubricants to complex and costly products and services.

Traditionally, procurement was paper- and conversation-based, usually with procurement

officers interacting with long-time partners or well-known suppliers and purchasing at

fixed prices. Key challenges the procurement managers are facing in the increasingly

competitive business world are mentioned in the study of Kalakota, R & Robinson, M.

(2001)6 . These Five challenges are: (1) Reducing order processing cost and cycle times (2)

Providing enterprise-wide access to corporate procurement capabilities (3) Empowering

desktop requisitioning through employee self-service (4) Achieving procurement software

integration with company‟s back office systems (5) Elevating the procurement function to

a position of strategic importance within the organization.

5 “Procurement”, last retrieved dated 22.03.2016 from https://en.wikipedia.org/wiki/Procurement

6 Kalakota, R & Robinson, M. (2001), “E-business 2.0: Roadmap for success (2nd Edition)”. USA Addison-

Wesley, ISBN: 978-0-201-60480-1, last retrieved on 21.03.2013 from

http://dinus.ac.id/repository/docs/ajar/e-business_roadmap_for_success_full.pdf

https://en.wikipedia.org/wiki/Procurement



Structure of Thesis

2

The Internet has brought about a lot of changes in business, economics, information and

entertainment. Also transfer of information has no geographical and time barrier. Virtually

all the manufacturers, suppliers, distributors, customers all across the world are now

connected to each other through World Wide Web (WWW). Activities and transactions

related to buying, selling, etc. can now be brought under the realm of internet. The pressure

on each business enterprise now is to plan transformation to e-Commerce paradigm. In the

Internet based system, not only transparency can be ensured but everything is also on

record7. In recent years, this has changed somewhat to become a strategic function.

Procurement officers seek suppliers that fit with a company's overall strategy. According to

Croom, S & Brandon-Jones, A., (2004)8 E-Procurement refers to the use of Internet based

(integrated) information and communication technologies (ICTs) to carry out individual or

all stages of the procurement process including search, sourcing, negotiation, ordering,

receipt, and post-purchase review. E-Procurement involves moving the procurement

process online to cut out steps and save money. E-Procurement involves electronic data

transfers to support operational, tactical and strategic procurement. According to de Boer

L. et al., (2002)9

, Aberdeen Group Inc. (2001),10

E-Procurement advantages are

significant bottom-line benefits, including cost reduction, process efficiencies, spending

controls and compliance. E-Procurement is presently the one of the most important and

discussed topic in Supply chain management, which has changed the way purchasing is

done. It creates private, web based procurement markets that automate communication,

transactions, and Collaboration between the members of supply chain.

Hence, the current study focuses on the E-Procurement practices in selected

industrial manufacturing units located in Gujarat.

7

“Transparency in public dealing through e-ERA”, last retrieved on 15.03.2013 from

http://www.iimm.org/ed/index.php?option=com_content&view=article&id=157&Itemid=107 8 Croom, S. & Brandon-Jones, A (2005), “Key issues in E-Procurement: Procurement implementation and

operation in the public sector”, journal of public procurement, volume 5, issue 3, 367-387 from

http://ippa.org/jopp/download/vol5/issue-3/SympAr3_CroomJones.pdf 9 de Boer L., Harink J., Heijboer G., (2002), “A review of methods supporting supplier selection”, European

Journal of Purchasing and Supply Management 7 (2), pp 75-89 10

Aberdeen Group Inc. (2001), “Best Practices in E-Procurement: The Abridged Report”, Aberdeen Group

Boston, Massachusetts, last retrieved dated 05.06.2013from http://www.cosmo-one.gr/educommerce/wp-

content/img/en2_1.pdf

http://www.iimm.org/ed/index.php?option=com_content&view=article&id=157&Itemid=107

http://ippa.org/jopp/download/vol5/issue-3/SympAr3_CroomJones.pdf

http://www.cosmo-one.gr/educommerce/wp-content/img/en2_1.pdf



Structure of Thesis

3

1.1 Definition of Important Terminologies

1.1.1 Definition of Procurement

Procurement refers to all activities involved in obtaining items from a suppliers e.g.,

purchasing, transporting and warehousing the items. Procurement is the important element

of Business operation which involves commerce between two or more businesses.

According to Nevalainen, A., (2001)11

from the strategic perspective, the procurement

include the entire operations pertaining to requisitioning, transportation, warehousing, and

in bound receiving process. The main aim of procurement is process efficiency (Aldin et

al. 2004)12

.

1.1.2 Major Function of Procurement

According to study of Aberdeen, Edie et al. (2007)13

Procurement activities can be divided

into three primary categories

Direct Procurement: is the purchase of high volume materials and /or services that

directly facilitate the production of end products. According to study of Aberdeen,

Edie et al. (2007)7, direct procurement involves the organization, planning and

management of Procurement / Supply chain activities associated with acquiring the

raw materials, parts and assemblies necessary to produce finished products. As per the

research done by Neef, D. (2001)14

, direct procurement involves fewer purchasing

transactions (20 per cent to 40 percent in manufacturing firm) but these are of higher

values and account for almost 60 percent of total procurement expenditure of the firm.

Indirect Procurement: is the purchase of the support materials and / or services

required to enable the production of end products. According to study of Aberdeen,

11

Nenvalainen, A. (2001), “The e-business Dictionary”, Rockbend Books, Alaska. 12

Aldin et al. (2004), “ Business development with electronic commerce: Refinement and repositioning”, last

retrieved dated 21.05.2013 from

https://www.researchgate.net/publication/235272281_Business_development_with_electronic_commerce_Re

finement_and_repositioning dated 21.05.2013 13

Eadie, Robert, Perera, Srinath, Heaney, George and Carlisle, Jim (2007), “Drivers and Barriers to Public

Sector E-Procurement within Northern Ireland‟s Construction Industry. Journal of Information Technology

in Construction, Vol. 12. pp. 103-120. ISSN 1874-4753 from http://nrl.northumbria.ac.uk/6607/1/e-

proc_paper-2007_6.content.07965.pdf 14

Neef, D. (2001), E-Procurement from Strategy to Implement, Financial times Prentice hall Harlow, One

Lake Street, Upper Saddle River, NJ 07458, ISBN 0-13-091411-8, United State of America from

https://books.google.co.in/books/about/E_procurement.html?id=UDaxAcoX1JQC&printsec=frontcover&sou

rce=kp_read_button&redir_esc=y#v=onepage&q&f=false

https://www.researchgate.net/publication/235272281_Business_development_with_electronic_commerce_Refinement_and_repositioning


http://nrl.northumbria.ac.uk/6607/1/e-proc_paper-2007_6.content.07965.pdf

http://nrl.northumbria.ac.uk/6607/1/e-proc_paper-2007_6.content.07965.pdf

https://books.google.co.in/books/about/E_procurement.html?id=UDaxAcoX1JQC&printsec=frontcover&source=kp_read_button&redir_esc=y#v=onepage&q&f=false



Structure of Thesis

4

Edie et al. (2007)15

, indirect procurement involves the selection, purchase, and

management of a wide range of nonproduction goods and services such as basic office

supplies to complex business services, such as printing, advertising, and temporary

labour. Support Materials are also categorised as the Operating resource management

(ORM) and Maintenance, Repair and Operations (MRO). According to Bartezzaghi,

E. and Ronchi, S. (2004)16

, MRO purchases are low volume and high frequency

items.

Sourcing: includes the Identification, evaluation and configuration of products,

services and suppliers for both direct and indirect procurement.

1.1.3 E-Procurement

According to Croom, S. & Brandon-Jones, A (2004)17

E-Procurement refers to the use of

Internet based (integrated) information and communication technologies (ICTs) to carry

out individual or all stages of the procurement process including search, sourcing,

negotiation, ordering, receipt, and post-purchase review. E-Procurement is the common

term applied to use of integrated database systems and wide area network (WAN) in part

or all of the purchase process. Chopra et al. (2001)18

stated that E-Procurement is Business

to Business purchasing practices that utilised electronic commerce (e-commerce) to

identify potential sources of supply, to purchase goods and services, to transfer payment

and to interact with suppliers. In general E-Procurement is electronic data transfer to

support operational, tactical and strategic procurement.

1.1.4 The History

From the year 1960s to mid 1990s, E-Procurement mainly took the form of Electronic Data

Interchange (EDI). At the present times, e- procurement is supported by Internet and

15

Aberdeen Group Inc. (2007), “E-Procurement: Trials and Triumphs”, last retrieved dated 05.06.2013 from

http://www.enporion.com/media/whitepapers/eprocurement _trials_and_triumphs.pdf 16

Bartezzaghi, E. and Ronchi, S. (2004), “A portfolio approach in the e-purchasing of Materials”, Journal of

Purchasing and Supply Management, 10 (3) pp. 117-26. 17

Croom, S. & Brandon-Jones, A (2005), “Key issues in E-Procurement: Procurement implementation and


http://ippa.org/jopp/download/vol5/issue-3/SympAr3_CroomJones.pdf 18

Chopra, S., Dougan, D and Taylor, G (2001), “B2B e-Commerce Opportunity”, Supply chain Review, 5

(3), pp. 50-62.

http://www.enporion.com/media/whitepapers/eprocurement



Structure of Thesis

5

Communication Technologies; therefore, it is become wide-spread. The historic context is

demonstrated in Figure 1.119

.

(Source: UN Procurement Practitioner‟s Handbook, https://www.ungm.org/Areas/Public/pph/ch04s02.html )

FIGURE 1.1: The Historic Context of E-Procurement

E-Procurement began in the 1980s, with the development of electronic data interchange

(EDI). EDI allowed customers and suppliers to send and receive orders (and invoices as

well) using call-forwarding networks. In the 1990s, technology improved and software

companies began to develop electronic catalogues, specifically for the vendor‟s use and,

E-Procurement software has become a mixture of the two: a platform for sending and

receiving orders and various catalogues. Marketplaces have also proved to be a popular

addition to E-Procurement software. According to Chartered Institute of Procurement and

Supply (CIPS) the definition of Marketplace is a virtual marketplace for suppliers,

distributors, agents and customers20

.

Chopra et al. (2001)18

mentioned the initial attempts to automate the buyer‟s side

procurement process by using electronic procurement system (EPS), Workflow system and

links with suppliers by using Electronic Data Interchange (EDI). These attempts are

19

UN Procurement Practitioner‟s Handbook, last retrieved dated 19.10.2014 from

https://www.ungm.org/Areas/Public/pph/ch04s02.html 20

Dr. J. Thirumaran (2015), “E Procurement - Challenges and Opportunities”, International Journal of

Advance Research and Innovative Ideas in Education, Vol-1, Issue-4.

https://www.ungm.org/Areas/Public/pph/ch04s02.html



Structure of Thesis

6

referred as first generation of E-Procurement which includes online entry, authorisation

and order placing through data entry forms, e-mails and scanned documents.

1.1.5 Procurement Process / Steps

Croom, S., R & Brandon-Jones, A., (2005)21

stated the followings procurement steps

Identification of Need: It is an internal step of the company; in which company

identifies the needs by establishing a short term strategy (three to five years)

followed by defining the technical direction and requirement.

Supplier Identification: Once the need is identified, then it needs to find who

provide the needed product or service.

Supplier Communication: Once the suitable suppliers have been identified, then

the Request for Quotation (RFQ), Request for Proposal (ROP), Request for

Information (RFI) or Request for Tender (RFT) may be advertised or direct contact

made with suppliers.

Negotiation: In this phase, the price, availability, customization possibility,

Delivery schedule etc., are negotiated with the supplier.

Supplier Liaison: In this phase, the company evaluates the performance of the

product and or service of suppliers. Supplier scorecard is used for such purpose.

When the product and or service needs to be re-ordered, the company determines

whether to consider other supplier or continue with same supplier based on the

performance of supplier.

Logistic Management: It includes Supplier preparation, expediting, delivery and

payment based on the contract term for Purchase. It also includes Installation and

training in some case as per the Product or Service.

Additional Step - Tender Notification: Some companies use notification service

to raise competition for the chosen opportunity. This service can be direct form the

e-tendering software or from an external notification company.

21






Structure of Thesis

7

1.1.6 E-Procurement process / Steps

According to Handfiel, R., (2003)22

the basic procurement cycle consists of up to nine

steps, depending on the complexity of the buying and organizational policies.

Requisition: A buyer recognizes needs and places a request for required goods or

services.

Authorization: Each requirement is verified by approval agent. The approvers

verify that the goods and services are required or not.

Purchase Order: Once the requisition is approved by the approver, a purchase

order is created and automatically delivered to the suppliers.

Receipt of Goods: Once goods are received, the buyer issues or confirms a receipt

of such goods to the supplier.

Invoice: After the preparation of shipment, an invoice is created.

Reconciliation: After the goods received, the invoice needs to be reconciled to the

purchase order and goods receipt before payment is made to supplier.

Payment: Once the goods received and invoice reconciled, payment is scheduled

through appropriate payment methods such as P-Card, Electronic fund transfer,

Cheque etc.

Reclamation of Taxes: Supplier often includes taxes as a charge in their invoice,

so that the buyer may reclaim it if buyer is eligible to retain it.

Analysis: After the number of procurement cycle completed, it is important to

analyse the efficiency and accuracy of the procurement process.

22

Handfiel, R. (2003), “ E-Procurement and the purchasing process”, The SCRC Articles Library, last

retrieved from 21.7.2013 from https://scm.ncsu.edu/scm-articles/article/e-procurement-and-the-purchasing-

process

https://scm.ncsu.edu/scm-articles/article/e-procurement-and-the-purchasing-process



Structure of Thesis

8

Haffar, N. & Wassim, M.23

explained the E-Procurement process as displayed in Figure

1.2.

How the e-procurement process works...

e-procurement enables distributed but controlled purchasing. It automates the

process from requisition to payment - to streamline operations, shorten cycle

times and reduce costs

End User

• Select approved goods

• Check prices

• Check availability

• Submit requisitions

Suppliers

• Manage content

• Maintain accuracy

• Negotiated relationships

• Buyer specific content

Purchasing Dept.• Approve requisitions

• Place orders

• Manage consolidation

• Analyse purchasing data

Catalogues

(Source: Haffar, N. & Wassim, M., “E-Procurement Technology”, Dubai Municipality, price water house

coopers)

FIGURE 1.2: How the E-Procurement process works

1.1.7 Forms of E-Procurement

In general, Traditional Procurement process starts with requirement definition, sourcing,

solicitation, evaluation, contracting and contract management. In the Internet age, this

system is replaced by e-sourcing, e-tendering, e-reverse auction, e-ordering and web based

ERP. Followings are the various from of electronic procurement24

.

E-sourcing: It supports the specification phase of the procurement. It can be used

to prequalify suppliers. It also identifies suppliers that can be used in the selection

phase.

E-tendering: It supports the selection stage and acts as a communication platform

between the procuring firm and suppliers. It includes analysis and assessment

activities but it does not support closing the deal with suppliers. In short it

facilitates a large part of the tactical procurement process.

23

Haffar, N. & Wassim, M., “E-Procurement Technology”, Dubai Municipality, price water house coopers

last retrieved dated 21.02.2014 from https://www.dm.gov.ae/wps/wcm/connect/.../E_procurement.ppt? 24



https://www.dm.gov.ae/wps/wcm/connect/.../E_procurement.ppt



Structure of Thesis

9

E-auctioning: It supports the contract stage. It can facilitate the closing of a deal

with suppliers if they agree with price. It operates with an upward or down ward

price mechanism. Upward mechanism for selling organization and downward price

mechanism for the buying organization.

According to Smeltzer. L. R. & Carr, A., (2002)25

auction can be direct and

reverse. Direct auction occurs when there is one seller and many buyers, which

increases the price. Reverse auction occurs when there is one buyer and many

sellers, which reduces the price.

E-ordering and web based Enterprise Resources Planning (ERP): It is the

process of creating and approving procurement requisitions, placing orders,

receiving goods and services ordered.

E-ordering is generally used for indirect goods and services, for ad-hoc

ordering and can be used by all employees of a firm.

Web based ERP is generally used for direct goods and services, for planned

ordering and used by the procurement department of a firm.

E-informing: is not directly associated with a stage in the procurement process. It

is the process of gathering and distributing procurement information both from and

to internal and external parties using Internet technology.

1.1.8 E-Procurement Tools and Applications

Some E-Procurement tools and applications include26

:

Electronic System to support traditional Procurement (Manual Procurement)

Electronic Data Interchange (EDI)

Enterprise Resources Planning (ERP) System

Internet to support traditional Procurement (Manual Procurement)

Electronic mail (e-mail)

Web enabled Electronic Data Interchange (WEB - EDI)

Extensible Mark-up Language (XML)

World Wide Web (WWW)

25

Smeltzer. L. R. and Carr, A. (2002), “Reverse Auctioning in Industrial Marketing and Buying, Business

Horizons, 45(2), pp. 47-52. 26




Structure of Thesis

10

Internet tools and Platforms that replace traditional Procurement (Manual

Procurement)

1.1.9 Electronic Systems to Support Procurement

Personal Computer (PC)

Electronic Data Interchange (EDI): is an application by which electronics data/

messages can be exchanged between computer programs of two different

organizations. Some features of EDI include:

Data/Messages are exchanged in groups, which are known as batches.

Data/Messages can automatically be sent, transmitted and stored between

computers without re-typing or keying data.

It (EDI) should be implemented by each pair of organizations, who wish to

use it.

It (EDI) is mainly used in exchange and is concerned with such matters as

orders, confirmation, transport information and invoicing.

It (EDI) runs on closed network (value added networks) unlike open

network like the Internet.

Enterprise Resources Planning (ERP) Systems: are Management Information

systems that integrate and automate all functional area of the business operation of

the firm. It (ERP system) mainly handles the manufacturing, logistics and

distribution, inventory, shipping, invoicing and accounting for a firm. It also

controls many business activities such as sales, delivery, billing, production,

procurement, inventory management and resources management.

1.1.10 Internet to Support Procurement

There are various types of internet based applications that serve different purposes. Some

well-known applications that use the internet are described below27

:

Electronic mail (e-mail): Email is an Internet based application through which

electronic messages are exchanged between people.

Web enabled Electronic Data Interchange (EDI): is like traditional EDI but run

on the Internet; also known as EDI-INT.

27





Structure of Thesis

11

Extensible Mark-up Language (XML): XML is used to allow for the easy

interchange of documents on the World Wide Web.

World Wide Web (WWW): is a major service on the Internet. The World Wide

Web is made up of "Web servers" that store and disseminate "Web pages," which

are "rich" documents that contain text, graphics, animations and videos to anyone

with an Internet connection.

1.2 Industry Classification

Industry refers to an economic activity which is concerned with production of goods,

extraction of minerals or the provision of services28

. Akrani, G., (2011)29

defined Industry

as the production side of business activities. It is related to raising, producing, processing

or manufacturing of products. He has also classified industry in several forms. Industry

can be classified into several groups. The following figure shows the classification of

Indian Industry (Chand, S.)30

.

(Source: Chand, S., “Industries: Classification of Industry in India”, from

http://www.yourarticlelibrary.com/industries/industries-classification-of-industries-in-india/19707/.)

FIGURE 1.3: Classification of Indian Industry

28

“Industries – Different types of based on Size, Ownership and Technology” last retrieved dated 13.03.2013

from http://www.currentaffairsindia.info/2011/11/industries-different-types-based-on.html 29

Akrani, G. (2011), “What is Industry? Meaning - Classification types of Industries” , last retrieved dated

22.04.2013 from http://kalyan-city.blogspot.in/2011/03/what-is-industry-meaning-classification.html 30

Chand, S., “Industries: Classification of Industry in India”, last retrieved dated 06.01.2013 from

http://www.yourarticlelibrary.com/industries/industries-classification-of-industries-in-india/19707/ .

http://www.currentaffairsindia.info/2011/11/industries-different-types-based-on.html

http://kalyan-city.blogspot.in/2011/03/what-is-industry-meaning-classification.html

http://www.yourarticlelibrary.com/industries/industries-classification-of-industries-in-india/19707/


Structure of Thesis

12

With reference to above diagram, the industry can be classified based on Labour, Raw

Material, Ownership, Sources of Raw Material and Others (miscellaneous).

According to Akrani, G., (2011)28

Manufacturing Industries are engaged in transforming

raw material into finished product by using machine and manpower. The finished goods

can be either consumer goods or producer goods.

1.2.1 Micro, Small and Medium Enterprise Classification

Enterprises have been classified under the Micro, Small and Medium according to

Enterprise Development Act, 200631

of Indian Government. This act includes enterprise

engaged in the Manufacturing of goods pertaining to any industry as well as engaged in

providing Services. The classification of enterprise for the Manufacturing Enterprises has

been defined in terms of investment in plant and machinery (excluding land and buildings),

whereas for the Service Enterprises, it is defined in terms of their investment in equipment.

Under the Act, Micro, Small and Medium Enterprises are classified as shown in following

table: (MSME Annual Report 2009-10).

TABLE 1.1: Micro, Small and Medium Enterprises as Defined in India

Class/Category

Investment in Plant &

Machinery

( Manufacturing)

Investment in

Equipment

(Services)

Micro Enterprises Up to Rs. 25 lakhs Up to Rs. 10 lakhs

Small Enterprises Above Rs. 25 lakhs

up to Rs. 5 crore

Above Rs. 10 lakhs

up to Rs. 2 crore

Medium

Enterprises

Above Rs. 5 crore

up to Rs. 10 crore

Above Rs. 2 crore

up to Rs. 5 crore

(Source: MSME Annual Report 2014-15)

Enterprises have been classified under the Micro, Small and Medium according European

commission32

based on the size of the employees. The criteria for defining the size of a

business differ from country to country.

31

“Enterprise Development Act, 2006 of Indian Government”, last retrieved dated 20.11.2015 from

http://msme.gov.in/sites/default/files/MSMED2006.pdf or

http://msme.gov.in/sites/default/files/MSME_at_a_GLANCE_2016_Final.pdf 32

“Enterprise classification”, European commission last retrieved dated 20.11..2015 from

https://en.wikipedia.org/wiki/Small_and_medium-sized_enterprises or

http://ec.europa.eu/eurostat/web/structural-business-statistics/structural-business-statistics/sme or

http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Enterprise_size

http://msme.gov.in/sites/default/files/MSMED2006.pdf

http://msme.gov.in/sites/default/files/MSME_at_a_GLANCE_2016_Final.pdf

https://en.wikipedia.org/wiki/Small_and_medium-sized_enterprises

http://ec.europa.eu/eurostat/web/structural-business-statistics/structural-business-statistics/sme

http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Enterprise_size


Structure of Thesis

13

TABLE 1.2: Micro, Small and Medium Enterprises as Defined in Europe

Class/Category Employees

Micro Enterprises Up to 10

Small Enterprises Above 10 up to 50

Medium Enterprises Above 50 up to 250

(Source: “Enterprise classification”, European commission,

https://en.wikipedia.org/wiki/Small_and_medium-sized_enterprises)

1.2.2 Ownership Patterns of MSMEs

According to Government of India, Ministry of Micro, Small & Medium Enterprise,

Annual Report, (2009-10)33

, the ownership patterns of MSMEs in India are highly lopsided

and skewed in favour of Proprietary enterprise. 90.35 percent enterprises are Proprietary,

3.85% are partnership, 2.69% are Private Limited, 0.3% is Public Private and 0.3% is

Cooperative Firms. The pattern of ownership structure of MSMEs is also confirmed with

other research studies (Khanka, S.S., 2009)34

(Banerjee, P., 2008)35

. Classification of

Industry based on the Ownership is given below (Chand, S.) 36

Private Sector Industries: Industries owned by individual or firms are called

Private Sector Industries

Public Sector Industries: Industries owned by the state and its Agencies are called

Public Sector Industries

Joint Sector Industries: Industries owned by the private firms and the state or its

agencies are called Joint Sector Industries

Co-operative Sector Industries: Industries owned and run cooperatively by a

group of people , generally produces raw materials of the given Industry are called

Co-operative Sector Industries

33

Annual Report (2009-10), “Ownership pattern of MSMEs” Ministry of Micro, Small & Medium

Enterprise, Government of India 34

Khanka, S.S. (2009), “Entrepreneurial Development”, 10th

Indian Reprint. New Delhi, ISBN

10: 8121918014 / ISBN 13: 9788121918015 35

Banerjee, P. (2008), “Micro, Small and Medium Enterprises of India: Innovation status and states of

affairs.”, India, Science and Technology last retrieved dated 12.02.2013 from

http://www.nistads.res.in/indiasnt2008/t4industry/t4ind8.htm 36

Chand,S., “Industries: Classification of Industry in India”, last retrieved dated 06.01.2013 from

http://www.yourarticlelibrary.com/industries/industries-classification-of-industries-in-india/19707/ .

https://www.abebooks.com/products/isbn/9788121918015?cm_sp=bdp-_-9788121918015-_-isbn10


http://www.nistads.res.in/indiasnt2008/t4industry/t4ind8.htm

http://www.yourarticlelibrary.com/industries/industries-classification-of-industries-in-india/19707/


Structure of Thesis

14

1.3 Structure of the Thesis

Chapter 1

Gives an overview of the general introduction, rationale of the study, significance of the

study and also definition of important terminologies.

Chapter 2

Contains the details of the review of literature under the categories of : Concept of E-

Procurement / e-Tendering, E-Procurement implementation, technology requirements for

participation in e-tendering / E-Procurement, Form / Types of E-Procurement, Benefits of

E-Procurement / e-tendering and Factors that affect implementation of e- procurement etc.

Chapter 3

Discusses the Research Methodology adopted for this research.

Chapter 4

Contains in detail Analysis of Data and Major Findings of the study.

Chapter 5

Contains the conclusions of the study; and also discusses the limitations of the study as

well as the scope for future research.

(Source: Author)

FIGURE 1.4: Schematic Structure of the Thesis

CHAPTER 1:

Introduction,

Definition of

terms and

Structure of

Thesis

CHAPTER 2:

Review of

Literature

CHAPTER 3:

Research

Methodology

CHAPTER 4:

Data Analysis &

Major Findings

CHAPTER 5:

Conclusion,

Limitation and

Directions for

future research

References &

Annexure

Review of Literature

15

CHAPTER 2


2.0 Introduction

A number of research studies have been conducted on various aspects of E-Procurement

practices. Some valuable studies in the area of E-Procurement practices in various

organisations are being viewed in the present chapter.

In the present Literature Review Chapter approximately 139 articles/ research papers/ PhD

Thesis have been referred to get an overview of the E-Procurement practices. In addition,

across the Thesis, approximately 169 articles/ research papers/ PhD Thesis have been done.

After a thorough study of the literature, the researcher has divided the chapter on Literature

Review in the following main areas, organized in chronological order, based on:

Concept of Procurement

Major Function of Procurement

Challenges Faced by Procurement Managers in the Increasingly Competitive

Business World

Information Technology

Concept of E-Procurement

Public E-Procurement

The History/ Trends of E-Procurement.

Procurement Process / Steps

E-Procurement process / Steps

E-Procurement Tools and Applications

Forms of E-Procurement

E-ordering and web based Enterprise Resources Planning (ERP)

E-informing

Electronic Systems to Support Procurement

Internet to Support Procurement

Roadmap for E-Procurement implementation.

Form / Types of E-Procurement.


16

Technology requirements for participation in e-tendering / E-Procurement.

How government procurement differs from private procurement.

Benefits (Drivers) to Implementation of E-Procurement

Challenges and Risks (Barriers) to Implementation of E-Procurement

Critical Success Factors (CSFs) of Adoption of E-Procurement

Factors that Affect E-Procurement Adoption

Implementation of E-Procurement

E-Procurement Architecture

E-Procurement System / E- Procurement Methods

Integrated Procurement Solutions

E-Procurement Tool

Impact of E-Procurement on Organizational Performance

Development of Research Model or Conceptual Model

Identifying Best Practices in E-Procurement

In addition, towards the end of the chapter, a tabular presentation of comparative study of

major articles/ research papers/ thesis/ books included in the chapter have been done across

the Research Gap/ Research Objectives, Research Methodology and Key Findings to give

a more representative view. (Refer Table 2.1).

Table 2.2 gives an overview of few major best practices of E-Procurement adopters, with

the monetary/ non-monetary benefits accrued by them. The objective of doing this by the

researcher was to highlight the few role model companies, with the intention that such

practices be replicated.

2.1 Concept of Procurement

Procurement is the act of acquiring, buying goods, services or works from an external

source, often via a tendering or bid process. It consists of all the activities required for

obtaining items from a supplier to the warehouse. Procurement is the important element of

Business operation which involves commerce between two or more businesses.


17

According to Nevalainen, A., (2001)37

the procurement include the entire operations

considering a requisitioning, transportation, warehousing, and in bound receiving process.

The main aim of procurement is process efficiency (Aldin, et al., 2004)38

.

Traditionally, firms use paper based system to procure materials and services by searching

from paper based catalogue provided by suppliers through telephone and fax. The

traditional material procurement process involves generation, copying and transfer of many

paper documents.

2.1.1 Challenges Faced by Procurement Managers in the Increasingly Competitive

Business World

Kalakota, R & Robinson, M., (2001)39

listed the five key challenges procurement

managers are facing in the increasingly competitive business world are:

Reducing order processing cost and cycle times

Providing enterprise-wide access to corporate procurement capabilities

Empowering desktop requisitioning through employee self-service

Achieving procurement software integration with company‟s back office systems

Elevating the procurement function to a position of strategic importance within the

organization.

2.2 Information Technology

According to Min, H. & Galle, W. P., (1999)40

information technology (IT) has helped to

solve several issues in the public sector, and electronic procurement (E-Procurement) has

been introduced as a method to attain higher, more value effective procurement systems.

The execution and usage of information technologies have a powerful impact on business

processes. E-Procurement technology is defined as usage of network technologies and

37

Nenvalainen, A. (2001), “The e-business Dictionary”, Rockbend Books, Alaska. 38

Aldin et al. (2004), “ Business development with electronic commerce: Refinement and repositioning”, last


https://www.researchgate.net/publication/235272281_Business_development_with_electronic_commerce_Re

finement_and_repositioning dated 21.05.2013 39

Kalakota, R & Robinson, M. (2001), “E-business 2.0: Roadmap for success (2nd Edition)”. USA Addison-


http://dinus.ac.id/repository/docs/ajar/e-business_roadmap_for_success_full.pdf 40

Min, H. & Galle, W. P. (1999), “Electronic Commerce Usage in Business to Business Purchasing.”

International Journal of Operations & Production Management, 4(1), pp. 79–95.





18

practices that facilitate exchange of information with the help of public or non-public

networks.

Trauth, T., (2001)41

said that due to the availability of Internet technologies,

companies have modified the way of purchasing goods and services. Organizations have

introduced a technology referred to as E-Procurement. The Organizations that initially

adopt the concept of e- procurement systems were Dell, IBM etc in the year 1990.

Min, H. & Galle, W., (2003)42

found that the extent of information technology

infrastructure integration between the organisations has a direct effect on the savings and

benefits on procurement process. Lack of information technology integration has been a

constraint on the benefits developed through the employment of E-Procurement owing to

processes like the need to key information.

Singh, A. et al., (2006)43

said that information technology is playing an important role in

India and has transformed India's image from a slow moving bureaucratic economy to a

land of innovative entrepreneurs. The IT sector in India is generating 2.5 million direct

employments. India is now one of the biggest IT capitals of the modern world and all the

major player in the world belongs to IT sector are present in the country. The use of

Information Technology (IT) has made the world small and through it business

transactions are conducted globally at a faster pace. The age of connectivity has reduced

distances and brought people closer. Today many companies use Information Technology

as a strategic tool to compete with others.

Shaikh, I. et al., (2015)44

indicated that E-Procurement was one of the most effective

vehicles that were being gainfully utilized in reaching the goal of caring governance. The

use of Information Technology is internet based net applications to boost the access to and

delivery of state information and services to their public agencies, voters, business

partners, employees, financial establishments and government departments. The rapid

growth of competition within the market and also the resultant changes in economic

conditions impose organizations and companies to implement new technologies to remain

competitive. The Central and State Governments, Autonomous Bodies, Judiciary Boards,

41

Trauth, T. (2001), “E-Procurement und e-marketplaces – new trends in B2B e-commerce‟, Electro

technical and Information‟s technique”, Vol. 118, No. 5, pp.253–261. 42

Min, H. & Galle, W. (2003), “E-Purchasing: profiles of adopters and non adopters”, Industrial Marketing

Management, pp. 227-233. 43

Singh A., Thapliyal M.P., Rauthan M.M.S. & Joshi D., (2006), “Enabling e-commerce in India”, last

retrieved on 14th

May 2011 44

Shaikh, I., Biswal, N.R., Ray, T.P., Hota, A.K., (2015), “An In depth Understanding of E-Procurement: A

Case Study Approach”, IOSR Journal of Computer Engineering (IOSR-JCE) e-ISSN: 2278-0661,p-ISSN:

2278-8727, Volume 17, Issue 6, Ver. V , PP 20-24


19

Corporations, Joint Ventures, PSUs, Statutory Bodies, Commissions and Councils have

invested in varied initiatives throughout the length and breadth of the country aimed at

extending the advantages of knowledge revolution to rural and remote space. The

Government has good governance by establishing Accountable, Committed, Inspiring,

Responsive, Nationalist, and Genuine Government.

2.3 Concept of E-Procurement

E-Procurement is an automation tool for corporate purchasing process. The core definition

is a business to business sale using the internet as the medium for order processing. E-

Procurement is more than the simple shortening of the supply chain with the Internet

closing time and distance obstacles between suppliers and users of products45

. In addition,

According to Chopra, et al., (2001)46

, the E-Procurement is Business to Business

purchasing practices that utilised electronic commerce (e-commerce) to identify potential

sources of supply, to purchase goods and service, to transfer payment and to interact with

suppliers. Neef, D., (2001) 47

considered an E-Procurement is an important step forward in

the development of the enterprise, where the E-Procurement is a process of connecting

customer to business partners.

Croom, S. & Brandon, J. A., (2004)48

defined an E-Procurement as the use of internet-

based integrated information and communication technologies to hold out individual or all

stages of the procurement method together with negotiation, search, sourcing, receipt,

ordering, and post-purchase review.

Black, P. et al, (2005)49

stated that electronic tendering is an electronic version of

traditional tendering process. It convert traditional acquisition, purchase of goods and

services, supply of goods and services into the Electronic process such as e-tendering, e-

45

“E Procurement - Challenges and Opportunities” last retrieved on 15.03.2016 from http://www.purchasing-

procurement-center.com/E-Procurement.html 46

Chopra, S., Dougan, D and Taylor, G (2001), “B2B e-Commerce Opportunity”, Supply chain Review, 5

(3), pp. 50-62. 47

Neef, D. (2201), “E-Procurement from strategy to Implement”, Financial times Prentice hall Harlow, One

Lake Street, Upper Saddle River, NJ 07458, ISBN 0-13-091411-8, United State of America from

https://books.google.co.in/books/about/E_procurement.html?id=UDaxAcoX1JQC&printsec=frontcover&sou

rce=kp_read_button&redir_esc=y#v=onepage&q&f=false 48




Black., P. et al. (2005), “Security and Legal Issues in e-tendering”, last retrieved dated 12.8.2012 from

http://www.construction-

innovation.info/images/pdfs/Research_library/ResearchLibraryA/Project_Reports/Security_and_Legal_Issue

s_in_eTendering.pdf

http://www.purchasing-procurement-center.com/E-Procurement.html





http://www.construction-innovation.info/images/pdfs/Research_library/ResearchLibraryA/Project_Reports/Security_and_Legal_Issues_in_eTendering.pdf




20

awarding, e-auction, e-sourcing, by using Internet. E-tendering is basically an expression

used to describe the dissemination and receipt of tender information, indication of interest

in tendering, receipt of tender documents, submission of tender sum and final selection of

successful tender for contracts via the internet.

Kameshwaran, S. et al., (2007)50

shared that electronic procurement is a method by which

goods and services can be purchased for the organization through internet and can

supervise the flow of goods and services in the business.

Baily, P. J. H., (2008)51

said that the E-Procurement is the business to business (B2B) or

business to consumer (B2C) or business to government (B2G) purchase and sale

of supplies, work and services through the Internet as well as other information and

networking systems, such as electronic data interchange and enterprise resource planning.

According to Gunasekaran, et al., (2009)52

, E-Procurement gives an opportunity to

suppliers and patrons, to enlarge the selection of merchandise, and makes

information easily procurable. E- Procurement connects a vast network of business which

helps business people to search necessary information and contact people in a convenient

way.

2.3.1 Public E-Procurement

According to Davila, A. et al., (2003)53

public E-Procurement has been defined as the use

of data and communication technology like web / net based system by governments in

conducting their procurement relationship with bidders for the acquisition of products,

works, services and other consulting services needed by the public sectors. Burton, R.,

(2005)54

indicated that public E-Procurement is the core instrument that helps in economic

management of public resources. An E-Procurement solution helps the government sector

units to procure all materials from office equipments to huge aircrafts and helps to procure

services and projects.

50

Kameshwaran, S., Narahari, Y., Rosa, C.H., Kulkarni, D.M. and Tew, J.D., (2007), “Multiattribute

electronic procurement using goal programming”, European Journal of Operational Research, 2007, vol.

179(2), pp.518–536. 51

Baily, P. J. H., (2008), “Procurement principles and management”, Harlow, England: Prentice Hall

Financial Times. p. 394. 52

Gunasekaran, et al., (2009), “E-Procurement adoption in the South coast SMEs”, International Journal of

Production Economics, vol. 122(1), pp.161-175. 53

Davila, A., Gupta, M and Palmer, R., (2003), “Moving Procurement Systems to the Internet: the Adoption

and Use of E-Procurement Technology Models”, European Management Journal, 21(1) 54

Burton, R., (2005), “Improving Integrity in Public Procurement: The Role of Transparency and

Accountability, in Fighting Corruption and Promoting Integrity in Public Procurement”, OECD Publishing,

pp. 23–8.


21

Vaidya, A. et al., (2006)55

stated that E-Procurement is the recent reform that is adopted by

the Government of Kenya to boost public procurement. Adoption of electronic

procurement may bring sanity within the procurement policies, reduce prices and improve

potency. The target of E-Procurement adoption include: improved accountability, improve

effectiveness and transparency.

According to Pheraon, C & Searraigh, S., (2007)56

Public E-Procurement system provides

all the project information through net. The bidders will read all the project specification,

and they can comply with normal document. Tendering and contract awarding is one of the

foremost stages of public procurement method where most of the corruption occur in

developing countries.

According to Kabaj, O., (2008)57

an economical public procurement system is very

important to the advancement of African countries economies and may be a concrete

expression of their national commitment to creating the most effective potential use of

public resources.

2.4 The History Trends of E-Procurement

The origin of E-Procurement began in the 1980s, with the development of electronic data

interchange (EDI). EDI allowed customers and suppliers to send and receive orders (and

invoices as well) using call-forwarding networks. In the 1990s, technology, as it tends to

do, improve and software companies began to develop electronic catalogues, specifically

for the vendor‟s use and, E-Procurement software has become a mixture of the two: a

platform for sending and receiving orders and various catalogues. Market places have also

proved to be a popular addition to E-Procurement software”58

.

2.4.1 E-Procurement Trends in Global Marketplace

There is no doubt that the Internet is drastically changing the way purchasing is done

globally. It has grown and evolved into a complex marketplace with many players offering

a variety of E-Procurement and business-to-business services. E-Procurement can include

55

Vaidya, A. Sajeev & Callender,G (2006), “Critical Factors that Influence E-Procurement Implementation

Success in the Public Sector”. Journal of Public Procurement, Volume 6, Issues 1 & 3, 70-99 56

Pheraon, C & Searraigh, S. (2007), “Corruption in the petroleum sector”, in SP J. Edgardo (ed.), The Many

Faces of Corruption, World Bank Publications, Washington, D.C. 57

Kabaj, O. (2008), “The Challenges of African Development”. UK: Oxford. 58

“The History of E-Procurement” last retrieved from https://blog.procurify.com/2014/08/11/e-procurement/


22

services such as hosting of databases, catalogue management, managing tenders and

auctions on behalf of clients through to a complete outsourced procurement service59

.

Robaty, S. & Bell, D., (2013)60

said that during the internet era, E-Procurement has

witnessed a steep rise in marketplace deployment; this has been followed by a considerable

range of failures. A number of larger technology suppliers are currently left to support each

tiny and enormous business. Flexibility has been a key enabler in supporting network

evolution across a varied range of domains. The study examines the flexibility around

marketplace evolution, success and failure; inter relationships between architectural

flexibility and the evolving web technology. A systematic literature review was

administered to uncover the changes taken place over the past fifteen years. A conceptual

model is made early in the analysis so as to supply discourse underpinning. Of the 22

relevant studies, one addressed analysis trends around E-Procurement in pharmaceutical

organizations. Three studies addressed E-Procurement in financial organizations. A range

of flexibility classes are uncovered by the systematic literature review which are used as a

way to support versatile E-Procurement marketplace style and adoption, suggesting E-

Procurement marketplace evolution over the duration of the study.

2.4.2 E-Procurement Trends in Private Sector

Externally hosted E-Procurement services are clearly part of a growing trend. Some

specialize by industry sector, like those serving the oil and gas, pharmaceutical and mining

industries, all of which have embraced E-Procurement more than some other sectors. Some

E-Procurement service companies provide the full range of supply network services to

support global procurement transactions. Another E-Procurement trend is where a large

number of corporations elect to manage their E-Procurement in-house. Successful

implementations of E-Procurement are considered as one of the measures of a world-class

purchasing organisation. To do this, they need to install enterprise-wide software to

manage the database and transactions but the big investment in time and money sometimes

means that there is not a compelling business case61

.

59

E-procurement trends in Global Marketplace, retrieved from http://www.purchasing-procurement-

center.com/e-procurement-trends.html 60

Robaty, S. & Bell, D., (2013), “A Systematic Literature Review of Flexible E-Procurement journal of

theoretical applied electronic commerce”, Journal of Theoretical and Applied Electronic Commerce Research

ISSN 0718–1876 Electronic Version Vol.8, Issue 2, pp, 49-70. 61

E-procurement trends in the private sector, retrieved from http://www.purchasing-procurement-

center.com/e-procurement-trends.html


23

2.4.3 E-Procurement Trends in Government Sector

Governments are adopting E-Procurement in mature economies more extensively as it

provides structure, audit trails and transparency of transactions. World Bank research has

also found some reluctance by governments in adopting a system that is so fully

transparent. Certain basic requirements need to be fulfilled before an E-Procurement

system can achieve maximum potential in government. These are recommendations by the

World Bank which include expanding Information & Communication Technology (ICT)

services, guaranteeing a secure online environment, development of standards and

processes, and most importantly, for purchasers to be trained62

.

Wyld, D.C., (2002)63

examined the state of E-Procurement in the United States through an

extensive analysis of data from the Institute for Supply Management (ISM)/Forrester

reports conducted on e-Business. These reports contain the trends in the use of E-

Procurement methods which include the major benefits of E-Procurement such as

reduction of paper work, reduction of cycle time, ease to collaborate with suppliers, ability

to procure direct and indirect goods and services, use of the Internet to Identify New

Supply Sources, and reduction of total cost of Procurement. This study concluded that the

push towards the E-Procurement is being led by the largest firms and have discussed the

other key trends along with few suggestions.

2.5 Procurement Procedure

Walker, H. & Harland, C. (2008)64

investigated the factors that influence the adoption of

E-Procurement in United Nations (UN). The research finds that E-Procurement is being

used for routine and non-strategic purchases.

Procurement manual (2009)65

, included procurement process approved by the NZ

Transport Agency (NZTA) under s25 of the Land Transport Management Act 2003

62

E-Procurement Trends in Government Sector, retrieved from http://www.purchasing-procurement-

center.com/e-procurement-trends.html 63

Wyld, D.C., (2002),"The electric company: how the supply chain is being reinvented through the rapid

application of E-Procurement processes in the business-to-business arena", Management Research News,

Vol. 25 Iss 12 pp. 22 – 53 last retrieved dated 08.07.2015 from Emerald Insight. 64

Walker, H. & Harland, C. (2008), “E-Procurement in the United Nations: Influences, issues and impact”,

International Journal of Operations & Production Management, retrieved from Emerald Insight, Vol.28, Iss.9,

pp.831-857. 65

Procurement manual (2009), “Procurement manual: for activities funded through the National Land

Transport Programme”, NZ Transport Agency last retrieved 01.08.2013 from

https://www.nzta.govt.nz/resources/procurement-manual/



24

(LTMA). The procurement procedures in this manual are available for all approved

organizations for use. The NZ Transport Agency requires that all approved organisations

have a procurement strategy that documents an approved organisation‟s long-term

integrated approach to the procurement of transport sector activities funded under s20 of

the Land Transport Management Act (LTMA). The manual contains Legislative and

policy framework, Roles of the NZ Transport Agency and approved organisations,

Strategic approach to procurement, Procurement procedures, Monitoring and auditing,

Guidelines on procurement procedures and Supplier selection methods. The manual refers

to approved organisations and the same rules apply to the NZTA.

According to United Nations Procurement practitioner’s Handbook, (2012)66

Competition carried out in a fair and transparent way is the main objective of procurement

in the United Nations. The procurement procedure should be carried out in a way that gives

assurance of fair process to all stakeholder of the procurement. The procurement process

should be transparent, which has clear regulations and mechanisms to guarantee

compliance with those regulations such as impartial specifications, purpose assessment

criteria, standard solicitation documents, the same information to all parties, privacy of

offers, etc. Records are open, as suitable, to check by auditors. Transparency identify the

deviations and from fair and identical treatment very early and makes such deviation less

likely to occur. Therefore, it looks after the integrity of the procedure and the interest of the

firm .Agency cooperation provided many benefits to United Nation firms such as improved

individual organization's specialisation, improved discounts based on combined volume,

reduced cost due to economies of scale, reduced maverick buying, increased control over

the procurement process eliminated non value added tasks, reduced long purchase-to-pay

cycle time and reduced transaction cost; and, increased total procurement.

Ware, G.T. et al., (2012)67

said that an electronic procurement had various level of project

identification such as advertisement, eligibility norms for bidding, preparation of

documents and submission of necessary documents for bid, evaluation of bid, finalizing the

contract, performance of contract.

66

UN Procurement practitioner‟s Handbook (2006), “Interagency Procurement Working Group (IAPWG)”

last retrieved dated 29.07.2013 from https://www.ungm.org/Areas/Public/pph/channels/PPH.pdf 67

Ware, G. T., Moss, S., Campos, J.E. and Noone, G.P. (2012), “Corruption in Procurement”, Graycar. A. &

Smith. R., (eds), Handbook of Global Research and Practice in Corruption, illustrated edition, Edward Elgar

Publishing, UK.

https://www.ungm.org/Areas/Public/pph/channels/PPH.pdf


25

2.6 Roadmap for E-Procurement Implementation

Kalakota, R., & Robinson, M., (2001) 68

discussed the following roadmap for E-

Procurement in his research

Clarify your goal: Businesses should make sure that the business problem or goal

is well defined and understood.

Construct a process audit: After setting the goal businesses should analyze their

current procurement process.

Create a business case for E-Procurement: Setting up a business case for E-

Procurement implementation, as it forces the company to systematically analyze

the business.

Develop a supplier integration matrix: Without supplier commitment and

involvement, the E-Procurement project is useless.

Select an E-Procurement application: According to Smeltzer, L. R., Carter, J. R.,

(2001)69

by categorizing the products and services purchased, companies can more

easily decide on the required procurement strategies and E-Procurement

applications.

Remember: integration is everything: Integrating the E-Procurement solution with

suppliers and company‟s existing back-office systems is the most important thing

in E-Procurement implementation.

Educate, educate, and educate: Change tends to generate resistance and managers

should deal with it by communicating and encouraging employees to comply with

the new guidelines.

According to PEPPOL (2008)70

,E-Procurement adoption at regime level was made by the

European Union with its Pan-European Public procurement on-line (PEPPOL) project.

This project is a novel example and a precious model for E-Procurement program at the

provincial level. The organization inside European Union member state communicate

digitally with the other public sector units within another European Union member state

for all procurement processes at the stage of completion of the project.

68

Kalakota, R & Robinson, M. (2001), “E-business 2.0: Roadmap for success (2nd Edition)”. USA Addison-


http://dinus.ac.id/repository/docs/ajar/e-business_roadmap_for_success_full.pdf 69

Smeltzer, L. R., & Carter, J. R. (2001), “Supply chain management review”, v. 5, no. 2 , p. 76-83 70

PEPPOL (2008), “About Peppol, Pan-European Public Procurement Online”, Available at

http://www.peppol.eu/About_PEPPOL (Accessed April 1, 2012).



26

2.7 Form / Types of E-Procurement

According to Kalakota, R. & Robinson, M., (2001)63

a large number of different

applications and systems of E-Procurement were identified in the literature:

E-MRO

Web-based ERP

E-Sourcing

E-Tendering

E-Reverse auctioning

E-Informing

According to Kishor, V. et al., (2006)71

there were various forms of E-Procurement that

concentrated on one or many stages of the procurement process such as:

E-Tendering

E-Marketplace

E-Auction/Reverse Auction

E-Catalogue/Purchasing.

2.8 Technology Requirements for Participation in E-Procurement

Subramaniam, C. & Shaw, M. J., (2004) 72

defined E-Procurement system as a Web based

client/ server application used to replace the manual procurement process. According to

him, E-Procurement solutions cover three major procurement areas:

Procurement Transactions

Procurement Management, and

Market Making.

It also impacts four major operative procurement activities:

Searching of products or services

Order processing

Monitoring and control, and

Coordination of relevant information.

71

Kishor, V, A., Sajeev, S. M. and Guy, C. (2006), “Critical factors that influence E-Procurement

implementation success in the public sector”, Journal of Public Procurement, Volume 6, Issues 1 & 3, pp.70

– 99. 72

Subramaniam C. & Shaw M. J. (2004), “The effects of process characteristics on the value of B2B e

procurement”, Information Technology for Management 5th edition (1-2), 161-180


27

On the buyer side, the E-Procurement solution is usually connected to other existing

information systems, such as ERP. On the supplier side, the solution is mostly connected to

the suppliers order fulfilment system or product catalogues on the website of the supplier.

According to Olukayode, S. et al., (2011)73

the facilities required for the implementation of

a viable e-tendering system may be grouped into three separate categories:

Hardware,

Software and

Internet/network facilities: Dial-up networking, Radio link and VSAT.

2.9 Implementation of E-Procurement

Ageshin, E.A. (2001)74

studied the drawback of E-Procurement, buyers who adopts e-

procurement are rely on suppliers on the implementation of just-in-time practices. Because

of this, there is an increase in the involvement of suppliers in product design and

development, shorter ordering cycles. Suppliers are disinclined to e- procurement for the

reason of cost involved in training the staff and the risk involved in sharing the business

data.

According to Gupta, M. & Narain, R., (2011)75

E-Procurement offers a range of benefits,

adoption rate is low. An investigation was conducted in Indian organizations about

the electronic procurement adoption and the effect of electronic procurement in these

organizations. From the study, it has been identified that, the objective of E-Procurement is

to provide customer satisfaction, to produce good producers, to improve performance and

product quality delivery of goods in time. The study indicates that the barriers for E-

Procurement adoption were the effect of E-Procurement on performance measures.

Gupta, M. & Narain, R., (2012)76

conducted a survey in 36 Indian Companies about the

implementation of E-Procurement. The findings brings out that companies are using e-

procurement to improve flexibility , to increase customer satisfaction, to provide better

73

Olukayode, S. Oyediran, Adeyemi A. Akintola. (2011), “ A survey of the state of the art of e-tendering in

Nigeria”, Journal of Information Technology in Construction - ISSN 1874-4753 74

Ageshin, E.A. (2001), “E-Procurement at work: a case study”, Production and Inventory Management

Journal, First Quarter, Vol. 42, No. 1, pp.48–53. 75

Gupta, M. & Narain, R., (2011), “A study on some aspects of E-Procurement in Indian Organizations”, 2nd

International Conference on Mechanical, Industrial, and Manufacturing Technologies (MIMT) last retrieved

from https://www.researchgate.net/publication/257546404_A_Study_on_some_Aspects_of_E-

Procurement_in_Indian_Organizations dated 12.06.2015 76

Gupta, M. & Narain, R., (2012), “A survey on adoption of E-Procurement in Indian organisations”, Int. J.

Indian Culture and Business Management, Vol. 5, No. 1.

https://www.researchgate.net/publication/257546404_A_Study_on_some_Aspects_of_E-Procurement_in_Indian_Organizations

https://www.researchgate.net/publication/257546404_A_Study_on_some_Aspects_of_E-Procurement_in_Indian_Organizations


28

inventory management, and to have on time delivery, etc. The practice of E-Procurement

implementation in Indian companies is likely to increase in near future, for the advantages

it offers like operating in competitive business environment, to easily adopt government

rules, to improve transparency and to eradicate corruption in procurement.

Hassan H, et al., (2014)77

observed that although E-Procurement is complicated, it can be

simplified by the representation of the state of E-Procurement in associate degree

organization to a binary measure through number of existing studies. Although this is

useful to grasp adoption choices, it does not fully capture the reach and richness of the

employment of knowledge technology (IT) innovations. Hence, this study explains the use

of E-Procurement in New Zealand, specifically focusing on the range of E-Procurement

functionalities used in the producing SMEs. The E-Procurement functionalities are seen

from the info and dealing views. A cross-sectional survey is used as a strategy for data

assortment. The SPSS software is used to analyse the info gathered from the 151 senior

managers. Outcomes demonstrate that all of the functionalities, especially those that have

faith in unremarkably accessible technologies, are in use. Nonetheless, complex E-

Procurement technologies like e-auctions are not common.

Mambo P et al., (2015)78

found that over the last few years, the internet has modified the

method business is completed in each trade. E-Procurement has dramatically modified the

way buying is done. Both public and non-public sector establishments have embraced the

advantages accumulated from E-Procurement practices. The Kenyan Government has

suggested adoption of ICT in service delivery to the general public and its citizens within

the Constitution. However, even given the potential advantage of E-Procurement, most of

the government ministries haven't effectively implemented the E-Procurement practices.

The study investigates the factors influencing the implementation of E-Procurement within

the Ministry of Co-ordination of National Government. The sample data of study was

collected from staff operating in numerous Departments of the Ministry of Co-ordination

of National Government and whose head workplace is in capital of Kenya. This study

employs the stratified random sampling technique to cover a sample size of 67 respondents

out of 168. Conjointly, this study relied mostly on primary data collected by the use of

questionnaires. The study provides both qualitative and quantitative knowledge.

77

Hassan H, Alexei Tretiakov, Dick Whiddett, Iskandar Adon (2014), “Extent of E-Procurement use in

SMEs: A descriptive study”, International Conference on Accounting Studies, Social and Behavioral

Sciences 164, pp. 264 – 270. 78

Mambo P., Ombui K., Kagiri A (2015), “Factors Influencing Implementation of E-Procurement in the

National Government: A Case of the Ministry of Interior and Co-Ordination of National Government”, Vol.

2 (46), pp 951-999


29

2.9.1 Implementation of E-Procurement by Government Agencies / Solution

Bubeck, B. & Fuchs, G., (2003)79

found that e-tendering is mainly used to accommodate

the requirements of the government sector units. Government sector units make use of e-

journals to advertise tender notices rather than publishing newspaper advertisements. This

strategy helps in the grant of contracts of high costs with a benefit of saving prices usually

spent on advertisements in newspapers. E-journal is mainly used to advertise tender, filling

up tender documents or to get them from the website in terms of soft copy format.

As per a Report by World Bank (2003)80

e-tendering solutions are complicated and

typically include numerous modules like tender procedure, decision on tender applications,

document preparation for tender, etc., e-journal is used for issue of notices regarding

tender which includes bidder‟s registration and document shipping, preparation of bid with

a digital signature and at last submission of application analysis of bids. E-Procurement

methods normally provide solutions for electronic purchase of goods and services, but e-

tendering is designed to digitally manage the tendency procedure.

Reunis, M.R.B. & Raaij, E.M.V., (2006)81

discussed some proactive influence which

encourages the electronic procurement adoption. For example; different ways of providing

summaries as per the demand of a genuine work, teamwork, influential recommendation,

management request, appraisal and control. Schoenherr, T. & Tummala, V.M.R. (2007)82

in their study on E-Procurement solutions employed in government undertakings report

the details of tender opportunities, solutions like e-catalogue, e-tendering, e-auction and e-

marketplace.

Basheka, B.C. & Bisangabasaija, E., (2010)83

believed that initially E-Procurement was

used by non-public sector, later attracted the government sector. The important

aspect for adoption of e- procurement in developed countries is better administration. E-

79

Bubeck, B. & Fuchs, G. (2003), “Structural changes in the administration and e -Government - The Case

of the electronic E-Procurement and procurement” 80

World Bank (2003), “Electronic Government Procurement (e-GP): World Bank Draft Strategy”,

Procurement Policy & Services Group, Washington, D.C. last retrieved dated 01.04.2012 from

siteresources.worldbank.org/INTPROCUREMENT/.../eGPStrategyfortheWBword.doc 81

Reunis, M.R.B. and Raaij, E.M.V. (2006) “Scale development for E-Procurement (EP) adoption influence

tactics, creating and managing value in supply networks”, Proceedings of the 15th IPSERA Conference, San

Diego, California. Last retrieved from

http://s3.amazonaws.com/academia.edu.documents/37745021/197621.pdf?AWSAccessKeyId=AKIAIWOW

YYGZ2Y53UL3A&Expires=1494414986&Signature=WHAzkWjP8Pswx5Ozne3EO42IMCE%3D&respons

e-content-disposition=inline%3B%20filename%3DScale_development_for_E-procurement_EP_a.pdf dated

24.11.2015 82

Schoenherr, T. and Tummala, V.M.R. (2007) “Electronic procurement: a structured literature review and

directions for future research”, International Journal Procurement Management, Vol.1, Nos. 1/2, pp.8–37. 83

Basheka, B.C. & Bisangabasaija, E. (2010), “Determinants of unethical public procurement in local

Government systems of Uganda: a case study”, Int. J. Procurement Management, Vol. 3, No. 1, pp.91–104.

http://s3.amazonaws.com/academia.edu.documents/37745021/197621.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1494414986&Signature=WHAzkWjP8Pswx5Ozne3EO42IMCE%3D&response-content-disposition=inline%3B%20filename%3DScale_development_for_E-procurement_EP_a.pdf




30

Procurement is used to fight corruption in underdeveloped countries where the corruption

rate is high. Government procurement accounts for 20 percent of public spending. In some

African countries, this will amount to as high as 70%. A reduction in public spending by

as little as 1% will build make a big difference by releasing huge amount of people‟s

money.

Greunen, D.V. et al., (2010)84

focussed on adoption of E-Procurement by government

agencies and the method of remodelling procurement practices in accordance with national

economic strategy. In order to deal with various socio economic challenges, government is

switching to technology to deal with issues like obsolete procurement practices. E-

Procurement provides the introduction of internationally accepted best practices to

facilitate the government to deliver on its mandate. From the background of South

African legislation that governs the procurement practices in accordance with National

Economic Development Initiatives is the main insight of this study. The study explains

how best Japanese Cape Provincial Administration will succeed in achieving the national

and provincial socio economic growth objectives. Reports and other primary sources of

information were used, and expert interviews were conducted to answer these queries. It

was found that measurable benefits of supply chain management haven't been completed

owing to general restricted understanding and how the supply chain management

conception works at government surroundings. Other limitations are lack of understanding

within the execution of policy and legal framework that govern obsolete, procurement,

disparate procurement systems and ICT infrastructure.

2.10 Benefits (Drivers) to Implementation of E-Procurement

Thai, K. & Grimm, R., (2000)85

found that the implementation of E-Procurement

initiatives should be seen as an effort to improve the procurement goals, which normally

include quality; timeliness; cost minimizing, business‟s financial and technical risks;

maximizing competition; and maintaining integrity. Brack, K., (2000)86

found out that

buyers indicated that the conversion from paper-based to e-purchasing resulted in a

84

D. Van Greunen, M. E. Herselman and J. Van Niekerk (2010), “Implementation of regulation-based E-

Procurement in the Eastern Cape provincial administration”, African Journal of Business Management Vol.

4(17), pp. 3655-3665, ISSN 1993-8233, Academic Journals. 85

Thai, K. & Grimm, R. (2000), “Government Procurement: Past and Current Developments.” Journal of

Public Budgeting, Accounting and Financial Management, 12 (2), pp.231-247. 86

Brack, K. (2000), “E-Procurement: the next frontier”, Industrial Distribution, 89(1), pp. 65-68.


31

reduction of purchasing cost, reduction in inventory level, a 5-day reduction in cycle time,

a US$77 saving per requisition administrative cost.

According to Attaran, M., (2001)87

in the international context, it will be necessary to gain

a competitive advantage in the future and use of Internet is becoming the necessary

condition of doing businesses in the global market. Electronic ordering appears to be the

trend for the future. With all the benefits that Web-based procurement offers, it would

seem that eventually every industry would turn to it. The reduction of paperwork, less

errors, accurate information, better inventory management, as well as quicker delivery

times, all lead us to believe that it's just a matter of time when every company will employ

this technology. The aim of this paper is to identify tips for IT managers for successful

implementation of the technology. Study found that the internet based technology gives

companies an opportunity to gain a competitive advantage. The proper implementation of

such technology is a key management issue. To make this technology successful, IT

managers must work to a plan and lay technology groundwork. They must believe in the

benefits of this technology, opt for a comprehensive approach, define new relationships

with vendors, train and support suppliers, and openly communicate with employees. The

employees play an equally important role in the success of this technology. To prepare

workers for their new roles, management needs to begin an education and training

program.

According to Aberdeen Group Inc., (2001)88

and de Boer L. et al., (2002)89

E-

Procurement advantages are significant bottom line benefits, including cost reduction,

process efficiencies, spending controls and compliance.

Gunasekaran et al., (2002)90

found that electronic procurement will provide firms to cut-

short the procurement period, get lowest price through bidding, minimize product

development period and speed up the time-to-market the product, access to global

markets, make sure that costs and selling info are continuously updated, improves

87

Mohsen Attaran, (2001),"The coming age of online procurement", Industrial Management & Data

Systems, Vol. 101 Iss 4 pp. 177 – 181 last retrieved dated 08.07.2015 from Emerald Insight. 88



content/img/en2_1.pdf 89

de Boer L., Labro, E., Morlacchi, P., (2002), “A review of methods supporting supplier selection”,

European Journal of Purchasing and Supply Management 7 (2), pp 75-89. 90

Gunasekaran, A., Marri, H.B., McGaughey, R.E. and Nebhwani, M.D. (2002), “E-commerce and its

impact on operations management”, International Journal of Production Economics, Vol. 75, Nos. 1/2,

pp.185–197.




32

communication speed, minimize geographical barriers, develop a good relationship with

clients.

In a similar vein, Consortium for Global Electronic Commerce (CGEC), (2002)91

identified cost, quality, program management progress measures (on-time, on-budget, and

issue management), process performance factors, and Return on Investment as the most

relevant measurements.

According to Min, H. & Galle, W., (2003) 92

,main E-Procurement benefits are (a) Cost

savings and subsequent increase in return-on-investment (b) Enhancement of supply chain

efficiency by providing real-time data regarding product availability, inventory level,

shipment status, production requirements (c) Facilitation of collaborative planning among

supply chain partners by sharing data on demand forecasts and production schedules that

dictate supply chain activities (d) Effective linkage of customer demand information to

upstream SCM functions, while also facilitating “pull” (demand-driven) SCM operations.

Croom, S. & Brandon-Jones, A., (2004)93

indicated that reducing the administrative

aspects of the procurement method through E-Procurement permits buying professionals to

pay longer attention on strategic aspects of procurement like improved supplier

relationships and communication processes.

Kauffman, R. & Mohtadi, H., (2004)94

reported that E-Procurement systems benefit each

customer and provider facet for all task concerned with the procurement method. Cost

saving will occur through improvement in effectiveness and efficiencies of procurement

tasks by minimising the purchase prices and the minimising the administrative functions.

Eadie, R., et al.,95

examined the drivers and barriers for E-Procurement in construction in

Northern Ireland. Findings show that the two highest ranked drivers by the contractors

were improving communication and reduced administration costs, while the two most

important barriers were security of transactions and the uncertainty surrounding the legal

issues of E-Procurement.

91

Consortium for Global Electronic Commerce (CGEC) (2002), “Measuring and Improving Value of E-

Procurement Initiatives”, Madison, WI: University of Wisconsin- Madison. 92

Min, H. & Galle, W. (2003), “E-purchasing: profiles of adopters and non adopters”, Industrial Marketing

Journal, 32(2), pp.227-233. 93




Kauffman, R. & Mohtadi, H. (2004), “Proprietary and Open Systems Adoption in E-Procurement: A Risk-

Augmented Transaction Cost Perspective”. Journal of Management Information Systems, 21(1), 137-166. 95

Eadie, R., Perera, S., Heaney, G., Carlisle, J. (2007), “Drivers and Barriers to Public Sector E-Procurement

within Northen Ireland‟s Construction Industry”, Journal of Information Technology in Construction,

pp.103-120, ISSN 1874-4753



33

Eadie, R. et al., (2012)96

carried out study with focus group, consisting of 5 domain

consultants, delineated the varied aspects and levels of experience of construction

procurement, namely: e-auctions, web-based materials procurement e-tendering, compact

disc write once, the contractor‟s perspective and electronic document production. This

group created a comprehensive list of construction-based E-Procurement drivers and

barriers. A detailed form for a web-based survey was created from the findings of this

focus cluster to establish the important rankings of those drivers and barriers. A telephone

survey was conducted to all Surveyors at the United Kingdom, listed on the Royal Institute

of Chartered Surveyors (RICS) web site to identify the usage of E-Procurement by

surveyors. This was followed by a web-based survey of the known organisations on E-

Procurement for construction-based activities. This study denotes the findings of the driver

and barrier verification study and also the driver and barrier importance ranking survey.

Further analysis can link the drivers and barriers to E-Procurement to the 5 maturity levels

in Paulk‟s maturity model through statistical analysis.

2.10.1 Key Business Value Findings

Attaran, M., (2001)97

listed the benefits of E-Procurements below in three main categories:

Strategic : This includes organizational changes and market benefits

High level of leverage opportunities: This involves improved business dealings

with suppliers and discover new suppliers and,

Operational benefits: This involves more economical procurement.

Aberdeen Group Inc, (2001)98

conducted the study of those enterprises that have

implemented best practices in the use of E-Procurement to control costs, rationalize

procedure, and improve openness across the extended supply chain. In 2001, Aberdeen

gathered the information and examined the E-Procurement implementation from more than

50 companies. The study categorised the implementation into: indirect E-Procurement,

direct E-Procurement and E-sourcing. The researcher has blindly evaluated the e-

96

Robert Eadie, Srinath Perera, George Heaney, (2010), “Identification of E-Procurement Drivers and

Barriers for UK Construction Organisations and Ranking of these from the Perspective of Quantity

Surveyors”, www.itcon.org - Journal of Information Technology in Construction - ISSN 1874-4753. ITcon

Vol. 15, pg. 23-43 last retrieved from http://www.itcon.org/paper/2010/2 dated 16.07.2015 97

Attaran, M. (2001), „The coming age of E-Procurement”, Industrial Management and Data Systems, Vol.

101, No. 4, pp.177–181. 98



content/img/en2_1.pdf

http://www.itcon.org/paper/2010/2




34

procurement implementations based on the multiple metrics, including usage, spending

volume, process efficiencies, and cost savings. The report included in depth case studies of

eighteen best E-Procurement Implementations. The report helps the Procurement

Managers, Corporate Officers, Business and Information technology mangers to find the

best practices for choosing, installing and Managing E-Procurement.

Thai, K.V., (2001)99

found that the implementation of E-Procurement initiatives should be

seen as an associate effort to enhance the procurement goals, which involves quality,

timeliness, cost, minimizing the risk in the areas like financial and technical risks,

maximising competition, and maintaining integrity.

Aberdeen Group Inc., (2005)100

carried out a research to discover the key tactics and

strategy for successful implementation of E-Procurement. E-Procurement implementations

from 25 Companies were strongly examined by researchers. The study also found that the

effective implementation of E-Procurement provides benefits like Reduction in

Transaction costs, Enhance procedure efficiency, Elimination of Maverick buying,

Increase Contract Compliance, Reduction in Cycle time, Reduction in the Inventory costs

etc. Use of an E-Procurement system has freed supply management and other personnel to

focus on creating value for the enterprise. Aberdeen Group Inc., (2007)101

is the fifth in a

series of Aberdeen benchmark studies, which have been conducted since 1998, focusing on

e -procurement performance and examining the goals, hurdles, strategies and results of 622

enterprises. This report also identifies the practices employed by Best- in - Class

enterprises to maximize spending under control and optimize the value of their E-

Procurement initiative. Use of E-Procurement resulted in improved enterprise. Based on

the research, Aberdeen recommends various strategies for improved results: Leverage

supplier networks and catalogue hubs, Enable electronic purchase order, Expand the E-

Procurement footprint to integrate with contract compliance, invoice reconciliation, and

payment solutions, Conduct periodically analysis, embrace on demand solutions that

integrate with ERP and Add processes, people, and technology to manage complex items

or service.

99

Thai, K. V. (2001), “Public procurement re-examined”. Journal of Public Procurement, 1(1), pp. 9– 50. 100

Aberdeen Group, Inc. (2005), “Best Practices in E-Procurement (Reducing Costs and Increasing Value

through Online Buying)”, Massachusetts, last retrieved dated 05.06.2013from http://www.cosmo-

one.gr/educommerce/wp-content/img/en2_1.pdf 101

Aberdeen Group Inc. (2007), “E-Procurement: Trials and Triumphs”, last retrieved dated 05.06.2013 from

http://www.enporion.com/media/whitepapers/eprocurement_trials_and_triumphs.pdf



http://www.enporion.com/media/whitepapers/eprocurement_trials_and_triumphs.pdf


35

According to Pearcy, D.H. & Giunipero, L.C., (2008)102

, several companies adopt E-

Procurement to attain the projected edges of lower value and increased potency, the use of

electronic procurement will bring positive outcomes for patrons and suppliers.

Haffar, N. & Wassim, M.103

concluded that Procurement is a collection of processes that

involve many steps and interactions with the other departments of a company and with the

suppliers. Because purchasing costs typically run to 50% of operational costs, the

procurement process provides many opportunities for cost savings that can make a great

difference to a company's bottom line. The rule of thumb is that a 5% savings in

purchasing costs can increase profit by 50%, and would equally increase revenue by 50%,

or a reduction in overhead costs of about 20%.

(Source: Haffar, N. & Wassim, M., “E-Procurement Technology”, Dubai Municipality, price water house

coopers)

FIGURE 2.1: Savings Due to E-Procurement Implementation

102

D. H. Pearcy, and L. C. Giunipero, (2008), “Using E-Procurement applications to achieve integration:

what role does firm size play”, Supply Chain Management: An International Journal, vol. 13(1), pp.26-34. 103

Haffar, N. and Wassim, M., “E-Procurement Technology”, Dubai Municipality, price water house

coopers last retrieved dated 21.02.2014 from

https://www.dm.gov.ae/wps/wcm/connect/.../E_procurement.ppt?


36

2.11 Challenges and Risks (Barriers) to Implementation of E-

Procurement

In a research by Davila, A. et al., (2003)104

four risks associated with adopting E-

Procurement technologies were identified.

Internal business risks: Businesses have to be careful while integrating E-

Procurement technologies with other business applications such as accounting,

human resources, accounts payable and cash management.

External business risk: E-Procurement solutions also need to be able to cooperate

with suppliers of IT-infrastructure.

Technology risks: Many companies are unsure about which E-Procurement

solution best suits the specific needs of their company.

E-Procurement process risks: This risk relates to the security and control of the E-

Procurement process itself.

Darlington, R., (2006) 105 found that the major risks factors relating to electronic

transactions on the internet include hacking, viruses, pirating, illegal trading, fraud, money

laundry, defamatory libel, among several others. All of these have very destructive impacts

on trust and transparency in the process of tendering.

A study by Angeles, R. & Nath, R., (2007)106

was conducted to seek to pursue the

understanding of current business-to-business E-Procurement practices by describing the

success factors and challenges to its implementation in the corporate setting. In this

research, data was collected from 185 organizations which are the members of the Institute

for Supply Management and the Council of Logistics Management through questionnaire

survey. Questionnaire is divided in two stages, the first stage captured E-Procurement

success factors and the other stage gathered data to determine the challenges to successful

E-Procurement implementation. Factor analysis was used to analyze data from valid

responses. The researchers have identified three important challenges to E-Procurement

implementation and these are: (1) Lack of system integration and standardization issues (2)

104

Davila, A., Gupta, M. & Palmer, R. (2003), “Moving procurement systems to the Internet: adoption and

use of E-Procurement technology”, European Management Journal, Vol. 21, No. 1, pp.11-23 105

Darlington R. (2006), “Crime on the net”. Retrieved on 22.03.2013 from

http://www.rogerdarlington.me.uk/crimeonthenet.html#What%20Are%20The%20Categories 106

Angeles, R. & Nath, R. (2007), “Business-to-business E-Procurement: success factors and challenges to

implementation”, Supply Chain Management : An International Journal, Emerald Group Publishing Limited,

ISSN 1359-8546, Volume 12 Number 2, 104-115.

http://www.rogerdarlington.me.uk/crimeonthenet.html#What%20Are%20The%20Categories


37

Immaturity of providers of E-Procurement services and the lack of supplier preparation,

and the resistance of solutions end users. (3) It is very difficult to change purchasing

related behaviour among the company‟s employees.

United Nations Procurement practitioner’s Handbook (2012)107

included characteristics

of risk level, spending categories and possible strategies also. The risks mentioned in this

handbook are:

Routine Purchase (Low risk and Low Spend)

Leverage (Low Risk and High Spend)

Bottleneck (High Risk and Low Spend)

Strategic (High Risk and High Spend)

Procurement falling into the leverage, and

Bottleneck and strategic categories would be considered as “significant purchases”.

2.11.1 Challenges of E-Procurement Implementation in the Government Sector

Aman, A. & Kasimin, H., (2011)108

had carried the study to understand the challenges of

E-Procurement implementation in the Government Sector in Malaysia. Study found that

the challenges in e- procurement implementation were not only related to Software

integration, Data Management and roll out strategy, these challenges also include legal and

administration procedures, Information Technology (IT) infrastructure, Outsourcing

Contract and IT skills, etc.

Barahona, J.C., (2012)109

surveyed and found that E-Procurement brings a set of recent

rules and dynamics that make ways of doing business with the government in a different

fashion, with a new set of participants, new incentives and a radically different value

structure; conditions that have the potential to produce a competitive marketplace of

transparency, efficiency and access. The researcher shows that literature has failed to

recognize the innovation in E-Procurement. The findings of this study contribute to

detailed understanding of the factors that promote the successful implementation of E-

107

UN Procurement practitioner‟s Handbook (2006), “Interagency Procurement Working Group (IAPWG)”

last retrieved dated 29.07.2013 from https://www.ungm.org/Areas/Public/pph/channels/PPH.pdf 108

Aman, A. & Kasimin, H. (2011),"E-Procurement implementation: a case of Malaysia government",

Transforming Government: People, Process and Policy, Vol. 5 Iss 4 pp. 330 – 344 last retrieved dated

08.07.2015 from Emerald Insight. 109

Juan Carlos Barahona, (2012), “The Disruptive Innovation Theory Applied to National Implementations

of E-Procurement”, ISSN 1479-439X 107, Electronic Journal of e-Government Volume 10 Issue 2 2012,

pp107 – 119.



38

Procurement systems with the operational model and technology which is required by

several governments.

According to Panda, P. & Sahu, G.P., (2012)110

, the 21century has seen migration of

several governance functions and services to web. The adoption of E-Procurement by

government entities to economise and optimise the public procurements has been the

catchphrase of clear governance. In fact, E-Procurement has been touted as cure-all for

corruption. Literature is replete with studies which underline varied edges of migration of

procurement functions to web. However, e-Government procurement has not taken off in

India through its associate Integrated Mission Mode Project as a section of National e-

Governance Project (NeGP) launched by Govt of India in 2006. A current review of the E-

Procurement implementation by Ministry of Communication and IT convey the progress of

E-Procurement project implementation. The research methodology followed a detailed

study of E-Procurement literature, government orders and multinational and international

agreements to identify Critical Success Factors. The study concludes that existing literature

indicates flat nature of Critical Success Factors i.e. there is no relation with the stage of e-

Governance Project implementation verses significance of a Critical Success Factors.

Therefore, existing Critical Success Factors and their study models do not aid managerial

higher cognitive process by project managers. Finally, the study brings out analysis gaps

and suggests direction for future research for achieving success in e-Governance Project in

India.

2.12 Critical Success Factors (CSFs) of Adoption of E-Procurement

Many studies have been conducted on critical success factors and Challenges of E-

Procurement. According to Rezgui, Y. et al., (2004)111

, organizational and human issues

have also been highlighted as key factors affecting the use of technologies in the

construction sector. Sigala, M., (2005)112

conducted a study with the objective to identify

the E-Procurement adoption factors through literature and to find their impact by gathering

110

Prabir Panda and GP Sahu (2012), “E-Procurement Implementation: Critical Analysis of Success Factors‟

Impact on Project Outcome”, SSRN 2019575, Elsevier, from

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2019575 111

Rezgui, Y., Wilson, I.E., Damodaran, L., Olphert, W., & Shilboum, M. (2004), “ICT adoption in the

construction sector: Education and training issues”. ICCCBE-X: the Xth International Conference on

Computing in Civil and Building Engineering, Bauhaus-University, Weimer, Germany. Last retrieved dated

22.03.2013 from file:///D:/Downloads/icccbe-x_258.pdf 112

Sigala, M. (2005), “E-Procurement Use and Adoption Barriers: Evidence from the Greek Foodservice

Sector.” Springer, pp. 393-404.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2019575


39

the data from Greek foodservice operators. Research provided the initial evidence of the E-

Procurement adoption in Greek Food service operation. Organizations were found in their

beginning phase of E-Procurement use. In adoption of E-Procurement, the Organizational,

Technological and Environmental factor play a crucial role. Study found that the firms

which perceived E-Procurement as advantageous, non-complex, friendly and risk free were

more likely to adopt E-Procurement. Findings also revealed that organizations with

knowledge and skills on E-Procurement are more likely to adopt it.

Kishor, V. et al., (2006)113

, identified related variables for each Critical Success Factors

(CSFs) and presented a model of the Critical Success Factors (CSFs), which are expected

to impact the achievement of E-Procurement initiatives in the public sector. This paper

identifies eleven aspects during the survey of E-Procurement Literature and these aspects

are end-user training, supplier adoption, compliance with best practices for business

case/project management, systems integration, security and authentication, re-engineering

the process, top management support, performance measurement, change management, E-

Procurement implementation strategy, and technological standards. Study found that E-

Procurement has a better reach and scope than traditional Procurement. Key differences in

the approach to the development of e- Procurement projects were also noted during the

study. Interestingly, the legal and legislative issues did not emerge as CSFs, although

aspects such as top management support and performance measurement were found to be

critical projects.

Williams, S.P. & Hardy, C.A. (2007)114

presented the findings from a survey of E-

Procurement in Australia. The survey was designed around the OECD model of e-business

adoption and provided a picture of the readiness, intensity and impact of E-Procurement in

Australian organisations.

In a study conducted by Vanjoki, V., (2012)115

, reasons were identified as to why more

companies have not adopted E-Procurement for indirect purchases; and how can E-

Procurement vendors make E-Procurement more attractive for companies.

113

Kishor, V, Sajeev , A. S. M. and Guy, C. (2006), “Critical factors that influence E-Procurement

implementation success in the public sector”, Journal of Public Procurement, Volume 6, Issues 1 & 3, pp.70

– 99. 114

Williams, S. P. & Hardy, C. A. (2007), “E-Procurement: Current Issues & Future Challenges”, „ECIS‟,

University of St. Gallen, pp. 131-142. 115

Viljami Vanjoki (2012), “Problems related to the adoption of E-Procurement for indirect purchases”,

School of Business, Lappeenranta University of technology from

http://www.doria.fi/bitstream/handle/10024/76986/Problems%20related%20to%20the%20adoption%20of%2

0e-

http://www.doria.fi/bitstream/handle/10024/76986/Problems%20related%20to%20the%20adoption%20of%20e-procurement%20for%20indirect%20purchases.pdf;jsessionid=09A38B426B42645DF75B57E9140FC9A0?sequence=1

http://www.doria.fi/bitstream/handle/10024/76986/Problems%20related%20to%20the%20adoption%20of%20e-procurement%20for%20indirect%20purchases.pdf;jsessionid=09A38B426B42645DF75B57E9140FC9A0?sequence=1


40

Robert, M.A & John, O.A. (2012)116

examined the factors that affect implementation of E-

Procurement within the textile and apparel firms in Kenya. Specifically it sought to

investigate the effect of organizational issues, environmental factors and technological

factors on the implementation of E-Procurement.

2.13 Factors that Affect E-Procurement Adoption

Sharon, P. & Dooley, K., (2005)117

considered various factors affecting the adoption of E-

Procurement systems in Australian firms. A model of buyer perceptions on the factors that

affect E-Procurement adoption was analysed. The study reveals that supplier relationships

and buyer perceptions have a direct influence on E-Procurement adoption whereas other

factors have an indirect influence.

Kishor, V., (2005)118

found that E-Procurement has a technological viewpoint. However,

factors related to other perspectives such as transactional, organizational and

environmental have not been sufficiently investigated in previous studies. In order to fill

this gap, this study investigated the intensity of E-Procurement assimilation from the four

perspectives: Transactional Perspective, Environmental Perspective, Technological

Perspective and Organizational Perspective. The Study explained the determinants of E-

Procurement assimilation and antecedent conditions of E-Procurement assimilation.

Sigala, M., (2005)119

conducted a study with the objective to identify the E-Procurement

adoption factors through literature and to find their impact by gathering the data from

Greek foodservice operators. Research provides the initial evidence of the E-Procurement

adoption in Greek Food service operation. Organizations were found in their beginning

phase of E-Procurement use. In adoption of E-Procurement, the Organizational,

Technological and Environmental factor play a crucial role. Study found that the firms

which perceived E-Procurement as advantageous, non-complex, friendly and risk free were

procurement%20for%20indirect%20purchases.pdf;jsessionid=09A38B426B42645DF75B57E9140FC9A0?se

quence=1 116

Robert, M.A & John, O.A. (2012), “ Antecedents to Successful Adoption of E-Procurement in Textile and

Apparel Firms in Kenya” International Journal of Scientific & Engineering Research, ISSN 2229-5518,

Volume 3, Issue 10. 117

Sharon, P. & Dooley, K.,, (2005), “Model Of E-Procurement Adoption”, ANZMAC Conference:

Retailing, Distribution Channels and Supply Chain Management 118

Kishor,V. (2005), “Antecedent Conditions Influencing E-Procurement Assimilation” Proceedings of the

Fifth International Conference on Electronic Business, Hong Kong, December 5-9, 2005, pp. 372 - 377. 119

Sigala, M. (2005), “E-Procurement Use and Adoption Barriers: Evidence from the Greek Foodservice

Sector”, Springer, pp. 393-404.


41

more likely to adopt E-Procurement. Findings also revealed that organizations with

knowledge and skills on E-Procurement are more likely to adopt it.

Croom, S., R. & Brandon-Jones, A., (2005)120

in their study explored five major themes

which were derived from available literature:

Impact on cost efficiency

The impact on the form and nature of supplier transaction

E-Procurement system implementation

Broader Information Technology issues; and

The behavioural and relational impact of E-Procurement.

The research study was intended to explore the perceptions and reflections of both „early‟

and „late‟ adopters of E-Procurement. Seven key lessons learned from E-Procurement

implementation across a range of UK public sector organisations are:

Lesson 1 and 2, significant motivation for e- procurement adoption was considered

to be the economic benefits.

Lesson 3 and 4, detailed the rollout experiences.

Lesson 5 and 6 were concerning system selection and integration. and,

Lessons 7 examined organisational commitment and support required for E-

Procurement.

Angeles, R. & Nath, R. (2007)121

conducted the study to understand the E-Procurement

practices, which mainly focus on the success and challenges in implementing an E-

Procurement. Researchers have used factor analysis and identified three success factors of

E-Procurement implementation

Supplier and Contract Management

End user behaviour and

E-Procurement business process.

Researchers have also identified the following three factors on challenges in E-

Procurement implementation

Lack of System Integration and Standardisation Issues

Immaturity of e- procurement base market services and end-user resistance and

120




Angeles, R. & Nath, R., (2007), “Business-to-business E-Procurement: success factors and challenges to

implementation”, Supply Chain Management : An International Journal, Emerald Group Publishing Limited,

ISSN 1359-8546, Volume 12 Number 2, 104-115.



42

Maverick buying and difficulty in integrating e-commerce with other systems.

Using factor analysis, this study has reduced a total of 12 variables into three success

factors and thirteen variables into three challenges to implementation factors for E-

Procurement from the buyer firms‟ perspective.

Fredrick, O. et al., (2013)122

determined the factors influencing the use of e- procurement

system in firms in Kisi city. The study adopted a descriptive survey method. The study

considered a population of 105 firms in Kisi city. The details of sample were collected

from Kisi County Offices as on 31st Jan‟ 2013. The researcher employed purposive

sampling to choose thirty two companies, translating into 32 procurement officers. Data

was gathered through questionnaires. Descriptive statistical techniques were used and

findings bestowed in kind of tables, charts and graphs. The research findings discovered

that all the variables were statistically significant: E-Procurement capability, price of E-

Procurement and E-Procurement models affect the use of E-Procurement. The researcher

came up with the recommendations: individual companies ought to increase the proportion

of expenditure on E-Procurement; widening the scope of provider sourcing thereby

justifying use of E-Procurement, companies want to increase the e procurement capability

in terms of IT experience and IT infrastructure injecting regular upgrading of IT system

and management of company to expand the use of E-Procurement by incorporating E-

Procurement processes in addition to all E-Procurement models.

Norfashiha, H. et al., (2013)123

observed that E-Procurement is gaining popularity in

business and a number of advantages have inspired its adoption, such as increasing

competitiveness and reducing prices. Previous research claimed that E-Procurement might

bring vital price to companies, but we tend to understand very little or nothing by trial and

error concerning the particular outcomes of its implementation within the industry. This

study addresses this gap in knowledge through a survey of one hundred twenty

construction companies in Malaysia. The findings indicate that the price of E-

Procurement‟s value is mostly restricted to enhancements in operational and military

science areas. The improvements in the market access and customer/supplier relationships

are not noticed. These empirical findings provide helpful information for construction

companies that want to embark upon and E-Procurement adoption journey. Furthermore,

122

Omany Fredrick, Otieno Njeri, Nancy Muthoni and Mungai Simon (2013), “Factors Affecting Use of E-

Procurement: A Survey in Selected Firms in Kisii Town”, Kenya, Interdisciplinary Journal of Contemporary

Research in Business, Vol 5, No 4. 123

Norfashiha Hashim, Ilias Said and Nur Hidayah Idris (2013), “Exploring E-Procurement Value for

Construction Companies in Malaysia”, Conference on enterprise Information Systems /International

Conference on Project Management , 836-845


43

the measures produced here could be used as a benchmarking exercise for the companies

who have already adopted E-Procurement practices.

Kumar N.V.K. & Srinivasan B., (2013)124

have conducted a study on Transportation trade

in general and marine transportation industry in particular and found that it is not an

exception in E-Procurement. Partners, customers, collaborators, agents, shippers, port

operators, suppliers and service agencies are concerned with the ship transport trade, and

one of the most important requirements in such a supply chain is the high speed

transferring of information between them. In marine transportation, E-Procurement method

plays an essential role. In this study supported by the literature review, seven most

frequently mentioned factors were found. These performance factors were: visibility of

supply chain, cost, procurement management, cycle time, inventory management and

purchasing errors that were influenced by executing E-Procurement. This analysis tries to

search out the performance result of E-Procurement implementation in ship management

firms.

2.14 E-Procurement Architecture

Cagliano, R. et al., (2003)125

in their research study have studied three important factors

that mostly use web technology and these are: electronic-procurement, electronic-

commerce and electronic- operations. E-commerce refers to sales of goods through

internet. E- Procurement involves the usage of web in procurement activities that includes

procurement of each strategic element. E-operations means the employment of net within

the activities across the corporate chain, like processing of orders, planning the production,

store management and planning the supply chain management.

Maniatopoulos, G. (2004)126

found that public sector procurement methods are extremely

complicated due to the character of the government establishments and are typically bound

by rules of native, regional, national and international public organisations. According to

124

Kumar N.V.K. & Srinivasan B (2013), “Implementation and Performance Effect on Electronic

Procurement and its Ship Management Companies”, I.J. Information Engineering and Electronic Business,

Published Online in MECS(http://www.mecs-press.org/)DOI:10.5815/ijieeb.2013.05.02 or

http://www.mecs-press.org/ijieeb/ijieeb-v5-n5/IJIEEB-V5-N5-2.pdf 125

Cagliano, R., Caniato, F. and Spina, G. (2003), “E-business strategy: How companies are shaping their

supply chain through the internet”, International Journal of Operations & Production Management, Vol. 23,

No. 10, pp.1142–1162. 126

Maniatopoulos, G. (2004), “Enacting E-Procurement technologies within UK local authorities”,

Proceedings of the IADIS International Conference e-Society 2004, IADIS Press, Vol. 2, pp.850–854.

http://www.mecs-press.org/ijieeb/ijieeb-v5-n5/IJIEEB-V5-N5-2.pdf


44

the E-government Strategy Study 2004, of Government of Kenya (GOK) (2004)127

, E-

Procurement was one in every of the medium term objectives which were speculated to be

enforced by Gregorian calendar month 2007, but the implementation method was terribly

slow.

Ho, C. et al., (2008)128

found that Service Oriented Architecture enables protocol-free

distributed computing. This uniqueness make Service Oriented Architecture probably

appropriate for an efficient electronic procurement model for any concern. Service

Oriented Architecture –based approach to E-Procurement creates a consistent model for

technological considerations and it supports transparency in purchase activities. Service

Oriented Architecture helps in sharing the information on purchase that can facilitate

reduction in purchase price, and improve transparency in overall process.

Aderonke A. et al., (2010)129

said that there is a lack of uniformity and transparency in the

procurement process between the subsidiary and parent organization because of the

absence of proper communication. In this study, Service Oriented Architecture framework

for E-Procurement model is proposed for efficient electronic procurement. This framework

addresses the problem of heterogeneousness inter operability and dynamic necessities. The

study suggests that this model is competent for attaining transparency in procurement

management.

2.15 E-Procurement System / E- Procurement Methods

De Boer et al., (2002)130

have found that there are various sorts of E-Procurement systems

like electronic market, electronic Maintenance, Repair and Operations, electronic sourcing,

electronic tendering, electronic ordering and electronic exchange. Huang, X. & Welsh, R.,

(2002)131

found that the rapid development of web technology has made inter-organisation

127

Government of Kenya (GOK), (2004). Strategy Paper for IFMIS, National Government Printer. 128

Ho, C., Tai, Y., Wu, W. and Jou, J. (2008), “Exploring the impacts of web-based E-Procurement on

organizational performance”, Pacific Asia Conference on Information Systems (PACIS) 2008 Proceedings,

Paper 106.Retrieved from http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1194&context=pacis2008. 129

Aderonke A. Adesina, J. Olawande Daramola and Charles K. Ayo (2010), “A SOA-based framework for

E-Procurement in multi-organisations”, Int. J. Electronic Finance, Vol. 4, No. 2. Retrieved from

file:///D:/Downloads/Adesina%20et%20al.pdf 130

De Boer, L, Harink, J & Heijboer, G (2002), “A conceptual model for assessing the impact of electronic

procurement”, European Journal of Purchasing & Supply Management,8(1):25-33. 131

Huang, X. & Welsh, R. (2002), “Strategic Implementation of E-Procurement: A Case Study of an

Australian Firm”, the second international conference on electronic business, Taipei, Taiwan. Last retrieved

dated 02.02.2015 from

http://s3.amazonaws.com/academia.edu.documents/30813480/f139.pdf?AWSAccessKeyId=AKIAIWOWYY

http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1194&context=pacis2008

http://s3.amazonaws.com/academia.edu.documents/30813480/f139.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1494419597&Signature=7SrkW5HaEew6XOZ5wzUSm3FNxWU%3D&response-content-disposition=inline%3B%20filename%3DStrategic_Implementation_of_E-Procuremen.pdf


45

property abundant, easier and cheaper than ever before, thereby providing a chance for

firms, both massive and little, to realise real value of the web. Despite the huge investment

and quality of implementing E-Procurement, there is little inquiry to produce for

developing effective procurement methods and for success of implementing E-

Procurement. This study tries to fill this gap by reporting of Australian case study on the

adoption of E-Procurement. The findings offer elaborate, varied and practical strategic

insights into critical factors, organisational redesign and challenges.

Matechak, J. P., (2002)132

identified three main phases of E-Procurement method that are

budget plan, procurement application, and finalising the contract and performance of

contract. .

Tonkin, C., (2003)133

said that E-Procurement system in any organization involves the use

of electronic ways in each stage of the buying beginning with method for the identification

of necessities to payment. There are three kinds of E-Procurement Systems and these are:

customer E-Procurement Systems, on-line Intermediaries E-Procurement Systems and

Seller E-Procurement Systems.

Cheung et al. (2004)134

executed the Agent-Oriented and Knowledge-Based System for

Strategic E-Procurement. The Agent-Oriented and Knowledge-Based System for Strategic

E-Procurement is based on a component-based design and was designed to capture the

knowledge of an enterprise agent technology. It also used the utilization of case-based

reasoning to get rules for effective procurement strategy. The e-Purchase model of Agent-

Oriented and Knowledge-Based System for Strategic E-Procurement is an initiative of the

Department for administrative and information Services, of South Australia Government –

Department of Communication Information and Humanities, 2004. It is an on-line E-

Procurement system with message routing and automatic progress capability.

Rai et al. (2006)135

in their study have suggested four E-Procurement techniques/

methods. (1) Electronic Reverse Auctions (ERA) for deciding the supplier of the product,

(2) Electronic Catalogue Management (ECM)for placing the orders, (3) Electronic Order

GZ2Y53UL3A&Expires=1494419597&Signature=7SrkW5HaEew6XOZ5wzUSm3FNxWU%3D&response-

content-disposition=inline%3B%20filename%3DStrategic_Implementation_of_E-Procuremen.pdf . 132

Matechak, J.P. (2002), “Fighting Corruption in Public Procurement', Centre for International Private

Enterprise CIPE”, Feature Service Articles. Retrieved February, 1047–55. 133

Tonkin, C. (2003), “E-Procurement in the Public Sector: Story, Myth and Legend”, The Policy Institute,

Trinity College Dublin from https://www.tcd.ie/policy-institute/assets/pdf/PIWP07_Tonkin.pdf 134

Cheung, C.F., Wang, W.M., Victor, L.O. and Lee, W.B. (2004), “An agent-oriented and knowledge-based

system for strategic E-Procurement”, Expert Systems, Vol. 21, No. 1, pp.11–21. 135

Rai, A., Tang, X. Brown, P. and Keil, M. (2006) „Assimilation patterns in the use of electronic

procurement innovations: a cluster analyses, Information & Management, Vol. 43, No. 3, pp.336–349.

https://www.tcd.ie/policy-institute/assets/pdf/PIWP07_Tonkin.pdf


46

Fulfilments (EOF) for executing the orders, electronic payment and settlement

innovations (e- procurement system) for payment and settlement.

Kameshwaran et al. (2007)136

said that Electronic Procurement is a way to acquire goods

and services quickly and is found to be low cost option for a business. E-Procurement

includes various methods and techniques where the main goal is to procure goods in a

smarter way; where in management can concentrate on its revenue generation and

customer service.

Iqbal, M.S. & Seo, J.W (2008)137

found that Government E-Procurement system of

Republic of Korean Peninsula is a web site for all public procurement. This website works

on the technology of Electronic Business Extended Markup Language documentation and

gives Business to Business capability for business. This website is connected to fifty three

external systems via web, for information sharing with various teams.

For information exchange they use Electronic documents and World Wide Web syndicate

suggested Extended Markup Language schema for such exchange of documents.

Lindskog, H. (2008)138

found that many governments have launched or planning to launch

E-Procurement systems collectively as their main electronic governance initiatives. Even

though, there is a progress but, the unification of the system into the government sector

undertakings has been found to be slow. In most of the government sector undertakings, E-

Procurement adoption process is same as adoption of IT system, which includes

organizational problems and external causes like lack of skilled personnel, IT-

infrastructure, standardization and legal problems.

Trkman, P. & McCormack, K., (2010)139

found that in recent years, companies have

invested huge amounts in E-Procurement technology solutions. However, an estimation of

the price of the technology-enabled procurement method is commonly lacking. This study

presents a rigorous methodological approach to analysis of the E-Procurement benefits.

Business process simulations are used to find the advantage of technological and structural

changes associated with E-Procurement. The approach enables estimation of average and

variability of procurement prices and workload, benefits, and lead times. In addition, the

136

Kameshwaran, S., Narahari, Y., Rosa, C.H., Kulkarni, D.M. and Tew, J.D. (2007), “Multi attribute

electronic procurement using goal programming”, European Journal of Operational Research, Vol. 179, No.

2, pp.518–536. 137

Iqbal, M.S. & Seo, J.W. (2008), “E-governance as an anti corruption tool: Korean cases”, Journal of

Korean Regional Information Society, Vol. 11, No. 2, pp.51–78. 138

Lindskog, H. (2008), “E-Procurement of telecom services for the public sector”, International J.

Knowledge Management Studies, Vol. 2, No. 1, pp.17–28. 139

Trkman, P. & McCormack, K., (2010), “Estimating the Benefits and Risks of Implementing E-

Procurement IEEE Transactions On Engineering Management”, Vol. 57, No. 2.


47

approach enables optimisation of a procurement strategy. Finally, an innovative approach

to estimation of price is shown.

Bulut, C. & Yen, B.P.C., (2013)140

provided a summary on the Hong Kong Government‟s

E- Procurement Pilot Project and denotes that Electronic procurement is less utilized in the

government undertakings, where the maximum enforced methods are e-tendering. The

finding reveals the rising trend of adoption of E-Procurement in public sector

undertakings. The case study suggests that the pilot project initiative is triple-crown by

way of political support, system adoption and suppliers. This study brings out the

electronic procurement initiatives in public sector.

2.16 Integrated Procurement Solutions

James et al., (2000)141

said that an ERP system is an integrated data system that manages

all aspects of the enterprise such as planning the production, designing the engineering

system, purchasing, distribution, marketing, accounts management and customer service.

Recent technologies that emerged will develop the ability of enterprise resource planning

in the areas of electronic commerce, electronic procurement, customer management,

logistics etc.

Government of Kenya (GoK), (2001)142

surveyed that in the public sector, many models

have been tried by completely different public entities to implement E-Procurement. These

are merchant Centric, buyer Centric, e-marketplaces or third-party managed models. The

Public Financial Reform Management (PFMR) Strategy Study 2001-2006 suggested

automation in addition to integration of key government functions like the, accounting,

human resources payroll, procurement and budgeting, citing transparency, better money

management and easier reportage as some of the advantages.

Panayiotou et al., (2004)143

found that electronic procurement solutions like preparation of

electronic market place (e-marketplaces) and electronic catalogues (e-catalogue) are used

by private sector and now it is way ahead of public sector. Even though both the sectors

140

Bulut, C & Yen, B.P.C., (2013), “E-Procurement in public sector: a global overview”, Electronic

Government, , Vol. 10 No. 2, pp. 189-210 141

James, D. and Wolf, M.L. (2000), “A second wind for ERP‟, McKinsey Quart”, Spring, No. 2, pp.100–

107. 142

Ogwang, M.& Abok, A., (2013), “Factors affecting effective implementation of E-Procurement in county

governments: a case study of kajiado county, Kenya, International Journal of Business & Law Research,

seahi publications, ISSN: 2360-8986, 1(1):94-109 from http://seahipaj.org/journals-ci/dec-

2013/IJBLR/full/IJBLR-D-7-2013.pdf . 143

Panayiotou, N.A., Gayialis, S.P. and Tatsiopoulos, I.P. (2004), “An E-Procurement system for

governmental purchasing”, International Journal of Production Economics, Vol. 90, No. 1, pp.79–102.

http://seahipaj.org/journals-ci/dec-2013/IJBLR/full/IJBLR-D-7-2013.pdf



48

have common procurement goal of identifying the suppliers for providing quality of goods

and services at the affordable price, e- procurement solutions did not actually satisfy the

need of government sector units.

Thomas, P. & Alt, R., (2005)144

focused on the introduction of E-Procurement system and

its contribution to the management of indirect goods supply chain. This study is divided

into two part qualitative approach. The first part summarizes the results of a benchmarking

study which was conducted on a group of 12 multinational companies. During this period

120 questionnaires were distributed, ten telephonic interview were taken, and five best in

class companies were selected and analysed. In second part, best success factors identified

in benchmarking study and maps them against the best-in-class companies in terms of E-

Procurement practices. The study found that the many companies operate multiple E-

Procurement solutions. Study suggests that, for Integrated Procurement Solutions, it is

essential to have an overall procurement strategy and proper alignment of various E-

Procurement solutions along with the procurement process and integrated system

architectures to be used for E-Procurement. Researcher also suggests that, there is no

standardised E-Procurement solution.

Paul O et al, (2008)145

demonstrated that E-Procurement offers manufacturing

organization with efficient solutions to drive important value into their respective business,

the use of internet technologies to accommodate E-Procurement systems remains in a

formative stage yet. Previous research tends to focus on larger economies, so this paper

provides a new perspective by presenting evidence from the Irish Information and

Communication Technology (ICT) manufacturing industry. Research discussed the

benefits provided by use of E-Procurement in manufacturing firms. It also focused on the

challenges in adoption of E-Procurement. Significant benefits were reported, including

streamlined business processes and reduced business costs. Difficulties associated with

implementation are minimal, and are related to integration issues. Study concluded that

the integration of E-Procurement, organisations should develop a dual focus on technical

and people issues to instil a culture of staff development and continuous improvement.

144

Thomas, P. & Alt, R. (2005), "Successful use of e‐procurement in supply chains", Supply Chain

Management: An International Journal, from emerald Insight, Vol. 10 Iss: 2, pp.122 - 133 145

Paul O et al, (2008), “The development of E-Procurement within the ICT manufacturing Industry in

Ireland”, Management Decision, retrieved from Emerald Insight, Vol.46, Iss. 3, pp. 481 -500.


49

Hsin Hsin Chang & Kit Hong Wong., (2010)146

found that IT has a major role in

accelerating the adoption of e-marketplace and E-Procurement participation in several

industries. The study analysed firm‟s motivations for adopting E-Procurement for their

operations in their marketplace and their performance were measured to assess its

advantage. Trust was considered as a moderating variable for the relationship between E-

Procurement adoption and e-marketplace participation. There are two-stage of analysis

which includes qualitative and quantitative approach. Hypotheses were formulated and a

model was constructed. A research form was developed and distributed followed by

information analysis and testing. The results indicate that firms that adopted E-

Procurement were more likely to gain by using the e-marketplace and that the company‟s

performance was improved after such participation. Trust was projected to have a

moderating effect to adopt E-Procurement.

Brandon-Jones, A. & Carey, S. (2011)147

examined the extent to which user perceived E-

Procurement Quality (EPQ) (Operationalized through the dimensions of professionalism,

processing, training, specification, content, and usability) influences both system and

contract compliance. Strong evidence was found of a positive relationship between user-

perceived EPQ and both system and contract compliance. System compliance was most

strongly influenced by professionalism and content dimensions, whilst contract compliance

was most strongly influenced by processing, specification, and content dimensions.

Ariba

Ariba is the world‟s leading Spend Management organization providing technology and

consulting services to reduce, control and manage enterprise wide spend and improve

profitability. Ariba is a NASDAQ listed, global organization working with more than 500

large corporate and Governments (including more than 50 of the fortune 100

organizations) in 22 countries. Integrated Ariba Spend Management solutions provide

world-class tools and technology for businesses to engage, manage, and leverage

Enterprise Spend Management (ESM) throughout the spend lifecycle.

Ariba Solutions Delivery can give the company a single point of connection to the

expertise required to leverage and extend their ESM successes. Only through Ariba Spend

146

Hsin Hsin Chang & Kit Hong Wong (2010), Adoption of e-procurement and participation of e-market

place on firm performance: Trust as a moderator, Information & Management 47 (2010) 262–270, retrieved

from https://pdfs.semanticscholar.org/2af7/4f1db4653270f15a871c830434b8f632d690.pdf. 147

Brandon-Jones, A & Carey, S. (2011)," The impact of user-perceived E-Procurement quality on system

and contract compliance", International Journal of Operations & Production Management, Vol. 31 Iss 3 pp.

274 – 296. Last retrieved dated 07.07.2015 from Emerald Insight.


50

Management can companies fully integrate their analysis, sourcing, and procurement

processes with any legacy system into a cohesive solution that works backwards and

forwards across the enterprise. Buyers and suppliers are empowered to transact globally in

a participative way that delivers true value.

Purchasing Card

Purchasing cards is the payment vehicle for low value transactions. The main benefit of the

purchasing card are the speed and convenience for the end user, reductions in the cost and

time associated with purchasing related activities, and the ease of use to acquire goods over

the Internet. The purchasing card was developed to streamline the traditional purchase

order and payment process and cut the cost and time of acquiring routine goods and

services. These purchases are typically described as MRO, (maintenance, repairs and

operational expenses).

Busch, J., (2012)148

stated the most common four types of E-Procurement system

integration namely.

The first and most common is integration into core Enterprise Resource Planning

(ERP) / Material Requirement Planning (MRP), which forms the connectivity

between front line buying and procurement activity and Information Technology

(IT) /Finance system. Today many organizations are highly dependent on the ERP

and Business application package which they try to integrate with.

The second is focused on various toolsets of Procurement related integrations

which includes Vendor Management System (VMS), Software Monitoring/

Metering/ Licensing applications, electronic invoicing automation tools, Contract

Management system and Supplier Management Applications.

Third is more generalized business application beyond the procurement which is

similar across the Industry. It includes Customer Relation Management (CRM).

Human Resources Management (HRM), Inventory Management, Warehouse

Management, Assets Management, Claim / Warranty and related toolsets.

The fourth is Industry specific, such as retail, Point of Sale System, Contract

Management etc

148

Busch, J. (2012), “Procurement Systems Integration Within the Enterprise: Exploring Integration in the

Cloud” , last retrieved dated 23.04.2014 from www.spend matters.com or

http://www.coupa.com/images/resources/downloads/spendmatters_integration.pdf


51

2.16.1 Impact of Size of the Firm on the Adoption of E-Procurement Applications

Dawn, H. P. & Giunipero, L. C., (2008)149

empirically investigated the role of firm size in

the adoption of E-Procurement applications that vary with respect to their ability to

facilitate supply chain integration. The research question was: “Is there a significant

relationship between firm size and the type (more or less integrative) of E-Procurement

application adopted?” Study focussed on the impact of firm size on the adoption of E-

Procurement applications that vary in the ability to facilitate supply chain integration. This

study contributed to the understanding of the adoption of a wide range of E-Procurement

applications by examining the role of firm size. This research provides support for studies

that suggest that firm size is related to Information Technology (IT) use. This study

examined actual usage of thirteen different E-Procurement applications across various

industries. Finally, this research focused on the use of E-Procurement in achieving

integration. The outcome of this research suggested that the firms in category II (with

revenues less than $3.5 billion) are not as likely to use integrative E-Procurement

applications as firms in category I (annual revenues exceeding $3.5 billion).

2.17 E-Procurement Tool

E procurement systems consist of a number of different tools. These include automation of

internal ordering processes, online catalogues from approved vendors, and an electronic

Request for Proposal (e-RFP) process that leverages online auctions (e-auctions) to

accumulate bids on providing goods and services for a specific project. The choice of

which document to use: RFI RFP RFQ for which type of sourcing project depends on the

desired outcome, a firm proposal or a detailed price bid that is needed150

.

A Request for Information (RFI) is a method of collating information from

different suppliers prior to formally sourcing products or services. It is normally

used where there are many potential suppliers and not enough information is known

about them. It is a structured process where a long list of potential suppliers can be

reduced to a short list of those organizations that are willing and able to fulfil your

requirements.

149

Dawn, H. P. & Giunipero, L. C. (2008),"Using E-Procurement applications to achieve integration: what

role does firm size play?” Supply Chain Management: An International Journal, Vol. 13 Iss 1 pp. 26 – 34 last

retrieved dated 07.07.2015 from Emerald Insight. 150

E Procurement - Challenges and Opportunities, http://www.purchasing-procurement-center.com/e-

procurement.html


52

A Request for Proposal (RFP) is a formal method of receiving detailed and

comparable proposals from different suppliers for a defined product or service. It is

a comprehensive document that should provide all the required information needed

to make an informed purchasing decision.

A Request for Quotation (RFQ) is a competitive bid document used when inviting

suppliers and subcontractors to submit a bid on projects or products. An RFQ is

suitable for sourcing products that are standardized or produced in repetitive

quantities. A technical specification must be provided as well as commercial

requirements. Sometimes an RFQ can be preceded by an RFP where the shortlisted

suppliers are requested to provide a more detailed price quote. The RFI, the RFP

and the RFQ are all tools that can be used separately or in combination to achieve a

successful sourcing solution.

Knudsen, D., (2003)151 presented a framework for assessing alignment between corporate

strategies, procurement strategies and purchasing E-Procurement tools. This framework

was based on three types of rents: Monopoly rents, Ricaedian rents and entrepreneurial

rents. The framework is then used for assessing the strategic origin of the E-Procurements

such as e-sourcing, e-tendering, e-informing, e-reversed auctions, e-MRO, web based

enterprise resources planning and e-collaboration. The results indicate that the E-

Procurement tools are fully viable for creating monopoly rents, moderately viable for

creating Ricardian rents and only somewhat viable for creating entrepreneurial rents. (The

concept of rent is commonly used in the strategy literature, and the knowledge base

involved in the concept is well established. By using the rent- concept in the field of

procurement, it ought to be possible to explain and show, how procurement can have a

truly strategic importance not only for E-Procurement applications, but also for other

procurement-related issues as well.)

Schoenherr, T. & Tummala, V.M.R., (2007)152

suggested that E-Procurement is a

subsection of electronic commerce, that is interlinked with tools like electronic marketing,

electronic selling, electronic distribution, electronic servicing and enterprise resources

planning (ERP). Due to the new generation mobile devices and the internet, e-commerce

is reborn into m-commerce.

151

Knudsen, D., (2003),"Aligning corporate strategy, procurement strategy and E-Procurement tools",

International Journal of Physical Distribution & Logistics Management, Vol. 33 Iss 8 pp. 720 – 734 last

retrieved dated 08.07.2015 from Emerald Insight. 152

Schoenherr, T. & Tummala, V.M.R., (2007), “Electronic procurement: a structured literature review and

directions for future research”, International Journal Procurement Management, Vol.1, Nos. 1/2, pp.8–37.


53

Sanyal, M.K & Guha, A., (2010)153

found that Electronic procurement has been used as a

means to considerably scale back prices, as it enables volume purchases, allows wider

selection of patrons and suppliers, brings about higher quality, improves delivery,

minimise study work, and lowers administrative prices. Earlier, inter organisational info

systems like Electronic Data Interchange were introduced; electronic markets emerged for

business purchasing. In view of the advancement of data Technology, business

organizations are using the web technology for transferring information between them.

This process ultimately leads to web based, mostly, E-Procurement systems and business

to business electronic markets. The rise within the popularity of web and therefore the fast

unfold of electronic procurement across the planet markets, each and every company is

currently alert to the system. In developed countries, organisations are using this facility

from the beginning. Indian industries as well as Government sectors are attempting to

adopt the new technological wonder. The study discussed about the initiatives of E-

Procurement system in Indian trade. Present case study highlighted the initiatives of the E-

Procurement platform across many government departments and public sector units in

India. The secondary data were utilised for the case studies and solely Indian industries

were studied and analyzed. The general findings indicated a positive attitude among the

industries in adopting the E-Procurement system.

Kakwezi, D & Nyeko, P. K., (2010)154

found that the procurement departments of public

entities in Uganda were two-faced with the downside of not having enough information

regarding the procurement procedure, its inputs, outputs, resource consumption and

outcomes, and it was unable to verify their potency and effectiveness. This result in tangle

required institution of clear procurement tips, procedures and performance standards.

P. Sabari Raghavendran et al., (2012)155

were of the opinion that an E-Procurement

avoids wide use of papers and printing, and that‟s why it was considered as Green

Purchasing. This study attempted to bring out the impact of necessary factors like

perception, size of the company and buying scenario on adopting E-Procurement in Indian

153

Sanyal, M.K & Guha, A., (2010), “E-Procurement Initiative in Indian Industry: A Case Study”, Global

Vistas, Volume-9, pp 1-40. 154

Kakwezi, D. & Nyeko, P. K. (2010), “Procurement Processes and Performance: Efficiency and

Effectiveness of the Procurement Function”, www.researchgate.net or

http://www.ippa.org/IPPC4/Proceedings/14ProcurementProfession/Paper14-2.pdf 155

P. Sabari Raghavendran, M.J Xavier and D Israel (2012), “Green Purchasing Practices: A study of E-

Procurement in B2B Buying in Indian Small and Medium Enterprises”, Journal of Supply Chain and

Operations Management, Volume 10, Number 1.Retrieved from

http://www.procurementobservatoryraj.in/Phase-I/pdf/Green_Purchasing_Practices_A_study_of_e-

procurement.pdf

http://www.researchgate.net/

http://www.ippa.org/IPPC4/Proceedings/14ProcurementProfession/Paper14-2.pdf

http://www.procurementobservatoryraj.in/Phase-I/pdf/Green_Purchasing_Practices_A_study_of_e-procurement.pdf

http://www.procurementobservatoryraj.in/Phase-I/pdf/Green_Purchasing_Practices_A_study_of_e-procurement.pdf


54

producing SMEs. Since E-Procurement use electronic media and also avoids extensive use

of printing, this falls under the scope of inexperienced buying. The outcome showed that

perception, size of the company and buying scenario didn‟t impact the adoption of E-

Procurement among the tiny and medium enterprises in India. Though they used email to

communicate with the suppliers, they preferred older modes of procurement when it comes

to actual procurement. Procurement was characterised by a sturdy personalised relationship

between the client and supplier. Consequently, online procurement had not taken roots

among the smaller companies in the manufacturing sector in India.

2.18 Impact of E-Procurement on Organizational Performance

2.18.1 Impact of E-Procurement on Organizational Performance

Ellram L. M & Pearson, J. N., (1993)156

described the procurement activities conducive to

the total value of possession including: delivery, management, service, communications,

price and quality. They show the Total Cost of Ownership (TCO) approach in procurement

that may give associate improvement in procurement and firm performance. The main

philosophy of TCO was to identify all activities that make companies to incur cost and to

determine those activities which add price. It was some kind of lean producing in the sense

that the ultimate objective was to eliminate waste and focus solely on those activities that

add final price.

The study by Phillips, P & Wojciech, P., (2006) 157

was based on the interdisciplinary

literature review which included strategic alternatives, various profiles and salient factors

of e- Procurement. The purpose of this study was to identify important factors of adoption

of E-Procurement. Further, it is classified as strategic and tactical E-Procurement

perspectives. This study identified the several important factors in adopting strategic E-

Procurement perspectives. The study projected a framework which can be used for

assessing the E-Procurement and also to explain the impact of E-Procurement on

organizational performance. This research also explained that the alignments of Business

Strategy, E-Procurement strategy, E-Procurement tool, Strategic Information Technology

capabilities have positive influence on a company‟s strategic performance.

156

Ellram, L. M & Pearson, J. N. (1993). “The role of purchasing function: Toward team participation.”

International Journal of Purchasing & Materials Management, 3(29), pp. 2– 9. 157

Phillips, P & Wojciech, P., (2006), “E-Procurement: How does it enhance strategic performance?” Kent

Business School, University of Kent, Canterbury, UK last retrieved dated 24.04.2013 from Working Paper

No.113 (https://kar.kent.ac.uk/10316/1/Web_Version.pdf ).

https://kar.kent.ac.uk/10316/1/Web_Version.pdf


55

Lakshmi, P & Visalakshmi, S., (2013)158

found that the utilization of web for business

transactions had advanced considerably. The penetration of the telecommunication

network had been a foremost causative issue. Advances in telecommunications and

computing occurred frequently before and was currently flocked on the web. Electronic

commerce was used by the firm to enter into new markets that can be otherwise excluded,

due to geography, price and other problems. Firm depends on electronic commerce to

extend their merchandise to novel sets of shoppers and novel elements of the world. The

web facilitates an organization to release a brand new product into the market, get

instantaneous client reaction, enhance and impeccable it, without incurring huge capital

investment in the physical distribution infrastructure or getting a shelf housed at

distributor‟s end or to have a distributor. Electronic procurement has been widely accepted

even by governments seeking body potency and value reduction techniques that were

originally intimate within the non-public sector. The purpose of this study was to grasp the

E-Procurement practice and its usage in Government organizations. Three Case studies

from the government organizations from India and U.S.A. were clearly studied and

analyzed. The outcome revealed that value of profit was the main driver for these

organizations to execute E-Procurement.

Oyuke, H.O & Shale, N., (2014)159

: The purpose of this study is to analyse the role of

strategic procurement practices on firm‟s performance by taking the case study of National

Audit office of Kenya. The researcher collected primary and secondary data throughout the

research. Primary data was collected with the help of a form containing the details of

strategic role of procurement in firm‟s performance. Quantitative data was analyzed with

the help of SPSS. Taking the recent and projected expenditures in procurement, the

increasing importance of the procuring function towards the firm‟s profitability, various

procurement practices that contribute to the achievement of goals of the company are

analysed in this study.

158

Lakshmi, P & Visalakshmi, S., (2013), “E-Procurement Praxis in Government Organizations”, ISSN:

1694-2108 | Vol. 2, No. 1. 159

Oyuke,H.O & Shale,N., (2014), “Role of Strategic Procurement Practices on Organizational Performance”;

A Case Study of Kenya National Audit Office European Journal of Business Management, Vol. 2, Issue 1,

2014 http://www.ejobm.org ISSN 2307-6305.


56

Geoffrey Kipngeno Rotich (2015)160

found that in developing countries, public

procurement has remained an interesting topic. Public procurement is characterized with

problem of transparency and irresponsibleness. Electronic procurement is the emerging

trends in procurement. This study examines the impact of electronic procurement and E-

Procurement performance in government organization in republic of Kenya. Information

was collected in Government organizations in Republic of Kenya. A sample of one

hundred twenty workers operating in procurement, accounts and IT departments of

Republic of Kenya was selected. Structured queries were used to collect data. The

outcomes revealed that electronic procurement is absolutely connected with performance

in Government organizations in Republic of Kenya. The study concludes that the

Government should take steps for e- procurement adoption and supply essential resources.

2.18.2 Impact of E-Procurement on Supply Chain Performance

Hsin, H. C. et al., (2013)161

: The study focuses on the relationship between E-Procurement

and supply chain performance. The empirical study indicated that information sharing and

supply chain integration is two important factors. From the study, it has been found that E-

Procurement systems can facilitate the information flow and activity coordination among

supply chain partners. Further, the paper found that partner relationships, information

sharing, and supply chain integration can represent the processes through which E-

Procurement contributes to supply chain performance. Supply chain integration has the

highest standardized total effect on supply chain performance.

Sundarraj, R.P & Kumari, K., (2013)162

found that Electronic Procurement Systems has

been a potential technological system for achieving a responsive supply chain, and thereby,

gaining a competitive benefit in today‟s global marketplace. A range of empirical studies

have targeted on the adoption of E-Procurement system in numerous countries. However,

no research work associated with adoption of E-Procurement system has been carried

in India. The study also discussed the potential benefits of E-Procurement system in

160

Geoffrey Kipngeno Rotich (2015), “Analysis of Use of E-Procurement on Performance of the

Procurement Functions of County Governments in Kenya”, International Journal of Economics, Commerce

and Management, United Kingdom Vol. III, Issue 6, June 2015, http:/ /ijecm.co.uk / , ISSN 2348 0386 161

Hsin, H. C. et al., (2013),"E-Procurement and supply chain performance", Supply Chain Management: An

International Journal, Vol. 18 Iss 1 pp. 34 – 51, last retrieved dated 07.07.2015 from Emerald Insight. 162

Sundarraj, R.P & Kumari, K., (2013), “Electronic Procurement Systems in India: Importance and Impact

on Supply Chain Operations”, Springer Science Business Media New York. Last retrieved from

file:///D:/Downloads/9781441961310-c2.pdf.


57

Indian companies. The study conducted an empirical survey, as well as three case-studies

concerning the importance and effect of E-Procurement system adoption in India.

2.18.3 Impact of E-Procurement on Corruption Practices

Ndou, V., (2004)163

found that E-Procurement completely eliminates human involvement

in bidding, thereby reducing the corruption and improving the effectiveness in public

sector units. Dobson, J. et al., (2005)164

found that the existing procurement models

presented in multi-organization are a mixture of divisions and various

departments, branches at different locations, and presence of subsidiaries, where there was

some degree of independence from the parent organization. Sohail, M & Cavill, S.,

(2008)165

indicated that E-Procurement improves the transparency and integrity in public

service like tendering, sourcing, ordering, and auctioning. E-Procurement has been

accepted as internationally vital instrument for checking the incidence of corruption and

misuse of power. Basheka, B.C and Bisangabasaija, E., (2010)166

found that E-

Procurement was used to counter the incidence of corruption in underdeveloped countries

where the corruption rate is high.

E. Osei-Tutu E. Badu D. Owusu-Manu, (2010)167

: The main objective of this research

was to explore the corrupt practices in public procurement of Infrastructural Projects in

Ghana. The paper also aimed to identify the corruption related challenges. Researcher have

observed corrupt practices such as bribe, kickbacks, Conflict of interest, embezzlement,

manipulation of tender, fraud etc, in delivery system of Infrastructural Project. Sound

procurement systems required controlling corruption practices, which have benefits such as

Good Governance, Transparency and Accountability etc. The paper also suggested a few

business approaches to combat corrupt practices in Ghana.

163

Ndou, V (2004), 'E-government for developing countries: opportunities and challenges', The Electronic

Journal of Information Systems in Developing Countries, 18 (1):1-24. 164

Dobson, J., Lock, S. and Martin, D. (2005), “Complexities of multi-organisational error management”,

Proceedings of the 2nd Workshop on Complexity in Design and Engineering, Glasgow, pp.110–119. 165

Sohail, M & Cavill, S (2008), 'Accountability to prevent corruption in construction projects', Journal of

Construction Engineering and Management, 134 (9): 729-38. 166

Basheka, B.C. and Bisangabasaija, E. (2010) „Determinants of unethical public procurement in local

government systems of Uganda: a case study‟, Int. J. Procurement Management, Vol. 3, No. 1, pp.91–104. 167

E. Osei-Tutu E. Badu D. Owusu-Manu, (2010),"Exploring corruption practices in public procurement of

infrastructural projects in Ghana", International Journal of Managing Projects in Business, Vol. 3 Iss 2 pp.

236 – 256 last retrieved dated 08.07.2015 from Emerald Insight.


58

Neupane, A. et al., (2014) 168

identified anti corruption attributes through literature review.

They have developed a theoretical model representing the impact of four latent variables,

namely, Monopoly of power, Information asymmetry, Trust and Transparency, and

Accountability (as dependent variables) on the Intent to adopt E-Procurement (ITA), as

independent variable. The result of the study suggested that intent to adopt E-Procurement

(ITA) has positive and significant relationship with the dependent variables.

Elezi, E & Harizaj, M.,(2012)169

found that E-Procurement enables the execution of the

anti-corruption policies that is why the Albania Government has launched the web based

public E-Procurement system for electronic management of the public procurement

process. With this, the Albania became the first country in the world, which has introduced

the 100 % E-Procurement system for all public sector tenders above 3500 Euro in 2009.

Even though, the Albania faced the corruption problems. The objective of this study was to

critically analyse the efficiency of the Albanian E-Procurement System with reference to

reduction of corruption in the public procurement practices. Based on the research, E-

Procurement system adopted by Albanian Government is a significant accomplishment in

the direction of the fight against corruption. Still, the Government should not consider the

E-Procurement as a finished project. The needs evidenced and the feedback from the data

research provided supportive insights for the essential improvements. The efficiency focus

of the procurement process and the technical and organisational needs evidenced in the

proceeding can be mapped through the Value Chain Model. The adoption of value chain

model in the case of the Albanian public E-Procurement case matched the needs with the

goals.

2.18.4 Impact of Electronic Procurement Technologies on Procurement Practices and

Procurement Performance.

Quesada, G. al., (2010) 170

investigated the impact of Electronic Procurement

Technologies on Procurement Practices and Procurement performance. This paper

168

Neupane, A., Soar, J., Vaidya, K. & Yong, J., (2014),"Willingness to adopt E-Procurement to reduce

corruption", Transforming Government: People, Process and Policy, Vol. 8 Iss 4 pp. 500 – 520 last retrieved

dated 08.07.2015 from Emerald Insight. 169

Elezi, E & Harizaj, M. (2012), “Efficiency evaluation of the public E-Procurement System in the

reduction of corruption: the Albanian Case” last retrieved dated 06.06.2013 from

https://www.scribd.com/document/152248751/Elezi-Harizaj 170

Quesada, G., González, M.E., Mueller, J. & Mueller, R. (2010),"Impact of E-Procurement on procurement

practices and performance", Benchmarking: An International Journal, Vol. 17, Iss. 4, pp. 516 – 538 last

retrieved dated 08.07.2015 from Emerald Insight.

https://www.scribd.com/document/152248751/Elezi-Harizaj


59

presented a model of the relationship between E-Procurement technology usage,

procurement practices and procurement performance. The model is tested and validated

using a sample of 368 Procurement Specialists in the USA. The outcomes of this research

propose that E-Procurement technologies usage positively affects managers‟ perceptions of

both procurement practices and procurement performance.

Gupta, M & Narain, R., (2012)171

conducted study in 36 organizations in India

to measure the electronic procurement impact and practices in these organizations. The

study discovered that the deployment of IT will be useful in improving the internal process

like higher internal control, cost reduction and enhanced client service. The study also

indicated the areas to be studied and their incompatibility and security issues. Three

important factors need to be concentrated for trust building on E-Procurement practices

and they are: Internet security issues, Information sharing issues, and Legal issues.

Minkyun, K et al., (2015)172

investigated the significance of difference among the strategic

sourcing, E-Procurement and performance of the firm. The study found a positive impact

of strategic sourcing and E-Procurement on firm performance.

2.19 Development of Research Model or Conceptual Model

2.19.1 Integrated Research Model to Predict and Understand an Intention to Use E-

Procurement Technology

Mohamed, G. A. (2010)173

carried out a research with the goal to establish an integrated

research model to predict and understand intention to use E-Procurement technology. The

model used in this research was Technology Acceptance Model (TAM) and Theory of

Planned Behaviour (TPB) to investigate both technical and social aspect of E-Procurement

technology. The result of the research shown that, the behavioural intention toward E-

Procurement technology was determined by user‟s attitude; perceived usefulness and

subjective norm (SN). Overall, the results showed that the proposed model has good

171

Gupta M and Narain R (2012), “A study on usage of IT and its implications on E-Procurement in Indian

organization”, International Journal of Business Information Systems, Vol. 10, No. 2, , pg 222 – 244. 172

Minkyun K, Nallan C. S., Canan Kocabasoglu-Hillmer, (2015),"A contextual analysis of the impact of

strategic sourcing and E-Procurement on performance", Journal of Business & Industrial Marketing, Vol. 30

Iss 1 pp. 1 – 16 last retrieved dated 08.07.2015 from Emerald Insight. 173

Mohamed, G. A., (2010),"Predicting E-Procurement adoption in a developing country", Industrial

Management & Data Systems, Vol. 110 Iss 3 pp. 392 – 414 last retrieved dated 08.07.2015 from Emerald

Insight.


60

explanatory power and confirms its robustness, with a reasonably strong empirical support,

in predicting users‟ intentions to use E-Procurement technology.

2.19.2 Conceptual Framework - When and How Benchmarking Applies To

Technology Adoption

Cammish, R & Keough, M., (1991)174

explained a development model for procurement in

four stages: Lowest unit cost, Procurement mandatory support, Coordinated procurement

effort and Strategic procurement. They suggested that shift from operating procurement to

strategic procurement should be done with the help of electronic procurement.

Azadegan, A & Teich, J., (2010)175

explained when and how benchmarking applies to

technology adoption by a new conceptual framework. The study suggested three main

adoptions theories that explain Innovation adoption. Researcher have categorised factors

into four groups which helped to find when and how benchmarking applies to technology

adoption by noted three theories. These factors are: (1) Technology Factor: The nature,

purpose, scope, and benefits of each technology can make it suitable for different

applications (2) Organizational factor: the Adopting firm (3) Trading Partner Factor and

(4) Network Factor: The firm within which it operates.

2.19.3 Model of Electronic Procurement Adoption Behaviour by Small- To Medium-

Sized Enterprises

Joyce, K. et al., (2003)176

: The target of this research was to check a model of electronic

procurement adoption behaviour by Small- to Medium-sized Enterprises. The study

examined the development perspective of buyer-seller relationship and argue that, trust on

supplier, cost of E-Procurement adoption, trust on IT, and power of suppliers are factors

leading to SME‟s adoption behaviour. Research analysis from the four case studies gives

proof that the former four factors have vital impact on SME‟s E-Procurement adoption

174

Cammish, R., & Keough, M. (1991). “A strategic role for purchasing”, The McKinsey Quarterly, (3), pp.

22-40. 175

Azadegan, A & Teich, J., (2010),"Effective benchmarking of innovation adoptions”, Benchmarking: An

International Journal, Vol. 17 Iss 4 pp. 472 – 490 last retrieved dated 08.07.2015 from Emerald Insight. 176

Joyce K. Chan, Y., Mattew K., Lee, O (2003), “SME E-Procurement Adoption in Hong Kong - The Roles

of Power, Trust and Value”, Proceedings of the 36th Hawaii International Conference on System Sciences.

Retrieved from https://www.researchgate.net/publication/261239497_SME_E-

Procurement_Adoption_in_Hong_Kong_-_The_Roles_of_Power_Trust_and_Value

https://www.researchgate.net/publication/261239497_SME_E-Procurement_Adoption_in_Hong_Kong_-_The_Roles_of_Power_Trust_and_Value

https://www.researchgate.net/publication/261239497_SME_E-Procurement_Adoption_in_Hong_Kong_-_The_Roles_of_Power_Trust_and_Value


61

behaviour. This study provides a better understanding of how and why SME in Hong

Kong use E-Procurement. Practical and theoretical implications are conjointly provided.

Table 2.1 shown Comparative study of major articles/ research papers/ thesis/ books

included in the chapter.

TABLE 2.1: Comparative study of major articles/ research papers/ thesis/ books

included in the chapter

Sr

No

Au

tho

r

Yea

r Research gap / Research

Purpose Research Methodology Key Findings

1

Kis

ho

r V

aid

ya

20

05

The previous studies have

not sufficiently

investigated the others

perspectives of E-

Procurement such as

transactional,

organizational, and

environmental. Hence, the

purpose of this study is to

examine the intensity of E-

Procurement adaptation

from the Transactional,

Environmental,

Technology and

Organizational point of

view.

The data was collected

through questionnaire

from 40 professional

from the six states of

Australia. Since the time

of research was early

stages of E-Procurement,

only Public Sector

agency which have

implemented or begin to

implement E-

Procurement were

chosen for the study.

Stated that E-Procurement is the

recent reform that is adopted by the

Government of Kenya to boost

public procurement. Adoption of

electronic procurement may bring

sanity within the procurement

policies, reduce prices and improve

potency. The target of E-

Procurement adoption include:

improved accountability, improve

effectiveness and transparency.

2

EL

EZ

I E

rmal

an

d

HA

RIZ

AJ

Mir

and

a P

hD

Stu

den

t

20

12

E-Procurement enables the

execution of the anti-

corruption policies that is

why the Albania

Government has launched

the web based public E-

Procurement system for

electronic management of

the public procurement

process. Even though, the

Albania faced the

corruption problems. The

objective of this study is to

critically analyse the

efficiency of the Albanian

E-Procurement System

with reference to reduction

of corruption in the public

procurement practices.

The questionnaire of the

survey was built upon

the key transparency

factors such as sector of

activity, company size,

capacity, training,

information quality,

traceability, efficiency,

security, data protection,

collaboration

and communication were

transformed in questions

as a method of scrutiny.

On the other side the

Qualitative research have

been used to measure

organizational behaviour.

E-Procurement system adopted by

Albanian Government is a significant

accomplishment in the direction of

the fight against corruption. Still, the

Government should not consider the

E-Procurement as a finished project.

The needs evidenced and the

feedback from the data research

provides supportive insights for the

essential improvements. The

efficiency focus of the procurement

process and the technical and

organisational needs evidenced in the

proceeding can be mapped through

the Value Chain Model. The

adoption of value chain model in the

case of the Albanian public E-

Procurement case matches the needs

with the goals.


62

3

Kis

ho

r V

aid

ya,

A.

S.

M.

Saj

eev

an

d G

uy

Cal

len

der

20

06

The study has more of a

Conceptual approach to

adoption of an Innovation,

hence does not throw any

light on the specific

technical description of

these e- Procurement tools.

The essential problem

motivating this study is to

understand the Critical

Success Factors (CSFs)

underlying the

implementation of E-

Procurement initiatives in

the public sector.

The researchers have

examined the various

literature related to e-

Procurement initiative in

order to investigate the

Critical Success Factors

for e- Procurement.

This study have identified related

variables for each Critical Success

Factors (CSFs) and presented a

model of the Critical Success Factors

(CSFs), which were expected to

impact the achievement of E-

Procurement initiatives in the public

sector. This paper identifies eleven

aspects during the survey of E-

Procurement Literature. Study found

that e -Procurement has a better

reach and scope than traditional

Procurement. Key differences in the

approach to the development of e-

Procurement projects were also

noted during the study. Interestingly,

the legal and legislative issues did

not emerge as CSFs.

4

Sim

on

R.

Cro

om

and

Ali

stai

r B

ran

do

n-

Jon

es

20

05

The aim of this research

is to contribute to the

existing literature by

exploring the perceptions

and reflections of both

„early‟ and „late‟ adopters

of E-Procurement.

The exploratory research

used for some inductive

analysis has been used

for this research. Data

were collected through

Semi Structured and

Open ended questions.

The participants

consisted of adopters of

E-Procurement which

include seven central

government departments,

six local authorities and

two agencies.

The study explored five major

themes which were derived from

available literature. Seven key

lessons learned from E-Procurement

implementation across a range of UK

public sector organisations. This

study also stated the procurement

steps.

5

R.P

Sab

ari,

M.J

Xav

ier

and

D. Is

rael

20

12-

13

The aim of the paper is to

find the impact of

significant factors such as

perception, size of the

company and buying

situation on adopting E-

Procurement in SMEs in

India. The paper focus on

Green purchasing with

specific reference to

Purchasing methods

essentially to eliminate

paper usage, time delay

with other advantages like

global connect with

suppliers, and seamless

flow of information.

Data were collected

through structured

questionnaire from

Managers in Operations /

Supply chain

Management function of

Small and Medium scale

companies from 112

Manufacturing industry

of Chennai in south

India. A convenient

sampling was used.

Study used response

from single respondent

from each organization.

The outcome found that perception,

size of the company and buying

scenario doesn‟t impact the adoption

of E-Procurement among the tiny

and medium enterprises in India.

Though they tend to use email to

communicate with the suppliers, they

prefer older modes of procurement

when it comes to actual procurement.

Procurement is characterised by a

sturdy personalised relationship

between the client and supplier.

Consequently, online procurement

has not taken roots among the

smaller companies in the

manufacturing sector in India.


63

6

Mar

ian

na

Sig

ala

20

05

The previous studies on E-

Procurement have focused

on investigating the

benefits or adoption in

manufacturing, a very rare

study found on Service.

This study aims to fill this

gap by exploring the

potential E-Procurement

adoption factors by

reviewing literature and

testing the latter‟s impact

by gathering data from

Greek food service

operators.

Data collected from 134

respondents through

questionnaire which is

comprised of three

sections. First, data

regarding firms‟ use of

E-Procurement systems,

second, data regarding

firms‟ perceptions

regarding E-

Procurement, last, data

about the size, type and

management

arrangement.

Organizations were found in their

beginning phase of E-Procurement

use. In adoption of E-Procurement,

the Organizational, Technological

and Environmental factor play a

crucial role. Study found that the

firms which perceived E-

Procurement as advantageous, non-

complex, friendly and risk free were

more likely to adopt E-Procurement.

Findings also revealed that

organizations with knowledge and

skills on E-Procurement are more

likely to adopt it.

7

Un

ited

Nat

ion

s

20

06

The purpose of United

Nation Procurement

practitioner‟s Handbook is

to serve as reference

material for the Common

Procurement Certification

Scheme for the UN. The

idea is to provide a broader

picture of the different

ways of doing procurement

within the UN system.

Authors consider it a

descriptive synopsis of

good practices within the

UN system rather than a

prescriptive document

such as the Common

Guidelines or existing

UN procurement

manuals.

Provide overview of the UN

procurement cycle, including certain

transverse themes like risk

management, sustainable and E-

Procurement, logistics, and ethics. It

also used as basis for development of

training material for further

development of UN procurement

reform, for further development of

UN Common Guidelines to adopt

good practices in procurement.

8

Ab

erd

een

Gro

up

, In

c.

20

05

The purpose of the study is

to help enterprises that

have not deployed E-

Procurement, especially

mid-market and small

firms.

The research was

conducted to

discover the key tactics

and strategy for

successful

implementation of E-

Procurement. E-

Procurement

implementations from 25

Companies were

examined by researchers.

Study helped Enterprises that have

not deployed E-Procurement. The

study found benefits of the effective

implementation of E-Procurement.

Use of an E-Procurement system has

freed supply management and other

personnel to focus on creating value

for the enterprise.

9

Ab

erd

een

Gro

up

, In

c. B

ost

on

,

Mas

sach

use

tts

Dec

emb

er,

20

01

This report is intended to

recognize those enterprises

that have demonstrated

industry best practices in

deployment of Internet-

based procurement

Automation.

The researcher has

blindly evaluated the e-

procurement

implementations from

more than 50 companies

based on the multiple

metrics, including usage,

spending volume,

process efficiencies, and

cost savings. The report

included in-depth case

studies of eighteen best

E-Procurement

Implementations.

A number of key findings emerged

from the report. Aberdeen‟s research

found that the most successful E-

Procurement deployments had the

ten common characteristics. The

report also helped procurement

executives, corporate executives, and

business and IT managers in

identifying best practices for

selecting, deploying, and managing

deployment of E-Procurement

technologies.


64

10

Ab

erd

een

Gro

up

, In

c.

Oct

ob

er 2

00

7

This is the fifth in a series

of Aberdeen benchmark

studies, which have been

conducted since 1998,

focusing on E -

Procurement performance

and examining the goals,

hurdles, strategies.

The report studied the

use of E-Procurement

solutions of more than

622 organizations

belonging to various

industries.

Based on the research, Aberdeen

recommended various strategies for

improved results. This report also

identifies the practices employed by

Best- in - Class enterprises to

maximize spend under control and

optimize the value of their E-

Procurement initiative.

11

Th

om

as P

usc

hm

ann,

Rai

ner

Alt

20

05

The aim of this research is

to explore the E-

Procurement systems and

their contribution to the

management of indirect

goods.

This study used

qualitative approach. It is

divided into two parts. In

the first, the study was

conducted on a group of

12 multinational

companies, 120

questionnaires were

distributed, ten

telephonic interviews

were taken, and five best

in class companies were

selected and analysed. In

second part, best success

factors identified and

maps them against the

best-in-class companies

in terms of E-

Procurement practices.

The study found that the many

companies operate multiple E-

Procurement solutions. Study

suggested that, for Integrated

Procurement Solutions, it was

essential to have an overall

procurement strategy and proper

alignment of various E-Procurement

solutions along with the procurement

process and integrated system

architectures to be used for E-

Procurement. Researcher also

suggested that, there was no

standardised E-Procurement solution.

12

NZ

Tra

nsp

ort

Ag

ency

‟s P

rocu

rem

ent

man

ual

20

11

The purpose of this manual

is to provide guidance and

processes to assist those

organizations which are

approved by Land

Transport Management

Act 2003(LTMA) to get

the best value for money

spent, to provide a basic

description of procurement

and procurement process

for land transport

activities.

The procurement procedures in this

manual are available for all approved

organizations for use. The manual

contains Legislative and policy

framework, Roles of the NZ

Transport Agency and approved

organisations, Strategic approach to

procurement, Procurement

procedures, Monitoring and auditing,

Guidelines on procurement

procedures and Supplier selection

methods. The manual refers to

approved organisations and the same

rules apply to the NZTA.


65

13

Pau

l P

hil

lip

s, W

ojc

iech

Pio

tro

wic

z

20

06

The purpose of this study

is to identify important

factors of adoption of E-

Procurement. Further, it is

classified as strategic and

tactical E-Procurement

perspectives.

The research studied

interdisciplinary

literature review which

includes strategic

alternatives, various

profiles and salient

factors of e-

Procurement. Four

hypotheses were framed

to present how E-

Procurement

arrangement can lead to

improved levels of

effectiveness.

Identified the several important

factors in adopting strategic E-

Procurement perspectives. The study

projected a framework which can be

used for assessing the E-Procurement

and also to explain the impact of E-

Procurement on organizational

performance. This research also

explained that the alignments of

Business Strategy, E-Procurement

strategy, E-Procurement tool.

14

Reb

ecca

An

gel

es R

avi

Nat

h

20

07

The purpose of this

research is to seek to

pursue the understanding

of current Business-to-

Business E-Procurement

practices by describing the

success factors and

challenges to its

implementation in the

corporate setting.

Data collected from 185

organizations, members

of the Institute for

Supply Management and

the Council of Logistics

Management, through

questionnaire. Factor

analysis was used to

analyze data from valid

responses.

Identified three important challenges

in implementing an E-Procurement.

Using factor analysis, this study has

reduced a total of 12 variables into 3

success factors and 13 variables into

3 challenges to implementation

factors for E-Procurement from the

buyer firms‟ perspective.

15

Daw

n H

. P

earc

y L

arry

C.

Giu

nip

ero

20

08


is to empirically

investigate the role of firm

size in the adoption of E-

Procurement applications.

The underlying research

question is as follows: “Is

there a significant

relationship between firm

size and the type (more or

less integrative) of E-

Procurement application

adopted?”

Data were collected from

33 industries through

questionnaire, by the

members of Institute for

Supply Management in

the US. The potential

survey participants were

from 11 different

standard industrial. This

study examined actual

usage of 13 E-

Procurement applications

across various industries.

This study contributed to the

understanding of the adoption of a

wide range of E-Procurement

applications by examining the role of

firm size. The outcome of this

research suggested that firms in

category II (with revenues less than

$3.5 billion) were not as likely to use

integrative E-Procurement

applications as firms in category I

(annual revenues exceeding $3.5

billion).

16

Hsi

n H

sin

Ch

ang

Yao

-Ch

uan

Tsa

i

Ch

e-H

ao H

su

20

13

The study focuses on the

relationship between

E-Procurement and supply

chain performance.

Conducted interviews

with practicing managers

prior to the empirical

study. The purposes of

interviews were two-

fold: to gather insights

into each research

construct from the

practice; and to

understand the

appropriateness of the

theoretical framework.

The study indicated that information

sharing and supply chain integration

are two important factors. The study

found that E-Procurement systems

can facilitate the information flow

and activity coordination among

supply chain partners. Supply chain

integration has the highest

standardized total effect on supply

chain performance.


66

17

Pau

l O

. H

arri

gan

Mar

y M

. B

oy

d E

lain

e

Ram

sey

Pat

rick

Ib

bo

tso

n M

uri

el B

rig

ht

20

08


to demonstrate that E-

Procurement offers

manufacturing

organization with efficient

solutions to drive

important value into their

respective business. This

paper provides a new

perspective by presenting

evidence from the Irish

ICT manufacturing

industry.

The exploratory research

adopted a quantitative

methodology with a

questionnaire instrument

being employed to

investigate various E-

Procurement activities

within a sample of top

performing ICT

manufacturing firms.

Research discussed the benefits

provided by the use of E-

Procurement in manufacturing firms.

It also discussed the challenges in

adopting E-Procurement. Significant

benefits and challenges were

reported in the study. Study

concluded that the integration of E-

Procurement, organisations should

develop a dual focus on technical

and people issues to instil a culture

of staff development and continuous

improvement.

18

Ali

stai

r B

ran

do

n-J

on

es S

inéa

d C

arey

20

11

The purpose of this paper

is to examine the extent to

which user perceived E-

Procurement quality (EPQ)

influences both system and

contract compliance.

The data collected

through questionnaire

form 274 respondents

from those who have

access to the E-

Procurement and support

provided by the

purchasing departments

in four organizations.

The survey included 33

paired statements

regarding the component

of user perceived E-

Procurement quality.

Positive relationship between user-

perceived EPQ and both system and

contract compliance found. System

compliance was most strongly

influenced by professionalism and

content dimensions, whilst contract

compliance was most strongly

influenced by processing,

specification, and content

dimensions.

19

Mo

hse

n A

ttar

an

20

01

The aim of this paper is to

identify tips for IT

managers for successful

implementation of this

technology.

Study found that the internet based

technology gives companies an

opportunity to gain a competitive

advantage. The proper

implementation of such technology

is a key management issue. To make

this technology successful, IT

managers must work to a plan and

lay technology groundwork. The

employees play an equally important

role in the success of this technology.

To prepare workers for their new

roles, management needs to begin an

education and training program.


67

20

Mo

ham

ed G

amal

Abo

elm

aged

20

10


is to establish an integrated

research model to predict

and understand intention to

use E-Procurement

technology.

The data of this research

was collected by a

questionnaire form 316

Purchase mangers or

Supply mangers that

were not using E-

Procurement in UAE.

Technology Acceptance

Model (TAM) and

Theory of Planned

Behaviour (TPB) is used

to investigate both

technical and social

aspect of E-Procurement

technology.

The result of the research shown that,

the behavioural intention toward E-

Procurement technology is

determined by user‟s attitude;

perceived usefulness and subjective

norm (SN). Overall, the results

showed that the proposed model has

good explanatory power and

confirmed its robustness, with a

reasonably strong empirical support,

in predicting users‟ intentions to use

E-Procurement technology.

21

Dav

id C

. W

yld

,

20

02


to examine the growth of

Business to Business e-

commerce.

In this research, the

researcher examined the

state of E-Procurement in

the United States through

an extensive analysis of

data from the Institute

for Supply Management

(ISM)/Forrester reports

conducted on e-Business.

This study concluded that the push

towards the E-Procurement is being

led by the largest firms and have

discussed the other key trends along

with few suggestions.

22

Qu

esad

a ,

G.

Et

al.

20

10


to investigate the impact of

Electronic Procurement

technologies on

procurement practices and

procurement performance.

This paper presented a

model of the relationship

between E-Procurement

technology usage,

Procurement Practices

and Procurement

performance. The model

is tested and validated

using a sample of 368

Procurement Specialists

in the USA.

The outcomes of this research

proposed that Electronic

Procurement technologies usage

positively affects managers‟

perceptions of both Procurement

Practices and Procurement

performance.

23

E.

Ose

i-T

utu

E.

Bad

u

D.

Ow

usu

-Man

u

20

10


is to explore and discuss

corruption practices

inherent in public

procurement of

infrastructural projects in

Ghana with the aim of

identifying corruption

related challenges that

must be addressed in order

to actualize the expected

economic gains of

infrastructural projects.

Drawing extensively on

existing literature and

published data, the

methodology adopted for

the paper consisted of

multi-stage critical

review of pertinent

literature.

Conflict of interest, bribery,

embezzlement, kickbacks, tender

manipulation and fraud are observed

in corruption practices in the

Ghanaian infrastructure projects. In

the pursuit to control corruption

practices, this would require

constitution of a sound procurement

system and pro-social equity policies

that would foster good governance,

corporate social responsibility,

transparency, accountability,

judicious public expenditure and

national progress.


68

24

H W

alk

er a

nd

C H

arla

nd

20

08


is to examine the factors

influencing e-procurement

adoption in the United

Nations (UN).

The study had three

objectives; first, to

determine the current and

planned use of E-

Procurement amongst the

UN system. Second, to

investigate the factors

affecting e-adoption, and

finally to assess the policy

implications of E-

Procurement, particularly

in relation to the digital

divide.

This paper reports on an

extended multi-method

case study of e-

procurement in the UN.

A three stage

methodology is adopted

– a questionnaire survey

of UN organizations,

case studies of E-

Procurement issues in

three UN organizations,

and an interactive

workshop with the heads

of purchasing of UN

organizations.

UN development agencies are more

likely to adopt e-procurement than

humanitarian aid agencies as their

operations are more predictable.

This study investigated issues,

influences and impacts of e-

procurement adoption by exploring

the perceptions of UN heads of

purchasing in an extended multiple-

method case study.

25

Arj

un

Neu

pan

e Je

ffre

y S

oar

Kis

ho

r V

aid

ya

Jian

min

g Y

on

g

20

14


is to report on research that

evaluates the perceived

willingness of potential

bidders to adopt public e-

procurement for the supply

of goods and services to

the government of Nepal.

The authors have identified

anti-corruption attributes

through an extensive

literature review and

developed a theoretical

model representing the

impact of four latent

variables.

Data were obtained by

questionnaire survey

from 220 bidders who

were officially registered

with the Government of

Nepal. This study used

scientific method to

design the research

project including survey

instruments, focusing on

facts and objective of the

assessment of attributes

that is supported by the

concept of positivism

research approach.

The findings suggest that a high level

of the ITA has a positive and

significant relationship with the

independent variables that might

inform the developed and emerging

countries to make a decision to

adoption of e-procurement to combat

corruption in public procurement.


69

26

D.

H.

Pea

rcy

, an

d L

. C

. G

iun

iper

o,

20

08

The purpose of this

research is to empirically

assess the extent to which

US-based firms use nine

different e-procurement

tools that differ in their

ability to facilitate supply

chain integration.

The data collected a

sample of 142 members

of the Institute for

Supply Management

(ISM). Of the 1,025

surveys mailed, a total of

142 useable surveys were

received.

Factor analysis revealed that the

group of nine e-procurement tools

could be categorized into two types:

basic, single-process tools and

integrative tools. Study found that

the firms used basic, single-process

tools to a greater extent than they

used integrative forms of e-

procurement. The paper found that e-

procurement is being used in the UN

for transactions of routine, non-

strategic purchases. UN development

agencies are more likely to adopt E-

Procurement than humanitarian aid

agencies as their operations are more

predictable. This study investigated

issues, influences and impacts of e-

procurement adoption by exploring

the perceptions of UN heads of

purchasing in an extended multiple-

method case study.

27

Min

ky

un K

im,

Nal

lan

C S

ure

sh a

nd

Can

an K

oca

bas

og

lu-H

illm

er

20

15

The aim of this study is to

investigate the

relationships among

strategic sourcing, E-

Procurement and firm

performance, along with

the moderating effects of

business characteristics

and environmental factors

on these relationships.

Data were obtained from

137 managers of US

manufacturing firms. The

partial least squares-

based structural equation

modelling approach is

used for data analysis.

Firm performance was

measured by the three

aspects of a firm‟s

financial performance,

operational performance

and supply chain

performance.

The results confirm that both

strategic sourcing and E-

Procurement have a positive effect

on firm performance. E-Procurement

found to have a positive impact on

strategic sourcing. The research

suggested that business

characteristics and the environment,

especially the degree of competition,

market turbulence, firm size and

stage in product life cycle moderate

these relationships significantly.

28

Am

an,

A.

&

Kas

imin

, H

asm

iah

20

11


is to understand the

challenges of e-

procurement

implementation in the

government sector and

efforts taken to overcome

the challenges, using a

Malaysian government

case.

This study adopts a

qualitative case study

approach of an e-

procurement project,

which is one of

Malaysia‟s e-government

initiatives. Data were

collected using a

triangulation approach

that involved semi-

structured interviews,

document reviews and

observation.

The challenges of e-procurement

implementation in government sector

can be categorised into system

specification and implementation

management. Challenges in system

specification are not only related to

software integration and data

management, but also legal and

administration procedures as well as

IT infrastructure, while challenges in

implementation management are

related to outsourcing contract and

IT skills.


70

29

Ara

sh A

zad

egan

Jef

frey

Tei

ch

20

10

The paper aims to aid in

understanding when and

how benchmarking applies

to technology adoptions by

introducing a new

conceptual framework.

The paper combines

facets of established

theories of innovation

adoption to develop a

new broad based

framework. It then

applies the framework to

develop propositions on

the adoption of two

distinct types of e-

procurement

technologies (EPT),

namely electronic data

interchange and online

auctions.

Three prominent adoption theories

that explain innovation adoption are

highlighted and it was noted that

while useful, on their own, these

theories may have limited

explanatory power. These paradigms

were leveraged to develop an

interlocked framework that helps

better explain the factors that

influence innovation adoption. The

factors were categorized into four

groups: technology, the adopting

firm, its trading partners and the

network within which it operates.

30

Dan

iel

Kn

ud

sen

20

03

This paper presents a

framework for assessing

alignment between

corporate strategy,

procurement strategy and

purchasing tools. The

framework is built on

generation of rents as its

common denominator for

assessing alignment

between the levels.

The framework was built

on generation of rents.

Three types of rents were

identified: monopoly

rents; ricardian rents and

entrepreneurial rents.

The framework was then

used for assessing the

strategic origin of the E-

Procurement

applications.

The results indicated that the E-

Procurement tools were fully viable

for creating monopoly rents,

moderately viable for creating

Ricardian rents and only somewhat

viable for creating entrepreneurial

rents. Therefore, it was necessary to

first understand how the firm

generates rents before procurement

strategy and e-procurement tools

were implemented in order to avoid

misalignment.

2.20 Identifying Best Practices in E-Procurement

Following Table 2.2 is made as per the information available in the reports of Aberdeen

Group Inc. in year of 2001, 2005 and 2009, based on the study of those enterprises that

have implemented best practices in the use of E-Procurement to control costs, rationalize

procedure, and improve openness across the extended supply chain. Table 2.2 gives an

overview of few major best practices of E-Procurement adopters, with the monetary/ non-

monetary benefits accrued by them. The objective of doing this by the researcher was to

highlight the few role model companies, with the intention that such practices be

replicated.


71

TABLE 2.2: Best Practices in E-Procurement

Best Practices in E-Procurement S

r N

o

Co

mp

any

Description of

the Company and Area

of Business

E-

Procurement

Solution

Provider

Result / Benefits

Monetary Non Monetary

1

RT

I (R

esea

rch

Tri

ang

le I

nst

itu

te)

Inte

rnat

ion

al, R

esea

rch

Tri

angle

Par

k,

N.C

.

RT

I, U

S

It is Non Profit

Organization with

more than 2500

employees and annual

spending of 150

million dollar. Field

Research and

Development work in

Pharmaceutical,

Advance technologies,

Education and

Training, Economic

and Social

development

ePlus inc

1. Savings $300,000 a

year.

2. Enhanced spend

leverage and strategic

sourcing saved $1

million in year 2005

3. Enabled RTI to

reduce its cost per

order by 70%, from

$85 to approximately

$25.

4. Dollar savings of

about $500,000 a year

1. Enables RTI supply

managers to make better

spending decisions and

improves the budgeting

process.

2. Has improved cycle and

delivery time by five to

seven days. Traditionally,

it takes 30 days.

3. System has improved

user productivity.

4. Away from day-to-day

tactical buying activities.

2

Ser

vic

e M

aste

r

It is 3.8 billion dollar

company in US. It

serves 10.5 million

homes and business

every year

approximately.

Field: Chemical

Ketera

1. Cost savings through

improved contract

pricing and pricing

compliance, which is

conservatively

estimated at 3% across

the board.

2. Additional savings

ranging from 7% to

20% through increased

spending leverage and

sourcing activity.

1. Allows for easier spend

aggregation and a more

efficient sourcing process.

2. Reduction of requisition

-to-payment

cycle.

3. One purchasing

platform with the ability to

collect data, track orders,

receipts, and compliance,

as well as create supplier

scorecards.

3

Th

e S

cott

ish

Ex

ecu

tiv

e(S

E)

The head office of SE

is in Scotland. SE is in

Research for day to day

issues concerning

Scottish people in field

of education, health,

justice, transport, and

rural affairs.

Cap Gemini

as prime

service

provider;

Elcom‟s

e-

procurement

technology

1. $2.875 million in

purchase-to-pay

savings since inception.

2. SE won an extra

1.5% discount by

automated payments

through an embedded

Visa procurement card.

3. Price savings of

$5.834 million from

200 4 to 2005 through

reverse auctions.

4. Major reduction in

administration costs.

1. Improved contract and

pricing compliance.

2. Elimination of 52,000

invoices from use of

physical and embedded

Visa government

procurement cards.


invoices as a result of

electronic consolidated

invoicing.

4. Reduction in the

number of purchase-to-

pay related processes from

45 to 4.


72

4

Th

e S

cott

ish

Ex

ecu

tiv

e (S

E)

The head office of

SE is in Scotland. SE

is in Research for

day to day issues

concerning Scottish

people in field of

education, health,

justice, transport,

and rural affairs.

Cap Gemini

as prime

service

provider;

Elcom‟s

e-

procurement

technology

1. $2.875 million in

purchase-to-pay

savings since

inception.

2. SE won an extra

1.5% discount by

automated payments

through an

embedded Visa

procurement card.

3. Price savings of

$5.834 million from

200 4 to 2005

through reverse

auctions.

4. Major reduction in

administration costs.

1. Improved contract and

pricing compliance.


invoices from use of

physical and embedded

Visa government

procurement cards.


invoices as a result of

electronic consolidated

invoicing.

4. Reduction in the

number of purchase-to-

pay related processes

from 45 to 4.

5

Un

iver

sity

of

Pen

nsy

lvan

ia,

Ph

ilad

elp

hia

,

Pen

nsy

lvan

ia,

US

. University of

Pennsylvania is

known as Penn or

Upenn, is a Private,

lvy league

university in

Philadelphia. It is

established in 1740.

Oracle;

SciQuest

1. Penn attributes

$77.4 million in total

product cost savings.

2. Purchasing

estimates at $7.7

million resulting

from the enablement

of Penn Marketplace

suppliers

1. Improvement in

contract compliance and

pricing compliance.

2. Average cycle time

(online purchase order

creation to electronic

order transmission to

supplier) has fallen from

18 days to less than one

for more than 92% of all

purchase orders.

3. Improved

administrative processes

and reduced the number

of full-time employees

needed to process

transactions.

6

Sk

ansk

a A

B\

Sw

eden

It is a world leading

project development

and construction

group. It has

approximately 54000

employees. Gain

Revenues of 15.11

billion dollar in 2004

and Spend is about

4.36 billion dollar.

IBX

1. New contracts

signed in 2005 in

Sweden alone have

generated $4.98

million in savings.

2. using preferred

suppliers within two

category areas have

saved $137,000, and

negotiated E-

Procurement price

reductions have

yielded another

$311,500 in savings.

1. improved compliance

with contracts.

2. Both direct and

indirect spend categories

flow through the e -

procurement system.


73

7

Gla

xo

Sm

ith

Kli

ne

(G

SK

)

It is a Research

based

Pharmaceutical

company. It has

approximately

100000 employees‟

worldwide. It has its

own 80

manufacturing sites

in 37 countries and

has 24 research and

development centres

globally. Annual

revenues is about

37.2 billion dollar

and annual spend is

about 13 billion

dollar.

SciQuest‟s

Spend

Director

solution

1. SciQuest allowed

GSK to

halt the practice of

using a

wholesaler, saving

more than $500,000

a year

1. Contract compliance

has improved more than

20% overall.

2. Capture more detailed

spend information,

enhancing spend

analysis.

3. Manual purchase

orders have been

eliminated, allowing

GSK to reduce

headcount or reassign

resources.

8

Hew

lett

Pac

kar

d (

HP

)

HP global company

with annual sales of

80 billion dollar,

Employees: 140000

worldwide in more

than 170 countries.

Annual spend is

about 60 billion

dollar, 13 billion

dollar in indirect and

the rest is in direct

materials and

services.

Ariba

1. Achieved over

$1.8 billion total

negotiated savings

and spend reduction.

2. Operation expense

was reduced from

0.95% of total

spends in 2002 to

0.75% in fiscal year

2005.

1. Contract compliance

has reached

approximately 80%.

2. The spend

management solution has

enabled HP procurement

professionals to address

more corporate spend

and focus more on

strategic supply

initiatives.

9

No

vo

No

rdis

k It is a Danish

pharmaceutical

manufacture.

Revenues: 4.6 billion

dollar in 2004.

Employees: 20750.

IBX and

SAP

1. Realized about $

20 million of savings

in 2003

1. cost savings achieved

through improved spend

leverage and sourcing

were 15% to 42%.

2. Maverick buying

dropped to 19% in

Q42004 from 52% in

Q42001.

10

Ro

lls-

Ro

yce

It is a leading

Producer of Power

Systems. It operates

globally in Civil,

Aerospace, Defence,

Marine and Energy.

The customers

includes 500 airlines,

4000 corporate and

utility aircraft and

helicopters,160

armed forces and >

2000 marine

customers.

Exostar

1. Reduction in cost

of goods of up to

20%.

2. Reduction in

inventory value

levels from $43.5

million to $8.7

million.

1. Reduction in errors

due to the elimination of

manual re-keying of

buying data;

2. Reduced cycle time, in

some cases by up to

80%;

3. Near-elimination of

paper and fax processes.

4. Improved relations

with suppliers


74

11

A P

lus

Man

ufa

ctu

rin

g

It is division of C-

MAC industries Inc.

It provides turnkey

manufacturing for

complex, high

density and high mix

printed circuit boards

(PCBs) and box

build assemblies for

the

telecommunications,

video, medical

devices, Industrial

and Military

markets.

Tradec

1. Cycle time savings for

both A-Plus and its

suppliers.

2. Improved information

transparency.

3. More competitive

bids.

12

Eas

tman

Ch

emic

al F

lori

da

Eastman is a global

provider of more

than 400 chemicals,

fibres and Plastics.

Employees: 16500 in

more than 30

countries. It has

manufacturing

facilities in five

states in US. It

spends 2.7 billion

dollar annually on

goods and services.

Commerce

One,

Diligent,

Software

Systems

1. Eastman has cut

prices paid by 5% to

10% through

increased contract

compliance,

shortened order-

fulfilment cycles

from a week to 24

hours

2. Lowered

administration costs

by $100,000

annually

3. Realize a 126%

return on investment

(ROI) on the

Commerce One

solutions in just 10

months

1. Ability to evaluate a

larger group of suppliers

based on a broader range

of parameters.

2. Increased visibility

into the cost structure of

supplier bids has helped

Eastman determine the

total cost of doing

business with a supplier.

3. It has also reduced

sourcing cycles by 25%

13

Fed

Ex

Co

rpo

rati

on

FedEx has over 370

facilities in the U.S.

and Canada, and a

presence in over 211

countries worldwide.

FedEx, 20 billion

dollar values, it

consists FedEx

Express, FedEx

Ground, FedEx

Freight, FedEx

Custom critical,

FedEx trade

networks and FedEx

Services.

Ariba 1. FedEx has seen

savings of up to 40%

1. Overall purchasing

cycle times have been

reduced from 20% to

70%.

2. Transfer procurement

professionals to more

strategic activities.

3. FedEx reduced the

number of suppliers by

more than half, from

90,000 to 110,000 down

to 40,000 to 50,000. Of

the 2,500 suppliers that

FedEx does regular

business with, 75 are

currently enabled on the

Ariba system.

4. Able to have largest

volume buys.


75

14

Ko

mat

su M

inin

g S

yst

em I

nc.

Its main business is

related to

Manufacturing and

selling of

construction and

Mining equipment.

Komatsu group

consists of 179 other

companies,

141consolidated

subsidiaries.

Baan

1. Reducing the time it

takes to propagate

changes in plans,

forecasts, and POs.

2. Driving significant

productivity

improvements.

3. Saved nearly 120

hours per week in non-

value-added time.

4. Automating supplier

interactions has

eliminated more than

3,000 pages per month of

correspondence that was

once printed, faxed, and

mailed to suppliers.

15

SP

X C

orp

ora

tio

n

SPX is fast growing

company with 34

business units in 34

countries. It has

highly diversified

product mix, ranging

from storage area

network products

and

telecommunication

equipment to

electrical transformer

and vehicle

components.

Free-

-Markets

Able to achieve

significant unit cost

savings, ranging

from 0.5% to over

20%.

1. Able to evaluate and

negotiate with suppliers

all over the globe.

2. With Full Source

automating data

collection, publication,

and revisions, SPX‟s

buyers have been able to

focus on more strategic

tasks, such as qualifying

new suppliers and

thoroughly analyzing

bids.

3.These efficiencies have

allowed SPX to apply

strategic sourcing to

spending areas such as

temporary labour,

transportation,

maintenance, repair, and

operating (MRO)

supplies that previously

had been overlooked due

to time and resource

constraints.

(Source: Compiled by Author, based on Literature Review)

Summary

The review of literature has revealed that the researches during the last two decades were

undertaken on E-Procurement practices from different angles and parameters namely:

Implementation, E-Procurement Systems, E-Procurement Adoption Behaviour, E-

Procurement Technology, Administrative aspects, E-Procurement Innovations etc.

The Research-gap identified in the various studies encouraged the researcher to undertake

a study of E-Procurement practices in selected organisations in Gujarat.

Research Methodology

76

CHAPTER 3


3.0 Introduction

Methodological process of defining problem, gathering facts or data, analyzing data and

accomplishing objectives is known as Research Methodology. Research Methodology

illustrates methods used to collect facts or data, research plan, sampling methods,

instrumentation and measurement, framing of model and analysis of data.

3.1 Definition of the Problem

Many developing countries like India are undergoing through major modernization

process. There are 243 Million internet users in India from the huge population of 1.237

Billion. The number of users may increase to 500 Million by 2018. India will become

larger than the US in terms of number of Internet users by the end of 2014 (Rajan

Anandan, MD, Google India)177

. Procurement is really a collection of processes that

involve many steps and interactions with the other departments of a company and with the

suppliers. Because purchasing costs typically run to 50% of operational costs, the

procurement process provides many opportunities for cost savings that can make a great

difference to a company's bottom line. The rule of thumb is that a 5% savings in

purchasing costs can increase profit by 50%, and would equally increase revenue by 50%,

or a reduction in overhead costs of about 20%178

. Traditionally, procurement was paper-

and conversation-based, usually with procurement officers interacting with long-time

partners or well-known suppliers and purchasing at fixed prices. In recent years, this has

changed to a certain extent to become a strategic function. Procurement officers seek

suppliers that fit with a company's overall strategy. E-Procurement involves moving the

procurement process online to cut out steps and save money. In business, time is money.

177

Rajan Anandan, MD, Google India, “Internet usage” last retrieved on 23.03.2016 from

http://blog.digitalinsights.in/important-statistics-digital-and-social-media-users-in-india/05224987.html 178

Haffar, N. and Wassim, M., “E-Procurement Technology”, Dubai Municipality, price water house

coopers last retrieved dated 21.02.2014 from


http://blog.digitalinsights.in/important-statistics-digital-and-social-media-users-in-india/05224987.html



77

So, more a company can reduce the involvement of staff in purchasing by quickly issuing a

purchase order, the more it can reduce on operational costs179

. The use of internet has made

the world smaller and, through it, business transactions are conducted globally at a faster

pace. The age of connectivity has reduced distances and brought people closer. Today

many companies use E-Procurement as a strategic tool to compete with others. Research

problems arise from the fact that a lot of businesses are still relying on the traditional

procurement and literature has provided limited result on e- procurement practices.

Therefore, the researcher has selected to study the E-Procurement practices in

selected manufacturing industrial units of Gujarat.

3.2 Research Objectives

1. To study the present status and to compare E-Procurement in selected manufacturing

industrial units of Gujarat.

2. To explore/ identify the difficulties faced in E-Procurement implementation.

3. To identify the reasons that has led to the implementation of E-Procurement in the

selected manufacturing industries of Gujarat.

4. To study the extent to which Information Technology (IT) tools are used in e-

procurement.

5. To study the documents exchanged in E-Procurement through Electronic Data Inter

change (EDI).

6. To identify the scopes for further up-gradation of Information Technology (IT) to

support the E-Procurement process.

3.3 Research Questions

1. Is there any relationship of E-Procurement practices adopted by the firm across the

Industry?

2. Is there any relationship between the E-Procurement practices adopted by the firm and

Size of the Organization?

179

“Procurement vs E-Procurement” last retrieved from 20.03.2016 from https://www.bdc.ca/en/articles-

tools/operations/purchasing/pages/traditional-vs-E-Procurement.aspx?caId=tabs-1

https://www.bdc.ca/en/articles-tools/operations/purchasing/pages/traditional-vs-e-procurement.aspx?caId=tabs-1



78

3. Is there any relationship between E-Procurement practices adopted by the firm and

Ownership of the Organization?

4. What is the present status of E-Procurement in these selected manufacturing industrial

units of Gujarat?

5. What are the difficulties faced in E-Procurement implementation in these selected

manufacturing industrial units of Gujarat?

6. What are the reasons that have led to the implementation of E-Procurement in the

selected manufacturing Industrial units of Gujarat?

7. To what extent Information Technology (IT) tools are used in E-Procurement?

8. Which documents are exchanged with supplier through EDI and what methods are

used?

9. Are there any scopes for further up-gradation of Information Technology (IT) to

support the E-Procurement process?

3.4 Research Hypothesis

Ho1: There is no significant difference in difficulties faced in E-Procurement

implementation across industry, size of the firm and the ownership of the firm.

Ho2: There is no significant difference in procurement objectives across industry, size of

the firm and the ownership of the firm.

Ho3: There is no significant difference of reasons for adopting E-Procurement across

industry, size of the firm and the ownership of the firm.

Ho4: There is no significant difference in importance of further up gradation of IT to

support the procurement process across industry, size of the firm and the ownership of the

firm.

Ho5: There is no significant difference in IT tools used for E-Procurement across industry,

size of the firm and the ownership of the firm.

Ho6: There is no significant difference in IT tools preferred for E-Procurement across

industry, size of the firm and the ownership of the firm.

Ho7: There is no significant association between size of the firm (based on Number of

employees) and IT solutions used for operative order processing.

Ho8: There is no significant association between size of firm and method used to exchange

the electronic business documents with suppliers.


79

3.5 Scope of the Work

The aim of the present research is to study the E-Procurement practices in the

manufacturing industrial units of Gujarat which are using E-Procurement. Those industrial

units of Gujarat which are not using E-Procurement are out of the scope of the present

study.

3.6 Research Design

Research design is a blueprint indicating the techniques and process used by a

researcher(s) to gather data and analyse it for their research. In general, the research

designs used by researchers may be exploratory, descriptive and causal. According to Reis,

H.T & Judd, C.M., (2000)180

, Research Design can be defined as the systematic planning

of research to achieve a given set of objectives. Malhotra, N & Dash, S., (2011)181

said

that the research design of any research study is a combination of Descriptive as well as

Exploratory Research. Descriptive Research is a type of conclusive research that has as its

major objective the description of something- usually market characteristics or functions.

Polit, D.F. et al., (2001)182

defined a research design as “the overall plan for collecting and

analysing data including specifications for enhancing the internal and external validity of

the study”. Research design focuses on how the research is to be conducted. It includes all

main fractions of the research study such as the samples or groups, measures, treatments or

programs, etc and work together in order to address the research questions.

Exploratory study is significant for getting a good hold of the phenomena of interest and

for advancing knowledge through good theory building and hypotheses testing.

Exploratory research is meaningful in any situation where the researcher does not have

enough understanding to proceed with the research project. Exploratory research is

characterized by flexibility and versatility with respect to the methods because formal

research protocols and procedures are not employed. Malhotra, Y., (2005)183

states that

180

Reis, H.T & Judd, C.M (2000), “Handbook of Research Methods in Social and Personality Psychology”

from https://books.google.co.in/books/about/Handbook_of_Research_Methods_in_Social_ 181

Malhotra, N & Dash, S (2011), “Marketing Research – An applied orientation (6th

Edition)” from Dorling

Kindersley (India) Pvt Ltd 182

Polit, D. F., Beck, C.T. & Hungler, B.P. (2001), “Essential of Nursing Research – Methods, Appraisal and

Utilization”, 5th

Edition, Philadelphia: Lippincott. 183

Malhotra, Y. (2005), “Integrating Knowledge Management Technologies in Organizational Business

Processes: Getting real time enterprises to deliver real business performance”, Journal of Knowledge

Management, Vol.9 Iss: 1

https://books.google.co.in/books/about/Handbook_of_Research_Methods_in_Social_


80

Descriptive research is normally more proper and ordered than Exploratory Research.

Descriptive Research design describes the characteristics of relevant group.

This research is based on newness of the technology involved. Search of the literature with

reference to India has provided limited results. So, the research will contain Descriptive

research design with an objective to study E- Procurement Practices in selected

organizations in Gujarat.

3.7 Area of Study

This study pertains to selected industrial units from the entire Gujarat: South Gujarat,

North Gujarat, Central Gujarat and Saurashtra region.

3.8 Sample Design

A sample is taken from the target population. The outcome of research will be derived

from selected manufacturing units of Gujarat. Hence the universe for this study is all the

manufacturing industrial units of entire Gujarat. According to Zikmund, W. (2003)184

,the

sample should be sufficiently large, that it will have characteristics of the Population. The

sample design involves Sampling Unit, Sampling Technique and Sample Size.

3.8.1 Sampling Unit

Aim of the research is to study the E-Procurement practices in selected Industrial units

(manufacturing firms) of Gujarat. The sampling unit is an Executive and Managers

concerned with E-Procurement activities of an organization.

3.8.2 Sampling Method

According to de Leeuw, E. D. et al. (2008)185

, different sampling techniques are used

when inferences are made about the target population. The sampling technique adopted for

this survey is non probability convenience sampling.

184

Zikmund, W. (2003), “Business Research Method, 7th Edition”. London: Thomson South-Western. 185

de Leeuw, E. D., Hox, J. J., & Dillman, D. A. (2008). “International handbook of survey methodology”.

New York, NY: Taylor & Francis.


81

3.8.3 Sample Size

Burns, A.C. & Bush, R.F., (2010)186

stated that Sample size represents the Population.

Saunders, M. et al., (2009)187

stated that the large sample more accurately represents the

population. Pallant, J., (2007)188

said that there was a general understanding among the

authors of Statistical books that large sample is suitable for the use of various statistical

analyses. Lawley, D.N. & Maxwell, A. E., (1971)189

suggested 51 more cases than the

number of variables. Data were collected from 72 Manufacturing Industrial Units from the

entire Gujarat which includes South, North, Central Gujarat and Saurashtra region. Data

were collected by non probability convenience sampling technique.

TABLE 3.1: Sample Profile

Region No of Company

(Respondent)

Central Gujarat

(Vadodara, Anand, Halol, Savli, Asoj, Godhra etc.) 19

South Gujarat

(Bharuch, Ankleshwar, Surat, Valsad, Vapi , Atul,

Dahej etc.) 18

North Gujarat

(Ganhinagar, Mehsana, Unja, Ahmadabad, Sanand,

Kalol, Bavala etc.) 19

Saurastra and Kutch

(Rajkot, Morbi, Jamnagar, Surendranagar , Anjar,

Amreli, Wadhwan, Kutch etc.) 16

(Source: Primary data)

3.9 Sources of Data

Sources of data are categorised as primary sources or secondary sources. According to

Malhotra, N., (2009)190

, Primary Data are originated by a researcher for the specific

purpose of addressing the problem at hand. In the present study, primary data has been

186

Burns, A.C & Bush, R.F (2010), “Marketing Research, 6 th Edition”, Pearson 187

Saunders, M., Lewis, P. & Thornhill, A. (2009), Research Methods for Business students, 5th edn. Essex:

Pearson Education Limited. 188

Pallant, J (2007), “SPSS Survival Manual: A Step by Step Guide to Data Analysis using SPSS for

Windows”, (3rd

Edition), Berkshire: McGraw Hill: Open University Press from

http://surveyresearch.weebly.com/pallant-2007-3rd-edition.html 189

Lawley, D.N. & Maxwell, A. E. (1971), “Factor Analysis as a Statistical Method”, American Elsevier

Pub.Co. 190

Malhotra, N. (2009), Marketing Research: An Applied Orientation,(6th Edition), Pearson, Upper Saddle

River, NJ.


82

collected by way of administering a structured questionnaire and getting it filled by the

respondents.

Secondary Data are Data which have already been collected for purposes other than the

problem at hand. Secondary sources in the study included information from journals,

books, thesis/ dissertations, website references as well as Governmental / Institutional

Reports or Publications and Directories.

3.10 Planning of Data Collection

According to Malhotra, N., (2009)191

, Survey Method is used to collect primary data/

information by asking questions from the respondents. In this research study, data were

collected from 72 manufacturing firms from the entire Gujarat through Survey Method.

Respondents were asked various questions on E-Procurement. Data were collected with the

help of a structured questionnaire. In this method, a formal questionnaire having questions

prearranged in order is used.

3.11 Data Collection Instrument & Scaling Technique

Questionnaire is a prearranged method for data collection, consists of a sequence of written

or verbal questions. According to Malhotra, N., (2009)193

, Questions in questionnaire are

the key to the survey research so they must be developed with caution as it is very

important to the survey. Hague, P. N., (2004)192

said that the main advantage of close-

ended questions was that they were pre-coded, hence they suited for self-completion

questionnaires as it saves time to writing the answer. Therefore, the close ended questions

were used in this study to collect the response by asking them to choose a given option.

In this study, the questionnaire begins with getting the basic details of the Companies. The

structured questionnaire focused on the present status of E-Procurement which includes

procurement objectives, extent to which Information Technology used to carry out

procurement functions, reasons that have led to Implementation of E-Procurement, extent

of Information Technology (IT) tools and IT Solutions used in E- Procurement, documents

191

Malhotra, N. (2009), Marketing Research: An Applied Orientation,(6th

Edition), Pearson, Upper Saddle

River, NJ. 192

Hague, P.N. (2004), Market research in practice: a guide to the basics, (Electronic resource) available at:

http://site.ebrary.com/lib/uon/Top?id=10084442&layout=document.

http://site.ebrary.com/lib/uon/Top?id=10084442&layout=document


83

exchanged in E-Procurement through EDI, difficulties faced in E-Procurement

implementation and importance of further up gradation of IT to support the strategic

procurement process.

The questionnaire of this study is framed based on the available Literature. It is based on

the following Study:

Tanner, C., et al. (2007)193

, this research was carried out on Current Trends and

Challenges in Electronic Procurement. This study has focused on main goals in

procurement, business documents exchanged with Supplier, difficulties faced in E-

Procurement implementation, further development of the use of Information Technology in

procurement. Tanner, C et al. (2006)194

, this research was carried out on the role of

Information Technology in procurement. This study included the contribution of

Information Technology (IT) to carry out the Procurement function, Information

Technology (IT) solution used for operative order processing, Number of Suppliers with

whom business documents were exchanged by means of EDI / WEB EDI, Methods by

which electronic business documents exchanged with suppliers.

The data collected through close-ended questions include Nominal Data, Categorical Data

and Data on Likert scale. The researcher has used 3 point and 5 point Likert Scale in some

questions for the study. According to Prayag, G., (2007)195

, five point scales help to reduce

the frustration among the respondents and it will also improve the rate and quality of data

collected from respondents. Malhotra, N., (2009)196

added that five point Likert Scale was

very easy to construct and administered. Moreover, respondents readily understand how to

use scale and this scale is more suitable for mail and personal interview.

193

Tanner, C.,Wolfle, R., Schubert, P., and Quade, M. (2007), “Current Trends and Challenges in Electronic

Procurement: An Empirical Study”, 20th Bled eConference, eMergence: Merging and Emerging

Technologies, Processes, and Institution, Bled, Slovenia. 194

Tanner, C.,Wolfle, R., and Quade, M. (2006), “The role of Information Technology in Procurement in the

Top 200 companies in Switzerland”, University of Applied Sciences North-western Switzerland – FHNW

School of Business, www.fhnw.ch/wirtschaft/iab. 195

Prayag, G. (2007), “Assessing International Tourists‟ Perceptions of Service Quality at Air Mauritius”.

International Journal of Quality and Reliability Management, Vol. 4, No .5, pp. 492-514 196



River, NJ.

http://www.fhnw.ch/wirtschaft/iab


84

3.12 Pilot Study

A pilot study was carried out prior to the data collection stage. According to Malhotra, N.,

(2009)197

pilot study as a testing of questionnaire on a small sample of respondent to

identify and eliminate potential problem. The appropriateness of the questions of the

questionnaire was tested including question content, wording, sequence, form and layout.

Survey of 49 companies was conducted in pilot study. The comments were sought on the

length, completeness and readability of the survey and each item was reviewed for content,

scope and purpose. Although the participants indicated no major modifications, however, a

number of important comments were incorporated in the instrument development and

wording/consistency of the questionnaire items.

3.12.1 Reliability of the Research Instrument

Reliability test was performed during the scale development process, to see the consistence

of the scale. Reliability, is a sign of how reliable the results are, depends on the technique

of data collection and analysis. Moreover, according to Saunders, M., et al., (2007)198

the

reliability is more required when questionnaire uses Likert scale for collection of data from

the respondents.

In the words of Freeman, M. S., (1965)199

, the term reliability has two closely related but

somewhat different implications in psychological testing. First, how precisely the test

measures a particular thing? Second, reliability refers to the extent to which a measuring

device yields constant results upon testing and re-testing”.

Generally, the Cronbach‟s alpha is used to compute the reliability of the instrument.

According to Pallant, J., (2007)200

,Cronbach‟s alpha estimate shows how nicely the items

197



River, NJ. 198

Saunders, M., Lewis, P. & Thornhill, A. (2009), Research Methods for Business students, 5th edn. Essex:

Pearson Education Limited. 199

Freeman, F.S., (1965), Theory and Practice of Psychological Testing, New Delhi: Oxford and IBH

Publishing Co., Indian edition. 200

Pallant, J. (2007), SPSS Survival manual: A Step by Step Guide to Data Analysis using SPSS for

Windows, 3rd edn. Berkshire: McGraw Hill: Open University Press.


85

in the questionnaire are interrelated. According to Hair, J.F. et al,. (2006)201

, the Cronbach

alpha coefficient ranges from 0 to 1 with a minimum of 0.6 while other studies suggest that

anything above 0.7 suggest high levels of internal reliability. Nunnally, J. C., (1978)202

suggested that an alpha value of 0.7 is acceptable.

(Source: Primary data; SPSS Output)

In this study, reliability test is performed by using SPSS version 20.0 through Cronbach

alpha coefficient. According to Nunnally (1978), Alpha value of 0.7 is used as minimal

accepted level. Internal reliabilities were computed for 12 items of procurement objectives

and Cronbach Alpha value obtained is 0.724, reliabilities were computed for 12 items of

reasons that has led to the implementation and Cronbach Alpha value obtained is 0.820,

reliabilities were computed for 11 items of IT tools used for procurement and Cronbach

Alpha value obtained is 0.802, reliabilities were computed for 10 items of difficulties faced

in E-Procurement implementation and Cronbach Alpha value obtained is 0.764 and

reliabilities were computed for 17 items of further up gradation of IT to support the

procurement process and Cronbach Alpha value obtained is 0.794. Further, reliabilities

were computed for all the items (96 items) of instrument and Cronbach Alpha value

obtained is 0.890. This result shows that the research instrument appears to be highly

reliable.

201

Hair J.F, Black W.C., Babin B.J., Anderson R.E. and Tatham R.L. (2006), Multivariate Data Analysis (6th

ed.), Upper Sadle River, New Jersey: Prentice Hall. 202

Nunnally, J.C. (1978), Psychometric Theory, 2nd ed., McGraw-Hill Book Company, New York, NY.

TABLE 3.2: Reliability Test Result

Variable No. of Items Cronbach's Alpha

All Variables (Entire Questions) 96 0.890

Procurement Objectives 12 0.724

Reasons that has led to the implementation

of E-Procurement 12 0.820

IT tools used for procurement 11 0.802

Difficulties faced in E-Procurement

implementation 10 0.764

Further up gradation of IT to support the

procurement process 17 0.794


86

3.13 Research Ethics

The research was carried out based on the fair and honest principle. In the case of primary

data, the research was conducted in respect of the selected manufacturing units of Gujarat.

All the respondents were well informed about the purpose of research and data collection.

It was also informed that collected data will not be processed with intent to take measures

or decision but only for the statistical research. No participant or data subject were

identified or identifiable in the report and as well as the results. Specific provisions of

confidentiality were taken in the case of technology and performance of the adopted E-

Procurement system in the research. In the case of secondary data, data collected from the

documents and reports were of public domain. A clear Openness attitude during the data

collection was the basis of the interaction with the respondents. Entire research was

exclusively based on valid as well as reliable data.

Data Analysis and Major Findings

87

CHAPTER 4


4.0 Introduction

After the Pilot Testing, data collection of 72 respondents was carried out. The analysis of

data begins after the collection of data. The scheme of data analysis is closely linked with

the nature of data collected for the research study. According to the Gromme, N.,

(1998)203

, data processing is concerned with activities and technologies which prepare the

collected data for analysis: data checking, entry, coding, and editing. Data analysis

concerns activities and technologies which provide statistical insight in the collected data:

weighting, tabulations, and response analysis.

In this chapter, researcher has used SPSS 20 to carry out different statistical tests for the

purpose of data analysis. Data were first coded in excel sheet and exported to Statistical

Software for further analysis.

The data analysis in the present chapter has been divided into two main heads:

(1) Descriptive Analysis: Statistical tools used in the present research study pertaining to

descriptive analysis: Frequency Distributions and Cross Tabulation

(2) Inferential Analysis: Statistical tools used in the present research study pertaining to the

inferential analysis: Exploratory Factor Analysis, Kruskal Wallis and Chi-square Analysis.

Question wise exploratory factor analysis was performed in which Principal Component

Method with Varimax rotation was used. Relations between E-Procurement practices and

the types of Industry, Size of the company (which is further classified based on Investment

in plant machinery and based on the number of employees), and Ownership of the

company were examined through Kruskal Wallis Test, and Chi-square Analysis.

203

Gromme, N. (1998), “Data Processing and Analysis”, In McDonald, C. and Vangelder, P. (eds, 4th

edition,

pp.389-416.


88

Throughout the analysis, acceptance and rejection of hypotheses was done at the

confidence interval of 95%. (5% of level of significance).

Table 4.1 shows the Achievements with respect to objectives and the tools used to achieve

each objective.

TABLE 4.1 - Achievements With Respect To Objectives

Sr

No Objectives Analysis/ Tools Achievements

1

To study the present status and to

compare E-Procurement in selected

manufacturing industrial units of

Gujarat.

Kruskal-Wallis Test

Chi-Square Test

Cross-Tabulation

Frequency Distributions

Hypothesis testing done

Linkages established

across various variables

2

To explore/ identify the difficulties

faced in E-Procurement

implementation.


Kruskal-Wallis Test

Factor Analysis




Factor Identified

3

To identify the reasons that has led to

the implementation of E-Procurement

in the selected manufacturing

industries of Gujarat.


Kruskal-Wallis Test

Factor Analysis




Factor Identified

4

To study the extent to which

Information Technology (IT) tools are

used in e- procurement.


Kruskal-Wallis Test

Chi-Square Test

Cross-Tabulation



across variables

5 To study the documents exchanged in

E-Procurement through EDI.


Kruskal-Wallis Test

Chi-Square Test

Cross-Tabulation




6

To identify the scopes for further up-

gradation of Information Technology

(IT) to support the E-Procurement

process.


Cross-Tabulation

Kruskal-Wallis Test




(Source: Compiled by Author)


89

4.1 Descriptive Statistics

Trochim, W. M., (2006)204

Descriptive statistics are used to describe the basic features of

the data in a study. It also provides a summary about the sample presented in a simple

graphics form. Descriptive statistic is a set of brief descriptive statistics to summarize a

given data set like mean, median , mode, and standard deviation, etc which can either be a

representation of the entire sample or a population. The measures which can be used to

describe the data set are categorized as measure of variability and central tendency. This

section provides an overview, results and evaluation of respondents towards E-

Procurement practices of selected Industrial Units of Gujarat. Researchers have interpreted

the questionnaires results in the form of tables and figures.

4.1.1 Frequency Distribution.

4.1.1.1 Classification of Companies Based on Types of Industry.

TABLE 4.2: Classification of Companies Based on Types of Industry

Industry Based on Product

Industry Frequency Percent

Chemical & Petroleum 18 25.0%

Automotive 5 6.9%

Pharmaceutical 4 5.6%

Electrical 8 11.1%

Textile 7 9.7%

Engineering & Machine Tools 18 25.0%

Fertilizer 1 1.4%

Others 11 15.3%

Total 72 100.0%


The industries of the participating companies primarily have been categorised as Chemical

& Petroleum (25% or 18), Automotive (6.9% or 5), Pharmaceutical (5.6% or 4), Electrical

(11.1% or 8), Textile (9.7% or 7), Engineering & Machine Tools (25% or 18), Fertilizer

(1.4% or 1) and others (15.3% or 11).

204

Trochim, W.M. (2006), “The Research Methods Knowledge Base”, 2nd

edition, from

http://www.socialresearchmethods.net/kb/>


90

4.1.1.2 Classification of Companies based on Size (Investment in plant machinery)

TABLE 4.3: Classification of Companies based on

Size of the company - Based on Investment in plant machinery

Investment In Plant Machinery Frequency Percent

Investment between 25 lakh to 5 crore rupees 2 2.8%

Investment between 5 crore to 10 crore rupees 10 13.9%

More than 10 crore Investment 60 83.3%

Total 72 100.0%


The size of the participating companies was based on investment in plant machinery. The

majority of them (83.3%) can be defined as large companies according to the standards.

Moreover, 2.8 % of the participants operate as small or micro business. The other 13.9%

of the participating companies categorise themselves as medium.

4.1.1.3 Classification of Companies based on Size (Number of Employees)

TABLE 4.4: Classification of Companies based on

Size of the company - Based on No. of Employees

No. of Employees Frequency Percent

50 to 249 employees 12 16.7%

More than 249 employees 60 83.3%

Total 72 100.0%


The size of the participating companies was also measured on the basis of number of

employees. The majority of them (83.3 %) can be defined as large companies according to

the standards. The other 16.7% of the participating companies categorise themselves as

medium.

4.1.1.4 Classification of Companies Based On Ownership Form

TABLE 4.5: Classification of Companies - Ownership Form

Ownership Form Frequency Percent

Public Sector 21 29.2%

Private Sector 46 63.9%

Joint Sector 5 6.9%

Total 72 100.0%



91

The ownership of the participating companies is primarily categorized as Public Sector (21

or 29.2%), Private Sector (46 or 63.9%) and Joint Sector (5 or 6.9%).

4.1.1.5 Classification based on Importance of Procurement objectives

TABLE 4.6: Classification of Importance of Procurement Objectives

Procurement Objectives

Not

Important

at all

Not

Important Neutral Important

Most

Important

Reduction of the purchasing price 0 0 6 38 28

Optimising total costs of

procurement 0 0 11 30 31

Internal process optimisation 1 3 11 18 39

Securing supplies 0 0 11 32 29

Maintaining quality guidelines 0 0 7 17 48

Increase in cost transparency 0 0 18 22 32

B2B process optimisation 0 1 8 38 25

Minimising warehouse costs 0 2 10 30 30

Reduction of the number of

suppliers 3 15 19 32 3

Product development with

suppliers 0 10 17 28 17

Outsourcing of operative

procurement processes 2 8 21 29 12

Outsourcing of strategic

procurement processes 2 10 14 36 10


Table 4.6 shows the frequency of Importance of Procurement Objectives. 66 companies

have considered “Reduction of the purchasing price” as the important Procurement

Objective. 61 companies have selected “Optimising total costs of procurement” and

“Securing supplies” as their important procurement Objectives. 57 Companies have

chosen “Internal process optimisation” as an important procurement Objective.

Likewise, 65 companies have considered “Maintaining quality guidelines”, 54

companies have considered “Increase in cost transparency”, 63 companies have

considered “B2B process optimisation”, 60 companies have considered “Minimising

warehouse costs”, 35 companies have considered “Reduction of the number of

suppliers”, 45 companies have considered “Product development with suppliers”, 41

companies have considered “Outsourcing of operative procurement processes” and 46

companies have considered “Outsourcing of strategic procurement processes” as their

important procurement Objective.


92

4.1.1.6 Extent to which Information Technology (IT) is used to carry Out the

Procurement Functions Successfully.

TABLE 4.7: Extent to Which Information Technology (IT)

Used to Carry Out the Procurement Functions Successfully.

IT used Frequency Percent

To a very small extent 3 4.2%

To a small extent 3 4.2%

To a moderate extent 15 20.8%

To a great extent 29 40.3%

To a very great extent 22 30.6%

Total 72 100.0%


Table 4.7 shows the frequency of Extent to which Information Technology (IT) is used to

carry out the procurement functions successfully. 3 out of 72 Manufacturing Industrial

Units have used IT to a very small extent to carry out the Procurement function. 3 out of 72

Manufacturing Industrial Units have used IT a small extent to carry out the Procurement

function. 15 out of 72 Manufacturing Industrial Units have used IT to a moderate extent to

carry out the Procurement function. 29 out of 72 Manufacturing Industrial Units have used

IT to a great extent to carry out the Procurement function. 15 out of 72 Manufacturing

Industrial Units have used IT to a very great extent to carry out the Procurement function.

4.1.1.7 Reasons that has Led to the Implementation of E-Procurement

TABLE 4.8: Reasons that has led to the implementation of E-Procurement

Reasons

Not

Important

at all

Not


Most

Important

Central coordination and

aggregation of demand 0 0 12 50 10

Accountability 0 0 1 34 37

Openness 0 0 3 30 39

Transparency 0 0 5 14 53

Process efficiency 0 5 3 21 43

Costs/expenditure transparency 0 2 9 37 24

Reduction in purchasing price

(price discrimination) 0 4 10 38 20

Price Discovery 0 4 6 46 16

Process quality assurance 0 3 5 30 34


93

Integration of suppliers into the

procurement system 0 1 15 37 19

Decentralised supply of

information 0 6 27 36 3

Decentralisation of operative

tasks 3 6 26 36 1


Table 4.8 shows the frequency of Reasons that has led to the implementation of E-

Procurement in selected manufacturing Companies in Gujarat. 60 companies have

considered “Central coordination and aggregation of demand” is the important reason for

adopting E-Procurement. 71 companies have selected “Accountability” as their important

reason for adopting E-Procurement. 69 Companies have chosen “Openness” as an

important reason for implementing an E-Procurement. Likewise, 67 companies have

considered “Transparency”, 64 companies have considered “Process efficiency”, 61

companies have considered “Costs/expenditure transparency”, 58 companies have

considered “Reduction in purchasing price (price discrimination)”, 62 companies have

considered “Price Discovery”, 56 companies have considered “Integration of suppliers into

the procurement system”, 39 companies have considered “Decentralised supply of

information” and 37 companies have considered “Decentralisation of operative tasks” as

their important reason for adopting E-Procurement.

4.1.1.8 Information Technology (IT) Tools Used for Procurement.

TABLE 4.9: Information Technology (IT) Tools Used for Procurement.

IT Tools Not Used Occasionally Frequently

Material Management Module (Enterprise Resources

Planning System) 4 7 61

Reporting and Controlling Tool 2 20 50

Electronic Data Interchange (EDI) 18 29 25

Tool For Supplier Evaluation 13 29 30

Catalogue Management Tool for Indirect Goods 15 30 27

Desktop Purchasing of Indirect Goods 14 39 19

Contract Management Tool for Direct Goods 8 40 24

Online Invitation to Tender 12 21 38

Online Purchasing Auctions 20 15 37

Web-Platform for Scheduling & Planning with Suppliers 23 24 25

Web-Platform for Product Development with Suppliers 26 23 23



94

Table 4.9 shows the Frequency of Information Technology (IT) tools used for

procurement. 61 companies frequently used “Materials management module (ERP-

System)” IT tool for Procurement, While, 50 companies frequently used “Reporting &

controlling tool” , 38 companies frequently used “Online invitations to tender” and 37

companies frequently used “Online purchasing auctions” IT tools for their Procurement.

Likewise, 30 companies frequently used “Tool for supplier evaluation”, 27 companies

frequently used “Catalogue management tool for indirect goods”, 25 companies frequently

used “Web platform for scheduling and planning with suppliers” and “Electronic data

interchange (EDI)”, 24 companies frequently used “Contract management tool”, 23

companies frequently used “Web platform for product development with suppliers” and 19

companies frequently used “Desktop purchasing of indirect goods” IT tools for

Procurement.

4.1.1.9 Information Technology (IT) Solution Used for Operative Order Processing.

TABLE 4.10: IT Solution Used for Operative Order Processing.

IT Solution Responses

Freq Percent

SAP MM (Materials Management Module) 37 51.40%

SAP BBP/EBP (The SAP solutions Enterprise Buyer Professional

(EBP) and its preceding version (BBP) 9 12.50%

Purchasing Card (VISA, Airplus, Amexco ..) 14 19.40%

SAP SRM (Supplier Relationship Management ) 6 8.30%

Oracle, PeopleSoft, J.D.Edwards 4 5.60%

Ariba 2 2.80%

Product development in-house 10 13.90%

ERP 38 52.80%


Table 4.10 shows the frequency of IT solutions used for operative order processing. 38 out

of 72 Manufacturing Industrial Units are using ERP. 37 out of 72 Manufacturing Industrial

Units are using SAP MM (materials management module). 14 out of 72 Manufacturing

Industrial Units are using Purchasing Card (VISA, Airplus, Amexco ..), 9 out of 72

Manufacturing Industrial Units are using SAP BBP/EBP (The SAP solutions Enterprise

Buyer Professional (EBP) and its preceding version (BBP), 10 out of 72 Manufacturing

Industrial Units are using Product development in-house, 6 out of 72 Manufacturing


95

Industrial Units are using SAP SRM (Supplier Relationship Management), 4 out of 72

Manufacturing Industrial Units are using Oracle, PeopleSoft, J.D.Edwards and Only 2 out

of 72 Manufacturing Industrial Units are using Ariba.

4.1.1.10 Information Technology (IT) Tools preferred to fulfil Industrial Procurement

Expectations.

TABLE 4.11: Preferred IT Tools to Fulfil Industrial Procurement Expectations.

IT Tools Not Preferred Neutral Preferred


Planning System) 0 13 59

Desktop purchasing indirect goods 22 28 22

Contract Management Tool for Direct Goods 10 36 26

Reporting and controlling tool 7 17 48

Web platform for scheduling/planning with suppliers 25 19 28

Electronic Data Interchange (EDI) 7 41 24

Tool For Supplier Evaluation 13 23 36

Catalogue Management Tool for Indirect Goods 12 32 28

Online Purchasing Auctions 18 25 29

Web-Platform for Product Development with

Suppliers 30 19 23

Online Invitation to Tender 19 16 37


Table 4.11 shows the Frequency of Information Technology (IT) tools preferred to fulfil

company‟s industrial procurement expectations. 59 companies preferred “Materials

management module (ERP-System)” IT tool to fulfill their industrial procurement

expectations. While, 48 companies preferred “Reporting & controlling tool”, 37 companies

preferred “Online invitations to tender” and 29 companies preferred “Online purchasing

auctions” IT tool to accomplish their industrial procurement expectations. Likewise, 36

companies preferred “Tool for supplier evaluation”, 28 companies preferred “Catalogue

management tool for indirect goods” and “Web platform for scheduling and planning with

suppliers” , 24 companies preferred “Electronic data interchange (EDI)”, 26 companies

preferred “Contract management tool”, 23 companies preferred “Web platform for product

development with suppliers” and 22 companies preferred “Desktop purchasing of indirect

goods” IT tools to accomplish their industrial procurement expectations.


96

4.1.1.11 Number of Supplier with Whom Business Document Exchanged by Means of

Electronic Data Interchange (EDI) / WEB EDI from Last Six Months

TABLE 4.12: No. of Supplier with whom Business Document

Exchanged by Means of EDI / WEB EDI form last six Months

No. of Supplier Frequency Percent

None 4 5.6%

One o five 3 4.2%

Six to Ten 6 8.3%

Eleven to Forty Nine 20 27.8%

Fifty to Ninety Nine 7 9.7%

Greater than 100 32 44.4%

Total 72 100%


As per Table 4.12, 32 out of 72 Manufacturing Industrial Units have exchanged their

documents with more than 100 suppliers by means of EDI/ Web EDI during the last six

months, 20 out of 72 Manufacturing Industrial Units have exchanged their documents with

Eleven to Forty nine suppliers by means of EDI/ Web EDI from last six months, 7 out of

72 Manufacturing Industrial Units have exchanged their documents with Fifty to Ninety

Nine suppliers by means of EDI/ Web EDI from last six months, 6 out of 72

Manufacturing Industrial Units have exchanged their documents with Six to Ten suppliers

by means of EDI/ Web EDI from last six months. 3 out of 72 Manufacturing Industrial

Units have exchanged their documents with one to five suppliers by means of EDI/ Web

EDI from last six months. 4 out of 72 Manufacturing Industrial Units did not exchange

their documents with suppliers by means of EDI/ Web EDI from last six months.

4.1.1.12 Frequency of Electronic Documents Exchanged with Suppliers More Often

TABLE 4.13: Eelectronic Documents Exchanged with Suppliers More Often

Documents Once in a

week

Once in a

month

Once in 3

Month

Once in 6

Month Can‟t Say

Purchase order 79.2 % 15.3 % 1.4 % 0 % 4.2 %

Invoice 87.5 % 0 % 9.7 % 1.4 % 1.4 %

Order confirmation 69.4 % 22.2 % 1.4 % 0 % 6.9 %

Request for quote/bid 33.3 % 27.8 % 26.4 % 4.2 % 8.3 %

Despatch advice 81.9 % 12.5 % 0 % 2.8 % 2.8 %


Table 4.13 shows, 79.2 % of manufacturing units have exchanged Purchase Order with

suppliers once in a week. 87.5 % of manufacturing units have exchanged Invoice with


97

suppliers once in a week. 69.4 % of manufacturing units have exchanged Order

confirmation with suppliers once in a week. 33.3 % of manufacturing units have

exchanged Request for quote / bid with suppliers once in a month. 81.9 % of

manufacturing units have exchanged Despatch advice with suppliers once in a week.

4.1.1.13 Frequencies of Methods Used in the Exchange of the Electronic Business

Documents with Suppliers

TABLE 4.14: Methods Used to Exchange Electronic Business Documents with

Suppliers

Method Responses

Freq Percentage

Fully integrated Solution (EDI) directly with Suppliers 40 55.60%

Fully integrated Solution (EDI) via Business to Business (B2B) Marketplace

/ transaction platform 15 20.80%

WEB Supplier Portal via (B2B) Marketplace / transaction platform (WEB

EDI) 28 38.90%

Company run supplier portal (Web EDI) 23 31.90%


As per Table 4.14, 55.60% manufacturing units have exchanged business documents with

suppliers by fully integrated solution (EDI) directly with the supplier method. 38.90%

manufacturing units have exchanged business documents with suppliers by Web supplier

portal via B2B marketplace/transaction platform (Web EDI) method. 31.90%

manufacturing units have exchanged business documents with suppliers by Company run

supplier portal (Web EDI) method. 20.80% manufacturing units have exchanged business

documents with suppliers by fully integrated solution (EDI) via B2B marketplace

/transaction platform method.

4.1.1.14 Difficulties Faced in E-Procurement Implementation.

TABLE 4.15: Difficulties Faced in E-Procurement Implementation.

Parameters Very

Difficult

Somewhat

Difficult Neutral

Not

Difficult

Not at all

Difficult

High introduction costs for new

solutions 1 21 20 23 7

Suppliers are Slow to link up with

Procurement System 1 39 13 18 1

Lack of quality of master data 3 15 31 17 6

Difficulties in judging Usefulness and 0 10 20 32 10


98


Table 4.15 shows the Difficulties faced in E-Procurement implementation in selected

manufacturing Companies in Gujarat. 22 companies have faced difficulty in “High

introduction costs for new solutions” in adopting E-Procurement. 40 companies have faced

difficulty in “Suppliers slow to link up with the procurement system” in adopting E-

Procurement. 18 companies have faced difficulty in “Lack of quality of master data” in

adopting E-Procurement. Likewise, 10 companies have faced difficulty in “Difficulty in

judging usefulness and potential of new IT solutions”, 16 companies have faced difficulty

in “Lack of user-friendliness and user-acceptance of solutions”, 9 companies have faced

difficulty in “Solutions only address some of our procurement processes”, 12 companies

have faced difficulty in “Solutions do not address the complexity of our processes”, 3

companies have faced difficulty in “Solutions are not well enough integrated (isolated

applications)”, 20 companies have faced difficulty in “Lack of qualified staff who can

work with modern procurement system” and 7 companies have faced difficulty in

“Consultant expertise is lacking in IT projects for procurement” in adopting E-

Procurement.

Potential of new Information

Technology Solutions

Lack of User friendliness and User

acceptance of Solutions 3 13 22 26 8

Solutions only address some of Our

Procurement processes 3 6 15 40 8

Solution do not able to address the

complexity of our processes 0 12 13 32 15

Solutions are not well enough

integrated (Isolated Applications) 0 3 22 38 9

Lack of qualified or skilled staff who

can work with modern procurement

system 8 12 13 16 23

Lack of Consultant expertise in IT for

Procurement 1 6 23 30 12


99

4.1.1.15 Who Initiate and Drives the Development (Up-Gradation) of IT for

Procurement

TABLE 4.16: Who Initiate and Drives the Development

(Up Gradation) of IT for Procurement

Department Frequency Percentage

Procurement Department 49 68.1 %

Process Leadership 24 33.3 %

Top management 55 76.4 %

IT department 43 59.7 %

Business development department 6 8.3 %

External consultants / software providers 11 15.3 %

Business development department 11 15.3 %


55 Companies have agreed that the “Top management” of the company initiate and drives

the development (up gradation) of IT for procurement, 49 Companies have the same

opinion that the “Procurement department” of the company drives the development of IT

for procurement, 43 Companies have considered that the “IT Department” of the company

initiate the development (up gradation) of IT for procurement. Likewise, 24 Companies

have agreed that the “Process leadership”, 11 Companies have agreed that the “External

consultants/software providers” and “Business development department” and 6 Companies

have agreed that the “Business development department” of the company initiate and

drives the development (up gradation) of IT for procurement.

4.1.1.16 Further Up-Gradation of Information Technology (IT) to Support the

Strategic Procurement Process.

TABLE 4.17: Further Up-Gradation of IT to Support Strategic Procurement Process.

Parameters Not Important

at all

Not


Most

Important

Optimising the Analysis of

expenditure 0 0 12 43 17

Supplier assessment 0 6 8 50 8

Contract management 3 4 15 38 12

Development and review of

procurement strategy 0 5 17 23 27

Negotiation (invitations to

tender, auctions) 0 8 18 30 16

Supplier identification 0 2 21 36 13



100

Table 4.17 shows the further up-gradation of Information Technology (IT) to support the

strategic procurement process in selected manufacturing Companies in Gujarat. 60

Companies have considered the importance of up gradation of Information Technology to

support “Optimising the Analysis of expenditure”, 58 Companies have considered the

importance of up-gradation of Information Technology to support “Supplier assessment”,

50 Companies have considered the importance of up-gradation of Information Technology

to support “Contract Management” and “Development and review of procurement

strategy”, 46 Companies have believed the importance of up-gradation of Information

Technology to support “Negotiation (invitations to tender, auctions)” and 49 Companies

have considered the importance of up-gradation of Information Technology to support

“Supplier identification”.

4.1.1.17 Further Up-Gradation of Information Technology (IT) to Support the

Operative Procurement Process.

TABLE 4.18: Further Up-Gradation of Information Technology (IT) to Support the

Operative Procurement Process.

Process

Not

Important

at all

Not


Most

Important

Order processing of direct goods 0 3 15 43 11

Automated invoice entry processing 0 2 22 27 21

Order processing of indirect goods 0 6 6 43 17

Order processing of services 3 8 20 33 8

Cooperative disposition / planning

with suppliers 1 3 18 42 8

Order processing of investment

goods 0 8 23 30 11

Electronic interchange of business

documents (EDI) 0 6 15 34 17

Cooperative Product development

with suppliers 0 7 12 34 19


Table 4.18 shows the further up-gradation of Information Technology (IT) to support the

operative procurement process in selected manufacturing Companies in Gujarat. 54

Companies have considered the importance of up-gradation of Information Technology to

support “Order processing of direct goods”, 48 Companies have considered the importance

of up-gradation of Information Technology to support “Automated invoice entry


101

processing”, 60 Companies have considered the importance of up-gradation of Information

Technology to support “Order processing of indirect goods”, 41 Companies have

considered the importance of up-gradation of Information Technology to support “Order

processing of services” and “Order processing of investment goods”, 50 Companies have

believed the importance of up-gradation of Information Technology to support

“Cooperative disposition / planning with suppliers”, 51 Companies have considered the

importance of up-gradation of Information Technology to support “Electronic interchange

of business documents (EDI)” and 53 Companies have considered the importance of up-

gradation of Information Technology to support “Cooperative product development with

suppliers”.

4.1.2 Cross Tabulation

Cross Tabulation is the method to understand as to how two different variables are related

to each other. Cross Tabulation is performed on Nominal / Ordinal Variables. It is a tool to

descriptively examine variables and to identify whether there is a relationship between two

variables205

.

4.1.2.1 Here, Cross Tabulation is Performed between Types of Industry and Extent to

Which Information Technology (IT) Used to Carry Out the Procurement Functions

Successfully.

TABLE 4.19: Cross Tabulation of the types of Industry – Extent to which

Information Technology (IT) used to carry out the procurement functions

successfully.

Crosstab

Use of IT for procurement

To a

very

small

extent

To a

small

extent

To a

moderate

extent

To a

great

extent

To a very

great

extent

Indust

ry

Based

on

Chemical

&

Petroleum

Count 1 0 2 9 6

% within

Industry Based

on Product

5.60% 0.00% 11.10% 50.00% 33.30%

205

“Cross Tabulation” last retrieved dated 21.10.2016 from

http://www.socsci.uci.edu/~schofer/2005soc5811/pub/Lecture%2015%20CROSSTABS%201.ppt.


102

Produ

ct % within Use of

IT for

procurement

33.30% 0.00% 13.30% 31.00% 27.30%

Automotiv

e

Count 1 0 1 1 2

% within

Industry Based

on Product

20.00% 0.00% 20.00% 20.00% 40.00%

% within Use of

IT for

procurement

33.30% 0.00% 6.70% 3.40% 9.10%

Pharmaceu

tical

Count 0 0 2 2 0

% within

Industry Based

on Product

0.00% 0.00% 50.00% 50.00% 0.00%

% within Use of

IT for

procurement

0.00% 0.00% 13.30% 6.90% 0.00%

Electrical

Count 1 0 3 3 1

% within

Industry Based

on Product

12.50% 0.00% 37.50% 37.50% 12.50%

% within Use of

IT for

procurement

33.30% 0.00% 20.00% 10.30% 4.50%

Textile

Count 0 0 1 2 4

% within

Industry Based

on Product

0.00% 0.00% 14.30% 28.60% 57.10%

% within Use of

IT for

procurement

0.00% 0.00% 6.70% 6.90% 18.20%

Engineerin

g &

Machine

Tools

Count 0 2 2 8 6

% within

Industry Based

on Product

0.00% 11.10% 11.10% 44.40% 33.30%

% within Use of

IT for

procurement

0.00% 66.70% 13.30% 27.60% 27.30%

Fertilizer

Count 0 0 0 0 1

% within

Industry Based

on Product

0.00% 0.00% 0.00% 0.00% 100.00%

% within Use of

IT for

procurement

0.00% 0.00% 0.00% 0.00% 4.50%

Others

Count 0 1 4 4 2

% within

Industry Based

on Product

0.00% 9.10% 36.40% 36.40% 18.20%


103

% within Use of

IT for

procurement

0.00% 33.30% 26.70% 13.80% 9.10%

Total

Count 3 3 15 29 22

% within

Industry Based

on Product

4.20% 4.20% 20.80% 40.30% 30.60%

% within Use of

IT for

procurement

100.00

%

100.00

% 100.00%

100.00

% 100.00%


FIGURE 4.1: Cross Tabulation of the types of Industry – Extent to which

Information Technology (IT) used to carry out the procurement functions

successfully.

The observed frequencies in the cross tabulation matrix, Chemical & Petroleum Industrial

Units have used IT at great extent to carry out the Procurement function (88.30%).

Automotive Industrial Units have used IT at great extent to carry out the Procurement

function (60.00%). Pharmaceutical Industrial Units have used IT at great extent to carry

out the Procurement function (50.00%). Electrical Industrial Units have used IT at great

extent to carry out the Procurement function (50.00%). Textile Industrial Units have used

IT at great extent to carry out the Procurement function (87.70%). Engineering & Machine

Industrial Units have used IT at great extent to carry out the Procurement function

(77.70%). Fertilizer Industrial Units have used IT at a very great extent to carry out the

Procurement function (100%).


104

4.1.2.2 Cross Tabulation Performed Between the Ownership of Company and Extent

to Which IT Used to Carry out Procurement Functions Successfully.

TABLE 4.20: Cross Tabulation of the Ownership of the Company – Extent to Which

IT Used to Carry Out Procurement Functions Successfully.

Use Of IT For Procurement

To a

very

small

extent

To a

small

extent

To a

moderate

extent

To a

great

extent

To a

very

great

extent

Owner

ship

Firm

Public

Sector

Count 1 1 4 9 6

% within

Ownership Firm 4.80% 4.80% 19.00% 42.90% 28.60%

% within Use of IT

for procurement 33.30% 33.30% 26.70% 31.00% 27.30%

Privat

e

Sector

Count 2 1 11 19 13

% within

Ownership Firm 4.30% 2.20% 23.90% 41.30% 28.30%

% within Use of IT

for procurement 66.70% 33.30% 73.30% 65.50% 59.10%

Joint

Sector

Count 0 1 0 1 3

% within

Ownership Firm 0.00% 20.00% 0.00% 20.00% 60.00%

% within Use of IT

for procurement 0.00% 33.30% 0.00% 3.40% 13.60%

Total

Count 3 3 15 29 22

% within

Ownership Firm 4.20% 4.20% 20.80% 40.30% 30.60%

% within Use of IT

for procurement 100.00% 100.00% 100.00% 100.00% 100.00%



105

FIGURE 4.2: Cross Tabulation of the Ownership of the Company – Extent to Which

IT Used to Carry Out the Procurement Functions Successfully.

The observed frequencies in the cross tabulation matrix, Public Sector Company has used

IT to a great extent to carry out the Procurement function (71.50%). Private Sector

Company has used IT to a great extent to carry out the Procurement function (69.60%).

Joint Sector Company has used IT to a great extent to carry out the Procurement function

(80.00%).

4.1.2.3 Cross Tabulation Performed Between Size of The Company (Based On

Investment) and Extent to Which IT Used to Carry Out the Procurement Functions.

TABLE 4.21: Cross Tabulation: Size of the Company (Based on Investment) – Extent

to Which IT Used to Carry Out the Procurement Functions.

Use Of IT For Procurement

To a

very

small

extent

To a

small

extent

To a

moderate

extent

To a

great

extent

To a very

great

extent

Size

of

the

com

pany

-

Base

d on

Inve

Investment

between 25

lakh to 5

crore

rupees

Count 0 1 0 1 0

% within Size of

the company -

Based on

Investment

0.00% 50.00% 0.00% 50.00% 0.00%

% within Use of

IT for

procurement

0.00% 33.30% 0.00% 3.40% 0.00%

Investment Count 1 0 5 4 0


106

stme

nt

between 5

crore to 10

crore

rupees

% within Size of

the company -

Based on

Investment

10.00% 0.00% 50.00% 40.00% 0.00%

% within Use of

IT for

procurement

33.30% 0.00% 33.30% 13.80% 0.00%

More than

10 crore

Investment

Count 2 2 10 24 22

% within Size of

the company -

Based on

Investment

3.30% 3.30% 16.70% 40.00% 36.70%

% within Use of

IT for

procurement

66.70% 66.70% 66.70% 82.80% 100.00%

Total

Count 3 3 15 29 22

% within Size of

the company -

Based on

Investment

4.20% 4.20% 20.80% 40.30% 30.60%

% within Use of

IT for

procurement

100.00% 100.00

% 100.00%

100.00

% 100.00%


FIGURE 4.3: Cross Tabulation: Size Of The Company (Based On Investment) –

Extent To Which IT Used To Carry Out The Procurement Functions.


107

The observed frequencies in the cross tabulation matrix, Small Scale Company (which has

Investment between 25 lakh rupees to 5 Crore rupees) have used IT at great extent to carry

out the Procurement function (50.00%). Medium Scale Company (which has Investment

between 5 Crore to 10 Crore rupees) have used IT at moderate extent to carry out the

Procurement function (50.00%). Large Company (which has More than 10 Crore rupees

Investment) have used IT at great extent to carry out the Procurement function (76.70%).

4.1.2.4 Cross Tabulation Performed Between Size of the Company (Based on

Employees) and Extent to Which IT Used to Carry Out Procurement Functions.

TABLE 4.22: Cross Tabulation: Size of the Company (Based on Employees) – Extent

to Which IT Used to Carry Out the Procurement Functions.

Use of IT for Procurement

To a

very

small

extent

To a

small

extent

To a

moderate

extent

To a

great

extent

To a very

great

extent

Size

of the

compa

ny -

Based

on No.

of

Emplo

yees

50 to

249

emplo

yees

Count 1 1 5 4 1

% within Size of the

company - Based on

No. of Employees

8.30% 8.30% 41.70% 33.30% 8.30%

% within Use of IT

for procurement 33.30%

33.30

% 33.30% 13.80% 4.50%

More

than

249

emplo

yees

Count 2 2 10 25 21


company - Based on

No. of Employees

3.30% 3.30% 16.70% 41.70% 35.00%

% within Use of IT


66.70

% 66.70% 86.20% 95.50%

Total

Count 3 3 15 29 22


company - Based on

No. of Employees

4.20% 4.20% 20.80% 40.30% 30.60%

% within Use of IT


100.00

% 100.00%

100.00

% 100.00%



108

FIGURE 4.4: Cross Tabulation: Size of the Company (Based on No. of Employees) –

Extent to Which IT Used to Carry Out Procurement Functions.

The observed frequencies in the cross tabulation matrix, Small Scale Company (which has

50 to 249 employees) has used IT at great extent to carry out the Procurement function

(41.60%). Small Scale Company (more than 249 employees) has used IT at great extent to

carry out the Procurement function (76.70%).

4.1.2.5 Cross Tabulation Performed Between the Types of Industry and Information

Technology (IT) Solutions Used For Operative Order Processing

TABLE 4.23: Cross Tabulation: Types of Industry –IT Solutions used for Operative

Order processing

Crosstab

SAP

MM

(Materia

ls

Manage

ment

Module)

SAP

BBP/EBP

(The SAP

solutions

Enterprise

Buyer

Professional

(EBP) and

Its

preceding

version

(BBP)

Purcha

sing

Card

(VISA,

Airplus

,

Amexc

o ...)

SAP

SRM

(Suppli

er

Relatio

nship

Manag

ement

)

Oracle,

People

Soft,

J.D.Ed

wards

Ariba

Produ

ct

develo

pment

in

house

ERP

Ind

ust

ry

Ba

sed

Che

mic

al

&

Petr

Count 11 1 3 4 1 0 2 7

% within

Industry

Based on

Product

61.10% 5.60% 16.70

%

22.20

% 5.60% 0.00%

11.10

%

38.9

0%


109

on

Pro

duc

t

ole

um

% within

SAP MM

(Materials

Manageme

nt

Module)

29.70% 11.10% 21.40

%

66.70

%

25.00

% 0.00%

20.00

%

18.4

0%

Aut

om

otiv

e

Count 3 2 1 0 0 0 1 2

% within

Industry

Based on

Product

60.00% 40.00% 20.00

% 0.00% 0.00% 0.00%

20.00

% 40.0

0%

% within

SAP MM

(Materials

Manageme

nt

Module)

8.10% 22.20% 7.10% 0.00% 0.00% 0.00% 10.00

%

5.30

%

Pha

rma

ceut

ical

Count 1 1 1 0 1 0 1 3

% within

Industry

Based on

Product

25.00% 25.00% 25.00

% 0.00%

25.00

% 0.00%

25.00

% 75.0

0%

% within

SAP MM

(Materials

Manageme

nt

Module)

2.70% 11.10% 7.10% 0.00% 25.00

% 0.00%

10.00

%

7.90

%

Ele

ctri

cal

Count 2 0 0 0 0 1 0 7

% within

Industry

Based on

Product

25.00% 0.00% 0.00% 0.00% 0.00% 12.50

% 0.00%

87.5

0%

% within

SAP MM

(Materials

Manageme

nt

Module)

5.40% 0.00% 0.00% 0.00% 0.00% 50.00

% 0.00%

18.4

0%

Tex

tile

Count 6 2 1 0 0 0 0 4

% within

Industry

Based on

Product

85.70% 28.60% 14.30

% 0.00% 0.00% 0.00% 0.00%

57.1

0%

% within

SAP MM

(Materials

Manageme

nt

Module)

16.20% 22.20% 7.10% 0.00% 0.00% 0.00% 0.00% 10.5

0%

Eng

inee

ring

&

Ma

Count 8 1 4 1 1 1 3 10

% within

Industry

Based on

Product

44.40% 5.60% 22.20

% 5.60% 5.60% 5.60%

16.70

% 55.6

0%


110

chi

ne

Too

ls

% within

SAP MM

(Materials

Manageme

nt

Module)

21.60% 11.10% 28.60

%

16.70

%

25.00

%

50.00

%

30.00

%

26.3

0%

Fert

iliz

er

Count 1 0 0 0 0 0 0 0

% within

Industry

Based on

Product

100.00

% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.00

%

% within

SAP MM

(Materials

Manageme

nt

Module)

2.70% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00

%

Oth

ers

Count 5 2 4 1 1 0 3 5

% within

Industry

Based on

Product

45.50% 18.20% 36.40

% 9.10% 9.10% 0.00%

27.30

% 45.5

0%

% within

SAP MM

(Materials

Manageme

nt

Module)

13.50% 22.20% 28.60

%

16.70

%

25.00

% 0.00%

30.00

%

13.2

0%

Total

Count 37 9 14 6 4 2 10 38

% within

Industry

Based on

Product

51.40% 12.50% 19.40

% 8.30% 5.60% 2.80%

13.90

%

52.8

0%

% within

SAP MM

(Materials

Manageme

nt

Module)

100.00% 100.00% 100.00

%

100.00

%

100.00

%

100.00

%

100.00

%

100.

00%


The observed frequencies in the cross tabulation matrix, one can infer that: IT solutions are

mainly used for operative order processing in Chemical & Petroleum Industry are SAP

MM (materials management module) (61.10% of them used) and ERP (38.90% of them

used); IT solutions are mainly used for operative order processing in Automotive Industry

are SAP MM (materials management module) (60 % of them used), SAP BBP/EBP (The

SAP solutions Enterprise Buyer Professional (EBP) and its preceding version (BBP) (40.00

% of them used) and ERP (40.00% of them used); IT solutions are mainly used for

operative order processing in Pharmaceutical Industry is ERP (75.0 % of them used); IT

solutions are mainly used for operative order processing in Electrical Industry is ERP


111

(87.5.0 % of them used); IT solutions are mainly used for operative order processing in

Textile Industry are SAP MM (materials management module) (85.70 % of them used) and

ERP (57.10% of them used); IT solutions are mainly used for operative order processing

in Engineering & Machine Industry are ERP (55.60 % of them used) and SAP MM

(materials management module) (44.40%); IT solutions are mainly used for operative order

processing in Fertilizer Industry is SAP MM (materials management module) (100 % of

them used); IT solutions are mainly used for operative order processing in Other Industries

are SAP MM (materials management module) and ERP (45.50 % of them used).

4.1.2.6 Cross Tabulation Performed Between Ownership of the Firm and Information

Technology (IT) Solutions Used for Operative Order Processing.

TABLE 4.24: Cross Tabulation of the Ownership of the Firm –IT Solutions Used For

Operative Order Processing

Crosstab

SAP

MM

(Materi

als

Manage

ment

Module

)

SAP

BBP/EBP

(The SAP

solutions

Enterprise

Buyer

Professional

(EBP) and Its

preceding

version

(BBP)

Purch

asing

Card

(VIS

A,

Airpl

us,

Ame

xco

...)

SAP

SRM

(Supplier

Relation

ship

Manage

ment )

Oracle,

People

Soft,

J.D.Ed

wards

Ariba

Prod

uct

devel

opme

nt in

house

ERP

O

w

ne

rs

hi

p

Fi

r

m

Pub

lic

Sec

tor

Count 13 6 4 3 2 0 3 14

% within

Ownership

Firm

61.90% 28.60% 19.00

% 14.30% 9.50%

0.00

%

14.30

%

66.7

0%

% within

SAP MM

(Materials

Managemen

t Module)

35.10% 66.70% 28.60

% 50.00%

50.00

%

0.00

%

30.00

%

36.8

0%

Priv

ate

Sec

tor

Count 20 2 7 2 2 2 5 24

% within

Ownership

Firm

43.50% 4.30% 15.20

% 4.30% 4.30%

4.30

%

10.90

%

52.2

0%

% within

SAP MM

(Materials

Managemen

t Module)

54.10% 22.20% 50.00

% 33.30%

50.00

%

100.0

0%

50.00

%

63.2

0%


112

Join

t

Sec

tor

Count 4 1 3 1 0 0 2 0

% within

Ownership

Firm

80.00% 20.00% 60.00

% 20.00% 0.00%

0.00

%

40.00

%

0.00

%

% within

SAP MM

(Materials

Managemen

t Module)

10.80% 11.10% 21.40

% 16.70% 0.00%

0.00

%

20.00

%

0.00

%

Total

Count 37 9 14 6 4 2 10 38

% within

Ownership

Firm

51.40% 12.50% 19.40

% 8.30% 5.60%

2.80

%

13.90

%

52.8

0%

% within

SAP MM

(Materials

Managemen

t Module)

100.00

% 100.00%

100.0

0% 100.00%

100.00

%

100.0

0%

100.0

0%

100.

00%


The observed frequencies in the cross tabulation matrix, IT solution majorly used for

operative order processing in Public Sector Company are ERP (66.70% of them used) and

SAP MM (materials management module) (61.90% of them used). IT solutions used for

operative order processing in Private Sector Company are ERP (52.20% of them used) and

SAP MM (materials management module) (43.50% of them used). IT solutions used for

operative order processing in Joint Sector Company are SAP MM (materials management

module) (80.00% of them used), Purchasing Card (VISA, Airplus, Amexco ...) (60.00%)

and Product development in house (40.00%).

4.1.2.7 Cross Tabulation Performed Between Size of the Company (Based on

Investment) and IT Solutions Used for Operative Order Processing.

TABLE 4.25: Cross Tabulation: Size of the Company (Based on Investment)

– IT Solutions used for Operative Order Processing

Crosstab

SAP

MM

(Materi

als

Manage

ment

Module

)

SAP BBP/EBP

(The SAP

solutions

Enterprise Buyer

Professional

(EBP) and Its

preceding

version (BBP)

Purch

asing

Card

(VIS

A,

Airpl

us,

Ame

xco

...)

SAP

SRM

(Suppli

er

Relatio

nship

Manag

ement )

Oracl

e,

Peopl

eSoft,

J.D.E

dwar

ds

Ariba

Prod

uct

devel

opme

nt in

house

ERP

Si Inves Count 0 0 1 0 0 0 1 1


113

ze

of

th

e

co

m

pa

ny

-

B

as

ed

on

In

ve

st

m

en

t

tment

betw

een

25

lakh

to 5

crore

rupee

s

% within

Size of the

company -

Based on

Investmen

t

0.00% 0.00% 50.00

% 0.00%

0.00

%

0.00

% 50.00

%

50.0

0%

% within

SAP MM

(Materials

Managem

ent

Module)

0.00% 0.00% 7.10

% 0.00%

0.00

%

0.00

%

10.00

%

2.60

%

Inves

tment

betw

een 5

crore

to 10

crore

rupee

s

Count 1 1 4 0 0 0 2 8

% within

Size of the

company -

Based on

Investmen

t

10.00% 10.00% 40.00

% 0.00%

0.00

%

0.00

%

20.00

% 80.0

0%

% within

SAP MM

(Materials

Managem

ent

Module)

2.70% 11.10% 28.60

% 0.00%

0.00

%

0.00

%

20.00

%

21.1

0%

More

than

10

crore

Inves

tment

Count 36 8 9 6 4 2 7 29

% within

Size of the

company -

Based on

Investmen

t

60.00% 13.30% 15.00

%

10.00

%

6.70

%

3.30

%

11.70

% 48.3

0%

% within

SAP MM

(Materials

Managem

ent

Module)

97.30% 88.90% 64.30

%

100.00

%

100.0

0%

100.0

0%

70.00

%

76.3

0%

Total

Count 37 9 14 6 4 2 10 38

% within

Size of the

company -

Based on

Investmen

t

51.40% 12.50% 19.40

% 8.30%

5.60

%

2.80

%

13.90

%

52.8

0%

% within

SAP MM

(Materials

Managem

ent

Module)

100.00

% 100.00%

100.0

0%

100.00

%

100.0

0%

100.0

0%

100.0

0%

100.

00%


The observed frequencies in the cross tabulation matrix, IT solution majorly used for

operative order processing in Small Scale Company (which has investment between 25

lakh to 5 coroe rupees) are Purchasing Card (VISA, Airplus, Amexco ...) (50% of them


114

used), Product development in house (50% of them used) and ERP (50% of them used). IT

solution majorly used for operative order processing in Medium Scale Company (which

has investment between 5 Crore to 10 Crore rupees) are Purchasing Card (VISA, Airplus,

Amexco ...) (40% of them used) and ERP (80% of them used). IT solution majorly used for

operative order processing in Large Scale Company (which has investment more than 10

Crore rupees) are SAP MM (materials management module) (60% of them used) and ERP

(48.30% of them used)

4.1.2.8 Cross Tabulation Performed Between the Size of the Company (Based On

Number Of Employees) and IT Solutions Used for Operative Order Processing.

TABLE 4.26: Cross Tabulation: Size of the Company (Based on Number of

Employees –IT Solutions Used for Operative Order Processing

Crosstab

SAP

MM

(Materi

als

Manage

ment

Module

)

SAP

BBP/EBP

(The SAP

solutions

Enterprise

Buyer

Professional

(EBP) and Its

preceding

version

(BBP)

Purchasi

ng Card

(VISA,

Airplus,

Amexco

...)

SAP

SRM

(Supp

lier

Relati

onshi

p

Mana

geme

nt )

Oracl

e,

Peopl

eSoft,

J.D.E

dwar

ds

Ariba

Prod

uct

deve

lopm

ent

in

hous

e

ERP

Siz

e of

the

co

mp

any

-

Bas

ed

on

No.

of

Em

plo

yee

s

50 to

249

empl

oyees

Count 3 1 4 0 0 0 3 7

% within

Size of the

company -

Based on

No. of

Employee

s

25.00% 8.30% 33.30% 0.00% 0.00

%

0.00

%

25.0

0% 58.30

%

% within

SAP MM

(Materials

Managem

ent

Module)

8.10% 11.10% 28.60% 0.00% 0.00

%

0.00

%

30.0

0%

18.40

%

More

than

249

empl

oyees

Count 34 8 10 6 4 2 7 31

% within

Size of the

company -

Based on

No. of

Employee

s

56.70% 13.30% 16.70% 10.00

%

6.70

%

3.30

%

11.7

0% 51.70

%


115

% within

SAP MM

(Materials

Managem

ent

Module)

91.90% 88.90% 71.40% 100.0

0%

100.0

0%

100.0

0%

70.0

0%

81.60

%

Total

Count 37 9 14 6 4 2 10 38

% within

Size of the

company -

Based on

No. of

Employee

s

51.40% 12.50% 19.40% 8.30% 5.60

%

2.80

%

13.9

0%

52.80

%

% within

SAP MM

(Materials

Managem

ent

Module)

100.00

% 100.00%

100.00

%

100.0

0%

100.0

0%

100.0

0%

100.

00%

100.0

0%


IT solutions majorly used for operative order processing in large scale company (which has

more than 250 employees) are SAP MM (materials management module) (56.70% of them

used) and ERP (51.70% of them used). IT solutions majorly used for operative order

processing in Medium Scale Company (which has 50 to 249 employees) are ERP (58.30%

of them used) and Purchasing Card (VISA, Airplus, Amexco ...) (33.30% of them used).

4.1.2.9 Cross Tabulation Performed Between the Types of Industry and Number of

Supplier with Whom Business Document Exchanged by Means of EDI) / WEB EDI

from Last Six Months

TABLE 4.27: Cross Tabulation: Types of Industry – No. of Suppliers with Whom

Business Document Exchanged by Means of EDI / WEN EDI from Last Six Months

Crosstab

No. of Suppliers with whom Business Document exchanged by

means of EDI / WEN EDI from last six Months

None One o

five

Six to

Ten

Eleven

to Forty

Nine

Fifty to

Ninety

Nine

Greater

than 100

Ind

ustr

y

Chemica

l &

Petroleu

Count 0 1 1 6 0 10

% within Industry

Based on Product 0.00% 5.60% 5.60% 33.30% 0.00% 55.60%


116

Bas

ed

on

Pro

duc

t

m % within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

0.00% 33.30% 16.70% 30.00% 0.00% 31.30%

Automot

ive

Count 0 1 0 2 0 2

% within Industry

Based on Product 0.00% 20.00% 0.00% 40.00% 0.00% 40.00%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

0.00% 33.30% 0.00% 10.00% 0.00% 6.30%

Pharmac

eutical

Count 1 0 0 2 1 0

% within Industry

Based on Product 25.00% 0.00% 0.00% 50.00% 25.00% 0.00%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

25.00% 0.00% 0.00% 10.00% 14.30% 0.00%

Electrica

l

Count 0 1 2 1 2 2

% within Industry

Based on Product 0.00% 12.50% 25.00% 12.50% 25.00% 25.00%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

0.00% 33.30% 33.30% 5.00% 28.60% 6.30%

Textile

Count 0 0 0 1 1 5

% within Industry

Based on Product 0.00% 0.00% 0.00% 14.30% 14.30% 71.40%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

0.00% 0.00% 0.00% 5.00% 14.30% 15.60%

Engineer Count 1 0 2 5 3 7


117

ing &

Machine

Tools

% within Industry

Based on Product 5.60% 0.00% 11.10% 27.80% 16.70% 38.90%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

25.00% 0.00% 33.30% 25.00% 42.90% 21.90%

Fertilizer

Count 0 0 0 0 0 1

% within Industry

Based on Product 0.00% 0.00% 0.00% 0.00% 0.00% 100.00%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

0.00% 0.00% 0.00% 0.00% 0.00% 3.10%

Others

Count 2 0 1 3 0 5

% within Industry

Based on Product 18.20% 0.00% 9.10% 27.30% 0.00% 45.50%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

50.00% 0.00% 16.70% 15.00% 0.00% 15.60%

Total

Count 4 3 6 20 7 32

% within Industry

Based on Product 5.60% 4.20% 8.30% 27.80% 9.70% 44.40%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

100.00

%

100.00

%

100.00

%

100.00

%

100.00

% 100.00%



118

FIGURE 4.5: Cross Tabulation: Types of Industry – No. of Suppliers with Whom

Business Document Exchanged by Means of EDI / WEN EDI from Last Six Months

The observed frequencies in the cross tabulation matrix, Chemical & Petroleum Industry

have exchanged business documents by means of EDI/Web EDI from last six months with

more than 100 suppliers (56.60% of them have exchanged). Automotive Industry have

exchanged business documents by means of EDI/Web EDI from last six months with more

than 100 Supplier (40.00% of them have exchanged). Pharmaceutical Industry have

exchanged business documents by means of EDI/Web EDI from last six months with

eleven to forty nine Suppliers (50.00% of them have exchanged). Electrical Industry have


greater than 100 Suppliers (25.00% of them have exchanged). Textile Industry have


greater than 100 Suppliers (71.40% of them have exchanged). Engineering and Machine

Industry have exchanged business documents by means of EDI/Web EDI from last six

months with greater than 100 Suppliers (38.90% of them have exchanged). Fertilizer

Industry have exchanged business documents by means of EDI/Web EDI from last six

months with greater than 100 Suppliers (100% of them have exchanged). Others Industry


greater than 100 Suppliers (45.5% of them have exchanged).


119

4.1.2.10 Cross Tabulation Performed Between Ownership of the Firms and No. of

Supplier with Whom Business Document Exchanged by Means of EDI / WEB EDI

from Last Six Months

TABLE 4.28: Cross Tabulation: Ownership of the Firms – No. of Suppliers with

Whom Business Document Exchanged by Means of EDI / WEB EDI

Crosstab

No. of Suppliers with whom Business Document exchanged by means

of EDI / WEN EDI from last six Months

None One o

five

Six to

Ten

Eleven to

Forty

Nine

Fifty to

Ninety

Nine

Greater

than 100

Ow

ners

hip

Fir

m

Publi

c

Secto

r

Count 1 1 1 6 2 10

% within

Ownership Firm 4.80% 4.80% 4.80% 28.60% 9.50% 47.60%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

25.00% 33.30% 16.70% 30.00% 28.60% 31.30%

Priva

te

Secto

r

Count 3 2 4 14 5 18

% within

Ownership Firm 6.50% 4.30% 8.70% 30.40% 10.90% 39.10%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

75.00% 66.70% 66.70% 70.00% 71.40% 56.30%

Joint

Secto

r

Count 0 0 1 0 0 4

% within

Ownership Firm 0.00% 0.00% 20.00% 0.00% 0.00% 80.00%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

0.00% 0.00% 16.70% 0.00% 0.00% 12.50%

Total

Count 4 3 6 20 7 32

% within

Ownership Firm 5.60% 4.20% 8.30% 27.80% 9.70% 44.40%


120

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

100.00% 100.00% 100.00% 100.00% 100.00% 100.00%


FIGURE 4.6: Cross Tabulation: Ownership of the Firms – No. of Suppliers with

Whom Business Document Exchanged by Means of EDI / WEB EDI.

The observed frequencies in the cross tabulation matrix, Public Sector Company have


Greater than 100 Supplier (47.60% of them have exchanged). Private Sector Company


Greater than 100 Supplier (39.10% of them have exchanged). Joint Sector Company have


Greater than 100 Supplier (80.00% of them have exchanged).


121

4.1.2.11 Cross Tabulation Performed Between Size of the Firms (Based On

Investment) and No. of Supplier with Whom Business Document Exchanged By

Means of EDI / WEB EDI from Last Six Months.

Table 4.29: Cross Tabulation: Size of the Firm (Based on Investment) – No. of

Suppliers with Whom Business Document Exchanged by Means of EDI / WEB EDI

Crosstab



None One o

five

Six to

Ten

Eleven

to Forty

Nine

Fifty to

Ninety

Nine

Greater

than 100

Size

of

the

com

pany

-

Base

d on

Inves

tmen

t

Invest

ment

betwee

n 25

lakh to

5 crore

rupees

Count 0 0 1 0 1 0


company - Based on

Investment

0.00% 0.00% 50.00% 0.00% 50.00% 0.00%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from last

six Months

0.00% 0.00% 16.70% 0.00% 14.30% 0.00%

Invest

ment

betwee

n 5

crore

to 10

crore

rupees

Count 3 1 1 3 1 1


company - Based on

Investment

30.00% 10.00% 10.00% 30.00% 10.00% 10.00%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from last

six Months

75.00% 33.30% 16.70% 15.00% 14.30% 3.10%

More

than 10

crore

Invest

ment

Count 1 2 4 17 5 31


company - Based on

Investment

1.70% 3.30% 6.70% 28.30% 8.30% 51.70%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from last

six Months

25.00% 66.70% 66.70% 85.00% 71.40% 96.90%

Total

Count 4 3 6 20 7 32


company - Based on

Investment

5.60% 4.20% 8.30% 27.80% 9.70% 44.40%


122

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from last

six Months

100.00% 100.00% 100.00% 100.00% 100.00% 100.00%


FIGURE 4.7: Cross Tabulation: Size of the Firms (Based on Investment) –No. of

Suppliers with Whom Business Document Exchanged by Means Of EDI / WEB EDI

The observed frequencies in the cross tabulation matrix: Small Scale Company (which has

investment between 25 lakh to 5 Crore rupees) have exchanged business documents by

means of EDI/Web EDI from last six months with fifty to Ninety nine Suppliers (50.00%

of them have exchanged). Medium Scale Company (which has investment between 5

Crore to 10 Crore rupees) have exchanged business documents by means of EDI/Web EDI

from last six months with fifty to Ninety nine Supplier (50.00% of them have exchanged).

Large Scale Company (which has investment greater than 10 Crore rupees) have


greater than 100 Supplier (51.70% of them have exchanged).


123

4.1.2.12 Cross Tabulation Performed Between Size of the Firms (Based On No. of

Employees) and No. of Supplier with Whom Business Document Exchanged by

Means of EDI / WEB EDI from Last Six Months.

TABLE 4.30: Cross Tabulation: Size of the Firm (Based on No. of Employees) – No.

of Suppliers with Whom Business Document Exchanged by Means of EDI / WEB EDI

Crosstab



None One o

five

Six to

Ten

Eleven

to Forty

Nine

Fifty to

Ninety

Nine

Greater

than 100

Size of

the

company

- Based

on No.

of

Employe

es

50 to

249

empl

oyees

Count 3 1 1 4 2 1

% within Size of

the company -

Based on No. of

Employees

25.00% 8.30% 8.30% 33.30% 16.70% 8.30%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

75.00% 33.30% 16.70% 20.00% 28.60% 3.10%

More

than

249

empl

oyees

Count 1 2 5 16 5 31

% within Size of

the company -

Based on No. of

Employees

1.70% 3.30% 8.30% 26.70% 8.30% 51.70%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

25.00% 66.70% 83.30% 80.00% 71.40% 96.90%

Total

Count 4 3 6 20 7 32

% within Size of

the company -

Based on No. of

Employees

5.60% 4.20% 8.30% 27.80% 9.70% 44.40%

% within No. of

Suppliers with

whom Business

Document

exchanged by

means of EDI /

WEN EDI from

last six Months

100.00% 100.00% 100.00% 100.00% 100.00% 100.00%



124

FIGURE 4.8: Cross Tabulation: Size of the Firms (Based on No. of Employees) –No.

of Suppliers with Whom Business Document Exchanged by Means Of EDI / WEB

EDI

The observed frequencies in the cross tabulation matrix, Medium Scale Company (which

has 50 to 249 employees) have exchanged business documents by means of EDI/Web EDI

from last six months with Eleven to Forty Nine Suppliers (33.30% of them have

exchanged). Large Scale Company (which has more than 250 employees) have exchanged

business documents by means of EDI/Web EDI from last six months with greater than 100

Supplier (51.70% of them have exchanged).

4.1.2.13 Cross Tabulation Performed Between Types of Industry and Electronic

Documents Exchanged with Suppliers More Often.

TABLE 4.31: Cross Tabulation: Types of Industry – Electronic Documents

Exchanged With Suppliers More Often

Crosstab

Purcha

se

order

Invoice

Order

Confirm

ation

Request for quote/bid Despatch

advice

Once in

a week

Once in

a week

Once in

a week

Once

in a

week

Once

in a

month

Once

in

three

months

Once in

a week

Indu

stry

Base

d on

Prod

uct

Chemica

l &

Petroleu

m

Count 14 15 13 8 5 4 16

% within

Industry

Based on

Product

77.80

% 83.30% 72.20%

44.40

%

27.80

%

22.20

% 88.90%

% within

Purchase

order

24.60% 23.80% 26.00% 33.30

%

25.00

%

21.10

% 27.10%


125

Automot

ive

Count 5 4 4 2 2 1 5

% within

Industry

Based on

Product

100.00

% 80.00% 80.00%

40.00

%

40.00

%

20.00

% 100.00%

% within

Purchase

order

8.80% 6.30% 8.00% 8.30% 10.00

% 5.30% 8.50%

Pharmac

eutical

Count 2 3 3 1 0 3 3

% within

Industry

Based on

Product

50.00

% 75.00% 75.00%

25.00

% 0.00%

75.00

% 75.00%

% within

Purchase

order

3.50% 4.80% 6.00% 4.20% 0.00% 15.80

% 5.10%

Electrica

l

Count 6 7 5 2 3 1 5

% within

Industry

Based on

Product

75.00

% 87.50% 62.50%

25.00

% 37.50

%

12.50

% 62.50%

% within

Purchase

order

10.50% 11.10% 10.00% 8.30% 15.00

% 5.30% 8.50%

Textile

Count 6 7 6 2 4 1 7

% within

Industry

Based on

Product

85.70

%

100.00

% 85.70%

28.60

% 57.10

%

14.30

% 100.00%

% within

Purchase

order

10.50% 11.10% 12.00% 8.30% 20.00

% 5.30% 11.90%

Engineer

ing &

Machine

Tools

Count 14 17 9 5 4 5 13

% within

Industry

Based on

Product

77.80

% 94.40% 50.00%

27.80

%

22.20

%

27.80

% 72.20%

% within

Purchase

order

24.60% 27.00% 18.00% 20.80

%

20.00

%

26.30

% 22.00%

Fertilizer

Count 1 1 1 1 0 0 1

% within

Industry

Based on

Product

100.00

%

100.00

%

100.00

%

100.00

% 0.00% 0.00% 100.00%

% within

Purchase

order

1.80% 1.60% 2.00% 4.20% 0.00% 0.00% 1.70%

Others

Count 9 9 9 3 2 4 9

% within

Industry

Based on

Product

81.80

% 81.80% 81.80%

27.30

%

18.20

% 36.40

% 81.80%


126

% within

Purchase

order

15.80% 14.30% 18.00% 12.50

%

10.00

%

21.10

% 15.30%

Total

Count 57 63 50 24 20 19 59

% within

Industry

Based on

Product

79.20% 87.50% 69.40% 33.30

%

27.80

%

26.40

% 81.90%

% within

Purchase

order

100.00

%

100.00

% 100.00%

100.00

%

100.00

%

100.00

% 100.00%


The observed frequency in the cross tabulation matrix:

Chemical and Petroleum Industry has exchanged Purchase order once in a week (77.80%)

with suppliers, Invoice once in a week (83.30%) with suppliers, Order Confirmation once

in a week (72.20%) with suppliers, Request for quote/bid once in a week (44.40%) with

suppliers and Despatch advice once in a week (89.90%) with suppliers. Automotive

Industry has exchanged Purchase order once in a week (100%) with suppliers, Invoice

once in a week (80%) with suppliers, Order Confirmation once in a week (80%) with

suppliers, Request for quote/bid once in a week (40%) with suppliers and Despatch advice

once in a week (100%) with suppliers. Pharmaceutical Industry has exchanged Purchase

order once in a week (50% of them) with suppliers, Invoice once in a week (75%) with

suppliers, Order Confirmation once in a week (75%) with suppliers, Request for quote/bid

once in three months (75%) with suppliers and Despatch advice once in a week (75%) with

suppliers. Electrical Industry has exchanged Purchase order once in a week (75.00% of

them) with suppliers, Invoice once in a week (87.50%) with suppliers, Order Confirmation

once in a week (62.50%) with suppliers, Request for quote/bid once in a month (37.50%)

with suppliers and Despatch advice once in a week (62.50%) with suppliers. Textile

Industry has exchanged Purchase order once in a week (85.70% of them) with suppliers,

Invoice once in a week (100%) with suppliers, Order Confirmation once in a week

(85.70%) with suppliers, Request for quote/bid once in a month (57.10%) with suppliers

and Despatch advice once in a week (100%) with suppliers. Engineering and Machine

tools Industry has exchanged Purchase order once in a week (77.80% of them) with

suppliers, Invoice once in a week (94.40%) with suppliers, Order Confirmation once in a

week (50%) with suppliers, Request for quote/bid once in a week (27.80%) with suppliers

and Despatch advice once in a week (72.20%) with suppliers. Fertilizer Industry has

exchanged Purchase order once in a week (100%) with suppliers, Invoice once in a week


127

(100%) with suppliers, Order Confirmation once in a week (100%) with suppliers, Request

for quote/bid once in a week (100%) with suppliers and Despatch advice once in a week

(100%) with suppliers.

4.1.2.14 Cross Tabulation Performed Between Ownership of the Firm and Electronic

Documents Exchanged With Suppliers More Often.

TABLE 4.32: Cross Tabulation: Ownership of the Firm – Electronic Documents

Exchanged With Suppliers More Often

Crosstab

Purchase

order Invoice

Order

Confirmation

Request for

quote/bid

Despatch

advice

Once in

a week

Once in

a week

Once in a

week

Once in

a week

Once in

three

months

Once in

a week

Ownership

Firm

Public

Sector

Count 17 18 18 6 9 17

% within

Ownership

Firm 81.00% 85.70% 85.70% 28.60% 42.90% 81.00%

% within

Purchase

order

29.80% 28.60% 36.00% 25.00% 47.40% 28.80%

Private

Sector

Count 37 41 30 16 10 38

% within

Ownership

Firm 80.40% 89.10% 65.20% 34.80% 21.70% 82.60%

% within

Purchase

order

64.90% 65.10% 60.00% 66.70% 52.60% 64.40%

Joint

Sector

Count 3 4 2 2 0 4

% within

Ownership

Firm 60.00% 80.00% 40.00% 40.00% 0.00% 80.00%

% within

Purchase

order

5.30% 6.30% 4.00% 8.30% 0.00% 6.80%

Total

Count 57 63 50 24 19 59

% within

Ownership

Firm

79.20% 87.50% 69.40% 33.30% 26.40% 81.90%

% within

Purchase

order

100.00% 100.00% 100.00% 100.00% 100.00%



128

The observed frequency in the cross tabulation matrix: Public Sector Company has

exchanged Purchase order once in a week (81.00%) with suppliers, Invoice once in a week

(85.70%) with suppliers, Order Confirmation once in a week (85.70%) with suppliers,

Request for quote/bid once in a three month (42.90%) with suppliers and Despatch advice

once in a week (81.00%) with suppliers.

Private Sector Company has exchanged Purchase order once in a week (80.40%) with


week (65.20%) with suppliers, Request for quote/bid once in a week (34.80%) with

suppliers and Despatch advice once in a week (82.60%) with suppliers.

Joint Sector Company has exchanged Purchase order once in a week (60% of them) with

suppliers, Invoice once in a week (80%) with suppliers, Order Confirmation once in a

week (40%) with suppliers, Request for quote/bid once in a week (40%) with suppliers and

Despatch advice once in a week (80%) with suppliers.

4.1.2.15 Cross Tabulation Performed Between Sizes of the Firm (Based on

Investment) – Electronic Documents Exchanged With Suppliers More Often.

TABLE 4.33: Cross Tabulation: Size of the Firms (Based On Investment) –

Electronic Documents Exchanged With Suppliers More Often

Crosstab

Purcha

se

order

Invoice

Order

Confirmati

on

Request for quote/bid

Despatc

h

advice

Once in

a week

Once in

a week

Once in a

week

Once in

a week

Once in

a

month

Once in

three

months

Once in

a week

Siz

e of

the

co

mp

any

-

Bas

ed

on

Inv

Invest

ment

betwee

n 25

lakh to

5 crore

rupees

Count 1 2 1 0 1 0 1

% within

Size of the

company -

Based on

Investment

50.00

%

100.00

% 50.00% 0.00%

50.00

% 0.00% 50.00%

% within

Purchase

order

1.80% 3.20% 2.00% 0.00% 5.00% 0.00% 1.70%

Invest Count 8 8 8 2 2 3 8


129

est

me

nt

ment

betwee

n 5

crore

to 10

crore

rupees

% within

Size of the

company -

Based on

Investment

80.00

% 80.00% 80.00% 20.00% 20.00%

30.00

% 80.00%

% within

Purchase

order

14.00% 12.70% 16.00% 8.30% 10.00% 15.80% 13.60%

More

than 10

crore

Invest

ment

Count 48 53 41 22 17 16 50

% within

Size of the

company -

Based on

Investment

80.00

% 88.30% 68.30%

36.70

% 28.30% 26.70% 83.30%

% within

Purchase

order

84.20% 84.10% 82.00% 91.70% 85.00% 84.20% 84.70%

Total

Count 57 63 50 24 20 19 59

% within

Size of the

company -

Based on

Investment

79.20% 87.50% 69.40% 33.30% 27.80% 26.40% 81.90%

% within

Purchase

order

100.00

%

100.00

% 100.00%

100.00

%

100.00

%

100.00

%

100.00

%


The observed frequency in the cross tabulation matrix: Small Scale Company (Which has

investment between 25 lakh and 5 Crore rupees) has exchanged Purchase order once in a

week (50%) with suppliers, Invoice once in a week (100%) with suppliers, Order

Confirmation once in a week (50%) with suppliers, Request for quote/bid once in a month

(50%) with suppliers and Despatch advice once in a week (50%) with suppliers.

Medium Scale Company (Which has investment between 5 Crore to 10 Crore rupees) has

exchanged Purchase order once in a week (80%) with suppliers, Invoice once in a week

(80%) with suppliers, Order Confirmation once in a week (80%) with suppliers, Request

for quote/bid once in a three month (30%) with suppliers and Despatch advice once in a

week (80%) with suppliers.

Large Scale Company (Which has more than 10 Crore rupees investment) has exchanged

Purchase order once in a week (80% of them) with suppliers, Invoice once in a week

(88.30%) with suppliers, Order Confirmation once in a week (68.30%) with suppliers,

Request for quote/bid once in a week (36.7%) with suppliers and Despatch advice once in

a week (83.30%) with suppliers.


130

4.1.2.16 Cross Tabulation Performed Between Size of the Firms (Based on Number of

Employees) and Electronic Documents Exchanged With Suppliers More Often.

TABLE 4.34: Cross Tabulation: Size of the Firms (Based On Number of Employees)

– Electronic Documents Exchanged with Suppliers More Often

Crosstab

Purchas

e order Invoice

Order

Confirmatio

n

Request for

quote/bid

Despatc

h advice

Once in

a week

Once in

a week

Once in a

week

Once in

a week

Once in

a month

Once in

a week

Size

of

the

com

pany

-

Base

d on

No.

of

Empl

oyee

s

50 to

249

employe

es

Count 9 11 8 2 5 12

% within Size of

the company -

Based on No. of

Employees

75.00% 91.70% 66.70% 16.70% 41.70% 100.00

%

% within

Purchase order 15.80% 17.50% 16.00% 8.30% 25.00% 20.30%

More

than 249

employe

es

Count 48 52 42 22 15 47

% within Size of

the company -

Based on No. of

Employees

80.00% 86.70% 70.00% 36.70% 25.00% 78.30%

% within

Purchase order 84.20% 82.50% 84.00% 91.70% 75.00% 79.70%

Total

Count 57 63 50 24 20 59

% within Size of

the company -

Based on No. of

Employees

79.20% 87.50% 69.40% 33.30% 27.80% 81.90%

% within

Purchase order

100.00

%

100.00

% 100.00%

100.00

%

100.00

% 100.00%


The observed frequency in the cross tabulation matrix: Medium Scale Company (Which

has 50 to 249 employees) has exchanged Purchase order once in a week (75.00%) with


week (66.70%) with suppliers, Request for quote/bid once in a month (41.70%) with

suppliers and Despatch advice once in a week (100%) with suppliers.

Large Scale Company (Which has more than 249 employees) has exchanged Purchase

order once in a week (80% of them) with suppliers, Invoice once in a week (86.70%) with

suppliers, Order Confirmation once in a week (70.00%) with suppliers, Request for


131

quote/bid once in a week (36.7%) with suppliers and Despatch advice once in a week

(78.30%) with suppliers.

4.1.2.17 Cross Tabulation Performed Between the Types of Industry and Methods the

Electronic Business Documents Exchanged With Suppliers.

TABLE 4.35: Cross Tabulation: Types of Industry –

Methods of Electronic Business Documents Exchanged With Suppliers

Crosstab

Fully

integrated

Solution

(EDI)

directly

with

Suppliers

Fully integrated

Solution (EDI)

via Business to

Business (B2B)

Marketplace /

transaction

platform

WEB supplier

Portal via

Business to

Business /

Transaction

platform

(WEB EDI)

Company

Run

supplier

portal

(WEB

EDI)

Yes Yes Yes Yes

Industry

Based

on

Product

Chemica

l &

Petroleu

m

Count 14 5 7 2

% within

Industry

Based on

Product

77.80% 27.80% 38.90% 11.10%

% within

Fully

integrated

Solution

(EDI)

directly with

Suppliers

35.00% 33.30% 25.00% 8.70%

Automot

ive

Count 3 2 0 2

% within

Industry

Based on

Product

60.00% 40.00% 0.00% 40.00%

% within

Fully

integrated

Solution

(EDI)

directly with

Suppliers

7.50% 13.30% 0.00% 8.70%

Pharmac

eutical

Count 1 0 2 3

% within

Industry

Based on

Product

25.00% 0.00% 50.00% 75.00%


132

% within

Fully

integrated

Solution

(EDI)

directly with

Suppliers

2.50% 0.00% 7.10% 13.00%

Electrical

Count 2 2 2 3

% within

Industry

Based on

Product

25.00% 25.00% 25.00% 37.50%

% within

Fully

integrated

Solution

(EDI)

directly with

Suppliers

5.00% 13.30% 7.10% 13.00%

Textile

Count 6 1 2 2

% within

Industry

Based on

Product

85.70% 14.30% 28.60% 28.60%

% within

Fully

integrated

Solution

(EDI)

directly with

Suppliers

15.00% 6.70% 7.10% 8.70%

Engineer

ing &

Machine

Tools

Count 9 3 11 6

% within

Industry

Based on

Product

50.00% 16.70% 61.10% 33.30%

% within

Fully

integrated

Solution

(EDI)

directly with

Suppliers

22.50% 20.00% 39.30% 26.10%

Fertilizer

Count 1 1 1 0

% within

Industry

Based on

Product

100.00% 100.00% 100.00% 0.00%

% within

Fully

integrated

Solution

(EDI)

2.50% 6.70% 3.60% 0.00%


133

directly with

Suppliers

Others

Count 4 1 3 5

% within

Industry

Based on

Product

36.40% 9.10% 27.30% 45.50%

% within

Fully

integrated

Solution

(EDI)

directly with

Suppliers

10.00% 6.70% 10.70% 21.70%

Total

Count 40 15 28 23

% within

Industry

Based on

Product

55.60% 20.80% 38.90% 31.90%

% within

Fully

integrated

Solution

(EDI)

directly with

Suppliers

100.00% 100.00% 100.00% 100.00%


The observed frequency in the cross tabulation matrix: in Chemical and Petroleum Industry

the methods of electronic business documents exchanged with suppliers are Fully

integrated solution (EDI) directly with the supplier (77.80% of them used) and Web

supplier portal via B2B marketplace/transaction platform (Web EDI) (38.90% of them

used).

In Automotive Industry the methods of electronic business documents exchanged with

suppliers are Fully integrated solution (EDI) directly with the supplier (60% of them used),

Fully integrated solution (EDI) via B2B marketplace/transaction platform ( 40% of them

used) and Company run supplier portal (Web EDI ) (40% of them used).

In Pharmaceutical Industry the methods of electronic business documents exchanged with

suppliers are Company run supplier portal (Web EDI ) (75% of them used) and Fully Web

supplier portal via B2B marketplace/transaction platform (Web EDI ) (50% of them used).


134

In Electrical Industry the methods of electronic business documents exchanged with

suppliers is Company run supplier portal (Web EDI) (37.50% of them used).

In Textile Industry the methods of electronic business documents exchanged with suppliers

are fully integrated solution (EDI) directly with the supplier (85.70% of them used).

In Engineering and Machine Industry the methods of electronic business documents

exchanged with suppliers are Web supplier portal via B2B marketplace/transaction

platform (Web EDI) (61.10% of them used) and Fully integrated solution (EDI) directly

with the supplier (50% of them used).

In Fertilizer Industry the methods of electronic business documents exchanged with

suppliers are Fully integrated solution (EDI) directly with the supplier (100% of them

used), Fully integrated solution (EDI) via B2B marketplace/transaction platform ( 100% of

them used) and Web supplier portal via B2B marketplace/transaction platform (Web EDI )

( 100.00% of them used).

4.1.2.18 Cross Tabulation Performed Between the Ownerships of the Firm – Methods

the Electronic Business Documents Exchanged With Suppliers.

TABLE 4.36: Cross Tabulation: Ownerships of the Firm – Methods of Electronic

Business Documents Exchanged With Suppliers

Crosstab

Fully

integrated

Solution

(EDI) directly

with Suppliers

Fully integrated

Solution (EDI) via

Business to

Business (B2B)

Marketplace /

transaction platform

WEB supplier Portal

via Business to

Business /

Transaction

platform (WEB

EDI)

Company

Run

supplier

portal

(WEB

EDI)

Yes Yes Yes Yes

Own

ershi

p

Firm

Pub

lic

Sect

or

Count 12 6 6 8

% within

Ownership

Firm 57.10% 28.60% 28.60% 38.10%

% within

Fully

integrated

Solution

(EDI) directly

with Suppliers

30.00% 40.00% 21.40% 34.80%

Priv

ate

Sect

or

Count 24 7 19 14

% within

Ownership

Firm 52.20% 15.20% 41.30% 30.40%


135

% within

Fully

integrated

Solution

(EDI) directly

with Suppliers

60.00% 46.70% 67.90% 60.90%

Join

t

Sect

or

Count 4 2 3 1

% within

Ownership

Firm 80.00% 40.00% 60.00% 20.00%

% within

Fully

integrated

Solution

(EDI) directly

with Suppliers

10.00% 13.30% 10.70% 4.30%

Total

Count 40 15 28 23

% within

Ownership

Firm

55.60% 20.80% 38.90% 31.90%

% within

Fully

integrated

Solution

(EDI) directly

with Suppliers

100.00% 100.00% 100.00% 100.00%


The observed frequency in the cross tabulation matrix: in Public Sector Company the

methods of electronic business documents exchanged with suppliers are Fully integrated

solution (EDI) directly with the supplier ( 57.10% of them used) and Company run

supplier portal (Web EDI ) ( 38.10% of them used).

In Private Sector Company the methods of electronic business documents exchanged with

suppliers are fully integrated solution (EDI) directly with the supplier (52.20% of them

used) and Web supplier portal via B2B marketplace/transaction platform (Web EDI)

(41.30% of them used). In Joint Sector Company the methods of electronic business

documents exchanged with suppliers are Fully integrated solution (EDI) directly with the

supplier ( 80% of them used) and Web supplier portal via B2B marketplace/transaction

platform (Web EDI ) ( 60% of them used).


136

4.1.2.19 Cross Tabulation Performed Between the Size of the Company (Based On

Investment) and Methods the Electronic Business Documents Exchanged With

Suppliers.

TABLE 4.37: Cross Tabulation: Size of the Company (Based on Investment) –

Methods the Electronic Business Documents Exchanged With Suppliers

Crosstab

Fully

integrated

Solution (EDI)

directly with

Suppliers

Fully integrated

Solution (EDI)

via Business to

Business (B2B)

Marketplace /

transaction

platform

WEB supplier Portal

via Business to

Business /

Transaction platform

(WEB EDI)

Compan

y Run

supplier

portal

(WEB

EDI)

Yes Yes Yes Yes

Size of

the

compan

y -

Based

on

Invest

ment

Invest

ment

betwe

en 25

lakh

to 5

crore

rupee

s

Count 0 0 1 2

% within Size

of the

company -

Based on

Investment

0.00% 0.00% 50.00% 100.00%

% within

Fully

integrated

Solution

(EDI) directly

with

Suppliers

0.00% 0.00% 3.60% 8.70%

Invest

ment

betwe

en 5

crore

to 10

crore

rupee

s

Count 1 1 3 5

% within Size

of the

company -

Based on

Investment

10.00% 10.00% 30.00% 50.00%

% within

Fully

integrated

Solution

(EDI) directly

with

Suppliers

2.50% 6.70% 10.70% 21.70%

More

than

10

crore

Invest

ment

Count 39 14 24 16

% within Size

of the

company -

Based on

Investment

65.00% 23.30% 40.00% 26.70%


137

% within

Fully

integrated

Solution

(EDI) directly

with

Suppliers

97.50% 93.30% 85.70% 69.60%

Total

Count 40 15 28 23

% within Size

of the

company -

Based on

Investment

55.60% 20.80% 38.90% 31.90%

% within

Fully

integrated

Solution

(EDI) directly

with

Suppliers

100.00% 100.00% 100.00% 100.00%


In Small Scale Company (Which has investment between 25 lakh to 5 Crore rupees), the

methods of electronic business documents exchanged with suppliers are Company run

supplier portal (Web EDI ) (100 % of them used) and Fully Web supplier portal via B2B

marketplace/transaction platform (Web EDI ) (50% of them used).

In Medium Scale Company (Which has investment between 5 Crore to 10 Crore rupees)

the methods of electronic business documents exchanged with suppliers are Company run

supplier portal (Web EDI ) (50 % of them used) and Fully Web supplier portal via B2B

marketplace/transaction platform (Web EDI ) (30% of them used).

In Large Scale Company (Which has investment more than 10 Crore rupees) the methods

of electronic business documents exchanged with suppliers are fully integrated solution

(EDI) directly with the supplier (65% of them used) and Web supplier portal via B2B

marketplace/transaction platform (Web EDI) (40% of them used).


138

4.1.2.20 Cross Tabulation Performed Between the Size of the Company (Based on

Number of Employees) and Methods the Electronic Business Documents Exchanged

With Suppliers.


Employees) – Methods the Electronic Business Documents Exchanged With Suppliers

Crosstab

Fully

integrated

Solution

(EDI)

directly with

Suppliers

Fully integrated

Solution (EDI)

via Business to

Business (B2B)

Marketplace /

transaction

platform

WEB supplier

Portal via

Business to

Business /

Transaction

platform (WEB

EDI)

Company

Run

supplier

portal

(WEB

EDI)

Yes Yes Yes Yes

Size

of the

comp

any -

Base

d on

No.

of

Empl

oyees

50 to

249

employ

ees

Count 3 1 4 6

% within Size

of the company

- Based on No.

of Employees

25.00% 8.30% 33.30% 50.00%

% within Fully

integrated

Solution (EDI)

directly with

Suppliers

7.50% 6.70% 14.30% 26.10%

More

than

249

employ

ees

Count 37 14 24 17

% within Size

of the company

- Based on No.

of Employees

61.70% 23.30% 40.00% 28.30%

% within Fully

integrated

Solution (EDI)

directly with

Suppliers

92.50% 93.30% 85.70% 73.90%

Total

Count 40 15 28 23

% within Size

of the company

- Based on No.

of Employees

55.60% 20.80% 38.90% 31.90%

% within Fully

integrated

Solution (EDI)

directly with

Suppliers

100.00% 100.00% 100.00% 100.00%


In Medium Scale Company (Which has employees between 50 to 249 employees), the

methods of electronic business documents exchanged with suppliers are Company run


139

supplier portal (Web EDI) (50 % of them used) and Fully Web supplier portal via B2B

marketplace/transaction platform (Web EDI) (33.30% of them used).

In Large Scale Company (Which has more than 249 employees) the methods of electronic

business documents exchanged with suppliers are fully integrated solution (EDI) directly

with the supplier (61.7% of them used) and Web supplier portal via B2B

marketplace/transaction platform (Web EDI) (40% of them used).

4.1.2.21 Cross Tabulation Performed Between the Types of Industry and Initiative /

Drive for the Development (Up Gradation) of IT For Procurement.

TABLE 4.39: Cross Tabulation between the types of Industry and

Initiative / drive for the development (up gradation) of IT for procurement

Crosstab

Procure

ment

Departm

ent

Proces

s

Leader

ship

Top

manage

ment

IT

depart

ment

Admini

strative

leaders

hip

External

consultant

s,

software

providers

Business

develop

ment

departm

ent

Yes Yes Yes Yes Yes Yes Yes

Ind

ustr

y

Bas

ed

on

Pro

duc

t

Chemi

cal &

Petrole

um

Count 11 6 15 14 2 5 4

% within

Industry

Based on

Product

61.10% 33.30

% 83.30%

77.80

% 11.10% 27.80% 22.20%

% within

Procuremen

t

Department

22.40% 25.00

% 27.30% 32.60% 33.30% 45.50% 36.40%

Autom

otive

Count 3 3 3 5 0 2 1

% within

Industry

Based on

Product

60.00% 60.00

% 60.00%

100.00

% 0.00% 40.00% 20.00%

% within

Procuremen

t

Department

6.10% 12.50

% 5.50% 11.60% 0.00% 18.20% 9.10%

Pharm

aceutic

al

Count 4 1 3 1 1 0 0

% within

Industry

Based on

Product

100.00

%

25.00

% 75.00% 25.00% 25.00% 0.00% 0.00%

% within

Procuremen

t

Department

8.20% 4.20% 5.50% 2.30% 16.70% 0.00% 0.00%

Electri Count 3 2 5 5 0 1 0


140

cal % within

Industry

Based on

Product

37.50% 25.00

% 62.50%

62.50

% 0.00% 12.50% 0.00%

% within

Procuremen

t

Department

6.10% 8.30% 9.10% 11.60% 0.00% 9.10% 0.00%

Textile

Count 6 1 6 3 0 0 0

% within

Industry

Based on

Product

85.70% 14.30

% 85.70% 42.90% 0.00% 0.00% 0.00%

% within

Procuremen

t

Department

12.20% 4.20% 10.90% 7.00% 0.00% 0.00% 0.00%

Engine

ering

&

Machi

ne

Tools

Count 12 9 12 11 3 2 4

% within

Industry

Based on

Product

66.70% 50.00

% 66.70%

61.10

% 16.70% 11.10% 22.20%

% within

Procuremen

t

Department

24.50% 37.50

% 21.80% 25.60% 50.00% 18.20% 36.40%

Fertiliz

er

Count 1 0 1 0 0 0 0

% within

Industry

Based on

Product

100.00

% 0.00%

100.00

% 0.00% 0.00% 0.00% 0.00%

% within

Procuremen

t

Department

2.00% 0.00% 1.80% 0.00% 0.00% 0.00% 0.00%

Others

Count 9 2 10 4 0 1 2

% within

Industry

Based on

Product

81.80% 18.20

% 90.90% 36.40% 0.00% 9.10% 18.20%

% within

Procuremen

t

Department

18.40% 8.30% 18.20% 9.30% 0.00% 9.10% 18.20%

Total

Count 49 24 55 43 6 11 11

% within

Industry

Based on

Product

68.10% 33.30

% 76.40% 59.70% 8.30% 15.30% 15.30%

% within

Procuremen

t

Department

100.00

%

100.00

%

100.00

%

100.00

%

100.00

% 100.00%

100.00

%



141

In Chemical and Petroleum Industry, initiative for further up gradation of Information

Technology for Procurement by the Top management has been observed to be (83.30%),

IT department (77.80%) and Procurement department (61.10%). In Automotive Industry,

the initiative for further up gradation of Information Technology for Procurement by the

IT department has been found to be (100%), by the Top management (60%), Procurement

department (60%) and Process leadership (60%). In Pharmaceutical Industry, the initiative

for further up gradation of Information Technology for Procurement by the Procurement

department has been found to be (100%) and by the Top management (75%). In Electrical

Industry, the initiative for further up gradation of Information Technology for Procurement

by the Top management has been found to be (62.50%) and by IT department (62.50%). In

Textile Industry, the initiative for further up gradation of Information Technology for

Procurement by the Procurement department has been found to be (85.70%) and by the

Top management (85.70%). In Engineering & Machine Tools Industry, the initiative for

further up gradation of Information Technology for Procurement by the Procurement

department has been found to be (85.70%), Top management (85.70%), IT department

(61.10%) and Process leadership (50%). In Fertilizer Industry, the initiative for further up

gradation of Information Technology for Procurement by the Procurement department has

been found to be (100%) and by the Top management (100%). In Other Industry, the

initiative for further up gradation of Information Technology for Procurement by the Top

management has been found to be (90.90%) and by the Procurement department (81.80%).

4.1.2.22 Cross Tabulation Performed Between the Ownerships Of The Firm And

Initiative/ Drive For The Development (Up Gradation) Of IT For Procurement.

TABLE 4.40: Cross Tabulation between the Ownerships of the firm and

Initiative/ Drive for the development (up gradation) of IT for procurement

Crosstab

Procure

ment

Departm

ent

Proces

s

Leader

ship

Top

manage

ment

IT

depart

ment

Administ

rative

leadershi

p

External

consulta

nts,

software

provider

s

Business

developm

ent

departme

nt


Ow

ner

shi

p

Pub

lic

Sec

tor

Count 15 7 18 11 1 2 3

% within

Ownership

Firm 71.40%

33.30

% 85.70% 52.40% 4.80% 9.50% 14.30%


142

Fir

m % within

Procurement

Department

30.60% 29.20

% 32.70% 25.60% 16.70% 18.20% 27.30%

Pri

vat

e

Sec

tor

Count 30 14 32 30 4 7 6

% within

Ownership

Firm 65.20%

30.40

% 69.60% 65.20% 8.70% 15.20% 13.00%

% within

Procurement

Department

61.20% 58.30

% 58.20% 69.80% 66.70% 63.60% 54.50%

Joi

nt

Sec

tor

Count 4 3 5 2 1 2 2

% within

Ownership

Firm 80.00%

60.00

%

100.00

% 40.00% 20.00% 40.00% 40.00%

% within

Procurement

Department

8.20% 12.50

% 9.10% 4.70% 16.70% 18.20% 18.20%

Total

Count 49 24 55 43 6 11 11

% within

Ownership

Firm

68.10% 33.30

% 76.40% 59.70% 8.30% 15.30% 15.30%

% within

Procurement

Department

100.00% 100.00

% 100.00%

100.00

% 100.00% 100.00% 100.00%


In Public Sector Company, the further up gradation of Information Technology for

Procurement has been initiated by the Top management to the extent of (85.70%) and by

the Procurement department (71.40%). In Private Sector Company, the further up

gradation of Information Technology for Procurement has been initiated by the Top

management to the extent of (69.60%) and Procurement department (65.20%) and IT

department (65.20%). In Joint Sector Company, the further up gradation of Information

Technology for Procurement has been initiated by the Top management to the extent of

(100%), by the Procurement department (80%) and by the Process leadership (60%).


143

4.1.2.23 Cross Tabulation Performed Between the Sizes of the Firm (Based on

Investment) and Initiative/ Drive for the Development (Up Gradation) of IT for

Procurement.

TABLE 4.41: Cross Tabulation between the Size of the firm (based on Investment)

and Initiative/ drive for the development (up gradation) of IT for procurement

Crosstab

Procure

ment

Departm

ent

Proces

s

Leader

ship

Top

manage

ment

IT

depart

ment

Admini

strative

leaders

hip

External

consultant

s, software

providers

Business

developme

nt

department


Siz

e of

the

co

mp

any

-

Bas

ed

on

Inv

est

me

nt

Invest

ment

betwee

n 25

lakh to

5 crore

rupees

Count 0 1 1 0 0 0 1

% within

Size of the

company -

Based on

Investment

0.00% 50.00

%

50.00

% 0.00% 0.00% 0.00% 50.00%

% within

Procureme

nt

Departmen

t

0.00% 4.20% 1.80% 0.00% 0.00% 0.00% 9.10%

Invest

ment

betwee

n 5

crore

to 10

crore

rupees

Count 7 2 8 3 0 2 0

% within

Size of the

company -

Based on

Investment

70.00% 20.00

% 80.00

%

30.00

% 0.00% 20.00% 0.00%

% within

Procureme

nt

Departmen

t

14.30% 8.30% 14.50% 7.00% 0.00% 18.20% 0.00%

More

than 10

crore

Invest

ment

Count 42 21 46 40 6 9 10

% within

Size of the

company -

Based on

Investment

70.00% 35.00

% 76.70

%

66.70

%

10.00

% 15.00% 16.70%

% within

Procureme

nt

Departmen

t

85.70% 87.50

% 83.60%

93.00

%

100.00

% 81.80% 90.90%

Total Count 49 24 55 43 6 11 11


144

% within

Size of the

company -

Based on

Investment

68.10% 33.30

% 76.40%

59.70

% 8.30% 15.30% 15.30%

% within

Procureme

nt

Departmen

t

100.00% 100.00

%

100.00

%

100.00

%

100.00

% 100.00% 100.00%


In Medium Scale Company (which has investment between 25 lakh to 5 Crore), the further

up gradation of Information Technology for Procurement has been initiated by the

Process leadership to the extent of (50%), by the Top management (50%) and by Business

development department (50%).

In Medium Scale Company (which has investment between 5 Crore to 10 Crore), the

further up gradation of Information Technology for Procurement has been initiated by the

Top management to the extent of (80%) and by the Procurement department (70%).

In Large Scale Company (which has more than 10 Crore investment), the further up

gradation of Information Technology for Procurement has been initiated by the Top

management to the extent of (76.70%), by the Procurement department (70.00%) and by

the IT department (66.70%).

4.1.2.24 Cross Tabulation Performed Between the Sizes of the Firm (Based on

Number of Employees) and the Initiative/ Drive for the Development (Up Gradation)

of IT for Procurement.

TABLE 4.42: Cross Tabulation: Size of the firm (based on Number of employees) and

the initiative/ drive for the development (up gradation) of IT for procurement

Crosstab

Procure

ment

Departm

ent

Proces

s

Leader

ship

Top

manage

ment

IT

depart

ment

Administr

ative

leadership

Externa

l

consulta

nts,

softwar

e

provide

rs

Business

develop

ment

departm

ent


Size 50 to Count 8 2 9 5 0 2 1


145

of

the

com

pany

-

Base

d on

No.

of

Empl

oyee

s

249

empl

oyees

% within

Size of the

company -

Based on

No. of

Employees

66.70% 16.70

% 75.00% 41.70% 0.00% 16.70% 8.30%

% within

Procurement

Department

16.30% 8.30% 16.40% 11.60% 0.00% 18.20% 9.10%

More

than

249

empl

oyees

Count 41 22 46 38 6 9 10

% within

Size of the

company -

Based on

No. of

Employees

68.30% 36.70

% 76.70%

63.30

% 10.00% 15.00% 16.70%

% within

Procurement

Department

83.70% 91.70

% 83.60% 88.40% 100.00% 81.80% 90.90%

Total

Count 49 24 55 43 6 11 11

% within

Size of the

company -

Based on

No. of

Employees

68.10% 33.30

% 76.40% 59.70% 8.30% 15.30% 15.30%

% within

Procurement

Department

100.00% 100.00

% 100.00%

100.00

% 100.00%

100.00

% 100.00%


In Medium Scale Company (which has 50 to 249 employees), the initiative for further up

gradation of Information Technology for Procurement has been undertaken by the Top

management to the extent of (75.00%) and by the, Procurement department (66.70%).

In Large Scale Company (which has more than 249 employees) the further up gradation of

Information Technology for Procurement has been initiated by the Top management to

the extent of (76.70%), Procurement department (63.30%) and IT department (63.30%).

4.2 Inferential Statistics

4.2.1. Krushkal Wallis Test

Kruskal-Wallis Test in very simple terms can be said to be the non-parametric equivalent

for the parametric test ANOVA. The non-parametric test- Krushkal Wallis test has been

performed for the following objectives and the result is shown below.


146

4.2.1.1. Kruskal-Wallis Test is Performed With an Objective to Understand the

Significance of Difference in Difficulties Faced in E-Procurement Implementation

across Industry.

Ho, 1: There is no significant difference in difficulties faced in E-Procurement

implementation across industry

H1, 1: There is a significant difference in difficulties faced in E-Procurement

implementation across industry

TABLE 4.43: Kruskal-Wallis Test (Statistics): Difficulties Faced in E-Procurement

Implementation – Types of Industry

Test Statistics a,b

Chi-

Square df

Asymp.

Sig.

High introduction costs for new solutions 10.321 7 .171

Suppliers are Slow to link up with Procurement System 12.880 7 .075

Lack of quality of master data 10.608 7 .157

Difficulties in judging Usefulness and Potential of new

Information Technology Solutions 4.071 7 .772

Lack of User friendliness and User acceptance of Solutions 9.474 7 .220

Solutions only address some of Our Procurement processes 17.000 7 .017

Solution do not able to address the complexity of our processes 14.232 7 .047

Solutions are not well enough integrated (Isolated Applications) 3.343 7 .852

Lack of qualified or skilled staff who can work with modern

procurement system 10.249 7 .175

Lack of Consultant expertise in Information Technology (IT)

for Procurement 8.361 7 .302

a. Kruskal Wallis Test

b. Grouping Variable: Industry Based on Product


In the table 4.43, the calculated value of Chi-Square, degree of freedom, and significant

value is given. Table shows the p-value of “Solutions only address some of our

procurement processes” is 0.017 and “Solutions do not address the complexity of our

processes” is 0.047. These p- values are less than 0.05, hence for these statements the null

hypotheses stand rejected. So the difficulties faced in E-Procurement implementation

across industry are significant for these statements at p= or <.05. For other statements, we

fail to reject the null hypothesis.


147

TABLE 4.44: Kruskal-Wallis Test (Ranks): Difficulties Faced in E-Procurement

Implementation - Types Industry

Ranks

Industry Based on Product N Mean Rank

High introduction costs

for new solutions

Chemical & Petroleum 18 36.83

Automotive 5 44.30

Pharmaceutical 4 27.63

Electrical 8 35.44

Textile 7 55.21

Engineering& Machine Tools 18 31.56

Fertilizer 1 54.00

Others 11 31.00

Total 72

Suppliers are Slow to link

up with Procurement

System


Automotive 5 51.10


Electrical 8 45.00

Textile 7 32.86

Engineering & Machine Tools 18 40.61

Fertilizer 1 21.00

Others 11 25.32

Total 72

Lack of quality of master

data


Automotive 5 39.50


Electrical 8 33.13

Textile 7 20.86


Fertilizer 1 11.00

Others 11 30.09

Total 72

Difficulties in judging

Usefulness and Potential

of new Information

Technology Solutions


Automotive 5 32.10


Electrical 8 25.13

Textile 7 38.36


Fertilizer 1 46.50

Others 11 38.59

Total 72

Lack of User friendliness

and User acceptance of

Solutions


Automotive 5 40.50



148

Electrical 8 24.94

Textile 7 38.71


Fertilizer 1 51.50

Others 11 37.41

Total 72

Solutions only address

some of Our

Procurement processes


Automotive 5 43.80


Electrical 8 27.00

Textile 7 37.07


Fertilizer 1 6.50

Others 11 26.64

Total 72

Solution do not able to

address the complexity

of our processes


Automotive 5 41.70


Electrical 8 22.75

Textile 7 33.21


Fertilizer 1 6.50

Others 11 25.91

Total 72

Solutions are not well

enough integrated

(Isolated Applications)


Automotive 5 26.50


Electrical 8 39.13

Textile 7 43.57


Fertilizer 1 44.50

Others 11 35.73

Total 72

Lack of qualified or

skilled staff who can

work with modern

procurement system


Automotive 5 45.80


Electrical 8 22.06

Textile 7 49.50


Fertilizer 1 61.00

Others 11 39.55

Total 72


149

Lack of Consultant

expertise in Information

Technology (IT) for

Procurement


Automotive 5 33.80


Electrical 8 26.13

Textile 7 47.71


Fertilizer 1 45.50

Others 11 37.27

Total 72


Table 4.44 shows the mean rank of difficulties faced by the companies. From the mean

rank, it can be concluded that Pharmaceutical Industry (Mean rank is 55.65 and 47.63)

have faced more difficulties and Fertilizer Industry (Mean rank is 6.50) have faced less

difficulties in „Solutions only address some of our procurement processes‟ and „Solutions

do not address the complexity of our processes‟.


Significance of Difference in Difficulties Faced in E-Procurement Implementation

across Size of the Firm.

Ho, 2: There is no significant difference in difficulties faced in E-Procurement

implementation across Size of the firm.

H1, 2: There is a significant difference difficulties faced in E-Procurement implementation

across Size of the firm.

TABLE 4.45: Kruskal-Wallis Test (Statistics): Difficulties Faced in E-Procurement

Implementation – Size of the Firm (Based on Investment)

Test Statistics a,b

Chi-Square df Asymp. Sig.

High introduction costs for new solutions 9.359 2 .009

Suppliers are Slow to link up with Procurement System .938 2 .626

Lack of quality of master data 1.068 2 .586


Information Technology Solutions 2.936 2 .230

Lack of User friendliness and User acceptance of

Solutions 4.900 2 .086

Solutions only address some of Our Procurement

processes 5.130 2 .077

Solution do not able to address the complexity of our

processes 2.969 2 .227


150

Solutions are not well enough integrated (Isolated

Applications) 2.861 2 .239

Lack of qualified or skilled staff who can work with

modern procurement system 4.349 2 .114

Lack of Consultant expertise in Information Technology

(IT) for Procurement 4.824 2 .090




Table 4.45 shows the p-value of “High introduction costs for new solutions” is 0.009,

which is less than 0.05. Hence for this statement null hypothesis is rejected. So there is a

significant difference in difficulties faced in E-Procurement implementation across Size of

the firm for this statement. For other statements, we fail to reject the null hypothesis.

TABLE 4.46: Kruskal-Wallis Test (Ranks): Difficulties Faced in E-Procurement

Implementation – Size of the Firm (Based on Investment)

Ranks

Size of the company - Based on Investment N Mean Rank

High introduction

costs for new

solutions

Investment between 25 lakh to 5 crore

rupees 2 12.00

Investment between 5 crore to 10 crore rupees 10 22.45

More than 10 crore Investment 60 39.66

Total 72

Suppliers are Slow

to link up with

Procurement System

Investment between 25 lakh to 5 crore rupees 2 41.75



Total 72

Lack of quality of

master data




Total 72

Difficulties in

judging Usefulness

and Potential of new

Information

Technology

Solutions




Total 72

Lack of User

friendliness and

User acceptance of

Solutions




Total 72

Solutions only

address some of Our

Procurement





151

processes Total 72

Solution do not able

to address the

complexity of our

processes




Total 72

Solutions are not

well enough

integrated (Isolated

Applications)




Total 72

Lack of qualified or

skilled staff who can

work with modern

procurement system




Total 72

Lack of Consultant

expertise in

Information

Technology (IT) for

Procurement




Total 72


Table 4.46 shows the mean rank of difficulties faced by the companies based on

investment. From the mean rank, it can be inferred that Large Companies (which have

More than 10 crore rupees Investment) (Mean rank is 39.66) have faced more difficulty

and Small Scale Companies (which have Investment between 25 lakh rupees and 5 crore

rupees) (Mean rank is 12.00) have faced less difficulty with respect to “High introduction

costs for new solutions”.

4.2.1.3 Kruskal-Wallis Test is performed With an Objective to Understand the

Significance of Difference in Procurement Objectives across Industry.

Ho, 3: There is no significant difference in procurement objectives across industry.

H1, 3: There is a significant difference of procurement objectives across industry.

TABLE 4.47: Kruskal-Wallis Test (Statistics): Procurement Objectives – Types of

Industry

Test Statisticsa,b


Reduction of purchase price 15.025 7 .036

Optimising total costs of procurement 16.387 7 .022

Internal process optimisation 10.285 7 .173

Securing supplies 8.930 7 .258

Maintaining quality guidelines 7.879 7 .343


152

Increase in cost transparency 13.612 7 .059

B2B process optimisation 4.108 7 .767

Minimising warehouse costs 11.413 7 .122

Reduction of the number of suppliers 6.649 7 .466

Product development with suppliers 11.457 7 .120

Outsourcing of operative procurement processes 3.916 7 .789

Outsourcing of strategic procurement processes 9.255 7 .235




Table 4.47 shows, the p-value of “Reduction of purchase price” is 0.036 and “Optimising

total costs of procurement” is 0.022, which are less than 0.05. Hence for these statements

the null hypothesis stands rejected. So there is a significant difference of procurement

objectives across industry with respect to these two objectives while for other objectives

we fail to reject the null hypothesis.

TABLE 4.48: Kruskal-Wallis Test (Ranks): Procurement Objectives – Types of

Industry

Ranks


Reduction of purchase

price


Automotive 5 45.30


Electrical 8 24.13

Textile 7 49.07


Fertilizer 1 58.50

Others 11 46.50

Total 72


procurement


Automotive 5 28.50


Electrical 8 17.50

Textile 7 43.93

Engineering& Tools 18 34.94

Fertilizer 1 26.50

Others 11 32.95

Total 72

Internal process

optimisation


Automotive 5 31.60



153

Electrical 8 25.94

Textile 7 53.00


Fertilizer 1 53.00

Others 11 41.32

Total 72

Securing supplies


Automotive 5 39.70


Electrical 8 38.94

Textile 7 49.29


Fertilizer 1 58.00

Others 11 42.18

Total 72

Maintaining quality

guidelines


Automotive 5 42.00


Electrical 8 44.44

Textile 7 39.21


Fertilizer 1 48.50

Others 11 36.36

Total 72

Increase in cost

transparency


Automotive 5 22.90


Electrical 8 27.13

Textile 7 48.79


Fertilizer 1 29.50

Others 11 30.77

Total 72

B2B process optimisation


Automotive 5 25.60


Electrical 8 30.63

Textile 7 37.50


Fertilizer 1 28.50

Others 11 35.00

Total 72


154

Minimising warehouse

costs


Automotive 5 45.50


Electrical 8 29.25

Textile 7 46.07


Fertilizer 1 57.50

Others 11 35.68

Total 72

Reduction of the number

of suppliers


Automotive 5 34.80


Electrical 8 33.31

Textile 7 46.21


Fertilizer 1 53.50

Others 11 35.68

Total 72


suppliers


Automotive 5 34.30


Electrical 8 46.56

Textile 7 47.93


Fertilizer 1 64.00

Others 11 41.50

Total 72


procurement processes


Automotive 5 33.10


Electrical 8 33.81

Textile 7 42.64


Fertilizer 1 6.50

Others 11 34.64

Total 72




Automotive 5 34.50


Electrical 8 48.25

Textile 7 38.93



155

Fertilizer 1 7.50

Others 11 32.05

Total 72


Table 4.48 shows the mean rank of importance of procurement objectives by the

companies. In Fertilizer Industry (Mean rank is 58.5) the most important procurement

objective and in Electrical Industry (Mean rank is 24.13) least important procurement

objectives was „Reduction of the purchasing price‟ and in Pharmaceutical Industry (Mean

rank is 49.38) the most important procurement objective and in Electrical Industry (Mean

rank is 17.50) least important procurement objectives was „optimising total costs of

procurement‟.

4.2.1.4 Kruskal-Wallis Test is performed With an Objective to Understand the

Significance of Difference in Procurement Objectives (Summated Variables) across

Size of the Firm (Based on Investment).

Ho, 4: There is no significant difference in procurement objectives (Summated Variables)

a Cross Size (based on Investment) of the firm.

H1, 4: There is a significant difference of procurement objectives (Summated Variables) a

Cross Size (based on Investment) of the firm.

TABLE 4.49: Kruskal-Wallis Test: Procurement Objectives (Summated Variables) –

Size of the Firm (Based On Investment)

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Summated Procurement

Objectives j 72 34.00 57.00 48.4028 4.99763

Valid N (listwise) 72


Summation of Responses from the Respondents was carried out on twelve variables of

Procurement Objectives namely, Reduction of Purchasing Price, Optimising Total Cost of

Procurement, Internal Process Optimization, Securing Supplies, Maintaining Quality

Guidelines, Cost Transparency, Business to Business (B2B) Process Optimization,

Minimize Warehouse Costs, Reduction of Number of Suppliers, Product Development

with Suppliers, Outsourcing of Operative Procurement Processes and Outsourcing of

Strategic Procurement Processes.


156

TABLE 4.50: Kruskal-Wallis Test (Ranks): Procurement Objectives (Summated

Variables) – Size of the Firm (Based On Investment)

Ranks

Size Of The Company - Based On Investment N Mean Rank

Summated

Procurement

Objectives




Total 72


TABLE 4.51: Kruskal-Wallis Test (Statistics): Procurement Objectives (Summated

Variables) – Size of the Firm (Based On Investment)

Test Statisticsa,b

Summated Procurement Objectives

Chi-Square 7.486

df 2

Asymp. Sig. .024


b. Grouping Variable: Size of the company - Based on Investment


Table 4.51 shows the p-values of “Summated Procurement Objectives” is 0.024, which is

less than 0.05. Hence for the Summated Procurement Objectives, the null hypothesis is

rejected. So there is a significant difference of procurement objectives across Size (based

on Investment) of the firm.

Table 4.50 shows the mean rank of “Summated Procurement Objectives”. From the mean

rank, it can be concluded that the Procurement Objectives considered as most important.

In Large Scale Company (which has More than 10 crore rupees Investment) (Mean rank is

39.51) and considered least important in Medium Scale Company (which has investment

between 5 crore rupees to 10 crore rupees) (Mean rank is 22.50).


157

4.2.1.5 Kruskal-Wallis Test is Performed With an Objective to Understand The

Significance of Difference in Procurement Objectives across Size of the Firm (Based

On Investment).

Ho, 5: There is no significant difference in procurement objectives across Size (based on

Investment) of the firm.

H1, 5: There is a significant difference of procurement objectives across Size (based on

Investment) of the firm.

TABLE 4.52: Kruskal-Wallis Test (Statistics): Procurement Objectives – Size of the

Firm (Based on Investment)

Test Statisticsa,b








B2B process optimisation .373 2 .830




Outsourcing of Operative Procurement Processes .229 2 .892

Outsourcing of Strategic Procurement Processes .659 2 .719




Table 4.52 shows the p-value of “Optimising total costs of procurement” is 0.044,

“Maintaining quality guidelines” is 0.014 and “Minimising warehouse costs” is 0.033,

which are less than 0.05. Hence for these statements the null hypothesis is rejected. So

there is a significant difference of procurement objectives across Size of the firm (based on

Investment) for these statements. For other objectives, we fail to reject the null hypothesis.

TABLE 4.53: Kruskal-Wallis Test (Ranks): Procurement Objectives – Size of the

Firm (Based on Investment)

Ranks


Reduction of

purchase price




158


Total 72

Optimising

total costs of

procurement




Total 72

Internal process

optimisation




Total 72

Securing

supplies




Total 72

Maintaining

quality

guidelines


Investment between 5 crore to 10 crore

rupees 10 22.15


Total 72

Increase in cost

transparency




Total 72

B2B process

optimisation




Total 72

Minimising

warehouse costs



rupees 10 22.50


Total 72

Reduction of the

number of

suppliers




Total 72

Product

development

with suppliers




Total 72

Outsourcing of

operative

procurement

processes





159

Total 72

Outsourcing of

strategic

procurement

processes




Total 72



companies. From the mean rank, it can be concluded that In Large Scale Company (which

has More than 10 crore rupees Investment) (Mean rank is 38.34) the most important

procurement objectives and in Small Scale Company (which has Investment between 25

lakh rupees to 5 crore rupees) (Mean rank is 6.00) least important procurement objective

was „optimizing total costs of procurement‟. In Large Scale Company (which has More

than 10 crore rupees Investment) (Mean rank is 39.13) the most important procurement

objectives and in Medium Scale Company (which has investment between 5 crore rupees

to exceed 10 crore rupees) (Mean rank is 22.50) least important procurement objective was

„minimizing warehouse costs‟. In Small Scale Company (which has Investment between

25 lakh rupees to 5 crore rupees) (Mean rank is 48.5) the most important procurement

objectives and in Medium Scale Company (which has investment between 5 crore rupees

to exceed 10 crore rupees) (Mean rank is 22.15) the least important procurement objective

was „Maintaining quality guidelines‟.


Significance of Difference in Procurement Objectives across Size of the Firm (Based

on No of Employees).

Ho, 6: There is no significant difference in procurement objectives across Size (based on

No of employees) of the firm.

H1, 6: There is a significant difference of procurement objectives across Size (based on No

of employees) of the firm.

TABLE 4.54: Kruskal-Wallis Test (Statistics): Procurement Objectives – Size of the

Firm (Based on No of Employees)

Test Statisticsa,b


Reduction of purchase price .870 1 .351

Optimising total costs of procurement .957 1 .328


160

Internal process optimisation .106 1 .745

Securing supplies .391 1 .532



B2B process optimisation 1.401 1 .237


Reduction of the number of suppliers .019 1 .891

Product development with suppliers .813 1 .367

Outsourcing of Operative Procurement Processes .940 1 .332

Outsourcing of Strategic Procurement Processes .086 1 .770


b. Grouping Variable: Size of the company - Based on No. of Employees


A table 4.54 show the p-value of “Maintaining quality guidelines” is 0.050 and

“Minimising warehouse costs” is 0.036, which are less than 0.05. Hence for these

statements, the null hypothesis is rejected. So there is a significant difference of

procurement objectives across Size of the firm (based on No of employees) for these

statements. For other statements of objectives, we fail to reject the null hypothesis.

Table 4.55: Kruskal-Wallis Test (Ranks): Procurement Objectives – Size of the Firm

(Based on No of Employees)

Ranks

Size of the company - Based on No. of Employees N Mean Rank

Reduction of purchase

price

50 to 249 employees 12 31.92

More than 249 employees 60 37.42

Total 72


procurement

50 to 249 employees 12 31.54


Total 72

Internal process

optimisation

50 to 249 employees 12 38.13


Total 72

Securing supplies

50 to 249 employees 12 33.33


Total 72

Maintaining quality

guidelines

50 to 249 employees 12 27.54


Total 72

Increase in cost

transparency

50 to 249 employees 12 31.25



161

Total 72

B2B process

optimisation

50 to 249 employees 12 30.63


Total 72

Minimising warehouse

costs

50 to 249 employees 12 25.83


Total 72

Reduction of the

number of suppliers

50 to 249 employees 12 35.79


Total 72

Product development

with suppliers

50 to 249 employees 12 31.75


Total 72

Outsourcing of

operative procurement

processes

50 to 249 employees 12 41.58


Total 72



50 to 249 employees 12 35.00


Total 72




has More than 249 employees) (mean rank 39.29 and 38.63) the most important

procurement objective and in Medium Scale Company (which has 50 to 249 employees)

(mean rank 27.54 and 25.83) least important procurement objectives were „maintaining

quality guidelines‟ and „minimizing warehouse costs‟.

4.2.1.7 Kruskal-Wallis Test is Performed with an Objective to Understand the

Significance of Difference in Procurement Objectives across Ownership of the Firm

Ho, 7: There is no significant difference in procurement objectives across Ownership of

the firm

H1, 7: There is a significant difference of procurement objectives across Ownership of the

firm


162

Table 4.56: Kruskal-Wallis Test (Statistics): Procurement Objectives – Ownership of

the Firm

Test Statisticsa,b








B2B process optimisation .382 2 .826




Outsourcing of operative procurement processes 1.264 2 .531

Outsourcing of strategic procurement processes 2.652 2 .266


b. Grouping Variable: Ownership Firm


Table 4.56 shows the p-value of “Reduction of the number of suppliers” is 0.042, which is

less than 0.05. Hence for this statement the null hypothesis is rejected. So there is a

significant difference of procurement objectives across Ownership of the firm for this

statement. For other statements of objective, we fail to reject the null hypothesis.

Table 4.57: Kruskal-Wallis Test (Ranks): Procurement Objectives – Ownership of the

Firm

Table 12: Ranks

Ownership Firm N Mean Rank

Reduction of purchase price

Public Sector 21 40.17

Private Sector 46 33.63

Joint Sector 5 47.50

Total 72


procurement




Total 72

Internal process optimisation




Total 72

Securing supplies Public Sector 21 42.02



163


Total 72

Maintaining quality guidelines




Total 72

Increase in cost transparency




Total 72





Total 72

Minimising warehouse costs




Total 72


suppliers




Total 72

Product development with suppliers




Total 72






Total 72






Total 72



companies. From the mean rank, it can be concluded that In Joint Sector Company (mean

rank is 57.00) the most important procurement objective and in Public Sector Company

(mean rank is 32.43) least important procurement objective was „Reduction of the number

of suppliers‟.


164

4.2.1.8 Kruskal-Wallis Test is Performed With an Objective to Understand the

Significance of Difference in Reasons for Adopting E-Procurement across Industry.

Ho, 8: There is no significant difference of reasons for adopting E-Procurement across

industry.

H1, 8: There is a significant difference of reasons for adopting E-Procurement across

industry.

TABLE 4.58: Kruskal-Wallis Test (Statistics): Reasons for Adopting E-Procurement

– Types of Industry

Test Statisticsa,b


Central coordination and aggregation of demand 6.408 7 .493

Accountability 9.851 7 .197

Openness 16.034 7 .025

Transparency 11.774 7 .108

Process efficiency 4.439 7 .728

Costs/Expenditure transparency 5.278 7 .626

Reduction in purchasing price 7.808 7 .350

Price Discovery 13.416 7 .063

Process quality assurance 4.060 7 .773

Integration of suppliers into the Procurement system 9.552 7 .215

Decentralised supply of information 9.734 7 .204

Decentralisation of operative tasks 13.054 7 .071




Table 4.58 shows the p-value of “Openness” is 0.025, which is less than 0.05, hence for

this statement the null hypothesis rejected. So there is a significant difference of reasons

for adopting E-Procurement across industry. For other statements pertaining to reasons, we

fail to reject the null hypothesis.

TABLE 4.59: Kruskal-Wallis Test (Ranks): Reasons for Adopting E-Procurement –

Types of Industry

Ranks


Central coordination

and aggregation of

demand


Automotive 5 25.10


Electrical 8 33.50

Textile 7 46.07


165


Fertilizer 1 37.50

Others 11 34.59

Total 72

Accountability


Automotive 5 39.80


Electrical 8 36.25

Textile 7 38.79


Fertilizer 1 18.50

Others 11 24.95

Total 72

Openness


Automotive 5 29.00


Electrical 8 25.06

Textile 7 43.14


Fertilizer 1 18.50

Others 11 31.05

Total 72

Transparency


Automotive 5 37.40


Electrical 8 23.88

Textile 7 41.21


Fertilizer 1 12.50

Others 11 36.86

Total 72

Process efficiency


Automotive 5 35.00


Electrical 8 33.00

Textile 7 32.71


Fertilizer 1 19.00

Others 11 42.27

Total 72

Costs/expenditure

transparency


Automotive 5 31.50


166


Electrical 8 38.56

Textile 7 32.14


Fertilizer 1 60.50

Others 11 41.09

Total 72

Reduction in

purchasing price


Automotive 5 38.90


Electrical 8 21.25

Textile 7 33.50


Fertilizer 1 33.50

Others 11 39.23

Total 72

Price Discovery


Automotive 5 39.70


Electrical 8 26.38

Textile 7 42.36


Fertilizer 1 64.50

Others 11 44.77

Total 72

Process quality

assurance


Automotive 5 25.60


Electrical 8 38.63

Textile 7 37.21


Fertilizer 1 55.50

Others 11 35.14

Total 72

Integration of

suppliers into the

Procurement system


Automotive 5 35.40


Electrical 8 22.25

Textile 7 47.00


Fertilizer 1 35.00

Others 11 37.55


167

Total 72

Decentralised supply

of information


Automotive 5 23.00


Electrical 8 30.13

Textile 7 51.50


Fertilizer 1 51.50

Others 11 36.09

Total 72

Decentralisation of

operative tasks


Automotive 5 25.50


Electrical 8 23.56

Textile 7 53.50


Fertilizer 1 53.50

Others 11 36.59

Total 72


Table 4.59 shows the mean rank of reasons for adopting an E-Procurement by the

companies. From the mean rank, it can be concluded that In Chemical and Petroleum

Industry (mean rank is 48.25) the most important reason for adopting E-Procurement and

in Fertilizer industry (mean rank is 18.50) the least important reason for adopting E-

Procurement was „Openness‟.


Significance of Difference in Reasons for Adopting E-Procurement across Size of The

Firm (Based On Investment).


Size of the firm (Based on Investment)

H1, 9: There is a significant difference of reasons for adopting E-Procurement across Size

of the firm (Based on Investment)


168


– Size of the Firm (Based On Investment)

Test Statisticsa,b



Accountability 2.658 2 .265

Openness 3.383 2 .184


Process efficiency 2.341 2 .310

Costs/Expenditure transparency .251 2 .882

Reduction in purchasing price 2.257 2 .323



Integration of suppliers into the Procurement system 1.253 2 .535

Decentralised supply of information 9.315 2 .009





Table 4.60 show the p-value of “Transparency” is 0.017 and “Decentralised supply of

information” is 0.009, which are less than 0.05, hence for these statements the null

hypothesis rejected. So there is a significant difference of reasons for adopting E-

Procurement across the size of the firm. For other statements, we fail to reject the null

hypothesis.


Size of the Firm (Based on Investment)

Ranks


Central

coordination and

aggregation of

demand



rupees 10 34.40


Total 72

Accountability



rupees 10 32.70


Total 72

Openness



rupees 10 30.65


169


Total 72

Transparency


rupees 2 12.50


rupees 10 28.30


Total 72

Process efficiency



rupees 10 33.40


Total 72

Costs/Expenditure

transparency



rupees 10 36.10


Total 72

Reduction in

purchasing price



rupees 10 31.40


Total 72

Price Discovery



rupees 10 27.80


Total 72

Process quality

assurance



rupees 10 30.95


Total 72

Integration of

suppliers into the

Procurement system



rupees 10 35.40


Total 72

Decentralised

supply of

information


rupees 2 20.00


rupees 10 21.50


Total 72

Decentralisation of Investment between 25 lakh to 5 crore rupees 2 22.50


170

operative tasks Investment between 5 crore to 10 crore

rupees 10 27.10


Total 72


Table 4.61 shows the mean rank of reasons for adopting an E-Procurement by the


has More than 10 crore rupees Investment) (mean rank is 38.67 and 39.55) the most

important reasons for adopting E-Procurement and in Small Scale Company (which has

Investment between 25 lakh rupees to 5 crore rupees) (mean rank is 12.5 and 20) least

important reasons for adopting E-Procurement were „Transparency‟ and „Decentralized

supply of information‟.


Significance of Difference in Reasons for Adopting E-Procurement across Size of The

Firm (Based on Investment).


Size of the firm (Based on Investment).

H1, 10: There is a significant difference of reasons for adopting E-Procurement across Size

of the firm (Based on Investment).


– Size of the Firm (Based on No. of Employees)

Test Statisticsa,b



Accountability .446 1 .504

Openness .193 1 .660


Process efficiency .346 1 .556

Costs/Expenditure transparency 1.098 1 .295

Reduction in purchasing price .300 1 .584



Integration of Suppliers into the Procurement System .053 1 .817

Decentralised supply of Information 5.177 1 .023



171




Table 4.62 show the p-value of “Decentralised supply of information” is 0.023, which is

less than 0.05; hence for this statement the null hypothesis rejected. So there is a

significant difference of reasons for adopting E-Procurement across Size of the firm. For

other objectives, we fail to reject the null hypothesis.


Size of the Firm (Based on No. of Employees)

Ranks


Central coordination and aggregation

of demand

50 to 249 employees 12 29.75


Total 72

Accountability

50 to 249 employees 12 33.29


Total 72

Openness

50 to 249 employees 12 34.38


Total 72

Transparency

50 to 249 employees 12 31.25


Total 72

Process efficiency

50 to 249 employees 12 33.67


Total 72

Costs/Expenditure transparency

50 to 249 employees 12 31.25


Total 72


50 to 249 employees 12 33.75


Total 72

Price Discovery

50 to 249 employees 12 31.33


Total 72

Process quality assurance

50 to 249 employees 12 29.71


Total 72


Procurement system

50 to 249 employees 12 35.33



172

Total 72


information

50 to 249 employees 12 25.13


Total 72

Decentralisation of operative tasks

50 to 249 employees 12 30.17


Total 72


Table shows the mean rank of reasons for adopting an E-Procurement by the companies.

From the mean rank, it can be concluded that In Large Scale Company (which has More

than 249 employees) (mean rank is 38.78) the most important reason for adopting E-

Procurement and in Medium Scale Company (which has 50 to 249 employees) (mean rank

is 25.13) the least important reason for adopting E-Procurement was „Decentralized supply

of information‟.


Significance of Difference in Importance of Further Up Gradation of IT to Support

the Procurement Process (Summated Response) across the Size of the Firm.

Ho, 11: There is no significant difference in importance of further up gradation of IT to

support the procurement process (Summated Response) across the size of the firm.

H1, 11: There is a significant difference in importance of further up gradation of IT to

support the procurement process (Summated Response) across the size of the firm.

TABLE 4.64: Descriptive Statistics of Up-Gradation of IT to Support The

Procurement Process

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Summated IT up gradation 72 36.00 62.00 53.5694 6.19138

Valid N (listwise) 72 (Source: Primary data; SPSS Output)

Summation of response from the respondents was carried out on fourteen variables of

importance of further up gradation of IT to support the procurement process namely,

Optimising the Analysis of Expenditure, Supplier Assessment, Contract Management,

Development and Review of Procurement Strategy, Negotiation (Invitation to Tender,

Auctions etc.), Supplier Identification, Order Processing of Direct Goods, Automated

Invoice entry Processing, Order Processing of Indirect Goods, Order Processing of

Services, Cooperative Disposition / Planning with Suppliers, Order Processing of


173

Investment Goods, Electronic Interchange of Business Documents (EDI) and Cooperative

Product Development with Suppliers.

TABLE 4.65: Kruskal-Wallis Test (Ranks): Up-Gradation of IT to Support The

Procurement Process – Size of the Firm (Based On Investment)

Ranks


Zscore (summated

IT up gradation )




Total 72


TABLE 4.66: Kruskal-Wallis Test (Statics): Up- Gradation of IT to Support the


Test Statisticsa,b

Zscore (summated IT up gradation )

Chi-Square 6.055

df 2

Asymp. Sig. .048




Table 4.66 shows the p-values of “importance of further up gradation of IT to support the

procurement process” is 0.048, which is less than 0.05. Hence the null hypothesis is

rejected. So there is a significant difference in importance of further up gradation of IT to

support the procurement process across the Size of the firm.

Table 4.65 shows the mean rank of “importance of further up gradation of IT to support the

procurement process”. From the mean rank, it can be concluded that the further up

gradation of IT to support the procurement process considered as most important In Large

Scale Company (which has More than 10 crore rupees Investment) (Mean rank is 38.91)

and considered least important in Small Scale Company (which has investment between 25

lakh rupees to 5 crore rupees) (Mean rank is 9.50).


Significance of Difference in Further Up Gradation of IT to Support the Procurement

Process across the Size of the Firm (Based On Investment).


174

Ho, 12: There is no significant difference in further up gradation of IT to support the

procurement process across the size of the firm.

H1, 12: There is a significant difference in further up gradation of IT to support the

procurement process across the size of the firm.

TABLE 4.67: Kruskal-Wallis Test (Statistics): Up-Gradation of IT to Support the


Test Statisticsa,b


Optimising the Analysis of expenditure 12.631 2 .002

Supplier assessment 8.745 2 .013

Contract management 5.003 2 .082

Development and review of procurement strategy 3.184 2 .204

Negotiation (invitations to tender, auctions) 5.702 2 .058

Supplier identification 1.928 2 .381

Order Processing of Direct Goods .969 2 .616

Automated Invoice entry Processing 4.189 2 .123

Order processing of indirect goods 4.439 2 .109

Order processing of services 3.781 2 .151

Cooperative disposition / planning with suppliers 5.148 2 .076

Order processing of investment goods 3.710 2 .156

Electronic interchange of business documents (EDI) 6.172 2 .046

Cooperative Product development with suppliers .967 2 .617




Table 4.67 show the p-value of “Optimising the Analysis of expenditure” is 0.002,

“Supplier assessment” is 0.013 and “Electronic interchange of business documents (EDI)”

is 0.046. These p- values are less than 0.05; hence for these statements the null hypothesis

is rejected. So there is a significant difference in further up gradation of IT to support the

procurement process across Size of the firm. For other statements, we fail to reject the null

hypothesis.

TABLE 4.68: Kruskal-Wallis Test (Ranks): Up-Gradation of IT to Support The


Ranks


Optimising the

Analysis of

expenditure




Total 72

Supplier assessment Investment between 25 lakh to 5 crore rupees 2 21.50


175



Total 72

Contract management




Total 72

Development and

review of

procurement strategy




Total 72

Negotiation

(invitations to tender,

auctions)




Total 72

Supplier identification




Total 72

Order processing of

direct goods




Total 72

Automated invoice

entry processing




Total 72

Order processing of

indirect goods




Total 72

Order processing of

services




Total 72

Cooperative

disposition / planning

with suppliers




Total 72


176

Order processing of

investment goods




Total 72

Electronic

interchange of

business documents

(EDI)




Total 72

Cooperative Product

development with

suppliers




Total 72


Table 4.68 shows the mean rank of Up-gradation of IT to support the procurement process.

From the mean rank, it can be concluded that in Large Scale Company (which has More

than 10 crore rupees of Investment) (mean rank is 39.75, 39.15 and 38.65) most important

IT up gradation and in Small Scale Company (which has Investment between 25 lakh

rupees to 5 crore rupees) (mean rank is 6.5, 21.50 and 8.75 ) least important IT up

gradation to support 1) Optimizing the Analysis of expenditure, 2) Supplier assessment and

3) Electronic interchange of business documents (EDI).


Significance of Difference in Further Up Gradation of IT to Support the Procurement

Process across The Ownership of the Firm.

Ho, 13: There is no significant difference in further up gradation of IT to support the

procurement process across the ownership of the firm.

H1, 13: There is a significant difference in further up gradation of IT to support the

procurement process across the ownership of the firm.

TABLE 4.69: Kruskal-Wallis Test (Statistics): Up-Gradation o IT to Support the

Procurement Process – Ownership of the Firm.

Test Statisticsa,b


Optimising the Analysis of expenditure .106 2 .948

Supplier Assessment 7.316 2 .026

Contract management 1.376 2 .503


177

Development and review of procurement strategy 1.477 2 .478

Negotiation (invitations to tender, auctions) 3.583 2 .167

Supplier identification 1.073 2 .585

Order processing of direct goods 2.171 2 .338

Automated invoice entry processing 1.164 2 .559

Order processing of indirect goods 4.027 2 .134

Order processing of services 1.719 2 .423

Cooperative disposition / planning with suppliers 1.764 2 .414

Order processing of investment goods 1.275 2 .529

Electronic interchange of business documents (EDI) 2.632 2 .268

Cooperative Product development with suppliers .654 2 .721


b. Grouping Variable: Ownership Firm


Table 4.69 shows the p-values of “Supplier assessment” is 0.026, which is less than 0.05.

Hence for this statement the null hypothesis is rejected. So there is a significant difference

in further up gradation of IT to support the procurement process across the ownership of

the firm. For other statements, we fail to reject the null hypothesis.

TABLE 4.70: Kruskal-Wallis Test (Ranks): Up-Gradation o IT to Support the

Procurement Process – Ownership of the Firm.

Ranks


Optimising the Analysis of expenditure




Total 72

Supplier assessment




Total 72

Contract management




Total 72

Development and review of procurement

strategy




Total 72

Negotiation (invitations to tender, Public Sector 21 42.74


178

auctions) Private Sector 46 34.67


Total 72





Total 72

Order processing of direct goods




Total 72

Automated invoice entry processing




Total 72

Order processing of indirect goods




Total 72

Order processing of services




Total 72

Cooperative disposition / planning with

suppliers




Total 72

Order processing of investment goods




Total 72

Electronic interchange of business

documents (EDI)




Total 72

Cooperative Product development with

suppliers




Total 72


Table 4.70 shows the mean rank of further Up-gradation of IT to support the procurement

process. From the mean rank, it can be concluded that in Joint Sector Company (mean rank


179

is 45.30) the most important further IT up gradation and in Private Sector Company (mean

rank is 32.43) the least important IT up gradation to support „Supplier assessment‟.


Significance of Difference in IT Tools Used for E-Procurement across Industry.

Ho, 14: There is no significant difference in IT tools used for E-Procurement across

industry.

H1, 14: There is a significant difference in IT tools used for E-Procurement across

industry.

TABLE 4.71: Kruskal-Wallis Test (Statics): IT Tools Used for E-Procurement –

Types of Industry.

Test Statisticsa,b


Material management module (ERP-System) 4.285 7 .746

Reporting and controlling tool 4.288 7 .746

Electronic Data Interchange (EDI) 14.899 7 .037

Tool For Supplier Evaluation 7.662 7 .363

Catalogue management tools for indirect goods 4.619 7 .706

Desktop Purchasing of Indirect Goods 5.447 7 .606

Contract Management Tool for Direct Goods 12.693 7 .080

Online Invitation to Tender 7.309 7 .397

Online Purchasing Auctions 5.191 7 .637

Web Platform for Scheduling & Planning with Suppliers 6.924 7 .437

Web-Platform for Product Development with Suppliers 6.380 7 .496




Table 4.71 shows the p-values of “Electronic data interchange (EDI)” is 0.037, which is


significant difference in IT tools used for E-Procurement across industry. For other

statements, we fail to reject the null hypothesis.

TABLE 4.72: Kruskal-Wallis Test (Ranks): IT Tools Used for E-Procurement –

Types of Industry.

Ranks


Material management

module (ERP-System)


Automotive 5 42.00


180


Electrical 8 33.50

Textile 7 42.00


Fertilizer 1 42.00

Others 11 35.32

Total 72

Reporting and controlling

tool


Automotive 5 26.50


Electrical 8 34.38

Textile 7 37.50


Fertilizer 1 47.50

Others 11 36.95

Total 72

Electronic Data

Interchange (EDI)


Automotive 5 39.10


Electrical 8 33.88

Textile 7 22.93


Fertilizer 1 9.50

Others 11 27.23

Total 72

Tool For Supplier

Evaluation


Automotive 5 31.40


Electrical 8 27.50

Textile 7 44.86


Fertilizer 1 57.50

Others 11 32.23

Total 72

Catalogue management

tools for indirect goods


Automotive 5 32.70


Electrical 8 41.69

Textile 7 32.07


Fertilizer 1 8.00

Others 11 35.05


181

Total 72

Desktop Purchasing of

Indirect Goods


Automotive 5 40.30


Electrical 8 34.31

Textile 7 26.79


Fertilizer 1 7.50

Others 11 39.95

Total 72

Contract Management Tool

for Direct Goods


Automotive 5 36.50


Electrical 8 22.50

Textile 7 25.07


Fertilizer 1 28.50

Others 11 37.95

Total 72

Online Invitation to Tender


Automotive 5 28.20


Electrical 8 37.75

Textile 7 37.50


Fertilizer 1 52.50

Others 11 33.41

Total 72

Online Purchasing Auctions


Automotive 5 31.20


Electrical 8 39.56

Textile 7 37.57


Fertilizer 1 53.50

Others 11 36.41

Total 72

Web-Platform for

Scheduling & Planning with

Suppliers


Automotive 5 35.90


Electrical 8 35.63

Textile 7 25.57


182


Fertilizer 1 12.00

Others 11 35.86

Total 72

Web-Platform for Product

Development with

Suppliers


Automotive 5 37.40


Electrical 8 40.50

Textile 7 23.79


Fertilizer 1 13.50

Others 11 35.36

Total 72


Table 4.72 shows the mean rank of IT tools used for e- procurement. From the mean rank,

it can be concluded that Chemical and Petroleum Industry (mean rank is 46.90) majorly

used IT tool and in Fertilizer industry (mean rank is 9.5) least used IT tool was „Electronic

Data Interchange (EDI)‟.


Significance o Difference in IT Tools Used for E-Procurement across Size of the Firm

(Based on Investment).

Ho, 15: There is no significant difference in IT tools used for E-Procurement across Size

of the firm.

H1, 15: There is a significant difference in IT tools used for E-Procurement across Size of

the firm.

TABLE 4.73: Kruskal-Wallis Test (Statistics): IT Tools Used for E-Procurement –

Size of the Firm (Based on Investment)

Test Statisticsa,b






Catalogue management tools for indirect goods 4.441 2 .109

Desktop Purchasing of Indirect Goods 1.365 2 .505


Online Invitation to Tender .797 2 .671


183

Online Purchasing Auctions .290 2 .865

Web Platform for Scheduling and Planning with Suppliers .901 2 .637

Web Platform for Product Development with Suppliers .375 2 .829




Table 4.73 shows the p-values of “Electronic data interchange (EDI)” is 0.041 and “Tool

for supplier evaluation” is 0.037, which are less than 0.05. Hence for these statements the

null hypothesis is rejected. So there is a significant difference in IT tools used for E-

Procurement across Size of the firm. We fail to reject the null hypothesis for other

statements.

TABLE 4.74: Kruskal-Wallis Test (Ranks): IT Tools Used for E-Procurement – Size

of the Firm (Based on Investment)

Ranks


Material

management

module (ERP-

System)




Total 72

Reporting and

controlling tool




Total 72

Electronic Data

Interchange

(EDI)




Total 72

Tool For

Supplier

Evaluation




Total 72

Catalogue

management tools

for indirect goods




Total 72

Desktop

Purchasing of

Indirect Goods




Total 72

Contract Investment between 25 lakh to 5 crore rupees 2 16.50


184

Management Tool

for Direct Goods Investment between 5 crore to 10 crore rupees 10 35.70


Total 72

Online Invitation

to Tender




Total 72

Online Purchasing

Auctions




Total 72

Web-Platform for

Scheduling &

Planning with

Suppliers




Total 72

Web-Platform for

Product

Development with

Suppliers




Total 72


Table 4.74 shows the mean rank of IT tools used for E-Procurement. From the mean rank,

it can be concluded that in Large Scale Company (which has More than 10 crore rupees

Investment) (mean rank is 39.10 and 38.62) majorly used „Electronic data interchange

(EDI)‟ and „Tool for supplier evaluation‟ to carried out Procurement. In Small Scale

Company (which has Investment between 25 lakh rupees to 5 crore rupees) (mean rank is

21.25 and 7.00) least used „Electronic data interchange (EDI)‟ and „Tool for supplier

evaluation‟ to carried out Procurement.


Significance of Difference in IT Tools Used for E-Procurement across Size of the

Firm (Based On No. of Employees).

Ho, 16: There is no significant difference in IT tools used for E-Procurement across Size

of the firm.

H1, 16: There is a significant difference in IT tools used for E-Procurement across Size of

the firm.


185

TABLE 4.75: Kruskal-Wallis Test (Statics): IT Tools Used for E-Procurement – Size

of the Firm (Based on No. of Employees)

Test Statisticsa,b



Reporting and controlling tool .128 1 .720


Tool For Supplier Evaluation .821 1 .365

Catalogue management tools for indirect goods .542 1 .462

Desktop Purchasing of Indirect Goods .004 1 .947

Contract Management Tool for Direct Goods .666 1 .415



Web-Platform for Scheduling & Planning with Suppliers .288 1 .591

Web-Platform for Product Development with Suppliers .880 1 .348




Table 4.75 shows the p-values of “Electronic data interchange (EDI)” is 0.004, which is


significant difference in IT tools used for E-Procurement across Size of the firm. For other

statements, we fail to reject the null hypothesis.

TABLE 4.76: Kruskal-Wallis Test (Ranks): IT Tools Used for E-Procurement – Size

of the Firm (Based on No. of Employees)

Ranks


Material management module (ERP-

System)

50 to 249 employees 12 33.04


Total 72

Reporting and controlling tool

50 to 249 employees 12 34.92


Total 72


50 to 249 employees 12 21.54


Total 72

Tool For Supplier Evaluation

50 to 249 employees 12 31.88


Total 72

Catalogue management tools for

indirect goods

50 to 249 employees 12 40.29


Total 72


186

Desktop Purchasing of Indirect

Goods

50 to 249 employees 12 36.83


Total 72

Contract Management Tool for Direct

Goods

50 to 249 employees 12 32.50


Total 72


50 to 249 employees 12 32.54


Total 72


50 to 249 employees 12 30.67


Total 72

Web-Platform for Scheduling &

Planning with Suppliers

50 to 249 employees 12 33.71


Total 72


Development with Suppliers

50 to 249 employees 12 31.63


Total 72



it can be concluded that Large Scale Company (which has More than 249 employees)

(mean rank is 39.49) majorly used and in Medium Scale Company (which has 50 to 249

employees) (mean rank is 21.54) least used „Electronic Data Interchange (EDI)‟ for

procurement.


Significance of Difference in IT Tools Used for E-Procurement across Ownership of

the Firm.

Ho, 17: There is no significant difference in IT tools used for E-Procurement across

ownership of the firm.

H1, 17: There is a significant difference in IT tools used for E-Procurement across

Ownership of the firm.

TABLE 4.77: Kruskal-Wallis Test (Statistics): IT Tools Used for E-Procurement –

Ownership of The Firm.

Test Statisticsa,b





187

Electronic Data Interchange (EDI) .101 2 .951


Catalogue management tools for indirect goods .579 2 .749

Desktop Purchasing of Indirect Goods .922 2 .631




Web-Platform for Scheduling & Planning with Suppliers .837 2 .658

Web-Platform for Product Development with Suppliers .912 2 .634




Table 4.77 shows the p-values of “Material management module (ERP-System)” is 0.033,

which is less than 0.05. Hence for this statement the null hypothesis is rejected. So there is

a significant difference in IT tools used for E-Procurement across Ownership of the firm.

For other statements, we fail to reject the null hypothesis.

TABLE 4.78: Kruskal-Wallis Test (Ranks): IT Tools Used for E-Procurement –

Ownership of The Firm.

Ranks


Material management module (ERP-

System)




Total 72





Total 72





Total 72





Total 72

Catalogue management tools for indirect

goods





188

Total 72

Desktop Purchasing of Indirect Goods




Total 72


Goods




Total 72





Total 72





Total 72

Web-Platform for Scheduling &

Planning with Suppliers




Total 72

Web-Platform for Product Development

with Suppliers




Total 72



it can be concluded that in Public Sector Company (mean rank is 42.00) majorly used and

in Joint Sector company (mean rank is 27.30) least used „Material Management Module

(ERP - System)‟ for procurement.

4.2.1.18 To Understand The Significance of Difference in IT Tools Preferred for E-

Procurement across Industry.

Ho, 18: There is no significant difference in IT tools preferred for E-Procurement across

industry.

H1, 18: There is a significant difference in IT tools preferred for E-Procurement across

industry.


189

TABLE 4.79: Kruskal-Wallis Test (Statistics): IT Tools Preferred for E-Procurement

– Types of Industry.

Test Statisticsa,b



Planning System) 7.804 7 .350

Desktop purchasing indirect goods 3.227 7 .863



Web platform for scheduling/planning with suppliers 5.349 7 .617



Catalogue Management Tool for Indirect Goods 14.063 7 .050







Table 4.79 shows the p-values of “Catalogue management tool for indirect goods” is 0.050.

Hence for this statement the null hypothesis is rejected. So there is a significant difference

in IT tools preferred for E-Procurement across industry. For other statements, we fail to

reject the null hypothesis.

TABLE 4.80: Kruskal-Wallis Test (Ranks): It Tools Preferred for E-Procurement –

Types of Industry.

Ranks


Material Management

Module (Enterprise

Resources Planning System)


Automotive 5 35.80


Electrical 8 43.00

Textile 7 43.00


Fertilizer 1 43.00

Others 11 33.18

Total 72

Desktop purchasing indirect

goods


Automotive 5 36.50


Electrical 8 30.25

Textile 7 36.50


190


Fertilizer 1 11.50

Others 11 36.50

Total 72

Contract Management Tool

for Direct Goods


Automotive 5 40.90


Electrical 8 27.63

Textile 7 30.79


Fertilizer 1 5.50

Others 11 30.68

Total 72

Reporting and controlling

tool


Automotive 5 24.20


Electrical 8 36.31

Textile 7 39.21


Fertilizer 1 48.50

Others 11 34.50

Total 72

Web platform for

scheduling/planning with

suppliers


Automotive 5 31.20


Electrical 8 35.75

Textile 7 45.29


Fertilizer 1 58.50

Others 11 41.68

Total 72

Electronic Data Interchange

(EDI)


Automotive 5 47.50


Electrical 8 36.13

Textile 7 35.07


Fertilizer 1 4.00

Others 11 32.50

Total 72

Tool For Supplier

Evaluation


Automotive 5 45.00


191


Electrical 8 37.50

Textile 7 39.29


Fertilizer 1 54.50

Others 11 42.14

Total 72

Catalogue Management

Tool for Indirect Goods


Automotive 5 30.10


Electrical 8 26.75

Textile 7 30.79


Fertilizer 1 6.50

Others 11 30.68

Total 72



Automotive 5 28.00


Electrical 8 25.38

Textile 7 39.57


Fertilizer 1 58.00

Others 11 46.27

Total 72




Automotive 5 33.70


Electrical 8 44.81

Textile 7 35.00


Fertilizer 1 15.50

Others 11 30.45

Total 72



Automotive 5 27.60


Electrical 8 35.25

Textile 7 41.43


Fertilizer 1 54.00

Others 11 38.77


192

Total 72


Table 4.80 shows the mean rank of IT tools preferred for e- procurement.. From the mean

rank, we can say that in Pharmaceutical Industry (Mean rank is 51.00) the foremost

preferred IT tool for procurement and in Fertilizer (Mean rank is 6.00) the least preferred

IT tool for procurement is „Catalogue Management Tool for Indirect Goods‟.


Significance of Difference in IT Tools Preferred for E-Procurement across the Size of

Firm.


the size of firm.

H1, 19: There is a significant difference in IT tools preferred for E-Procurement across the

size of firm.

TABLE 4.81: Kruskal-Wallis Test (Statistics): IT Tools Preferred for E-Procurement

– Size of Firm (Based on Investment)

Test Statisticsa,b



Planning System) 1.796 2 .407




Web platform for scheduling/planning with suppliers .577 2 .749



Catalogue Management Tool for Indirect Goods 1.055 2 .590







Table 4.81 shows the p-values of “Desktop purchasing indirect goods” is 0.019, which is



193

significant difference in IT tools preferred for E-Procurement across the size of firm. For

other statements, we fail to reject the null hypothesis.

TABLE 4.82: Kruskal-Wallis Test (Ranks): IT Tools Preferred for E-Procurement –

Size of Firm (Based on Investment)

Ranks


Material Management

Module (Enterprise

Resources Planning

System)




Total 72

Desktop purchasing

indirect goods




Total 72

Contract Management

Tool for Direct Goods




Total 72

Reporting and

controlling tool




Total 72

Web platform for

scheduling/planning

with suppliers




Total 72

Electronic Data

Interchange (EDI)




Total 72

Tool For Supplier

Evaluation




Total 72

Catalogue Management

Tool for Indirect Goods




Total 72

Online Purchasing

Auctions




194


Total 72

Web-Platform for

Product Development

with Suppliers




Total 72

Online Invitation to

Tender




Total 72


Table 4.82 shows the mean rank of IT tools preferred for E-Procurement. From the mean

rank, it can be concluded that in Medium Scale Company (which has investment between 5

crore rupees to 10 crore rupees) (mean rank is 51.50) the foremost preferred IT tool for

procurement and in Large Scale Company (which has More than 10 crore rupees

Investment) (mean rank is 33.58) least preferred IT tool for procurement is „Desktop

purchasing for indirect goods‟.


Significance of Difference in IT Tools Preferred for E-Procurement across the Size of

Firm (Based on No. of Employees).


the size of firm.

H1, 20: There is a significant difference in IT tools preferred for E-Procurement across the

size of firm.

TABLE 4.83: Kruskal-Wallis Test (Statistics): IT Tools

Preferred for E-Procurement – Size of Firm (Based on No. of Employees).

Test Statisticsa,b



Planning System) .019 1 .892



Reporting and controlling tool .394 1 .530

Web platform for scheduling/planning with suppliers .037 1 .847


195

Electronic Data Interchange (EDI) .809 1 .368


Catalogue Management Tool for Indirect Goods .275 1 .600

Online Purchasing Auctions .009 1 .923






Table 4.83 shows the p-values of “Desktop purchasing indirect goods” is 0.045, which is


significant difference in IT tools preferred for E-Procurement across the size of firm. For

other statements, we fail to reject the null hypothesis.

TABLE 4.84: Kruskal-Wallis Test (Ranks): IT Tools

Preferred for E-Procurement – Size of Firm (Based on No. of Employees).

Ranks


Material Management Module

(Enterprise Resources Planning

System)

50 to 249 employees 12 37.00


Total 72

Desktop purchasing indirect goods

50 to 249 employees 12 46.92


Total 72


Goods

50 to 249 employees 12 41.42


Total 72


50 to 249 employees 12 39.38


Total 72

Web platform for

scheduling/planning with suppliers

50 to 249 employees 12 35.50


Total 72


50 to 249 employees 12 32.13


Total 72


50 to 249 employees 12 40.71


Total 72

Catalogue Management Tool for

Indirect Goods

50 to 249 employees 12 39.17



196

Total 72


50 to 249 employees 12 37.00


Total 72



50 to 249 employees 12 46.13


Total 72


50 to 249 employees 12 38.58


Total 72


Table 4.84 shows the mean rank of IT tools preferred for e- procurement. From the mean

rank, it can be concluded that in Medium Scale Company (which has 50 to 249 employees)

(mean rank is 46.92) the foremost preferred IT tool for procurement and in Large Scale

Company (which has More than 249 employees) (mean rank is 34.42) the least preferred

IT tool for procurement is „Desktop purchasing for indirect goods‟.

4.2.2 Factor Analysis

Factor analysis is a statistical method used to describe variability among observed,

correlated variables in terms of a potentially lower number of unobserved variables called

factors. In other words, it is possible, for example, that variations in three or four observed

variables mainly reflect the variations in fewer such unobserved variables. Factor analysis

searches for such joint variations in response to unobserved latent variables. The observed

variables are modelled as linear combinations of the potential factors, plus "error" terms.

The information gained about the interdependencies between observed variables can be

used later to reduce the set of variables in a dataset. Computationally this technique is

equivalent to low rank approximation of the matrix of observed variables. Factor analysis

originated in psychometrics, and is used in behavioural sciences, social sciences,

marketing, Product management, operations research, and other applied sciences that deal

with large quantities of data.

4.2.2.1 Factor Analysis Performed on Difficulties Faced in E-Procurement

Implementation in the Selected Manufacturing Industries of Gujarat.


197

Factor Analysis was carried out on ten variables namely, High introduction costs for new

solutions, Suppliers slow to link up with the procurement system, Lack of quality of master

data, Difficulty in judging usefulness and potential of new IT solutions, Lack of user-

friendliness and user-acceptance of solutions, Solutions only address some of our

procurement processes, Solutions do not address the complexity of our processes,

Solutions are not well enough integrated (isolated applications), Lack of qualified staff

who can work with modern procurement system, Consultant expertise is lacking in IT

projects for procurement.

TABLE 4.85: Factor Analysis (KMO & Bartlett‟s Test) - Difficulties

Faced in E-Procurement Implementation

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .513

Bartlett's Test of Sphericity

Approx. Chi-Square 302.377

Df 45

Sig. .000


Kaiser-Meyer-Olkin Measure of Sampling Adequacy should be greater than .70 indicating

sufficient items for each factor. Here, the result of the KMO is 0.513. Though the KMO

value is less than .07, the variance explained by Four Factors is very high, the author

considered the use of Exploratory Factor Analysis as appropriate statistical tool for this

research. Bartlett‟s Test of Sphericity should be significant (less than .05), indicating that

the correlation matrix is significantly different from an identity matrix, in which

correlations between variables are all zero. Here, Bartlett‟s test of Sphericity (Significance

– 0.000) indicates that factor analysis done with ten variables is significant.

TABLE 4.86: Factor Analysis (Communalities) - Difficulties Faced in E-Procurement

Implementation

Communalities

Initial Extraction

High introduction costs for new solutions 1.000 .571

Suppliers are Slow to link up with Procurement System 1.000 .891

Lack of quality of master data 1.000 .639

Difficulties in judging Usefulness and Potential of new Information

Technology Solutions 1.000 .819

Lack of User friendliness and User acceptance of Solutions 1.000 .565

Solutions only address some of Our Procurement processes 1.000 .856

Solution do not able to address the complexity of our processes 1.000 .783

Solutions are not well enough integrated (Isolated Applications) 1.000 .880

Lack of qualified or skilled staff who can work with modern procurement 1.000 .678


198

system

Lack of Consultant expertise in Information Technology (IT) for

Procurement 1.000 .702

Extraction Method: Principal Component Analysis.


These communalities represent the relation between the variable and all other variables

(i.e., the squared multiple correlation between the item and all other items).The table 4.86

shows that communalities of all variables are above 0.5 hence it can be stated that none of

the above variables needs to be excluded in further analysis.

TABLE 4.87: Factor Analysis (Variance) - Difficulties

Faced in E-Procurement Implementation

Total Variance Explained

Co

mp

on

ent

Initial Eigen values Extraction Sums of Squared

Loadings

Rotation Sums of Squared

Loadings

Total % of

Variance

Cumulative

% Total

% of

Variance

Cumulative

% Total

% of

Variance

Cumulati

ve %

1 3.403 34.035 34.035 3.403 34.035 34.035 2.350 23.496 23.496

2 1.710 17.096 51.130 1.710 17.096 51.130 2.053 20.527 44.022

3 1.224 12.238 63.368 1.224 12.238 63.368 1.708 17.077 61.099

4 1.046 10.458 73.827 1.046 10.458 73.827 1.273 12.728 73.827

5 .881 8.813 82.640

6 .733 7.333 89.973

7 .445 4.452 94.424

8 .277 2.767 97.191

9 .178 1.783 98.974

10 .103 1.026 100.000



The Total Variance Explained table shows how the variance is divided among the 10

possible factors. Note that four factors have Eigen values (a measure of explained

variance) greater than 1.0, which is a common criterion for a factor to be useful. When the

Eigen value is less than 1.0, this means that the factor explains less information than a

single item would have explained. Most researchers would not consider the information

gained from such a factor to be sufficient to justify keeping that factor. Thus, if researcher

had not specified otherwise, the computer would have looked for the best factor solution

by "rotating" factors. It can be concluded that these four factors extracted from the 10

variables are explaining about 73.827% variance of total variance.


199

TABLE 4.88: Factor Analysis (Rotated Component) - Difficulties Faced in E-

Procurement Implementation

Rotated Component Matrixa

Component

1 2 3 4

Solutions only address some of Our Procurement processes 0.892

Solutions do not address the complexity of our processes 0.868

Lack of quality of master data 0.592

Lack of qualified or skilled staff who can work with modern

procurement system 0.817

High introduction costs for new solutions 0.722

Lack of Consultant expertise in Information Technology (IT)

for Procurement 0.645

Lack of User friendliness and User acceptance of Solutions 0.541

Solutions are not well enough integrated (Isolated Applications) 0.905


Information Technology Solutions 0.802

Suppliers are Slow to link up with Procurement System 0.935


Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 6 iterations.


The Rotated Factor Matrix table, which contains these loadings, is key for understanding

the results of the analysis. Note that the computer has sorted the 10 difficulties faced in E-

Procurement implementation in the selected manufacturing Industries of Gujarat into four

overlapping groups of items, each which has a loading of |.50| or higher (|.50| means the

absolute value, or value without considering the sign, is greater than .50). Actually, every

item has some loading from every factor, but there are blanks in the matrix where weights

were less than |.50|. Within each factor (to the extent possible), the items are sorted from

the one with the highest factor weight or loading for that factor to the one with the lowest

loading on that first factor.

Four factors are derived from factor analysis related to difficulties faced in E-Procurement

implementation. They are named as follows:

(1) Poor data management and partial solutions: The first factor consists of three

variables of difficulty in implementing E-Procurement. They are related to lack of

availability as well as quality of master data. Also there is difficulty in

implementing it due to large and complex data.


200

(2) Costly non-user friendly solutions and lack of expertise: The second factor

consists of four variables of difficulty in implementing E-Procurement. They are

related to scarcity of quality feed employee who can work on E-Procurement

system. Also there are few consultants available for the same. Even the E-

Procurement system is not very user-friendly so as to make people accept it easily.

(3) Non-useful Non-integrated solutions: The third factor consists of two variables of

difficulty in implementing E-Procurement. They specify that the E-Procurement

solutions are not well enough integrated. Hence not all functions and areas of E-

Procurement are found in the system. Also the employees are not able to judge the

benefit of implementing the solution due to their traditional thought process.

(4) Lack of supplier readiness: The forth factor consist of only one variable related to

supplier readiness to accept the E-Procurement process. The suppliers still wants to

work with the traditional mindset. Also many are not financially sound to

implement the E-Procurement process.

4.2.2.2 Factor Analysis Performed on Reasons that Led to the Implementation of E-

Procurement in the Selected Manufacturing Industries of Gujarat.

Factor Analysis was carried out on twelve variables namely, Central Coordination and

Aggregation of Demand, Accountability, Openness, Transparency, Process Efficiency,

Costs / Expenditure Transparency, Reduction in Purchasing Price, Price Discovery,

Process Quality Assurance, Integration of Suppliers into the Procurement System,

Decentralised Supply of Information and Decentralisation of Operative Tasks.

TABLE 4.89: Factor Analysis (KMO And Bartlett's Test) - Reasons

that Led to the Implementation of E- Procurement

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .680

Bartlett's Test of Sphericity

Approx. Chi-Square 408.608

Df 66

Sig. .000


Kaiser-Meyer-Olkin Measure of Sampling Adequacy should be greater than .70 indicating

sufficient items for each factor. Here, the result of the KMO is 0.680. Though the KMO


201

value is less than .07, the variance explained by Four Factors is very high, the author

considered the use of Exploratory Factor Analysis as appropriate statistical tool for this

research. Bartlett‟s Test of Sphericity should be significant (less than .05), indicating that

the correlation matrix is significantly different from an identity matrix, in which

correlations between variables are all zero. Here, Bartlett‟s test of Sphericity (Significance

– 0.000) indicates that factor analysis done with twelve variables is significant.

TABLE 4.90: Factor Analysis (Communalities) – Reasons that Led to the

Implementation of E- Procurement

Communalities

Initial Extraction

Central coordination and aggregation of demand 1.000 .772

Accountability 1.000 .708

Openness 1.000 .744

Transparency 1.000 .614

Process efficiency 1.000 .800

Costs/Expenditure transparency 1.000 .583

Reduction in purchasing price 1.000 .805

Price Discovery 1.000 .819

Process quality assurance 1.000 .493

Integration of Suppliers into the Procurement System 1.000 .798

Decentralised Supply of Information 1.000 .743

Decentralisation of Operative Tasks 1.000 .719



These communalities represent the relation between the variable and all other variables

(i.e., the squared multiple correlation between the item and all other items).The above table

shows that communalities of all variables are above 0.5 hence it can be stated that none of

the above variables needs to be excluded in further analysis.

TABLE 4.91: Factor Analysis (Variance) - Reasons that Led to the Implementation of

E- Procurement

Total Variance Explained

Co

mp

one

nt

Initial Eigen values Extraction Sums of Squared

Loadings

Rotation Sums of Squared

Loadings

Total % of

Variance

Cumulat

ive % Total

% of

Variance

Cumulat

ive % Total

% of

Variance

Cumulat

ive %

1 4.420 36.837 36.837 4.420 36.837 36.837 2.864 23.866 23.866

2 1.716 14.297 51.134 1.716 14.297 51.134 2.366 19.720 43.586

3 1.403 11.689 62.823 1.403 11.689 62.823 2.077 17.307 60.893

4 1.060 8.834 71.657 1.060 8.834 71.657 1.292 10.764 71.657

5 .952 7.935 79.592


202

6 .691 5.758 85.350

7 .543 4.525 89.875

8 .422 3.517 93.393

9 .295 2.461 95.853

10 .202 1.686 97.539

11 .184 1.534 99.073

12 .111 .927 100.000



The Total Variance Explained table shows how the variance is divided among the 12

possible factors. Note that four factors have Eigen values (a measure of explained

variance) greater than 1.0, which is a common criterion for a factor to be useful. When the

Eigen value is less than 1.0, this means that the factor explains less information than a

single item would have explained. Most researchers would not consider the information

gained from such a factor to be sufficient to justify keeping that factor. Thus, if researcher

had not specified otherwise, the computer would have looked for the best factor solution

by "rotating" factors. It can be concluded that these four factors extracted from the 12

variables are explaining about 71.657% variance of total variance.

TABLE 4.92: Factor Analysis (Rotated Component) - Reasons that Led to the

Implementation of E- Procurement

Rotated Component Matrixa

Component

1 2 3 4

Integration of suppliers into the procurement system 0.88

Reduction in purchasing price 0.694

Decentralised supply of information 0.623

Transparency 0.586

Accountability 0.552

Central coordination and aggregation of demand 0.846

Decentralisation of operative tasks 0.828

Openness

0.620

Process efficiency 0.777

Costs/Expenditure transparency 0.761

Process quality assurance 0.519

Price Discovery 0.88


Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 8 iterations.



203

The Rotated Factor Matrix table, which contains these loadings, is key for understanding

the results of the analysis. Note that the computer has sorted the 12 reasons that has led to

the implementation of E-Procurement in the selected manufacturing Industries of Gujarat

into four overlapping groups of items, each which has a loading of |.50| or higher (|.50|

means the absolute value, or value without considering the sign, is greater than .50).

Actually, every item has some loading from every factor, but there are blanks in the matrix

where weights were less than |.50|. Within each factor (to the extent possible), the items are

sorted from the one with the highest factor weight or loading for that factor to the one with

the lowest loading on that first factor.

Four factors are derived from factor analysis related to reasons for adopting e-

procurement. They are named as follows:

(1) Supply Management with Process Accountability: The first factor consists of five

variables of reasons that have led to the implementation of e- procurement. They are

related to Procurement System Integration as well as Decentralised supply of

information. It also includes Accountability and Transparency of Procurement

process, and purchasing price reduction too.

(2) Demand Management with Lucidity: The second factor consists of three variables

of reasons that have led to the implementation of e- procurement. They are related to

Central coordination and aggregation of demand, Decentralisation of operative tasks

and Openness.

(3) Operational Efficiency of Procurement Process: The third factor consists of three

variables of reasons that have led to the implementation of e- procurement. They are

related to Process efficiency and quality assurance. It also includes the

Costs/Expenditure transparency in the procurement.

(4) Price Discovery: The fourth factor consists of one only variable of Reasons that

has led to the implementation of e- procurement.


204

4.2.3 Chi-Square Analysis

Chi-Square analysis is used to examine the similarities between two or more variables on

some characteristics of interest206

. It simply a way of quantifying the various deviations

expected by chance if a hypothesis is true. Chi-square test is considered when we are

interested in finding the differences in frequency counts using nominal data. The chi-

square statistic (χ2) is used to test the statistical significance of the observed association in

a cross-tabulation. To determine whether a systematic association exists, the probability of

obtaining a value of chi-square as large as or larger than the one calculated from the cross-

tabulation is estimated. An important characteristic of the chi-square statistic is the number

of degrees of freedom (df) associated with it. That is, df = (r - 1) x (c -1). The null

hypothesis (H0) of no association between the two variables will be rejected only when the

calculated value of the test statistic is greater than the critical value of the chi-square

distribution with the appropriate degrees of freedom. Hypotheses testing were done to see

if some significant associations exist.

4.2.3.1 Chi-Square Analysis Performed to Identify the Association Between Size of

The Firm (Based on Number of Employees) and IT Solutions Used for Operative

Order Processing.

Ho, 21: there is no significance association between size of the firm (based on Number of


H1, 21: there is a significance association between size of the firm (based on Number of



Employees) - IT Solutions Used for Operative Order Processing

Crosstab

SAP MM (Materials

Management Module)

No Yes Total

Size of the 50 to 249 Count 9 3 12

206

“Chi-Square analysis” last retrieved dated 22.10.2016 from

http://www.pindling.org/Math/Statistics/Textbook/Chapter11_Chi_Square/introduction.html



205

company -

Based on

No. of

Employees

employees % within Size of the company -

Based on No. of Employees 75.00% 25.00% 100.00%

% within SAP MM (Materials

Management Module) 25.70% 8.10% 16.70%

More than

249

employees

Count 26 34 60

% within Size of the company -




Total

Count 35 37 72






TABLE 4.94: Chi-Square Test: Size of the Company (Based on Number of


Chi-Square Tests

Value df Asymp. Sig.

(2-sided)

Exact Sig.

(2-sided)

Exact Sig.

(1-sided)

Pearson Chi-Square 4.014a 1 0.045

Continuity Correctionb 2.847 1 0.092

Likelihood Ratio 4.154 1 0.042

Fisher's Exact Test 0.06 0.045

Linear-by-Linear Association 3.958 1 0.047

N of Valid Cases 72

a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.83.

b. Computed only for a 2x2 table



206

FIGURE 4.9: Chi-Square Test: Size of the Company (Based on Number of


In this case the observed chi-square statistic is 4.014, with 1 degree of freedom, the p value

is 0.045which is less than 0.05 which means, Null hypothesis is rejected. Therefore, there

is a significance association between size of the (based on Number of employees) and SAP

MM (Materials Management Module) IT solutions used for operative order processing.

By eyeballing the observed frequencies in the Cross tabulation matrix, it appears that From

the table, IT solutions used for operative order processing in large scale company (which

has more than 250 employees) is SAP MM (Materials Management Module) (56.70%of

them used). While, only 25.00% of them used SAP MM (Materials Management Module)

IT solutions for operative order processing in Medium Scale Company (which has 50 to

249 employees).

4.2.3.2 Chi-Square Analysis Performed to Identify the Association Between Sizes of

Firm (Based on Number of Employees) and Method Used to Exchange the Electronic

Business Documents with Suppliers.

Ho, 22: there is no significance association between size of firm (based on Number of

employees) and method used to exchange the Electronic business documents with

suppliers.

H1, 22: there is no significance association between size of the firm (based on Number of

employees) and method used to exchange the Electronic business documents with

suppliers.


207


Employees) - Method Used to Exchange the Electronic Business Documents with

Suppliers.

Crosstab

Fully integrated Solution (EDI)

directly with Suppliers

No Yes Total

Size of the

company -

Based on

No. of

Employees

50 to 249

employees

Count 9 3 12



% within Fully integrated

Solution (EDI) directly with

Suppliers

28.10% 7.50% 16.70%

More than

249

employees

Count 23 37 60





Suppliers

71.90% 92.50% 83.30%

Total

Count 32 40 72





Suppliers

100.00% 100.00% 100.00%


TABLE 4.96: Chi-Square Tests: Size of the Company (Based on Number of


Suppliers.

Chi-Square Tests

Value df Asymp. Sig. (2-

sided)

Exact Sig.

(2-sided)

Exact Sig. (1-

sided)

Pearson Chi-Square 5.445a 1 0.02

Continuity Correctionb 4.061 1 0.044

Likelihood Ratio 5.546 1 0.019

Fisher's Exact Test 0.027 0.022

Linear-by-Linear Association 5.369 1 0.02

N of Valid Cases 72

a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.33.

b. Computed only for a 2x2 table



208

FIGURE 4.10: Chi-Square Test: Size of the Company (Based on Number of


Suppliers.

The observed chi-square statistic is 5.115, with 1 degree of freedom, the p value is 0.022

which is less than 0.05 which means, Null hypothesis is rejected. Therefore, there is a

significance association between size of the (based on Number of employees) and fully

integrated solution (EDI) directly with the supplier method used to exchange the electronic

business documents with suppliers.

By eyeballing the observed frequencies in the cross tabulation matrix, it appears that From

the table, method used to exchange the electronic business documents with suppliers in

large scale company (which has more than 250 employees) is Fully integrated solution

(EDI) directly with the supplier (61.70%of them used). While, only 25.00%of them used

fully integrated solution (EDI) directly with the supplier method used to exchange the

electronic business documents with suppliers in Medium Scale Company (which has 50 to

249 employees).

Summary of Major Findings, Limitations and

Scope for Future Research

209

CHAPTER 5



5.0 Introduction

This Chapter discusses the findings of the study, its limitations and scope for future

research. Given below are the major findings (Conclusions) based on the analysis of data

given in the previous chapter.

5.1 Conclusions - Major Findings:

Multi National Companies (MNCs) are in favour of starting and expanding their businesses

in India owing to its high economic growth and favourable business environment.

Manufacturing sector‟s contribution in India‟s GDP is very high. In such a situation,

western corporates are eying on those Indian Manufacturing firms that have either adopted

E-Procurement practices or in the process of adoption of E-Procurement. While there are a

number of research studies reported in many other countries, not many have been carried

out to study E-Procurement practices adopted by the manufacturing firm in India.

This study addresses a gap in knowledge by investigating E-Procurement practices in the

selected manufacturing industrial units of Gujarat. According to the best knowledge of the

author based on an extensive literature survey, there has not been a comparably extensive

study about this topic in India. The study‟s findings will benefit Information System

Researchers, Practicing Managers and E-Procurement vendors in several ways. The major

outcomes of this study have been derived from the comparisons of E-Procurement process

in selected manufacturing Industrial units of Gujarat. For this purpose, hypothesized

relations were established to compare the E-Procurement practices adopted by the firm and

types of Industry, Size of the company and Ownership of the firm. It also helps to

understand the reasons and difficulties faced by the firm along with IT tools used and



210

preferred by them. The research will also help to understand the extent to which IT tools

can be used in e- procurement and the documents exchanged in E-Procurement through

EDI.

This detailed research was carried out in 72 manufacturing industrial units from across the

State of Gujarat.

The major findings have been summarized in the below mentioned section of the

chapter, objective wise:

Objective 1: To study the present status and to compare E-Procurement in selected

manufacturing industrial units of Gujarat.

5.1.1 Procurement Objectives

5.1.1.1 The important procurement objectives considered by the majority of

respondents are (Refer topic 4.1.1.5 in Chapter 4):

Reduction of the purchasing price


Business to Business (B2B) process optimisation

Optimising total costs of procurement

Securing supplies, and

Minimising warehouse costs.

5.1.1.2 The study found the significant difference in procurement objectives across

Industry, Size of the firm and Ownership of the firm (Refer topic 4.2.1.3 to 4.2.1.7 in

Chapter 4).

In Fertilizer Industry the most important procurement objective is „Reduction of

the purchasing price‟ while it is least important procurement objective in Electrical

Industry.

In Pharmaceutical Industry the most important procurement objective is

„optimising total costs of procurement‟ while it is least important procurement

objectives in Electrical Industry.

In Large Scale Companies, the most important procurement objectives is

„optimizing total costs of procurement‟ and „minimizing warehouse costs‟. In



211

Large Scale Company (which has More than 249 employees) the most important

procurement objectives are „maintaining quality guidelines‟ and „minimizing

warehouse costs‟.

In Small Scale Company, the most important procurement objective is

„Maintaining quality guidelines‟ and the least important procurement objective is

„optimizing total costs of procurement‟.

In Medium Scale Company, least important procurement objective is

„minimizing warehouse costs‟ and „Maintaining quality guidelines‟.

In Joint Sector Company, the most important procurement objective is „Reduction

of the number of suppliers‟ while it is the least important procurement objective in

Public Sector Company.

5.1.2 Extent of Information Technology (IT) Tools Used in E- Procurement

5.1.2.1 Almost all respondent have used Information Technology to a ‘Great extent’ to

carry out the Procurement function (Refer topic 4.1.1.6 in Chapter 4).

5.1.2.2 The present study attempted to study the relation between Extent of

Information Technology (IT) Tools used in e- procurement and Industry, Size and

Ownership of the firm.

The findings are given below (Refer topic 4.1.2.1 to 4.1.2.4 in Chapter 4):

Fertilizer Industry has used Information Technology to a ‘very great extent’ to

carry out the Procurement function.

While, Chemical & Petroleum industry, Automotive industry, Pharmaceutical

industry, Electrical industry, Textile industry and Engineering & Machine tool

industry have used Information Technology to ‘great extent’.

Public Sector Companies, Private Sector Companies and Joint Sector

Companies have used IT to ‘great extent’ to carry out the Procurement function.

Large Scale Companies and Small Scale Companies have used IT to ‘great

extent’ while Medium Scale Companies (which has Investment between 5 Crore

and 10 Crore rupees) have used IT to „moderate extent’ to carry out the

Procurement function.



212

5.1.3 Difficulties Faced in E-Procurement Implementation

5.1.3.1 The major difficulties faced in E-Procurement implementation as reported by the

respondents are (Refer topic 4.1.1.14 in Chapter 4):

Suppliers slow to link up with the procurement system

Lack of quality of master data

Lack of qualified staff who can work with modern procurement system, and

High introduction costs for new solutions.

5.1.3.2 The statistical significance for the difference in difficulties faced in E-

Procurement across industry and Size of the company has been studied.

Researcher gives below the salient findings (Refer topic 4.2.1.1 to 4.2.1.2 in Chapter 4):

Pharmaceutical Industry has faced more difficulties in ‘Solutions only address

some of our procurement processes’ and ‘Solutions do not address the complexity

of our processes’ while, Fertilizer Industry have faced less difficulties in it.

Large Companies based on investment, have faced more difficulties in ‘High

introduction costs for new solutions’ while Small Scale Company have faced less

difficulty in it.

5.1.4 Reasons that have led to the Implementation of E-Procurement

5.1.4.1 The main reasons that have led to the implementation of E-Procurement in the

selected manufacturing Industries of Gujarat are (Refer topic 4.1.1.7 in Chapter 4):

Accountability

Openness

Transparency

Process efficiency

Price Discovery

Costs/expenditure transparency

Central coordination, and

Aggregation of demand.



213

5.1.4.2 The present endeavored to study the statistical significant of the difference of

reasons that have led to the implementation of E-Procurement s across Industry, Size

of the firm and Ownership of the firm.

The followings are the outcomes of the analysis (Refer topic 4.2.1.8 to 4.2.1.10 in Chapter

4):

In Chemical and Petroleum Industry, the most important reason for adopting E-

Procurement is ‘Openness’, while it is considered as the least important reason in

Fertilizer industry.

In Large Scale Companies based on investment, the most important reasons for

adopting E-Procurement are ‘Transparency’ and ‘Decentralized supply of

information’, while these are considered as the least important reasons in Small

Scale Companies.

In Large Scale Companies based on number of employees (More than 249

employees), the most important reason for adopting E-Procurement is

‘Decentralized supply of information’ while it is the least important reason in

Medium Scale Company (which has 50 to 249 employees).

5.1.5 Information Technology (IT) tools used for Procurement

5.1.5.1 Frequently used information technology tools for procurement are (Refer topic

4.1.1.8 in Chapter 4):

Materials management module (ERP-System)

Reporting & controlling tool

Online invitations to tender, and

Online purchasing auctions.

5.1.5.2 The statistical significance of difference in Information Technology tools used

for E-Procurement across industry, Size of the firm and Ownership of the firm was

found.


In Chemical and Petroleum Industry, the most widely used Information

technology tool for procurement is ‘Electronic data interchange (EDI)’ while it is

least used in Fertilizer industry.

In Large Scale Companies, the most of the companies used Information

technology tools of ‘Electronic data interchange (EDI)’ and ‘Tool for supplier



214

evaluation’ while these are least used in Small Scale Companies based on

investment and in Medium Scale Companies (which has 50 to 249 employees).

In Public Sector Company, the most widely used Information technology tool for

procurement is ‘Material Management Module (ERP - System)’ while it least used

in Joint Sector company.

5.1.6 Information Technology (IT) Solution Used for Operative Order Processing

5.1.6.1 Enterprise and Resources Planning (ERP) and SAP MM (materials management

module) are foremost used Information technology solutions for operative order processing

(Refer topic 4.1.1.9 in Chapter 4).

5.1.6.2 The present study found linkages between the extent of use of Information

Technology (IT) solution used for operative order processing across the Industry, Size

and Ownership of the firm.


Enterprise Resources Planning (ERP is foremost used IT solutions for operative

order processing in Chemical & Petroleum Industry, Automotive Industry,

Pharmaceutical Industry, Electrical Industry, Textile Industry, and

Engineering & Machine Industry.

SAP MM (materials management module) is foremost used IT solutions for

operative order processing in Chemical & Petroleum Industry, Automotive

Industry, Textile Industry, Fertilizer Industry and Engineering & Machine

Industry.

SAP BBP/EBP (The SAP solutions Enterprise Buyer Professional (EBP) and its

preceding version (BBP) is foremost used IT solutions for operative order

processing in automotive industry.

Enterprise Resources Planning (ERP) is foremost used IT solutions for operative

order processing in Public and Private Sector Company.

SAP MM (materials management module)’ is foremost used IT solutions for

operative order processing in Public, Private and Joint Sector Company

Purchasing Card (VISA, Airplus, Amexco ...) and Product development in house is

foremost used IT solutions for operative order processing in Joint Sector

Company.



215

Enterprise Resources Planning (ERP) is foremost used IT solutions for operative

order processing in Small Scale Company as per the investment, Medium Scale

Company, and Large Scale Company.

5.1.6.3 There is association found between size of the firm (based on Number of

employees) and IT solutions used for operative order processing (Refer topic 4.2.3.1 in

Chapter 4).

SAP MM (materials management module)’ is foremost used IT solutions for

operative order processing in Large scale company (which has more than 250

employees) while it is least used in Medium Scale Company (which has 50 to 249

employees).

5.1.7 Information Technology (IT) Tools Preferred for E-Procurement

5.1.7.1 Majority of Manufacturing Industrial units preferred (Refer topic 4.1.1.10 in

Chapter 4):

Material Management Module (ERP System)

Reporting & Controlling tool

Online Invitations to tender, and

Tool for supplier evaluation.

5.1.7.2 Study found the significance of difference in Information Technology (IT)

tools preferred for E-Procurement across industry and Size of the firm.

The following are the findings (Refer topic 4.2.1.18 to 4.2.1.20 in Chapter 4):

Catalogue management tool for indirect goods’ is the foremost preferred IT tool

for procurement in Pharmaceutical Industry while it is least preferred in

Fertilizer industry.

Desktop purchasing for indirect goods is the foremost preferred IT tool for

procurement in Medium Scale Company while it is least preferred in Large

Scale Company.

5.1.8 Number of Supplier with Whom Business Documents were Exchanged by

Means of EDI/Web EDI during the Last Six Months.



216

5.1.8.1 Majority of Manufacturing Industrial Units have exchanged their documents with

More than Hundred suppliers followed Eleven to Forty nine suppliers by means of EDI/

Web EDI during the last six months (Refer topic 4.1.1.11 in Chapter 4).

5.1.8.2 Study found the relation between Number of suppliers with whom business

document were exchanged by means of EDI/Web EDI during the last six months and

Industry, Size and Ownership of the firm.


Chemical & Petroleum, Automotive, Electrical, Textile, Fertilizers and

Engineering & Machine tool Industries have exchanged business documents

with „More than hundred Suppliers’ while Pharmaceutical Industries have

exchanged business documents with ‘eleven to forty nine Suppliers’ by means of

EDI/Web EDI during the last six months.

Public Sector Companies, Private Sector Companies and Joint Sector

Companies have exchanged their business documents with ‘More than hundred

Suppliers’ by means of EDI/Web EDI for the last six months.

Small Scale Company and Medium Scale Company (which has investment

between 5 Crore to 10 Crore rupees) have exchanged business documents with

‘Fifty to Ninety nine Suppliers’.

Large Scale Company has exchanged business documents with ‘more than

hundred Suppliers’.

Medium Scale Company (which has 50 to 249 employees) has exchanged

business documents with ‘Eleven to Forty Nine Suppliers’ by means of EDI/Web

EDI for the last six months.

5.1.9 Eelectronics Documents Exchanged with Suppliers More Often by Means of

EDI/Web EDI during the Last Six Months

5.1.9.1 Majority of manufacturing units have exchanged „Purchase Order’, ‘Invoice’,

‘Order confirmation’ and ‘Despatch advice’ with suppliers ‘once in a week, While

‘Request for quote / bid with suppliers’ were exchanged once in a month (Refer topic

4.1.1.12 in Chapter 4).



217

5.1.9.2 Study found the relation between Eelectronics documents exchanged with

suppliers more often by means of EDI/Web EDI from last six months and Industry,

Size and Ownership of the firm.


Chemical & Petroleum, Automotive, Electrical, Textile, Pharmaceutical,

Fertilizers and Engineering & Machine Industries have exchanged Purchase

order, Invoice, Order confirmation and Despatch advice ‘once in a week’.

Requests for quote/bid have been exchanged „once in a week‟ in Chemical &

Petroleum, Automotive, Fertilizers and Engineering & Machine Industries ,

while it is exchanged „once in month‟ in Electrical and Textile industry and „once

in three month‟ in Pharmaceutical Industry.

Private companies and Public Sector companies have exchanged Purchase order,

Invoice, Order Confirmation, Request for quote/bid and Despatch advice ‘Once in

a week’. While, Request for quote/bid have been exchanged ‘Once in a three

month’ in Public Sector.

Small Scale companies, Medium Scale companies and Large Scale companies

have exchanged Purchase order, Invoice, Order Confirmation and Despatch advice

‘Once in a week’.

Request for quote/bid have been exchanged ‘Once in a three month’ in Medium

Scale and ‘Once in a month’ in Small Scale Companies and Medium Scale

Company (Which has 50 to 249 employees).

5.1.10 Methods Used to Exchange Electronic Business Documents with Suppliers

5.1.10.1 Majority of all manufacturing companies have used ‘Fully Integrated Solution

(EDI) directly with supplier’ and ‘Web Supplier portal via Business to Business (B2B)

marketplace/transaction platform (Web EDI)’ methods to exchange electronics business

documents with supplier (Refer topic 4.1.1.13 in Chapter 4).

5.1.10.2 Study found the relation between Methods used to exchange electronic

business documents with suppliers and Industry, Size and Ownership of the firm.




218

In Chemical & Petroleum industry, Automotive industry, Textile industry and

Fertilizer industry, the foremost method used to exchange electronic business

documents is ‘Fully Integrated Solution (EDI) directly with supplier’.

In Pharmaceutical industry and Electrical Industry, the foremost method used

to exchange electronic business documents is ‘Company run supplier portal (Web

EDI)’.

In Engineering and Machine industry and Fertilizer Industry the foremost

method used to exchange electronic business documents is ‘Web supplier portal

via B2B marketplace/transaction platform (Web EDI’).

In Fertilizer Industry the foremost method used to exchange electronic business

documents is ‘Fully integrated solution (EDI) via B2B marketplace/transaction

platform.

In Public Sector Companies, Private Sector Companies and Joint Sector

Companies, the foremost method used to exchange electronic business

documents is ‘Fully integrated solution (EDI) directly with the supplier’ and ‘Web

supplier portal via B2B marketplace/transaction platform (Web EDI)’.

In Small and Medium companies the foremost method used to exchange

electronic business documents is ‘Company run supplier portal (Web EDI)’ and

‘Web supplier portal via B2B marketplace/transaction platform (Web EDI)’.

In Large scale companies the foremost method used to exchange electronic

business documents is ‘Fully integrated solution (EDI) directly with the supplier’

and ‘Web supplier portal via B2B marketplace/transaction platform (Web EDI)’.

5.1.10.3 There is an association found between size of firm (based on Number of

employees) and method used to exchange the electronic business documents with

suppliers (Refer topic 4.2.3.2 in Chapter 4).

In large scale company (which has more than 250 employees), the foremost

method used to exchange electronic business documents is „Fully integrated

solution (EDI) directly with the supplier‟, while it is least used in Medium Scale

Company (with 50 to 249 employees).

5.1.11 Who Initiates and Drives the Development (Up Gradation) of IT for

Procurement



219

5.1.11.1 Almost all respondent agreed that the ‘Top management’, ‘Procurement

department’ and ‘IT Department’ have initiated the development (up gradation) of

Information Technology for Procurement (Refer topic 4.1.1.15 in Chapter 4).

5.1.11.2 Study found the relation between who initiates and drives the development

(up gradation) of IT for procurement and Industry, Size and Ownership of the firm.

The findings are (Refer topic 4.1.2.21 to 4.1.2.24 in Chapter 4):

In Chemical and Petroleum Industry and Electrical Industry, the further up

gradation of Information Technology for Procurement is initiated by the ‘Top

management’ and ‘IT department’.

In Pharmaceutical Industry, Engineering & Machine Tools Industry, Fertilizer

Industry and Textile Industry, the further up gradation of Information

Technology for Procurement is initiated by the ‘Procurement department’ and ‘Top

management’.

In Automotive Industry, the further up gradation of Information Technology for

Procurement is initiated by the ‘IT department’ and ‘Top management’.

In Public Sector Companies, Private Sector Companies and Joint Sector

Companies, the further up gradation of Information Technology for Procurement is

initiated by the ‘Top management’ and ‘Procurement department’.

In Small Scale Company the further up gradation of Information Technology for

Procurement is initiated by the ‘Process Leadership’, ‘Top Management’ and

‘Business Development Department’.

In Medium Scale Company the further up gradation of Information Technology

for Procurement is initiated by the ‘Top management’ and ‘Procurement

department’.

In Large Scale Company the further up gradation of Information Technology for

Procurement is initiated by the ‘Top management’, ‘Procurement department’ and

‘IT department’.

5.1.12 Further Up-Gradation of Information Technology (IT) to Support the

Procurement Process

5.1.12.1 Majority of the respondents have considered the importance of further up

gradation of Information Technology to support ‘Optimising the Analysis of expenditure’,

‘Supplier assessment’, ‘Contract Management’, ‘Development and review of procurement



220

strategy’, ‘Order processing of indirect goods’, ‘Cooperative product development with

suppliers’ and ‘Electronic interchange of business documents (EDI)’ (Refer topic 4.1.1.16

and 4.1.1.17 in Chapter 4).

5.1.12.2 Study found the significance of difference in further up gradation of IT to

support the procurement process across the Size of the firm and Ownership of the

firm.

The findings are given (Refer topic 4.2.1.11 to 4.2.1.13 in Chapter 4):

In Large Scale Companies based on investment, the most important further up

gradation of Information Technology to Support have been found as ‘Optimizing

the Analysis of expenditure’, ‘Supplier assessment’ and ‘Electronic interchange of

business documents (EDI)’ while these are considered as the least important IT up

gradation in Small Scale Company (which has Investment between 25 lakh rupees

to 5 crore rupees).

In Joint Sector Companies, the most important further up-gradation of

Information Technology to Support has been found as ‘Supplier assessment’ while

it is considered least important in Private Sector Company.

Objective 2: To explore/ identify the difficulties faced in E-Procurement

implementation.

5.2.1.1 The major difficulties faced in E-Procurement implementation as reported by the

respondents are shown in topic 5. 1.3.1 in chapter 5.

5.2.1.2 The statistical significance of the difference found in difficulties faced in E-

Procurement across industry and Size of the company has been studied. Findings are

shown in topic 5. 1.3.2 in chapter 5.

5.2.1.3 Four factors are derived from exploratory factor analysis related to difficulties

faced in E-Procurement implementation (Refer topic 4.2.2.1 in Chapter 4). They are

named as

Poor data management and partial solutions

Costly non-user friendly solutions and lack of expertise

Non-useful Non-integrated solutions, and

Lack of supplier readiness.



221

Objective 3: To identify the reasons that has led to the implementation of E-

Procurement in the selected manufacturing Industries of Gujarat.

5.3.1.1 The main reasons that have led to the implementation of E-Procurement in the

selected manufacturing Industries of Gujarat are shown in topic 5.1.4.1 in chapter 5.

5.3.1.2 The statistical significant of the difference found in reasons that have led to the

implementation of E-Procurement across Industry, Size of the firm and Ownership of the

firm. Findings are shown in topic 5.1.4.2 in chapter 5.

5.3.1.3 Four factors have been found from the exploratory factor analysis (Refer topic

4.2.2.2 in Chapter 4). These are named as:

Supply Management with Process Accountability

Demand Management with Lucidity

Operational Efficiency of Procurement Process, and

Price Discovery.

Objective 4: To study the extent to which Information Technology (IT) tools are used

in e- procurement.

5.4.1 Extent of Information Technology (IT) tools used in E- Procurement

5.4.1.1 Almost all respondent have used Information Technology to a ‘Great extent’ to

carry out the Procurement function. (Refer topic 5.1.2.1 in Chapter 5).

5.4.1.2 The relation found between extent of Information Technology (IT) tools used in E-

Procurement and Industry, Size and Ownership of the firm. (Refer topic 5.2.2.2 in

Chapter 5).

5.4.2 Information Technology (IT) tools used for Procurement

5.4.2.1 Frequently used information technology tools for procurement are shown in topic

5.1.5.1 in chapter 5.

5.4.2.2 The statistical significance of difference found in Information Technology tools

used for E-Procurement across industry, Size of the firm and Ownership of the firm was

found. Findings are shown in topic 5.1.5.2 in chapter 5.



222

5.4.3 Information Technology (IT) Solution Used for Operative Order Processing

5.4.3.1 Enterprise and Resources Planning (ERP) and SAP MM (materials management

module) are foremost used Information technology solutions for operative order

processing.

5.4.3.2 The present study found the extent of use of Information Technology (IT) solution

used for operative order processing across the Industry, Size and Ownership of the firm.

Findings are shown in topic 5.1.6.2 in chapter 5.

5.4.3.3 There is association found between size of the firm (based on Number of

employees) and IT solutions used for operative order processing. Findings are shown in

topic 5.1.6.3 in chapter 5.

5.4.4 Information Technology (IT) Tools Preferred for E-Procurement

5.4.4.1 Most Preferred Information Technology (IT) Tools for E-Procurement are shown

in topic 5.1.7.1 in chapter 5.

5.4.4.2 Study found the significance of difference in Information Technology (IT) tools

preferred for E-Procurement across industry and Size of the firm. Findings are shown in

topic 5.1.7.2 in chapter 5.

Objective 5: To study the documents exchanged in E-Procurement through

Electronic Data Inter change (EDI).

5.5.1 Number of Supplier with Whom Business Documents were Exchanged by

Means of EDI/Web EDI during the Last Six Months

5.5.1.1 Majority of Manufacturing Industrial Units have exchanged their documents with

More than Hundred suppliers followed Eleven to Forty nine suppliers by means of EDI/

Web EDI during the last six months.

5.5.1.2 Study found the relation between Number of suppliers with whom business

document were exchanged by means of EDI/Web EDI during the last six months and

Industry, Size and Ownership of the firm. The Findings are shown in topic 5.1.8.2 in

chapter 5.

5.5.2 Eelectronics Documents Exchanged with Suppliers More Often by Means of

EDI/Web EDI during the Last Six Months



223

5.5.2.1 Majority of manufacturing units have exchanged „Purchase Order‟, „Invoice‟,

„Order confirmation‟ and „Despatch advice‟ with suppliers „once in a week, While

„Request for quote / bid with suppliers‟ were exchanged once in a month.

5.5.2.2 Study found the relation between Eelectronics documents exchanged with suppliers

more often by means of EDI/Web EDI from last six months and Industry, Size and

Ownership of the firm. Findings are shown in topic 5.1.9.2 in chapter 5.

5.5.3 Methods Used to Exchange Electronic Business Documents with Suppliers

5.5.3.1 Majority of all manufacturing companies have used „Fully Integrated Solution

(EDI) directly with supplier‟ and „Web Supplier portal via Business to Business (B2B)

marketplace/transaction platform (Web EDI)‟ methods to exchange electronics business

documents with supplier.

5.5.3.2 Study found the relation between Methods used to exchange electronic business

documents with suppliers and Industry, Size and Ownership of the firm. Findings are

shown in topic 5.1.10.2 in chapter 5.

5.5.3.3 There is an association found between size of firm (based on Number of

employees) and method used to exchange the electronic business documents with

suppliers. Findings are shown in topic 5.1.10.3 in chapter 5.

Objective 6: To identify the scopes for further up-gradation of Information

Technology (IT) to support the E-Procurement process.

5.6.1.1 Majority of the respondents have considered the importance of further up gradation

of Information Technology to support ‘Optimising the Analysis of expenditure’, ‘Supplier

assessment’, ‘Contract Management’, ‘Development and review of procurement strategy’,

‘Order processing of indirect goods’, ‘Cooperative product development with suppliers’

and ‘Electronic interchange of business documents (EDI)’.

5.6.1.2 Study found the significance of difference in further up gradation of IT to support

the procurement process across the Size of the firm and Ownership of the firm. Findings

are shown in topic 5.1.12.2 in chapter 5.

5.2 Limitations of the Study

This study had some limitations and there is a further scope of research in this area by

overcoming those limitations.



224

Limitations of small sample size negate the ability to generalise.

The study is limited to manufacturing industrial units of Gujarat. The study could

have been extended to some other states of India as well.

Respondents‟ error may subsist in the study (Malhotra & Das (2005). Respondents‟

may not be able to fill out the entire questionnaire due to certain reasons.

5.3 Scopes for Future Research

It is essential for academicians and practitioners to know the role that E-Procurement plays

in vital business outcomes.

The future studies can address the new areas of Improvement and analyze in detail,

the integration of Mobile and Collaborative procurement functions in to existing

Solutions.

Future study could be investigating the relationship between the use of Integrative

E-Procurement applications and Business results such as Cost savings, Profitability

and Quality of Product or Service.

Investigation of a wider range of variables in E-Procurement adoption such as

Characteristics of technology, Environmental factors, Individual adopter factors

and other organizational factors such as corporate strategy, Company Policies,

Innovativeness and Management behaviours will provide further insight.

This research is based on the response from executives of the firm who are

practising E-Procurement. The responses of supplier also need to be analyzed

which may provide important insight into the implementation of E-Procurement. It

is necessary to know the supplier‟s views on E-Procurement applications which

facilitate coordination and market mechanism (bargaining).

Future research could be analyzing the relationship among the E-Procurement,

Supply chain integration and Supply chain performance.

225

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List of Appendice

Appendix A: Questionnaire

Name of your organization:

________________________________________________________________________

Select the Industry based on Product

Chemical and Petroleum: Automotive:

Pharmaceutical: Electrical:

Textile: Engineering and Machine tools:

Fertilizer:

Other:

PleaseSpecify_____________________________________________________________

Ownership Form

Public sector: Private sector:

Cooperative sector: Joint sector:

Size of the company (Investment in plant machinery)

Does not exceed 25 lakh rupees:

More than 25 lakh rupees but does not exceed 5 crore rupees:

More than 5 crore rupees but does not exceed 10 crore rupees:

More than 10 crore rupees:

Size of the company (numbers of employees)

Less than 10 employees: 10 to 49 employees:

50 to 249 employees: More than 249 employees:

Name: ____________________________________________________

242

Job title:

Procurement / Purchase Head / Manager:

Supply chain Head / Manager:

Material Management Head / Manager:

Information System Head / Manager:

Other functions:

1. Please rate the following procurement objectives based on its importance in your

organization?

Procurement Objectives

Not

Important

at all

Not


Most

Important

Reduction of the purchasing

price


procurement

Internal process optimisation

Securing supplies


Increase in cost transparency


Minimising warehouse costs


suppliers


suppliers





2. To what extent do you use IT to carry out the procurement functions

successfully?

To a very small Extent:

To a small Extent:

To a Moderate Extent:

To great extent:

To very Great Extent:

243

3. Please rate the following reasons that has led to the implementation of E-

Procurement based on its importance in your organization?

Reasons

Not

Important

at all

Not


Most

Important

Central coordination and

aggregation of demand

Accountability

Openness

Transparency

Process efficiency

Costs/expenditure transparency


(price discrimination)

Price Discovery

Process quality assurance


procurement system


information

Decentralisation of operative

tasks

4. How frequently the following IT tools used for procurement in your

organisation?

IT Tools Not

Used Occasionally Frequently


Reporting & controlling tool

Electronic data interchange (EDI)

Tool for supplier evaluation

Catalogue management tool for indirect goods

Desktop purchasing of indirect goods

Contract management tool

Online invitations to tender

Online purchasing auctions

Web platform for scheduling and planning with suppliers

Web platform for product development with suppliers

Others

Please Specify:

244

5. What kinds of IT solutions used for operative order processing? ( Can tick more

than One)

a. SAP MM (materials management module):

b. SAP BBP/EBP (The SAP solutions Enterprise Buyer

Professional (EBP) and its preceding version (BBP))

c. Purchasing Card (VISA, Airplus, Amexco ...)

d. SAP SRM (Supplier Relationship Management )

e. Oracle, PeopleSoft, J.D. Edwards

f. Ariba

g. Products developed in-house

h. ERP

i. Other

Please Specify:

6. Which of the following IT tools preferred as fulfilling your industrial

procurement expectations?

IT Tools Not

Preferred Neutral Preferred


Desktop purchasing indirect goods

Contract management tool


Web platform for scheduling/planning with suppliers

Electronic data interchange (EDI)

Tool for supplier evaluation

Catalogue management tool for indirect goods

Online purchasing auctions

Web platform for product development with suppliers

Online invitations to tender

Others

Please Specify:

7. Number of suppliers with whom business documents are exchanged by means of

EDI/WebEDI from last Six Months?

a. None:

b. 1–5:

c. 6 – 10:

d. 11 – 49:

e. 50 –99:

245

f. > 100:

8. Which of the electronic documents are exchanged with suppliers more often?

Documents Once in a

week

Once in a

month

Once in 3

Month

Once in 6

Month

Can‟t

Say

Purchase order

Invoice

Order confirmation

Request for quote/bid

Despatch advice

Others

Please Specify

9. By which methods the electronic business documents are exchanged with

suppliers? (Can tick more than One)

a. Fully integrated solution (EDI) directly with the supplier:

b. Fully integrated solution (EDI) via B2B marketplace/transaction platform:

c. Web supplier portal via B2B marketplace/transaction platform (WebEDI):

d. Company run supplier portal (WebEDI):

e. Other method:

Please Specify

10. Which of the following difficulties faced in E-Procurement implementation?

Parameters Very

Difficult

Somewhat

Difficult Neutral

Not

Difficult

Not at all

Difficult

High introduction costs for

new solutions

Suppliers slow to link up

with the procurement system

Lack of quality of master

data

Difficulty in judging

usefulness and potential of

new IT solutions

Lack of user-friendliness

and user-acceptance of

solutions

Solutions only address some

of our procurement

processes

Solutions do not address the

complexity of our processes

Solutions are not w ell

enough integrated (isolated

applications)

Lack of qualified staff who

246

can work with modern

procurement system

Consultant expertise is

lacking in IT projects for

procurement

Other

Please Specify

11. Who initiate and drives the development (up gradation) of IT for procurement?

(Can tick more than one)

a. Procurement department:

b. Process leadership:

c. Top management:

d. IT department:

e. Administrative leadership:

f. External consultants, software providers:

g. Business development department:

h. Others:

Please Specify

12. Please mention the importance of further up gradation of IT to support the

following strategic procurement process?

Parameters

Not

Important

at all

Not


Most

Important

Optimising the Analysis of

expenditure

Supplier assessment

Contract management

Development and review of

procurement strategy

Negotiation (invitations to

tender, auctions)


Others

Please Specify:

247

13. Please mention the importance of further up gradation of IT to support the

following operative procurement process?

Process

Not

Important

at all

Not


Most

Important

Order processing of direct

goods

Automated invoice entry

processing

Order processing of indirect

goods

Order processing of services

Cooperative disposition /

planning with suppliers

Order processing of investment

goods

Electronic interchange of

business documents (EDI)

Cooperative product

development with suppliers

Others

Please Specify:

248

Appendix B: List of Publication

Sr.

No. Title of Paper

Details of Journal /

Conference

Proceeding

Publication

Type

ISSN /

ISBN No.

Month &

Year of

Publication

1

A study to identify

further up-gradation of

Information

Technology (IT) to

support the

procurement process.

Management Insight-

The Journal of

Incisive Analyzers,

School of

Management

Science, Varanasi

(Indexed with

Crossref, Inflibnet,

PKP,MRI etc)

Journal

(Peer/ blind

reviewed

bi-annual)

ISSN

0973936X

(Print)

24560936

(online)

Dec – 16

Volume

XII

Number 2

2

E-Procurement

Implementation in

selected Industrial

Units of Gujarat

Sankalpa: Journal of

Management and

Research (Indexed in

ProQuest)

Journal

(Peer

reviewed

bi-annual)

ISSN No.

2231-1904

(Impact

Factor :

2.813)

July-16

Volume 6

Issue 2

3

Identifying reasons for

adopting an E

procurement in

selected Industrial

units

of Gujarat

Business Review

Journal

(Peer-

reviewed)

ISSN 0973-

9076

Apr-16

Volume 10

Issue 1

4

A Study to Identify

Factors That Affect E-

Procurement

Implementation

International Journal

of Science

Technology and

Engineering.

Journal

2349-784X

(Online)

(Impact

Factor :

3.905)

Mar-16

Volume 2

Issue 9

5

The extent to which IT

tools are used in e-

procurement in

selected Industrial

units

of Gujarat

Amity Management

Review, A Journal of

Amity Business

School, Jaipur.

Journal ISSN

2230-7230

Dec-15

Volume 4

Number 2

6

Identifying Barriers

and Enablers for

adoption of E-

Contracting: Some

Conclusion from


Changing face of

India incorporate:

innovative practices

Conference

Proceeding

978-93-

81583-12-8 Dec-11

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