ASSESSING THE PERFORMANCE OF E-PROCUREMENT THROUGH PROCUREMENT GROWTH STAGES.
1.0 BACKGROUND STUDY
Public procurement in organizations previously was treated as a low level operational function that only achieved minor contributions to cooperate performance (Ammer, 1974). However in recent times competitiveness and importance of public procurement to organization’s success has led to the shift of procurement being operational to tactical (Gonza´les-Benito, 2007; Narasimhan and Das, 2001; Kraljic, 1983). The drive to improve the effectiveness of public procurement from the traditional procurement approach lead to the introduction of E-procurement, which has been adopted by some countries worldwide whiles other countries are in the process of
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E-procurement technologies is an improved development for the procurement processes (Neef, 2001) which has benefits of increasing the efficiency of procurement process and price reduction (Essig and Arnold, 2001; de Boer et al., 2002), notwithstanding it promotes collaborative relationships (Holland, 1995; Dyer, 2000; Tang et al., 2001). According to Duyshart et al. (2003) and Costa et al. (2013) the use of e-procurement generates a benefit of more than 3% reduction in public expenditure meanwhile governments spend about 50% of their expenditure on procurement. Chomchaiya and Esichaikul (2016) stated that to realized the achievement of these benefits of e-procurement, performance measurements are required to reflect these benefits …show more content…
The lack of a holistic evaluation performance measurements for e-procurement growth does not allow the true performance of e-procurement to be appreciated. Whilst e-procurement measurable outcomes are desired, e-procurement performance measurements are also vital for the successful implementation (Settoon and Wyld, 2006; Vaidya et al., 2006).
A review of literature on e-procurement measurement has mainly focused on the financial aspect such as financial efficiency and financial effectiveness based on transactional cost theory (Williamson, 1975; Capon et al., 1990) but government stakes in procurement goes beyond the financials to other aspects.
E-procurement assessment is complex in nature and its performance evaluation should be based on its complex and numerous goals; to streamline expenditure, to decrease administrative bottlenecks and costs, to promote operational efficiency (Croom, 2000), to strengthen organizations’ network vision and technological collaboration with business partners (Murray, 2001) and to completely automate certain procurement activities (Smith and Flanegin, 2004; Aisbett et al.,
Laudon, Kenneth C. Traver, Carol. E-commerce: Business. Technology. Society 3th ed. Pearson Prentice Hall. Upper Saddle NJ, 2007.
OECD has noted that Electronic government particularly refers to the use of the Internet as a tool to achieve better government (OECD 2003). Effective e-government seeks to achieve greater efficiency in government performance by making services easier to access, ensure accuracy, and improved efficiency (Almarabeh and Abu Ali, 2010). While government is still seen as inefficient, ineffective, or unresponsive and depriving citizens of abilities to engage in public affairs, e-government becomes a natural extension of the technological revolution that has accompanied the knowledge society by adding new concepts such as transparency, accountability, and citizen participation in the evaluation of government performance (Mohammad et al. 2009). E-government has the potential to increase transparency in public administration by making it easier to relay information of activities to those being governed (Drüke 2007). La Porte, Demchak, and De Jong (2002) also argue that a change in current management techniques to include more collaborative relationships can help government become more efficient, effective, and
The future of economic competitiveness for most enterprises relies on entrance and active participation in the e-commerce market. An essential problem with e-commerce is that the controls and organization are different for each site. There is no standard way of building t...
Beam and Segev (1997) defined an electronic auction as a special case of electronic negotiation and an electronic reverse auction (e-RA)-synonymously named online reverse auction - is a frequently used type of electronic auction in B2B commerce. Among different procurement methods an electronic reverse auction emerged in the mid 1990s started to play an important role. Initially it was adapted by automotive and aerospace procurement managers for commodity parts. Nowadays it is applied and extensively used by many companies both of public and private sectors, non-profit organizations. Annual spend sourced by e-RAs could be normally estimated at 10-15% for an average company and at half of annual spend for aggressive players. As Moorhouse noted (2008) analysts have noted that among Fortune 500 companies, almost all private sector firms of this size employ reverse auctioning today to some extent. Fast acceptance and growing popularity of eRAs is generally explained by Internet development and based on it software systems. Smart and Harrison (2003) pointed that the Internet, and new e-Procurement applications, allow companies to trade with an almost infinite number of suppliers online at very low cost. Sustainability of this technique is confirmed by many years of efficient implementation and economic value it adds. For buyers there were some valuable advantages of this method such as automating of many issues of sourcing process for incumbent suppliers, reducing costs by attracting contender vendors, shortening time spent on purchasing and making company’s needs more open on the market. This technique also increases transparency of the process providing equal participant’s treatment due to ‘compromising free’ approach and making s...
Since mid-90, technology changed procedures for evaluating supplier’s relationships. Before technology, Suppliers relationships used to be an isolated activity disconnected from others companies’ activities highly influenced by conflict of interest. But when technology started to provide accurate data, companies begin the focus on inventory management activities increasing the importance of procurements departments’ evaluation as a way to reduce supply chain cost. With data, procurement can evaluate suppliers and their benefits for the company. In today business environment, the company dilemma is evaluating if the supply chain should be vertical, full outsourced of mix, considering industry maturity impact and price competition (Chopra & Meindl, 2007; Slack & Lewis, 2011).
Previous researchers have shown that there is a positive relationship between cooperation and satisfaction (e.g. Mallen, 1963; Dwyer, 1980; Schmitz Whipple and Gentry, 2000). The cooperative efforts of channel members should results in greater trust, commitment, channel efficiency and the achievement goals, thus leading to higher levels of satisfaction. (Jonsson and Zineldin, 2003).
Supply chain management is the flow of goods and services from company suppliers to product/services users. The Supply chain varies from company to company the long it is more complex it is. Supply chain management includes the coordination of different intermediaries having different objectives from each other; therefore, So, for this effective and efficient coordination of different intermediaries, organizations are now moving towards the implementation of electronically managing the supply chain activities so that not only customers but also the other stakeholders of the organization must be willing to have long term business relationships with all the entities in a supply chain. This e-based supply chain management has its implication in the ERP systems, which not only automates important transactions but also results in better long and short term planning as well.
Procurement in any type of business is vital because this strategic function does not only improve the organization's profitability, but it also improves the streamline processes of a company, reduce the prices and costs of raw materials, and helps it to identify better sources of supply. On the other hand, the supply chain management helps a company to optimize its operations so that speed and efficiency are both maximized. For customers, speed is important because they value fast service. However, increasing speed would cause a company too much. Thus, maximizing efficiency is essential. For the purposes of this paper, the chosen area of expenditure are the products produced and manufactured
This system connects, accumulates, processesas well as provides imperative information to all parties thus enhancing continuity in the procurement process. However, if valid output is to be expected, features as well as requirements of the procurement process must be compatible to current system technologies (Giner, et al, 2011). The harmonization of suppliers as enhanced through the adoption of electronic sourcing enables firms to readily identify new potential suppliers for specific needs when old suppliers` capabilities are in question. The adoption of E-tendering that supports sending requests of pricesand information to suppliers as well as receiving suppliers responses improves on procurement efficiencies as it leads to significant cost reductions thus leading to better procurement performance through cost savings.For this system to achieve desired results however,all users must beready and willing to adopt the new systemsso enable seamless adoption and consequently ensure optimal
In general, there are different types of procurement type for various situations due to no one method can be suitable under the all different construction project. In this case, there are four procurement paths, which are traditional, design and build, management and design and manage, will be advised to use. However, each method has different aspects of advantages and disadvantages.
Shin, N. (2001). Strategies for Competitive Advantage in Electronic Commerce. Journal of Electronic Commerce Research, 2 (4), pp. 164-171.
E-commerce application is a platform where there is buying and selling of products and services which are done by businesses and consumers via an electronic medium
E-business and e-commerce are terms that are sometimes used interchangeably, and sometimes they are used to differentiate one vendor’s product from another. In both cases, the e stands for "electronic networks" and describes the application of electronic network technology - including Internet and electronic data interchange (EDI) - to improve and change business processes (Bartels, 2000)
This paper examines the legal aspects of procurement management and specifically how procurement management can be used as an effective tool for the overall management of a project. This paper focuses on the basics of common contract laws, the basics of agency law, the Uniform Commercial Code (UCC), and some aspects of that pertain to the Federal Acquisition Regulations (FAR). A summation of the company’s position in relation to a given supplier (provided the company decides not to procure all of the material in a contract) will be examined along with how that position is strengthened by understanding the legal aspects of procurement management. Finally, the paper will analyze how the project manager is supported by the contracting management function.
Online shopping is the latest and greatest craze in the history of the internet, it’s fantastic! You can sit in the comfort of your own home, being as daggy-looking as you like and shop for all your pantry needs or buy that dress you’d like to wear out this weekend, its takes shopping to a whole new level. My favourite online shopping (because I’m female) is online fashion, I love the convenience of being tired and not having to go anywhere to get an outfit.