Adoption of e-procurement in Hong Kong.pdf

Int. J. Production Economics 113 (2008) 159–175
Adoption of e-procurement in Hong Kong:
An empirical research
Angappa Gunasekarana
, Eric W.T. Ngaib,
a
Department of Management, Charlton College of Business, University of Massachusetts-Dartmouth, 285 Old Westport Road,
North Dartmouth, MA 02747-2300, USA
b
Department of Management and Marketing, The Hong Kong Polytechnic University, Hong Hum, Kowloon, Hong Kong
Received 6 March 2006; accepted 15 April 2007
Available online 24 July 2007
Abstract
For the past 5 years, a large number of procurement articles have appeared in the literature. E-procurement solutions
make purchasing activities more effective in terms of both time and cost. E-procurement is changing the way businesses
purchase goods. Since most products and services are procured using electronic data interchange and the Internet, the
application of e-procurement is inevitable in both manufacturing and services. There are limited empirical studies in the
literature on the adoption of e-procurement in a country, that is, at the macro-level. Nevertheless, such a study will help
companies in other countries to develop policies, strategies, and procedures to implement e-procurement. Understanding
the importance of such a study, we have conducted a questionnaire-based survey about the adoption of e-procurement in
Hong Kong. The main objective of this study is to identify the perceived critical success factors and perceived barriers
regarding the implementation of e-procurement. A conceptual framework has been developed for the adoption of
e-procurement, and this subsequently has been tested with data collected from companies in Hong Kong. Also, this study
examines the current status of e-procurement adoption in Hong Kong. Finally, a framework is proposed based on the
conceptual and empirical analysis for the adoption of e-procurement. The results indicate that educating companies in
both long- and short-term benefits would encourage the application of e-procurement. Some critical success factors include
adequate financial support, availability of interoperability and standards with traditional communication systems, top
management support and commitment, understanding the priorities of the company, and having suitable security systems.
r 2007 Elsevier B.V. All rights reserved.
Keywords: E-procurement adoption; Empirical analysis; Framework
1. Introduction
The emergence of Internet technologies has far-
reaching ramifications on the way business is
conducted. Kheng and Al-Hawamdeh (2002) ex-
plore the role of business-to-business (B2B) electro-
nic commerce (e-commerce), with an emphasis on
electronic procurement (e-procurement) among
companies in Singapore. Their study examines the
impact of Internet-based technology on the buyer
side of the procurement function, how e-procure-
ment is helping organizations to enhance their
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0925-5273/$ - see front matter r 2007 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2007.04.012
Corresponding author. Tel.: +852 2766 7296;
fax: +852 2765 0611.
E-mail address: mswtngai@inet.polyu.edu.hk (E.W.T. Ngai).

competitiveness and the challenges to its adoption.
In e-procurement, buyer software enables users to
automate transactions and focus on the buying
organizations’ activities, such as order placement,
catalog management, payment, reporting, and so on
(Rajkumar, 2001). E-procurement systems generally
must be capable of integrating multiple supplier
catalogs into an aggregated, buyer-managed view of
the catalog. They enable review of product purchase
patterns and deliver knowledge that can be used to
facilitate supplier negotiations. These systems en-
able purchasing to automate most of the transaction
processing, as well as to reduce cycle times, limit
reductions in off-catalog buying, and free purchas-
ing to focus more on activities such as strategic
sourcing.
E-business is the process whereby Internet tech-
nology is used to simplify certain company pro-
cesses, improve productivity, and increase
efficiency. It allows companies to easily commu-
nicate with their suppliers, buyers, and customers,
to integrate ‘‘back-office’’ systems with those used
for transactions, to accurately transmit information,
and to carry out data analysis in order to increase
their competitiveness (Muffatto and Payaro, 2004).
E-procurement strategies are emerging as a
powerful means of attaining the goal of cost
reduction and productivity enhancement. For ex-
ample, Digital Buyer, a solution developed by Agile
Software, offers a comprehensive enterprise appli-
cation suite for Internet-based sourcing and supply
chain optimization. By facilitating quotes and order
transactions, it helps manufacturers speed up new
product introduction to boost product revenue and
enhance customer satisfaction, while at the same
time cutting direct material costs to improve profits
(Peleg et al., 2002). Many other online exchanges
that focus on connecting buyers with potential
sellers for the exchange of direct materials, such as
www.insurance.com (insurance policies), www.brid-
gepath.com (IT contract staffing), and www.noosh.-
com (printing services), report substantial cost
savings that their customers have realized by using
their services (Peleg et al., 2002).
Cagno et al. (2004) examine the state-of-the art
and development prospects of using e-procurement
for projects related to the engineering and contract-
ing (EC) sector in Italy, through the results of a
study carried out during 2001–2002 in collaboration
with ANIMP (Italian Association of Industrial Plan
Engineering). The study was concerned with SMEs,
which account for about 75% of the revenue
generated in Italy. Engineering and contracting
companies spend between 60% and 70% of their
revenue on procurement (98%) of project materials.
According to the Business Internet Consortium,
members of which include more than 20 of the
world’s leading high-tech companies, including
Microsoft, IBM, Intel, ‘‘by 2010, B2B e-commerce
could affect up to 30 percent of US gross national
product (GNP)’’ (Enos, 2000). Iresearch (China-
Byte, 2005), a professional market research com-
pany in China, estimates that the B2B market will
approach $8.3 trillion, with the whole e-commerce
market projected to reach approximately $8.8
trillion by 2007. E-procurement methods could: (1)
reduce the paperwork and cycle times, (2) enable the
direct and indirect procurement of goods and
services, (3) enable collaboration with suppliers,
and (4) reduce the total cost of procurement.
E-procurement has been introduced as a way to
achieve better, more cost-effective procurement
systems to solve many administrative problems in
the public sector (Moon, 2005). Davila et al. (2003)
suggest that e-procurement technologies will be-
come an important part of supply chain manage-
ment and that the rate of adoption will accelerate as
aggressive adopters share their experiences. The
advantages of e-procurement include: (i) reducing
administrative costs, (ii) shortening the order
fulfillment cycle time, (iii) lowering inventory levels,
(iv) lowering the prices paid for goods, and (v)
preparing organizations for increased technological
collaboration and planning with business partners
(Croom, 2000; Roche, 2001).
E-procurement solutions, the Internet technology
platforms, and services that make corporate pur-
chasing activities more efficient and cost effective
are moving from the early adopter age to rapid
adoption by mainstream companies. Panayiotou et
al. (2004) argue that government can also influence
uptake of e-commerce through its own transactions
with business and achieve flow-through effects to
influence the environment in which B2B transac-
tions take place (Robinson et al., 2005).
Proponents of e-procurement argue that it helps
governments save money and provides a more
accountable, more effective, and faster way to
manage procurement. Moon (2005) suggests that
the potential benefits of e-procurement are the
following: (1) lowered transaction costs; (2) faster
ordering; (3) wider vendor choices; (4) standardized,
more efficient procurement processes; (5) greater
control over procurement spending and better
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160

employee compliance; (6) more accessible Internet
alternatives for buyers; (7) less paperwork and fewer
repetitious administrative procedures; and (8) re-
engineered procurement work flows (Bendoly and
Schoenherr, 2005).
According to Subramaniam and Shaw (2004),
large organizations spend 14–30% of their revenue
on procurement of non-production goods and
services, such as office equipment, supplies, compu-
ters, travel, and entertainment. B2B e-commerce is
projected to grow to $7 trillion in 2006 (Jupiter
Research at www.jup.com). Organizations are un-
certain of realizing these benefits for themselves at
the ground level, and therefore the e-procurement
research needs to expand to overcome this.
As indicated earlier, the literature available on
e-procurement discusses its benefits and barriers
against its adoption. There are some case studies on
this subject, but few empirical studies on e-procure-
ment adoption. Realizing the importance of
e-procurement and its scope in organizational
competitiveness, this paper presents the results of
an empirical study that was conducted to study in
detail the implications of barriers and critical
success factors for e-procurement adoption. The
results obtained and subsequent analyses are
reported below.
2. E-procurement
Traditionally, procurement has involved a num-
ber of communication mediums to facilitate pro-
curement processes between the various parties.
These have included the use of mail, phone, fax,
EDI, and, more recently, email and the Internet.
E-procurement has evolved into the use of electro-
nic technologies to streamline and enable the
procurement activities of an organization (Hawking
et al., 2004).
E-procurement is not new; there have been a
number of attempts to automate the procurement
process for buyers by using electronic procurement
systems, workflow systems, and EDI. As there is no
universal definition for e-procurement, we have
chosen some from the literature. The following
offers a number of definitions of e-procurement.
E-procurement is defined as a comprehensive
process in which organizations use IT systems to
establish agreements for the acquisition of products
or services (contracting) or purchase products or
services in exchange for payment (purchasing).
E-procurement employs various elements, including
electronic ordering, Internet bidding, purchasing
cards, reverse auctions, and integrated automatic
procurement systems (Moon, 2005).
E-procurement can be defined as the process of
electronically purchasing the goods and services needed
for an organization’s operation. It offers a real-time
platform for conducting business, while providing a
significant opportunity to cut costs, increase organiza-
tional effectiveness, and improve customer service.
E-procurement offers promising opportunities as
regards the efficiency, transparency, and the opening
up of public procurement, ensuring that public
contracts are awarded to the bidder offering best value
for money (Oliveira and Amorim, 2001).
An e-procurement technology is defined as any
technology designed to facilitate the acquisition of
goods by a commercial or a government organiza-
tion over the Internet. E-procurement technolo-
gies—including e-procurement software, B2B
market exchanges, and purchasing consortia—are
focused on automating workflows, consolidating
and leveraging organizational spending power, and
identifying new sourcing opportunities through the
Internet (Davila et al., 2003).
Raghavan and Prabhu (2004, p. 732) resort to the
CIPS’s definition of e-procurement, which is ‘‘the
electronic acquisition of goods and services includ-
ing all processes from the identification of a need to
purchase of products, to the payment for these
purchases, including post-contract/payment activ-
ities such as contract management, supplier man-
agement and development’’.
E-sourcing includes forward and reverse electro-
nic auctions, and online bidding and tendering,
which are also referred to as electronic requests for
quotations or proposals (eRFx) (Johnson and
Klassen, 2005), in particular, electronic reverse
auctions, in which online sellers compete to offer a
product to a single buyer at the lowest possible price
(Germer et al., 2004).
E-procurement is changing the way businesses
purchase goods. Most e-procurement activities of
companies are confined to non-production areas such
as maintenance, repair, and operating supplies (MRO)
goods (Rajkumar, 2001). E-procurement allows aid-
funded buyers to compare quickly, easily, and cheaply
processes, specifications, and delivery dates from
suppliers worldwide. E-procurement can cover many
ways of using the Internet, including (Cater, 2001):
company web sites with catalogs of products,
perhaps with online purchase;
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aid agency web sites with tenders inviting
company bids via online forms or emails;
web ‘‘portals’’ or exchanges that create markets
by bringing buyers, sellers or both together;
circulating information by email to potential
buyers or suppliers.
Reviewing the background of e-procurement
shows that a company may not be able to achieve
an integrated supply chain without the application
of e-procurement. Therefore, e-procurement adop-
tion issues pose a great challenge in achieving the
full potential of supply chain management. In this
paper, we will address the critical issues regarding
the barriers and success factors in the adoption of e-
procurement.
3. Adoption of e-procurement
The purchasing function has undergone a trans-
formation from being more of a clerical function to
a managerial function, which has a strategic focus
on improving the organizational competitive posi-
tion of companies. IT has been a key enabler in
purchasing’s evolution into a more strategic busi-
ness function, by reducing the time taken to
complete mundane tasks and allowing purchasing
agents to focus on more value-added activities
(Rajkumar, 2001).
MacManus (2002) examined the slow implemen-
tation rate of public e-procurement systems. In a
related research, 85% of the 2001 NIGP survey
respondents mention ‘‘time savings’’, while 75% cite
‘‘reduction in costs’’. Similar results came up in
Forrester Research, Inc.’s survey of 35 state and
local government purchasing directors. Respondents
claimed that, by using the Internet to purchase, 54%
lowered paper/printing costs, 49% saved postage/
mailing costs, and 43% experienced quicker re-
sponse/turnaround time (Sharrard, 2001, p. 5).
Reddick (2004) demonstrates an e-govern-
ment growth model as a way of modeling the
development of e-procurement. The results of the
e-procurement model indicated positive support
for electronic procurement on state management
capacity and IT management capacity, indicat-
ing that high-performing management is critical
for e-procurement development.
Knudsen (2003) presents a framework for asses-
sing alignment between corporate strategy, procure-
ment strategy, and purchasing tools. The
framework is used for assessing the strategic origin
of the following e-procurement applications: e-
sourcing, e-tendering, e-informing, e-reversed auc-
tions, e-MRO, Web-based enterprise resource plan-
ning, and e-collaboration. The results indicate that
e-procurement tools are fully viable for creating
monopoly rents, moderately viable for creating
Ricardian rents, and only somewhat viable for
creating entrepreneurial rents. This indicates the
importance of e-procurement tools in the successful
application of e-procurement.
Moon (2005) examines which e-procurement
tools state governments are using as well as
exploring what factors affect the adoption of these
tools. This study confirms that simple innovations
are more rapidly diffused than those that are
technically or legally complex. State governments
that are more likely to adopt e-procurement tools
tend to be larger, managerially innovative, and to
have a strong centralized procurement office. Over-
all, e-procurement is promising technology, but
managerial and technical challenges still remain.
This highlights the importance of the adoption
issues of e-procurement. E-procurement adoption
issues have two dimensions: (i) behavioral control
and (ii) process control. However, they are inter-
dependent with behavior issues, including things
such as perceived understanding of the benefits and
barriers, while process issues include things such as
critical success factors and performance assessment
of the adoption.
Hawking et al. (2004) have identified the follow-
ing as barriers against the adoption of e-procure-
ment based on an empirical research conducted in
Australia: (a) security of transactions, (b) lack of
supplier e-procurement solutions, (c) high cost of
technology, (d) lack of a legal framework, (e) lack of
technical expertise, (f) lack of e-procurement knowl-
edge, (g) no real business benefits being identified,
(h) lack of data exchange standards, and (i) lack of
business relationships with suppliers.
Considering the need for developing a framework
for the adoption of e-procurement, we have devel-
oped a theoretical framework using behavioral
perspectives (perceived by the people in organiza-
tions) only. The details of the framework are
discussed in the following section.
4. A theoretical framework for the adoption of e-
procurement
In this section, we have made an attempt to
develop a theoretical framework for the adoption of
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162

e-procurement in an organization. This framework
(see Fig. 1) is based on a literature survey and some
reported cases and empirical studies. The building
blocks of e-procurement adoption are: (1) perceived
benefits of e-procurement, (2) perceived barriers
of e-procurement, (3) critical success factors of
e-procurement adoption, and (4) perceived organi-
zational performance with e-procurement. This
framework, as presented in Fig. 1, has been used
to study the status of the adoption of e-procurement
in Hong Kong industries. The details of the frame-
work are discussed below.
4.1. Perceived benefits of e-procurement
The perceived benefits of e-procurement as seen
by companies have tremendous implications
whether one goes for the technology or not. In
many cases, the real benefits including strategic
impact, intangibles, and non-financial outcomes are
not spelt out, resulting in companies not recognizing
the true value of e-procurement in the supply chain
and in turn helping to provide the best possible
customer service.
Peleg et al. (2002) study three possible strategies a
company might choose to follow, namely (1)
strategic partnership, in which a company signs a
long-term contract with a single supplier, so that
future prices are known in advance; (2) online
search, in which the Internet is used for selecting the
supplier with whom an order will be placed. Unit
price in this case is assumed to be random, but its
distribution is known in advance, and it is assumed
to be a function of the number of suppliers
contacted for a price quote; and (3) a combined
strategy, under which a supplier is used as a long-
term partner, but a second source might be chosen
through the Internet (Peleg et al., 2002).
Attaran (2001) classifies e-procurement benefits
into three different categories: (1) strategic, which
concerns organizational changes and market ad-
vantage; (2) opportunity, which is mainly related to
improved and explored relations with present or
even new suppliers; and (3) operational, which
means cheaper and more efficient purchasing
processes. Roche (2001) emphasizes the benefits
coming from immediate availability of information,
paperless processes, and supply chain integration.
The adaptors of e-procurement systems world-
wide, such as Cisco, Chevron, and Eastman
Chemicals, have demonstrated substantial improve-
ments in several ways. The benefits of e-procure-
ment should include improved control of vendor
relationships, accurate order fulfillment processes,
improved effectiveness of the purchasing process,
achievement of higher service levels, reduced prices
from the key suppliers, reduced inventory-carrying
costs, and reduction of the order cycle (Panayiotou
et al., 2004).
4.2. Perceived barriers to e-procurement
The successful adoption of e-procurement de-
pends on the barriers present in the system.
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Implementation of
E-Procurement
Critical Success
Factors in
E-Procurement
Perceived Barriers to
E-Procurement
Implementation
Organizational
Performance with
E-Procurement
Perceived Benefits of
E-Procurement
Fig. 1. Theoretical framework for the implementation of e-procurement.

Identifying the barriers themselves is part of the
major managerial function in developing the right
pathway for the adoption of e-procurement. The
barriers could stem from infrastructure, strategy,
people, culture, etc.
Liao et al. (2003) highlight the problems asso-
ciated with procurement: untrue floor prices,
improper alteration supplements, improper proce-
dures in awarding contracts, information leaks,
taking bribes and improper benefits for some
favored companies, and careless supervision and
resource distribution. Behavioral and political
dimensions have a great influence in defining the
procurement process and its effectiveness. In many
cases, the communication has been distorted by the
individuals to pursue their own interests in the
organization. E-procurement will facilitate shared
information and hence open communication, and
there will be fewer behavioral and political impacts.
Some of the perceived barriers one should include
against adopting e-procurement are insufficient
resources, lack of motivation of people, resistance
to new technology, lack of top management
support, etc.
4.3. Critical success factors in e-procurement
The factors that are critical to the successful
adoption of e-procurement have to be identified
based on previous experience, the literature avail-
able, seminars, etc., with the objective of determin-
ing the CSFs for the adoption of e-procurement.
This could be even defined as the best practices for
the successful adoption of the e-procurement
system.
In e-procurement systems, critical success factors
should include efficient processes without excessive
idle times, existence of monitoring and evaluation
systems that permit the continuous improvement of
the process, and adequate training of the employees
in order to enable them take advantage of the new
system (Panayiotou et al., 2004).
According to Kim and Shunk (2004), e-commerce
is not something that can be instantly plugged into
by an existing workplace, and implementing
e-procurement is not a simple matter. Its introduc-
tion will require changes, updates, replacements,
and adaptations throughout the infrastructure.
Successful e-procurement is more concerned with
the fundamental procurement aspects than with the
electronic aspects. Plans for new ways of doing
business, particularly when expressed using techno-
logical jargon, are generally not well received. It
may need changes in the way people work, as well as
in the strategies of the organization.
4.4. Perceived organizational performance of e-
procurement
Optimum organizational performance is the key
objective of any organization. Therefore, any
change in the process or technology should have
a positive impact on a company’s performance.
E-procurement does have some implications for
process improvement but more important is how
this improvement, affects organizational perfor-
mance in both financial and non-financial terms.
E-procurement has several advantages (Ragha-
van and Prabhu, 2004): reduced overall procure-
ment costs compared with current traditional
methods, shorter-order processing and fulfillment
cycles, reduction in administrative costs, improved
strategic sourcing, and reduced inventory costs.
Fu et al. (2004) present an implementation of an
e-procurement model. The following are the critical
success factors in the successful implementation of
e-commerce: feasible measures, step-by-step trans-
formation, promotion incentives, government sup-
port, commitment of top management, and system
operation and maintenance mechanisms. Once the
strategy was clearly set up, the top management
team took the lead in mapping out an implementa-
tion plan and a complete set of measures. The
enterprise also provided sufficient incentives to
suppliers and made good use of the external
resources to promote the project.
In Section 5, the details of the research questions
and methodology are discussed.
5. Research questions and methodology
The research questions were based on the above-
mentioned barriers and critical success factors,
together with perceived organizational performance
with e-procurement. The following research ques-
tions were posed:
What are the major perceived barriers to the
adoption of e-procurement in Hong Kong?
What are the critical success factors in the
adoption of e-procurement in Hong Kong?
What are the major perceived benefits to
organizational performance of e-procurement in
Hong Kong?
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The purpose of this study is to understand the
importance of e-procurement in Hong Kong and
help develop pertinent hypotheses for further
research. This effort starts with reviewing the
background to the application of e-procurement,
which is then followed by various definitions of
e-procurement. Subsequently, we review the litera-
ture available on the adoption of e-procurement
with the objective of developing a theoretical
framework for determining the barriers against,
and critical success factors for the successful adop-
tion of e-procurement. The proposed framework is
then validated with the help of empirical data
collected from Hong Kong industries. Finally,
based on the empirical results and analysis, we deve-
lop a framework for the adoption of e-procurement.
Specific questionnaire items were developed to
collect data relevant to the objectives of the study,
as well as descriptive information. The questions
were fundamentally structured to gauge the ap-
proaches organizations were taking in several key
functions of e-procurement, in particular with
regard to the issue of potential barriers to e-procure-
ment in Hong Kong. The survey instrument was
developed using standard techniques including
reliability analysis. To ensure content validity, a
thorough survey of the relevant literature was
undertaken related to procurement to gain an
understanding of the important aspects of each
major construct and its components, and to ensure
that no important dimensions were neglected.
The derived questionnaire was then pilot tested
with 40 postgraduate students studying part-time
for an MBA at The Hong Kong Polytechnic
University before being sent out. The feedback
from pilot testing was used in refining the format of
the questionnaire and the addition, removal and
rephrasing of several items. The study employed a
cross-sectional field study survey method, using self-
administered questionnaires mailed to key infor-
mants in 276 randomly selected companies drawn
from those companies publicly listed on the Hong
Kong Stock Exchange and other selected companies
listed in the Business Directory (2001). To protect
the respondents, they were promised complete
anonymity and informed that only aggregate
information on participants would be made public.
A self-addressed, stamped envelope was provided
for questionnaires returned directly to the authors.
This survey did not intend to concentrate on any
particular industry sector. A response of 78 replies
to the survey was received, this being a rate of
28.2%. Data analysis of the respondents of 74 valid
responses received was carried out using SPSS
software package.
6. Empirical results and analysis
In this section, the results of the empirical
analysis are discussed with the objective of devel-
oping a framework for the adoption of e-procure-
ment. Table 1 presents the profile of the respondent
organizations. An employee profile of the respon-
dent organizations is presented in Table 2. The
number of employees in the procurement or
purchasing department is presented in Table 3.
About 35% of the respondents believe that
e-procurement is important and 42% believe it is
important to a certain extent. The rest believe
e-procurement is not important. This indicates
about 77% of the companies believe that e-procure-
ment is important (see Table 4). In Table 5, the
history of e-procurement adoption is presented. It
appears that about 79% of the companies have
not implemented e-procurement systems. The
rest have implemented one over the past 1–4 years.
E-procurement models such as business-to-employ-
ee (B2E) requisitioning applications, corporate
procurement portals and EDI networks, trading
exchanges storefront, and automated requisition
processes have been used. About 17.5% indicated
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Table 1
Profile of the respondent organizations
Frequency Percentage
Organization’s operation
Hong Kong only 3 3.9
Hong Kong and Mainland China 20 26.3
International 53 69.7
Total 76 100.0
Industry type
Manufacturing 18 23.7
Financial Banking service 15 19.7
Wholesales, retail, import export 14 18.4
Transport, storage communication 15 19.7
Hotel, restaurant tourism 1 1.3
Construction, mining 2 2.6
Utilities 4 5.3
Media 2 2.6
Textile 4 5.3
Aircraft Maintenance 1 1.3
Total 76 100.0

that they have used one for industrial consortiums
and collaborative supply chain (see Table 6).
Table 7 indicates that e-procurement has been
primarily used for supporting communication with
suppliers, electronic ordering, gathering informa-
tion, order status control, providing e-catalogs, and
searching for suppliers. Table 8 indicates that 90%
of the respondents said that they use e-procurement
for purchasing (a) ram materials, (b) office pro-
ducts, and (c) maintenance items. Most respondents
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Table 2
Employee profile of the respondent organizations
Number of employees in Hong Kong
Below 50 18 23.7
50–199 16 21.1
200–499 9 11.8
500–999 9 11.8
1000–5000 15 19.7
Over 5000 9 11.8
Total 76 100.0
Number of employees in the purchasing department
1–5 16 34.0
6–10 7 14.9
11–15 1 2.1
415 23 48.9
Total 47 100.0
Job position
President/Director/General
Manager/Senior Executive
35 66.0
IT Manager/Programmer/System
Analyst
8 15.1
Procurement Officer 6 11.3
Engineer 4 7.5
Total 53 100.0
Age
o25 years old 5 7.5
25–30 years old 26 38.8
31–40 years old 25 37.3
440 years old 11 16.4
Total 67 100.0
Education level
Post-secondary certificate/diploma 3 4.5
Bachelor’s degree 39 59.1
Master’s degree or above 24 36.4
Total 66 100.0
Year of full-time working experience
Less than 3 years 5 7.8
3–6 years 19 29.7
7–10 years 17 26.6
11–14 years 6 9.4
More than 14 years 17 26.6
Total 64 100.0
Table 3
Number of employees in the procurement/purchasing department
o2 29 38.2
2–5 15 19.7
6–10 7 9.2
11–15 1 1.3
415 24 31.6
Total 74 100.0
Table 4
Important of the Internet in procurement
Extremely important 10 13.5
Important 16 21.6
Important to a certain extent 31 41.9
Unimportant 13 17.6
Extremely unimportant 4 5.4
Total 72 100.0
Table 5
History of e-procurement implementation
Not yet implemented 60 78.9
o1 year 4 5.3
1–2 year (s%) 7 9.2
3–4 years 3 3.9
44 years 2 2.6
Total 76 100
Table 6
E-procurement models used/that will be used in respondents’
organizations
B2E requisitioning applications 9 15.8
Corporate procurement portals 12 21.1
EDI networks 10 17.5
Industrial consortiums 4 7.0
Trading exchanges storefront 8 14.0
Automated requisition process 8 14.0
Collaborative supply chain 6 10.5
Total 57 100.0
166

indicate the following as the reasons for not
implementing e-procurement in their organizations:
(1) customers are satisfied with current practices,
(2) a lack of adequate resources, (3) too costly
to implement, (4) it not being perceived as an
advantage at all, (5) security concerns and immature
technology, and (6) inadequate knowledge in imple-
menting an e-procurement system (see Table 9).
Croom and Johnston (2003) address issues relat-
ing to the impact of e-business developments
on internal customer service with a focus on
e-procurement introduction. The e-procurement
process is the basis for one of the primary
internal-customer-provider interfaces and the paper
presents a valid and useful domain of study in
internal customer service. They focus their analysis
on three e-procurement-related issues: (1) the
impact of e-procurement adoption, (2) implications
of e-procurement adoption for process compliance,
and (3) consequences of internal customer satisfac-
tion for e-procurement adoption.
6.1. Perceived benefits of e-procurement adoption
A company’s perception about the benefits of
e-procurement plays a major role in the successful
adoption of e-procurement, starting with the decision
to go for e-procurement. Based on the analysis of the
results presented in Table 10, we can easily conclude
that the companies (about 85% of them) feel that
adoption of e-procurement will significantly contri-
bute to: improvements in efficiency, achieving supply
chain management, increased customer satisfaction,
reduction in operational tasks, reduction in proces-
sing time, and reduction in transactions costs. Over-
all, there is a strong positive view from the respondent
companies about e-procurement outcomes such as
increases in efficiency, achieving supply chain man-
agement, increased customer service levels, and
reduction in processing time. However, respondent
companies are not optimistic about benefits such as
better utilization of staff, improving existing markets,
improving relationships with partners and suppliers,
increasing market share, reducing inventory levels,
reducing maverick buying, and increasing support for
environmental issues.
Under competitive pressure to leverage, Web
technology and derive strategic advantages for their
firms, B2B managers face the challenges of convincing
the participating users and top management of the
value of the Web (Subramaniam and Shaw, 2004). The
value-creating potential of e-procurement has signifi-
cant implications for the industrial marketer. Industrial
marketers need to understand the value-creating
benefits that are driving their customers or potential
customers to aggressively exploit the advantages of the
Internet in adopting e-procurement strategies. The
move away from the transaction focuses of more
traditional ‘‘purchasing’’ has profound implications for
the industrial marketer (Presutti, 2003).
6.2. Perceived barriers to e-procurement adoption
The behavioral issues of clients or companies
regarding the adoption of e-procurement have a
ARTICLE IN PRESS
Table 7
Use of e-procurement in supporting procurement activities
1. Communication with suppliers 14 15.6
2. Electronic ordering 15 16.7
3. Gathering information 18 20.0
4. Order status control 16 17.8
5. Presentation of the procurement/ purchasing department 4 4.4
6. Provision of catalogs 11 12.2
7. Searching for suppliers 11 12.2
8. For internal user registration 1 1.1
Total 90 100.0
Table 8
Products purchased through the Internet
Raw materials 8 23.5
Office products 13 38.2
Maintenance items 10 29.4
Electrical Equipment 3 8.8
Total 34 100

tremendous influence on its success. The companies
were asked what the factors were, if any that
prevented them from the adoption of e-procurement
(see the results of Table 11). Many companies
claimed not to have any experience or knowledge of
e-procurement. However, the fear of changing to a
new system was rated as the main impediment
against the adoption of e-procurement by about
40% of the respondent companies, while 28.6% said
that this was not the case. The majority (about
38.5%) of the respondents believed immaturity of
technology was not the cause for not implementing
e-procurement. They were evenly divided (about
32% each) about whether or not incompatibility
with ERP systems was a barrier for the adoption of
e-procurement.
The majority of the companies believe that
barriers include insufficient financial support, lack
of interoperability and standards with traditional
communication, lack of skill and knowledge in
e-procurement, lack of top management support
and commitment, and it not being the top initiative
or top priority of the company and security
concerns. However, (i) insufficient financial support,
ARTICLE IN PRESS
Table 9
Reason for not implementing e-procurement systems in organization
1. Customers are satisfied with current practices 28 22.6
2. Immaturity of technology 12 9.7
3. Existing e-procurement systems are incompatible with ERP systems 3 2.4
4. Inadequate knowledge in implementing an e-procurement systems 10 8.1
5. Lack of adequate resources 15 12.1
6. Not perceived as an advantage at all 15 12.1
7. Security concerns 15 12.1
8. Too difficult to implement 5 4.0
9. Too costly to implement 15 12.1
10. No need 3 2.4
11. Company policy 3 2.4
Total 124 100
Table 10
Mean rating of perceived benefits to e-procurement implementation
Mean S.D. Not been
realized
Somewhat
realized
Just to
begin to
realized
Realized Fully
realized
1. Better utilization of staff 3.3 1.1 4 (5.8%) 11 (15.9%) 19 (27.5%) 28 (40.6%) 7 (10.2%)
2. Efficiencies increment 3.5 1.0 1 (1.5%) 9 (13.2%) 25 (36.8%) 22 (32.3%) 11 (16.2%)
3. Help to achieve supply chain
management
3.5 1.0 2 (2.9%) 7 (10.3%) 24 (35.3%) 25 (36.8%) 10 (14.7%)
4. Improved existing markets 3.0 1.0 5 (7.3%) 17 (24.6%) 21 (30.4%) 22 (31.9%) 4 (5.8%)
5. Improved relationships with partners
and suppliers
3.3 1.1 4 (5.8%) 10 (14.5%) 23 (33.3%) 22 (31.9%) 10 (14.5%)
6. Increased customer service levels 3.5 1.0 4 (5.9%) 4 (5.9%) 23 (33.8%) 29 (42.6%) 8 (11.8%)
7. Increased customer satisfaction 3.4 1.0 4 (5.9%) 3 (4.4%) 26 (38.2%) 30 (44.1%) 5 (7.4%)
8. Increased market share 3.0 1.1 7 (10.3%) 13 (19.1%) 27 (39.7%) 15 (22.1%) 6 (8.8%)
9. Reduction in inventory levels 3.3 1.0 4 (5.8%) 11 (16%) 24 (34.8%) 23 (33.3%) 7 (10.1%)
10. Reduction in maverick (non-
contractual%) buying
3.1 1.1 6 (8.7%) 9 (13.0%) 34 (49.3%) 15 (21.8%) 5 (7.2%)
11. Reduction in operational tasks 3.2 1.1 3 (4.3%) 10 (14.5%) 30 (43.5%) 20 (29.0%) 6 (8.7%)
12. Reduction in processing time 3.6 1.0 1 (1.5%) 9 (13.0%) 17 (24.6%) 34 (49.3%) 8 (11.6%)
13. Reduction in transaction costs 3.4 0.8 1 (1.5%) 7 (10.1%) 31 (44.9%) 24 (34.8%) 6 (8.7%)
14. Support for environmental issues 3.2 1.0 6 (8.7%) 9 (13.0%) 28 (40.6%) 21 (30.4%) 5 (7.3%)
168

(ii) lack of interoperability and standards with
traditional communication systems, (iii) lack of
top management support and commitment, (iv) it
not being the top initiative or priority of the
company, and (v) security concern seem to be the
major barriers for the lack of e-procurement
implementation.
6.3. Critical success factors for e-procurement
adoption
Many companies have some form of e-procure-
ment applications in their organizations. The
companies were asked what they saw as being
critical success factors, based on their experience,
for the successful adoption of e-procurement (see
Table 12). The majority (over 60% of the respon-
dents) saw the following as being critical success
factors for the adoption of e-procurement: (1)
centralized control and management of e-procure-
ment initiatives, (2) communication between parti-
cipants, (3) clear accountability with purchasing and
organizing structural changes, (4) information
systems specialists with skills in the Internet and
WWW, (5) streamlined approval and workflow
systems, and (6) top management involvement and
support.
The following critical factors have been viewed as
the most important of all (about 70% of the res-
pondents) for the successful adoption of e-procure-
ment: (i) clear accountability with purchasing and
organizing structural changes, (ii) information
systems specialists with skills in the Internet,
(iii) streamlined approval and workflow systems
(business process reengineering), and (iv) top
management involvement and support.
6.4. Perceived organizational performance with e-
procurement adoption
Perceived organizational performance changes
with e-procurement adoption is a significant issue
while implementing e-procurement. There are five
perceived organizational performance changes with
e-procurement adoption: (i) successful e-procure-
ment adoption can improve short-term organiza-
tional performance, (ii) successful e-procurement
adoption can improve long-term organizational
performance, (iii) successful e-procurement adop-
tion can improve cost performance in an organiza-
tion, (iv) successful e-procurement adoption can
improve an organization’s competitiveness, and (v)
successful e-procurement adoption can improve
strategic alliances and networking (see Table 13).
The majority of the respondents feel that successful
e-procurement adoption can improve: (i) long-term
organizational performance, (ii) cost performance in
an organization, (iii) an organization’s competitive-
ness, and (iv) strategic alliances and networking.
ARTICLE IN PRESS
Table 11
Mean rating of perceived barriers to e-procurement implementation
Mean S.D. Strongly
disagree
Disagree Uncertain Agree Strongly
agree
1. Fear of change to a new
system
3.0 1.2 5 (14.3%) 5 (14.3%) 11 (31.4%) 10 (28.6%) 4 (11.4%)
2. Immaturity of technology 2.9 1.1 8 (11.4%) 19 (27.1%) 23 (32.9%) 14 (20%) 6 (8.6%)
3. Incompatibility with ERP
systems
3.1 1.0 3 (4.3%) 19 (27.1%) 25 (35.7%) 16 (22.9%) 7 (10%)
4. Insufficient financial support 3.2 1.1 6 (8.6%) 11 (15.7%) 24 (34.3%) 19 (27.1%) 10 (14.3%)
5. Lack of interoperability and
standards with traditional
communication systems
3.3 1.0 1 (1.5%) 17 (24.6%) 20 (29%) 25 (36.2%) 6 (8.7%)
6. Lack of skill and knowledge
in e-procurement
3.1 1.0 4 (5.8%) 13 (18.8%) 28 (40.6%) 20 (29%) 4 (5.8%)
7. Lack of top management
support and commitment
3.2 1.1 5 (7.2%) 12 (17.4%) 24 (34.8%) 22 (31.9%) 6 (8.7%)
8. Not the top initiative or
priority of the company
3.6 1.0 – 6 (17.6%) 9 (26.5%) 11 (32.4%) 8 (23.5%)
9. Security concerns 3.1 1.1 5 (7.2%) 14 (20.3%) 24 (34.8%) 18 (26.1%) 8 (11.6%)

Factors (2)–(4) as shown in Table 13 have been
highly rated as important by the majority of the
respondents, with a mean weight of 3.4 and above.
Based on these analyses and theoretical framework,
a more practical and reﬁned framework is devel-
oped and presented in Section 7.
7. A framework for the adoption of e-procurement
The generic framework presented is based on the
initial framework presented in Section 5 and on the
outcome of empirical research. Also, evidence from
the literature has been employed to develop a more
ARTICLE IN PRESS
Table 13
Perceived organizational performance with e-procurement implementation
Mean S.D. Strongly
disagree
agree
1. Successful e-procurement
implementation can improve short-
term organizational performance
3.2 0.80 2 (2.9%) 9 (13.0%) 34 (49.3%) 22 (31.9%) 2 (2.9%)
implementation can improve long-
term organizational performance
3.8 0.85 1 (1.5%) 3 (4.3%) 19 (27.5%) 34 (49.3%) 12 (17.4%)
implementation can improve cost
performance in organization
3.6 0.82 2 (2.9%) 2 (2.9%) 24 (35.3%) 34 (50%) 6 (8.9%)
implementation can improve
organization competitiveness
3.5 0.88 1 (1.5%) 7 (10.1%) 23 (33.3%) 31 (44.9%) 7 (10.2%)
implementation can improve
strategic alliance and networking
3.4 0.92 3 (4.4%) 5 (7.2%) 25 (36.2%) 30 (43.5%) 6 (8.7%)
Table 12
Mean rating of CSFs to e-procurement implementation
Mean S.D. Strongly
disagree
agree
1. Centralized control and
management of e-
procurement initiatives
3.7 1.0 2 (3.0%) 6 (9.0%) 14 (20.9%) 32 (47.7%) 13 (19.4%)
2. Communication between
participants
3.7 0.9 1 (1.5%) 4 (5.9%) 21 (30.9%) 32 (47.0%) 10 (14.7%)
3. Clear and achievable
implementation phase
3.7 0.9 – 6 (9.0%) 23 (34.3%) 23 (34.3%) 15 (22.4%)
4. Clear accountability with
purchasing and organizing
structural change
4.1 0.5 – – 3 (8.6%) 25 (71.4%) 7 (20.0%)
5. Close collaboration with
suppliers
3.6 0.9 1 (1.5%) 6 (8.8%) 22 (32.3%) 28 (41.2%) 11 (16.2%)
6. Content management
(catalog management %)
3.6 0.8 1 (1.5%) 3 (4.4%) 26 (38.2%) 32 (47.1%) 6 (8.8%)
7. Information systems
specialists with skills in the
Internet
3.7 0.8 – 3 (8.6%) 8 (22.8%) 19 (54.3%) 5 (14.3%)
8. Involvement of stakeholders 3.4 0.9 1 (1.5%) 7 (10.3%) 29 (42.6%) 23 (33.8%) 8 (11.8%)
9. Streamlined approval and
workﬂow systems
4.1 0.6 – – 6 (17.1%) 21 (60%) 8 (22.9%)
10. The use of prototype 3.3 0.9 1 (1.5%) 11 (16.2%) 27 (39.7%) 25 (36.7%) 4 (5.9%)
11. Top management
involvement and support
3.8 1.0 1 (1.5%) 5 (7.4%) 17 (25.4%) 26 (38.8%) 18 (26.9%)
170

practical framework for the adoption of e-procure-
ment. It should be noted that some articles
appearing in the literature do discuss various issues
related to the adoption of e-procurement. We will
discuss some of them as background information
for the developed framework.
Kothari et al. (2005) attempted to study the
adoption of the e-procurement concept by hotels’
purchasing departments in the Philadelphia area.
They attempted to address two important issues
related to supply chain management by hotels
in Philadelphia: (1) the costs and benefits of
e-procurement adoption as perceived by the hotels’
purchase decision makers, and (2) the current or
planned adoption of e-procurement as described by
the participant hotels. Chang et al. (2004) describe
the issues and design principles of an e-procurement
system. They explain the overall development
processes that include generic procurement pro-
cesses, data entities used in the system, functional
diagram, and technical architecture as a guideline
for e-procurement system development. They sug-
gest a 5-step adoption framework:
Analyze business processes (how goods are
purchased?)
Collect business requirements
Synchronize data and business processes with
suppliers
Map software functions with current practices
Determine deliverables and measures for evalua-
tion
For a firm to realize the maximum value-creating
benefits from an e-procurement strategy, the purchas-
ing process must be evaluated to determine if it needs
to be re-engineered. A firm cannot succeed in e-
procurement if it has little history of cross-functional
collaboration and early supplier involvement, and the
collaborative potential of the e-design component of
an e-procurement strategy. There is a need for a
transformation in the corporate culture as well as a
re-engineering of the specification development pro-
cess. Moreover, if there are redundancies in the
requisition approval process, those redundancies need
to be eliminated before applying an e-procurement
solution (Presutti, 2003). The first major step in
purchasing is supplier rating and selection, which
needs to be integrated with e-procurement.
The details of the framework developed for the
implementation of e-procurement are presented in
Table 14.
7.1. The benefits of e-procurement and its strategic
impact
The tremendous potential of e-procurement has
stimulated major enterprise resource planning
(ERP) software providers to add e-procurement
capabilities to their systems. For example, Oracle
Corporation has developed its ‘‘procure-to-pay’’
solution that automates the complete procure-
ment cycle. Its features include spending analysis,
ARTICLE IN PRESS
Table 14
Implementation framework for e-procurement
Building blocks of e-
procurement
implementation
Strategies/methods/tools/
technologies
Perceived benefits Explain the strategic impact of e-
procurement on organizational
performance, provide adequate
financial and technical resources,
increase the awareness and
understanding of the benefits both
in long and short terms, and invest
in knowledge and expertize about e-
procurement.
Perceived barriers Provide financial support through
strategic alliances, consortiums of
companies, develop standards and
systems for facilitating effective
interoperability with traditional
communication systems, increase
the awareness of top management in
order to obtain support and
commitment for the implementation
of e-procurement, demonstrate the
importance of e-procurement and
high leverage opportunities both in
short and long terms, and develop
application software for assuring
security of the data.
Critical success factors Business process reengineering to
assure a streamlined procurement
process, train and educate IT
engineers and hire skilled IT people,
and a team consists of participation
from top management.
Organizational
performance
Establish suitable performance
measures and metrics for the
justification and evaluation of e-
procurement; consider strategic,
tactical and operational
performance measures and metrics,
financial and non-financial
performance measures and tangibles
and intangibles performance
measures.

strategic sourcing, supplier collaboration, desktop
requisitioning, and electronic invoicing and pay-
ment. Similarly, ERP provider SAP offers its
mySAP E-procurement solution in partnership with
Commerce One Corporation (Presutti, 2003).
Presutti (2003) lists the benefits of e-procurement,
which include reduction in labor costs and errors,
material cost reduction by strategic purchasing,
enabling firms more efficiently and accurately to
capture and aggregate how much they are spending
corporate-wide in various purchased product areas,
and having an overall impact on a firm’s asset base.
The main reasons for not adopting e-procurement
include: (i) customers being satisfied with current
purchasing practices and systems, (ii) a lack of
adequate resources including financial and technical
resources, (iii) a lack of awareness and under-
standing of the benefits of e-procurement, (iv) a lack
of availability of technology and affordability,
and (v) a lack of knowledge and expertise about
e-procurement. Knowledge about e-procurement
and its benefits in both long and short terms
(operational, tactical, and strategic) will positively
encourage firms to implement e-procurement.
Companies should be convinced about the benefits
of e-procurement, including cost reduction, in-
creased customer satisfaction, improvements in
efficiency, reduction in operational tasks, reduction
in processing time, reduction in transaction costs,
increases in organizational competitiveness, supply
chain integration, etc. It is important to explain the
strategic and long-term benefits of e-procurement to
be successful in business.
Therefore, it is most important that senior
managers in particular are truly aware of the
benefits of e-procurement. Many managers do not
see the intangible and strategic benefits of adopting
e-procurement. If they look at only the financial and
short-term benefits, many may decide not to go for
adopting e-procurement. However, this will endan-
ger the long-term survival of their companies for not
keeping up with the competition and new technol-
ogies. Suitable workshops and seminars should be
arranged wherein the senior managers should
participate to learn more about the pros and cons
of e-procurement. Also, managers should have the
cost of not adopting e-procurement explained to
them. In any event, frequent meetings and focus
group meetings of senior managers should occur on
the adoption of new technologies.
ERP systems and those that support enterprise-
wide business activities such as e-procurement
represent complex socio-technical change. These
systems need to be integrated with a diverse range of
existing technologies, infrastructures, policies, and
practices of multiple stakeholders both within and
beyond the organization (Williams and Hardy,
2005).
7.2. Barriers against the adoption of e-procurement
For the successful adoption of e-procurement,
companies have to look at the major barriers or
impediments. The barriers could be related to: (i)
people, (ii) the organization, and (iii) technology.
First of all, companies have to determine their
requirements (in terms of changes to people,
organization, and technology) for the successful
adoption of e-procurement. Then they need to look
at the current status of business processes including
people and infrastructure and identify the changes
required to facilitate the adoption of e-procurement.
Peleg et al. (2002) have developed a better
understanding of the conditions under which e-
procurement strategies are most cost effective. To
do that, they study three possible strategies a
company might choose to follow, namely (1)
strategic partnership, in which a company signs a
long-term contract with a single supplier, so that
future prices are known in advance; (2) online
search, in which the Internet is used for electing the
supplier with whom an order will be placed (Unit
price in this case is assumed to be random, but its
distribution is known in advance, and is assumed to
be a function of the number of suppliers contacted
for a price quote.); and (3) a combined strategy,
under which a supplier is used as a long-term
partner, but a second source might be chosen
through the Internet (Peleg et al., 2002).
Most critical barriers against the successful
adoption of e-procurement are: (i) lack of financial
support, (ii) lack of interoperability and standards
with traditional communication systems, (iii) lack of
top management support and commitment, (iv) it
not being a priority of the company, and (v) lack of
data security. The financial barriers can be over-
come by suitable strategic alliances, being part of
consortiums, and getting support from the govern-
ment. Developing standards and systems for facil-
itating effective interoperability with traditional
communication systems will help the adoption of
e-procurement fairly well with minimum investment
and changes to the business processes through re-
engineering. Increasing the awareness of e-procure-
ARTICLE IN PRESS
172

ment and its benefits in both short and long terms
can eliminate some of the barriers. Developing
security systems may encourage the stakeholders in
e-procurement systems to develop confidence in the
system to the extent they are prepared to exchange
goods and payments.
7.3. Most important factors that will influence the
successful adoption and application of e-procurement
In the literature, the critical success factors for
any change process either to business or to
technology have been widely studied. These factors
are primarily based on experience and research. The
so-called CSFs can be useful for companies to
follow when adopting a technology or method of
production. One may list commonly used CSFs for
the adoption of a new technology or process, but
the questions here are what are the key CSFs
regarding the technology or processes involved in
the adoption of e-procurement. This depends upon
the individual organization’s characteristics and its
absorption capability of e-procurement technology.
The critical factors for the successful adoption of
e-procurement include: (i) clear accountability with
purchasing and organizing structural change, (ii)
information systems specialists with skills in the
Internet, (iii) streamlined approval and workflow
systems (business process re-engineering), and (iv)
top management involvement and support. It is a
necessity to re-engineer the purchasing/supply chain
process with the objective of streamlining the
functions of procurement. This will help to auto-
mate the process using e-procurement. Training and
education in new procurement processes and
technology are essential to ensure the successful
adoption of e-procurement. Senior managers should
be a part of the e-procurement team and perhaps
even the e-procurement champions. Moreover,
suitably trained IT people are essential for the
success of e-procurement adoption.
7.4. Impact on organizational performance
Many companies fail to see the real impact of e-
procurement on organizational performance. It has
both long- and short-term impacts on organiza-
tional performance. These include things such as
rate of return on investment, payback period, profit,
annual revenue, etc. Also, e-procurement adoption
indicates to what extent a company has advanced in
technology and hence streamlined its supply chain
process in order to assure flexible and responsive
products and services in a cost-effective manner.
E-procurement not only results in process efficiency
but also provides higher leverage opportunities in
areas such as reduced cost, increased utilization of
resources for productive purposes, new technology,
new products, new processes, and new markets.
Therefore, it is important to consider the key
organizational performance in order to justify the
investment in e-procurement technology or systems.
The following are the critical success factors in
e-procurement (Vaidya et al., 2004; Leipold et al.,
2004): (1) end-users’ uptake and training, (2)
supplier adoption, (3) business case and project
management, (4) system integration, (5) security
and authentication, (6) re-engineering the process,
(7) performance measurement, (8) top management
support, (9) change management, (10) e-procure-
ment adoption strategy, and (11) technology stan-
dards.
For the adoption of e-procurement, communica-
tion and sponsorship measures have to be sustained
in order to improve people’s awareness of e-
procurement aims and opportunities, in particular
electronic catalogs. A feasible scheme could include
meetings, training sessions for purchasing opera-
tors, circular letters, and dedicated mailboxes
(Barbieri and Zanoni, 2005). The purchasing
process involves four stages or functions: (i) request
for supply, (ii) supplier search, (iii) supplier selec-
tion, and (iv) order fulfillment, invoice payment and
possible claims (Caridi et al., 2004; Croom and
Brandon-Jones, 2005).
Suitable justification schema or frameworks need
to be developed with the objective of evaluating the
impact of adoption of e-procurement on a com-
pany’s performance. For this, suitable performance
measures and metrics need to be established
incorporating both costs and benefits. Also, the
risks involved for not investing in e-procurement,
such as the opportunities lost in terms of both
productivity and competitiveness, need to be
assessed. Performance measures at three key levels
of decision making such as at strategic, tactical, and
operational levels should be considered, including
financial and non-financial and tangibles and
intangibles.
8. Concluding remarks
E-procurement has become an important enabler
for achieving a flexible and responsive supply chain.
ARTICLE IN PRESS

Dell’s build-to-order supply chain system primarily
hinges on their e-procurement system. Considering
the importance of the globalization of manufactur-
ing and services, Internet-based procurement sys-
tems are of paramount importance in achieving a
well-integrated global supply chain with the objec-
tive of reaching the market as quickly as possible
with the right products and services in the most
cost-effective manner. An attempt has been made
in this paper to study the potential barriers to
e-procurement implementation. Also, some of the
critical success factors have been identified for the
successful adoption of e-procurement. However,
this study has its own limitations like any other
study that looks at some cross-parameters or factor
issues. The data were collected cross-sectionally
from Hong Kong, and while they are useful in
understanding the adoption of e-procurement, the
perceived barriers and critical successful factors will
continue to evolve and change in a longitudinal
sense. It will be useful to conduct a longitudinal
study to measure the mentioned factors.
The research model developed here identifies a
few important building blocks in e-procurement
adoption. There are other blocks, identified by other
studies, which could be included in the model.
Further research could include these building blocks
and develop a more comprehensive model.
The study can be expanded to include some cross-
country and industry factors that will influence the
implementation of e-procurement. The following
questions still need to be investigated in detail with
suitable multiple case studies and empirical research
(Carayannis and Popescu, 2005; Berlak and Weber,
2004):
Barriers to greater open competition, transpar-
ency, disclosure of information, and account-
ability
Main costs and factors of e-procurement
Startup cost compared with the operation cost
Overall benefit ratio of e-procurement process
Direct, indirect, and strategic benefits of e-pro-
curement.
Besides the above-mentioned issues, further stu-
dies could be considered to:
assess the potential risks and impacts involved
with e-procurement before adoption (Reduced
staff time due to implementing e-procurement
may cause redeployment or reduce manpower.
Adoption of e-procurement may require suppli-
ers to bid on their business that overcome of fears
of trust may need for suppliers,)
better understand the technical issues of integra-
tion/interfacing with the legacy systems or
existing ERP system via a middleware system
(It will be a challenge for the integration or
replacement of existing purchasing systems with
a variety of supplier/buyer systems.)
Acknowledgments
The authors are most grateful to two anonymous
reviewers for their constructive comments on the
earlier version of the paper, which helped to
improve the presentation of the paper considerably.
The authors are thankful to Miss H. Lau for helping
in the collection of data for this research study.
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