“Importance & Adoption of e-Procurement and Supply Chain Management

Integration: Public Sector Perspective in Pakistan”

By: Name: Hashmat Ali

Enrl No: 01-222121-005

Contact No 0306-5441148

Email: hashmatkhan@hotmail.com

Supervisor: Dr H. Mushtaq Ahmad

A research thesis submitted in partial fulfillment of the

requirement for the degree of MBA

Department of Management Sciences (MS)Bahria Institute of Management and ComputerSciences

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Bahria University Islamabad2nd June, 2014

ACKNOWLEDGEMENTS

All thanks to ALLAH ALMIGHTY, the benevolent and compassionate, who blessed

me with the power & capabilities and remained contented on all intricacies

found during the successful completion of my task.

I extend my special thanks to my Supervisor for his encouraging response and

guidance to make my Research Project a real learning experience and to

fulfill the degree requirement.

I also acknowledge my Parents for their prayers, my Wife for her throughout

support in fulfilling social life obligations and Teachers for their

guidance because I think all these are indispensable for success in every

stage of life.

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ABSTRACT

The paper explains the reasons behind the e-transformation that occurred in

the global supply chains in the recent past. It highlights the importance

and adoption of renewing e-procurement systems, as many companies have now

shifted from the traditional procurement practices to e-procurement through

the use of modern planning systems, enterprise resource (ERP) and network

exchanges.

It also includes an overview of the developments and achievements in the

field of e-procurement, which helped companies, achieve and sustain its

strategic objectives. Finally, it has provided a macroeconomic perspective

on the supply chain sector in Pakistan through in-depth analysis of the

success factors.

Keywords: Supply Chain Management (SCM), E-procurement, StrategicObjectives, SMEs, ERP, RFQ

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TABLE OF CONTENTS

S.#

DESCRIPTION PAGE #

1. Introduction…………………………………………………………………

Background…………………………………………………………

Overview of the context……………………………………………

Purpose of the study………………………………………………..

Objectives of the study……………………………………

Problem Statement…………………………………………………

Research questions…………………………………………………

Theoretical framework…………………………………………

Significance…………………………………………………………

The structure of the study………..…………………………………

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2. Literature Review……………………………………………………………

Technological Infrastructure………………………………………..

Strategic Value of e-procurement for private sector organizations…

Perceived benefits with e-procurement…..…………………………

Employees willing to adopt e-procurement…………………………

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3. Theoretical Framework…………………………………………………… 23

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General description of the framework..……………………………

Summary………………………………………………………….

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4. Research Methodology……………………………………………………

Overview of Research Objectives…………………………………

Overview of Research Design………………………………………

Research Methodology………………………………………………

Population……………………………………………………………

Sampling Plan……………………………………………….

Sampling Units………………………………………

Sample Size………………………………………….

Sample Technique ………………………………….

Instrument and Measures …………………………..

Data Collection …………………………………….

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5. Critical Analysis of the Collected Data….…………………………………

Demographic Profile……………………………………….………

Analysis and Findings……………………………………………..

Factor Analysis…………………………………………………….

Summary…………………………………………………………...

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Conclusion...…………………………………………………………………

Study Objectives………………………….………………….………

Study Hypothesis………………………….…………………………

Key Findings………………………………………………………...

Implications…………………………………………………………

Significance/Justification of the Research………………………….

Limitations………………………………………………………….

Further Research / Recommendations………………………………

Summary……………………………………………………………

References………………………………………………………………….

Appendices…………………………………………………………………

Appendix I: Employee questionnaire………

Appendix II: SPSS datasheet…………………………

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Abstract

During the last few years, a large number of new procurement business

models have been developed, mostly concerning companies operating in the

private sector. Their main objective is the introduction and utilization of

new technologies such as e-systems, e-commerce, B2B, B3C, EDI, e-transfer

etc for the fulfilment of the procurement process. Lately, such models are

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also developed for organisations operating in the public sector. This paper

presents a research work concerning the analysis of “Importance & adoption

of e-procurement and supply chain integration; private sector perspective

in Pakistan” and the functions’ definition of the new e-procurement system.

The methodological approach as well as the tools used are analysed and the

achieved results are presented. The objective of the analysis is the

identification of potential factors for adopting e-procurements and the

design of new processes in order to maximise the possibilities of a

successful implementation of a new or improvement in the existing e-

procurement system.

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CHAPTER 1

INTRODUCTION

In the present corporate environment managers try their level best to make

organizations efficient, effective and profitable. To stream line

purchasing or logistics is an important means to become competitive.

Purchase of goods/services electronically is called e-procurement and is

considered as an essential piece of the generally strategic procurement

strategy in the current business environment. The plan consists of, but is

not restricted to tactical sourcing and vendor validation, switching from

manual procurement to automation/electronic system procurement and

participation in one or more marketplaces at the same time. The emphasis is

on streamlining business processes with long construction of a digitized

product profile and to automate the request for quotes (RFQs) based on the

purchasing process while providing integration with planning in corporate

supply chain resource management systems. It is believed that with adoption

of e-procurement system the purchase order cost will be greatly reduced and

the choice of suppliers will increase. This kind of compromise and

flexibility will allow the organization to become more profitable, held

broader competition between suppliers, enjoy transparency, get great rates

and bring market efficiency. For decades, the globe has changed and a

radical change in management functions and business services was noted. It

has been observed that organizations are also quickly adapted to new market

trends and functions of specialized services (Hasan et al, 2010). To get

objectives of the strategic business, for example efficiency in operations,

sustainability alongside profitability and evolution of many organizations

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in the e-system is clear. They turned to the improvement, development and

integration of support functions. The global economic downturn has also

forced organizations to embrace change and move their business tactics.

The advancement in technology, business transformation, easy and reliable

access to electronic support system is a reality now. Cost reduction, e-

commerce solutions, global business requirements, cultural barriers and

transparency are few of the elements which turned indispensable both the e-

commerce and e-procurement. E-systems have enabled organizations to

effectively control from remote locations and with required efficiency.

Due to its fundamental part, procurement has resulted in the profitability

of organizations and has compelled the organizations to go global and adopt

e-transformation. This new form of procurement has got the terminology as

"e-procurement". While electronic trading is still in its infancy stage in

the world, executives from leading companies and professionals truly have

realized its importance. Swaminathan et al. (2003) noted that the paradigm

of e-procurement alongside e-business has resulted in providing an

opportunity for business to make their purchasing processes as composite

unit. E-procurement has benefited both the managers of the management and

operation of their businesses at lower cost and with greater efficiency and

given to stakeholders to properly choose multiple options with respect to

raw materials, engineering items, utilities or services. Nowadays, the web-

based portals or exchanges are used by companies that are managed by

professional companies. According to Subramanian et al (2002) to improve

the linkage in organizations and business partners, e-systems can play a

pivotal role in business-to-business (B2B) processes.

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According to Irfan et al (2008), the challenges of reducing delivery time,

cost estimation, the increased levels of customer service and improved

product quality make organizations competitive in today's market. This can

be achieved by having firm grip of enterprises in technological

development. As explained above procurement is an important element of the

SCM and has a straight effect on the "profitability" of organizations

(Irfan et al 2008). Due to the widespread use of e-procurement,

organizations have not only improved its cost efficiency, profitability and

cutting, but also explored untapped and unattainable markets. According to

PPRA (Public Procurement Regularity Authority, Pakistan) website

(http://www.ppra.org.pk, the developed nations of the world have

revolutionized their economies through e-procurement systems. Over a period

of time a strong need has been felt for the government to develop a system

of e-Procurement for Pakistan to achieve economies of scale, transparency,

economy, quality and efficiency in public procurement. The growth of public

and private sector is equally important for a stable economy.

Literature on e-procurement stresses upon the many advantages of e-

purchasing. Engstrom et al, (2008) noted that the main advantages of e-

procurement include cost-effective and time-saving, easy ordering, reduced

paperwork, uniform and transparent process, and the enforcement of better

and easier access to information. Similarly, he pointed out Paul Schnapper

(2007) that "the e-procurement can also be a means of standardization and

control process that is easy to control and limit the discretion of

measurement.

According to Hussain (2013) e-commerce has become important tool in

unlocking job creation and innovation of small and medium enterprises

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(SMEs) in developing countries. International Trade Centre (ITC) Executive

Director González (2013) focused on e-procurement in SMEs beyond the local,

national, regional and global market, and stressed upon them to operate

worldwide through this tool.

In the rapid spreading contemporary world economy, small and medium

enterprises (SME) sector is playing a crucial role in bringing modern

business trends, flexible terms and dynamism not only in developing

economies but also in the more developed countries and industrialized

countries. SMEs play dual role in the economy, i.e, significantly increase

development of economy and reduce the rate of unemployment (Koh et al.,

2007). SMEs have also be truly called as economic actor (Peng, 2009).

Economic Survey (2004-05) disclosed that Pakistan fallen second to China as

the fastest growing economy, as was also claimed by the country and well

accepted by the global financial entities of reviewers (Saeed, 2009 ). The

increase in real grand domestic product was termed to be resulted due to

extraordinary performance by the services and manufacturing sectors on a

large scale. Saeed (2009) further said that despite the large-scale growth

in manufacturing sector (which grew by 15.4%), small and medium enterprises

(SMEs) remained the focus on the economic progress of Pakistan and

especially for the progress of public and low paid income of the country.

According to Saeed (2009) Pakistan is ranked 135 out of 174 of countries of

low-income public surviving rate on Human Development Index.

The survival and growth of small and medium enterprises can be difficult in

the contemporary competitive business environment and global business

markets; customers are more serious than improve and cheaper products,

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higher levels of service, more varieties of products and faster delivery

(Chow et al, 2008; .. Ketchen et al, 2008). In addition, different business

models, such as manufacturing costs, customer value creation, better

service elasticity and the continuing impact of information technology

creates enormous challenges for businesses to stay alive (Chandra and

Kumar, 2000).

Therefore, many companies have realized and experienced that nowadays the

individual firms have been overtaken by the shift of rivalry from them to

the existing networks of SCM (Koh et al, 2007; Li et al, 2005 & Chow et al,

2008). To achieve competitiveness, supply chain management through e-

procurement can be an important instrument to be distinctive from others in

the industry (Li et al, 2005;.Ketchen et al, 2008).

Supply Chain Management is a total change in demand, sourcing and

procurement, production and logistics process management (Chow et al.,

2008). It is a system that consists of all business partners including

manufacturers, suppliers, distributors and customers and providing services

or products to end customers, both downstream and upstream (Mentzer et al.,

2001) through division of financial and information flow.

The SCM has advanced and grown rapidly. In the previous decades, the focus

was on networking inside the organizations (Monczka et al., 2009) and now

the external stakeholders are given more importance in terms of integration

with the business entities (Lummus and Vokurka, 1999, Lagrosen, 2005) to

achieve optimum performance levels. SMEs in the states of America and

Europe are well aware of the advantages networking with SCM through

collaborations (Mudambi et al, 2004, Meehan and Muir, 2008), but business

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in the Asian countries are far behind in the process of integration with

the SCM. Integration will difinetely bring profitability to the

organizations with positive results and better quality services as well as

reduction in costs and increase in efficiency.

1.1 Background of the Study

The present procurement process consists of traditional manual procedures

that are slow and even slower systematic process of purchasing entries

(Hawking et al., 2004). The impact of e-procurement on the B2B sale is

great and more important. Subramaniam et al. 2002 pointed that the Web

based Business-e-Business electronic commerce has improved harmonization

between organizations, thus contributing to a reduction in transaction

costs and competitive procurement chances for the seller & buyer

organizations. However, despite the propagation of journalism on the

supposition and practice, a handsome amount of research just provides half

solution to the common regulations of conduct. Presutti (2003) noted that

Supply Chain Managers are to take into account the affects of IT and know

how to make a commercial case for electronic procurement. Now a days,

businesses are increasingly demanding in terms of decisions to be taken

with regard to e-procurement and to manage the huge number of influences

and pressures. However, in spite of huge stress on the benefits associated

with e-procurement, research on the topic is lacking with regard to the

integration theory of strategic choice. The debate is emphasizing on the

adoption of e-procurement with regard to the concept of strategy and the

strategic choice (Child, 1997). Hult et al. (2004) stated that the

predictability of the supply chain must be achieved, without letting go the

flexibility. According to Philips (2003), business entities operating in

the global economy are to be integrated into the internal dynamic

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environment for tactical purposes. For example innovative thinking that

must be beneficial for the organization, said Cousins & Spekman (2003).

Philips (2003) noted that extranets based on Internet and the use of

organizational networking systems, such as electronic data interchange

(EDI) show new types of mutual coalition among distant business associates.

According to Malone et al. (1987), these new ways of business association

can shift traditional market trends. To achieve fully the benefits of such

alliances both the dominance on the relevant industry and production rate

will matter.

The IT also meets the requirements of the company to meet current and

emerging needs. He helped many companies to improve operational efficiency

through networking solutions for electronic supply chain and on the

Internet.

Manual and systematic slower processes are the main factors of traditional

procurement. The transformation of the procurement system of traditional

markets in electronic trading has had fundamental and important business

transactions for business role (B2B). Internet-based systems and e-

procurement transactions enabled B2B e-commerce to improve networking

between organizations results in lower transaction costs and competitive

procurement opportunities for the organization of the buyer. Organizations

are now well informed decisions how beneficial e-commerce and how to react

to the huge number of stress and pressure in the world of business.

According to Carayannis and Popescu (2005), e-Business has radically

changed the way businesses and suppliers deal with each other (Phillips,

2003). Due to the uninterrupted and improved connectivity, effective and

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efficient information technology is available at affordable rates

throughout the world. As explained by Knudsen, (2003), e-purchasing is not

so easy to adopt, rather it requires various tools. To be ad part with the

requirements of business world approximately six forms of e-tools are

applied by firms. Few of such applications are ERAs, e-MROs, ERP, e-

sourcing , e-tendering and e-info. Hawking and Stein (2004) stated that

not only e-procurement a strategic actor in the value chain, but it also

works as an important driver for the advanced supply chain management.

The Federal Road Safety Commission (FRSC), Nigeria stated that e-purchasing

is the buying and selling of goods and services through the Internet and

network systems.

According to Baily (2008) value chain of e-procurement pertains to vendor

management, e-auction, e-Tendering, integration orders, catalog management,

ship notification, order status, electronic billing, contract management

and electronic payment and. The management of indents is a systematic way

of tender processing (Kishor et al., 2006). But this piece of the value

creation process is not obligatory in contracts with offices to develop the

process of withdrawal. In the works organizations are obtaining the

approval of the technical and administrative sanctions in the form of a

letter. In the purchase of goods, and the activity was down generation on

the Internet. Taken following the end of the stage as inputs for issuing

NTI (Kishore et al, 2006).

1.2 Overview of the Context

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David (2002) reported that, contrary to the general perception we have that

B2B has experienced a sharp decline due to the recession; electronic

trading has taken root and is rapidly expanding across the landscape. Jaya

and Selang (2014) said that following the trends of e-procurement through

the last 20 years highlights some of the successes and challenges. There is

no doubt that e-procurement based Internet has significantly changed the

way people acquire worldwide. It is claimed that e-procurement is a catch-

all term that incorporates many aspects of electronic purchasing power

(Jaya and Selang, 2014).

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E-procurement trends in the private sector

The private sector business organizations are being held responsible too

for focusing too narrowly on the technology based procurements and taking

it for granted. An analysis by KPMG Consulting (2001, p.1) concluded that

"there has-been significant confusion in the marketplace about how these

tools (online procurement) should be appropriately applied. In part, this

hasbeen the product of market assertive advertising and planning, but it

has resulted from a jump towards perceived technology panaceas without

paying attention to the basic procurement ". Jaya and Selang (2014)

described that externally hosted e-procurement services are part of a

growing clearly 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 other than the industries.

E-procurement trends in the government sector

Governments should focus on the general welfare of the subjects. Only

efficiency should not be the sole objective of public procurement. As

indicated in the report on electronic contracts by the Miami-Dade County,

Florida (2000, p 10.): "Unlike the private sector hiring, purchasing

private sector must work within the rules and policies established to meet

the social and economic objectives desirable. Purchasesin private sector

should include global competition instead of using a small number of

suppliers with whom a relationship of trust has been established. "

One of the most serious problems facing large procurement offices today is

digital divided minority business owners. "Like many companies take

advantage of the promise of the Internet, minority entrepreneurs (many

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small business owners) are struggling to harness the power of computers,

information technology and electronic commerce" (Anonymous, 2000).

According to the Bureau of Minority Business Development, Department of

Commerce, U.S, about half of all minority-owned companies are involved in

electronic commerce. Some governments in mature economies are adopting e-

procurement more broadly, providing structure, audit trails and

transparency of transactions. However, governments in emerging markets are

not aware of the benefits that e-procurement can provide (Jaya and Selang,

2014).

Public Procurement Regularity Authority Pakistan (PPRA)’s website

reiterated that developed nations in the world have revolutionized their

economies through e-procurement systems. Over the time a strong need has

been felt in the Government arena to develop an e-Procurement system for

Pakistan to achieve economies of scale, transparency, economy, quality and

efficiency in public procurements (PPRA 2004).

 Nick Cater (2013) noted that an increasing number of firms in the developed

business segment to make the Internet an essential part of your sales and

marketing for business-related support to governments, the United Nations

(UN) and charities around the world. Procurement for assistance needs,

development projects such as the construction of roads for emergency aid to

refugees, has always involved companies in countries, particularly in the

local purchase of goods and basic services through negotiations face-to-

face and paper-based transactions.

1.3 The Purpose of the Study

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This study explains the importance of importance and importance of e-

procurement and its integration with supply chain management in the private

sector of Pakistan. It was meant to know the need of changing analog

procurement systems to digitized form, its importance for organizations,

integration with SCM channels and its implementation by the private sector

in Pakistan. The primary purpose of this study is to evaluate the

importance and implementation of e-procurement by the private sector,

especially the private sector in the country. The improved efficiency of

the e-procurement system is considered very useful in improving

organizational productivity, reduce costs and bring the efficiency of the

management of the supply chain.

The Internet (basic need to go online) is used in almost all organizations

for one reason or another. There are a number of studies exploring the need

for internet use, the adoption of e-procurement, the benefits for

organizations and employees conduct regarding the use of internet and go

for online shopping etc. However, very limited studies investigated the

adoption of e-procurement by SMEs in addition to managing the supply chain

and reduce the extra cost on analog acquisitions. (Arshad et al, 2008;

Arjun et al, 2012; Aboelmaged, 2010).

In Pakistan, the use of Internet is applied in almost all private sector

organizations because of its many advantages, in various forms. However,

there is a lack of information concerning the measurement of the

effectiveness of e-procurement system to make further improvements in the

process and make it more efficient / increase efficiency even more (Susan

A. MacManus 2002). This study is a tool to fill this gap and provides

information that can be considered as further improvements in the

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efficiency of the performance evaluation system. The information can be

very useful for practitioners and researchers, as well as in the field of

performance evaluations.

This paper relates to the importance of e-procurement and integration of

supply chain management; the private sector perspective in Pakistan. In

addition, this study also identified the employee response (satisfaction /

dissatisfaction) for using internet to forward and backward integration

with customers and suppliers in the supply chain and proposed ways to

improve the effectiveness of management the supply chain to the final

improved profitability of the private sector in Pakistan.

1.4 Objective of the study

The formal objectives of the study were as under:

To determine the importance of technological infrastructure for e-

procurement adoption in private sector organizations.

To find out whether e-procurement is of any strategic value to the

business organizations of Pakistan.

To determine the perceived benefits with e-procurement in corporate

entities of Pakistan.

To study and discover the behaviour (willingness/unwillingness) of

employees to adopt e-procurement in private sector of Pakistan.

The formulation of the study objectives led to the development of the

problem statement which is explained in the next section.

1.5 Problem Statement

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The formulation of the study objectives led to the development of the

problem statement which is explained as:

E-Procurement simplifies procurement and purchasing process in an

organization. However, there is still some resistance to change and its

implementation, therefore, the importance of identifying what e-procurement

creates value for the process of procurement. The study is to explore the

relationship between intending e-procurement and integration management

chain offers to achieve efficiency and effectiveness of business

competition. The research will also explore how e-procurement will reduce

costs and increase market efficiency.

1.5 Research questionsLike any other study the present study will also address some of the

important questions. The existing study will try to find out the answers of

following questions:

1. What is the importance of e-procurement system in private sector organizations particularly in SME sector of Pakistan?

2. What are the ways and means needs to be adopted by the organizationto implement e-procurement system?

3. Is there any relationship between e-procurement and supply chain management with respect to SME?

4. What is the role of e-procurement to gain efficiency and effectiveness of the organization and particularly in SME sector?

Significance of the Study

Internet use is one of the most important tools and widely used resource

for online business. However, there was a concern that, despite its

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importance, extensive use and heavy spending on it by the organizations,

dissatisfaction with the system is commonly observed phenomenon by

organizations in a way or another. Especially, it has been observed that

there are many criticisms and dissatisfaction with the system of Pakistani

organizations.

Research is generally very rare on this subject in the socio-economic

context of Pakistan. This study intends to explore the practical

significance of e-procurement in reference to small and medium enterprises.

There are virtually no studies on the subject of the implementation of e-

procurement in the Pakistani context. Few studies were found on the

importance and adoption of e-procurement in both the public and private

sector of Pakistan. Even in these studies the specific importance of e-

procurement for the private sector has been ignored (AtiyaHussain, 2013,

Hasan et al, 2010; Irfan et al 2008; Saeed, 2009). The role of the private

sector is more important in economic growth and bringing more employment

opportunities for the nations, has motivated the researcher to explore the

importance of e-procurement and integration with management the supply of

private sector in Pakistan chain.

Another reason for conducting this study was individual variables related

to the implementation of e-procurement and its integration with the

management of the supply chain. However, e-procurement and integration with

SCM as a system has not been seen. It is argued that organizations identify

gaps in their procurement systems as a whole if they want to improve their

performance practices in the supply chain. In addition, it was also said

that researchers would be able to explain the phenomenon of e-procurement

in seeing the whole process. This study has explored electronic procurement

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system as a whole and providing a theoretical contribution to the existing

literature. The present study will take into account the local business

environment and culture to see how important and beneficial e-procurement

is for the SME sector in socio-economic perspective of Pakistan. The study

will further add to the current knowledge of e-procurement. This will add

to the existing information about the importance of e-procurement in small

business in general and the private sector organization in Pakistan in

particular.

Importance of this study is that it was made all previous research in

technologically advanced countries, and considers that the results of these

studies cannot be generalized in Pakistan due to the difference in the

conditions of social norms, economic and cultural affairs. This study was

conducted in the social, economic and cultural (Pakistan), which differ

from those of Western settings, thus making a contribution to the

theoretical literature on this topic.

In addition, on the basis of the result of the conduct of this analysis in

the private sector that the corporate sector plays more and more

significant role in the manufacturing and offering services around the

world and add to the work and tax revenues, and financial enlargement and

expansion in the marketplace system. The country was also adopted on the

corporate sector to become the largest manufacturer and offer of basic

services since its commencement. It also requires the World Trade

Organization (WTO) to push the private sector institutions in the country.

Thus, the conduct of the study in the private sector, is the best option to

explore this phenomenon in the private sector. Reference to the study

contributes to the improvement of policies and the integration of the

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management of electronic logistics supply chain, and in particular the

private sector in Pakistan. These organizations have an urgent need for

best practices to improve efficiency and organizational effectiveness and

the conclusion of this study was to address this need. That is why private

schools were selected for analysis in this study.

The reason for conducting the study about the importance of e-procurement

and supply management integration chain has also emerged from the

observation that, despite advances in technology (ICT) information around

the world, the Internet is simply used as a tool for lean business

activities however, the use of the same for the full benefit of companies

is mandatory in the business world contemporary. The internet and e-

procurement can bring multiple benefits to organizations including much

improving the performance of the supply chain, customer reviews, links to

the upward and downward communication with stakeholders, strengthening

management of the supply chain, reaching out to suppliers and customers,

etc. unlimited research and its results can help organizations know the

importance of e-procurement tool in its true letter and spirit and

following its integration with the management of the supply chain.

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1.1 The Structure of the Thesis

The study aimed to provide a complete and an empirical analysis of the

importance of e-Procurement and Supply Chain Management Integration:

private sector perspective in Pakistan through a theoretical framework

developed. Therefore, the first step of the research was to undertake a

complete study of all factors relevant with the subject matter that guided

the experiential examination of e-procurement implementation.

The introductory chapter 1 gives an overview of the main concepts of the

importance of e-Procurement and Supply Management Integration of the chain:

the perspective of the private sector in Pakistan. It then provides a brief

overview of the context in which the study was conducted; the reasons for

the choice of subject; main research questions; set goals; concise

introduction to the theoretical framework; importance of the research and

at the end examines the arrangement of the research.

Chapter 2 provides an overview of the literature mainly on the emergence of

electronic technology, the markets and on the Internet, and the management

integration of e-procurement and the role of small and medium enterprises

in developing a series of economic growth in Pakistan, Employment and e-

procurement in the private sector, which led to the formation of the

theoretical framework and the hypotheses of this study rates.

Chapter 3 focuses on the theoretical framework and justification of the

proposed relationship. It also has a sequence of study proposition

structures, taking into account some of the most important probable

associations inbuilt in the frame.

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Chapter No.4 deals with the methods used to undertake the study consisting

of theoretical and operational elaboration of the variables of the study,

the selection of sample, collection of data and approach to have analytic

aspects of the study.

Chapter No.5 of this research focuses on the conclusions of the main

conclusion as they relate to objectives of the research. The perspective of

the private sector in Pakistan and as such the culmination of research:

these results on the identification and development of the key factors to

the importance of e-procurement and supply chain management integration.

Chapter 6 concludes the study, present the results and the main

repercussions of the research. It also recognizes areas for related

investigations in the future. This chapter especially stress on the

research contribution towards the existing body of knowledge in the field

of e-systems. The final module of this research examines the

recommendations/challenges and limitations confronted by during the conduct

of research.

CHAPTER 2

LITERATURE REVIEWThis chapter of the study "Importance and adoption of e-Procurement and

Supply Chain Management Integration; private sector prospective in Pakistan

includes literature review and detailed study of private sector

organizations of Pakistan." They study gives an overview of the extensive

historical research and its relationship with variables. It covers the

aspects of usage of online tools, the implementation of e-procurement in

26

firms, its all time benefits, and this review of the literature on the

control of the employee for adoption email -system, in particular the e-

procurement process well. It also discusses the implementation of e-

system by the firms to assess the dynamic scanning and assist in the

evaluation of the effectiveness of e-procurement system. In the portion of

literature review a soft evolution to the theoretical framework of the

research has made.

The ensuing section begins with the Technological Infrastructure, which is

central to the e-procurement system. Then it examines e-procurement

adoption by private sector in Pakistan.

2.1 Technological Infrastructure

It is disclosed that in our days, companies are upgrading their IT

infrastructure and reforming the processes of their business to make it as

digital enterprises. If the internal stake holders of the organization

will not optimize the use its IT infrastructure, the productivity gain

significantly reduced (Sing and Puni, 2011). Therefore, it is necessary to

find the factors that affect the adoption of e-procurement systems and

usage by the employee.

According to the European Union (2012), e-procurement is a phenomenon that

began in the developed economies, but because of the spread of the

Internet, it has been increasingly adopted in the developing world.

Organizations and individual business people have come to embrace because

of the benefits of integration and the immense possibilities it brings

about: space collapse, distance and time.

27

Batenburg (2007) conducted research regarding the implementation of e-

procurement by European firms. Quantitative research found that technical

elements play an important role in determining the adoption of e-

procurement (Batenburg, 2007). According to research, companies face

technical compatibility issues and those who do not have expertise in

information technology tend to collect at least the adoption of e-

procurement. Such studies prove tend to dovetail with. Pires and Stanton

(2005) suggested that important factors common to the implementation of e-

procurement are technical design process, the international operational

efficiency, and reducing costs and organizational leadership. Global

research by Pires and Stanton (2005) emphasized the very critical technical

architecture of e-purchasing as in the implementation of e-system.

According ArieSegev et al (1998) the IT infrastructure is capable to result

in important changes in the markets. Though most of the present available

off-the-shelf systems were anew, they kept on facilitating the key roles to

reduce the overheads of the firms, improve quality of service, more rapid

location and reception products, and increased elasticity.

Alsaffar (2009) noted that the supply is a major business in the area of

community service. The developments in ICT (IT and communication

technology) supported on the Functioning of the company to increase its

effectiveness and promote partnership among the firms and its associates

suppliers. That has led to a movement of the purchase operations of

conventional markets for a concept of e-procurement.

28

Braga (2002) noted that the globalization of markets has been determined by

forces linked to a mixture of information reduction on the basis of trade

barriers in the world, extending within own business market, thanks to the

fall and the connection of transactions and logistics costs.

In Australia, the significance of global ICT at the micro/macro levels has

been understood long ago. Australian society in ICT is the 3rd from top in

the list of Organisation for Economic Cooperation and Development (OECD) as

a percentage of GDP and is recognized as one of its power houses. Due to

the strengths of the company, it had got the place of the country in the

best places on the globe for availability of excellence, competitiveness

and quality of its workers (DFAT, 2003).

Elsevier (2003) stated that the SCM has been the strategy of the 21st

century world operations for the competitiveness of the organization.

Companies have put their best efforts to look for alternates to show

openness, flexibility and capability in turn shifting their operations

methods, plans and technologies which consist of the adoption of supply

chain management information technology and paradigm shift.

The market of electronic B2B marketplace was not robust (Mahoney 2001 Sliwa

2001), and no one can refuse the basic changes in the business processes

that occur in managing the supply chain globally (Reuters, 2001) . A report

published by New York-based e-Marketer.com said that "IBM has more than 43

billion e-procurement in 2000, while Boeing is now being treated more than

20,000 daily transactions on its website" (BusinessWire, 2001). Infact lot

of spectators consider newly invented IT tools in this field a "hook up or

lose out" tactical value scheme (Clemons 1986 EK 1991 and Mc Farlan, 1997).

29

BCG (Boston Consulting Group) reported that till the year 2004, most

companies who go for the new IT tools will get saving on sales from 1% to

2% (Forrester, 2001).

According to a report released by the Health and Human Services Department

of USA in 2013, in the environment of e-system, offers from suppliers,

customers and buyers are handled online through easily accessible and

available web-based tools. Due internet such facility can be availed

worldwide from any distant place.

According to the Ministry of Health and Social Services, Health Resources

and Services Administration (2013) of the United States, in e-procurement

environment offers from both the buyers and sellers are dealt online. As

such facility is available and can be accessed worldwide on the web-based

platform.

According to Johnson et al. (2002) internet has a important effect on the

way businesses collaborate among themselves and with their customers. The

last uncertain block for the amalgamation of the SCM, such as high costs on

transaction among associates, and the less available information and the

challenges to manage compound interfaces among functional entities were

dissolved all over the Internet.

Soar et al. (2004) referred to organizational learning in the context of e-

procurement, which took place due to the interaction of various factors

thrown in the organization and the environment, processes and procurement

practices and systems and technology. According to Vaidya (2006) Critical

success factors (CSF) are likely to influence the success of e-commerce

initiatives in the private sector.

30

According to Lee and Whang (2001), the Internet has enabled companies to

find that speed up the extensive implementation of their principles base of

supply chain such as information sharing highly innovative solutions, the

multi-part design of the management of the supply chain, outsourcing and

partnerships and delaying mass customization.

E- Processes and systems that are used everywhere staged such as the

Internet and web browser have a profound effect on the monitoring of a

joint operation between the organizations. Thus, the main insinuation of e-

business is its effect on management (2005 Croom), supply chain.

Web-enabled business-to-business (B2B) electronic commerce increases inter-

firms alignment, which ultimately results in savings of business costs and

spirited procurement chances for the firms of the buyer (Sub-ramaniam et

al. 2002).

Internet is having an important effect on the way companies collaborate

with each other and its customers. The last uncertain block for the

integration of the SCM, such as high costs on transaction among the

associates and the limited accessibility of information and the challenges

of supervision multifaceted interfaces between functional firms and melt

all on the Internet (the penis and Johnson, 2002).

The Giunipero and Sawchuk (2002) said that the Internet can be used as a

search function, which allows for the purchase of a professional shop and

compare capabilities and suppliers access to online catalogues. Second, to

generate savings, optimal use of internet can be beneficial. Buying online

is a good way to decrease the high costs on transaction for other materials

31

of little value such as operating, repair and maintenance. 3rd, the

purchase of items online can result in bring down costs on transactions,

and also as a way to reduce the prices paid for purchases of goods /

services (Giunipero and Sawchuk, 2002).

H1: Adopting e-Procurement is highly dependent on Technological Infrastructure.

2.2 Strategic Value of e-Procurement for Private Sector

OrganizationsAccording to Phillips (2008), several research on the assessment and

recovery of e-procurement have advanced academic literature. Constant

wanted to alter the function of conventional supply was now asked to create

more value. It can not only be considered as a function of a defined set of

operational tasks. To date, however, many organizations have not recognized

the full extent of the benefits of strategic performance that allows e-

procurement.

Philips (2008) stated that the winning project for the implementation of e-

procurement has become a useful factor in the ability that allows processes

to proceed higher, faster, differently, more effectively, in parallel or

allows any new processes to implement. However, some practitioners later,

whether the benefits of e-procurement had been oversold and we were looking

to reinvent their processes to e-procurement. In addition, the various

problems of change management that hinder successful implementation,

illustrate possible avenues for researchers and practitioners.

According to Rajkumar (2001) during the last ten years e- systems

(especially e-procurement) has been proved to be the main actor in the

32

field of supply chain management. Now the businesses have adopted new

digitalized ways to do purchases of goods. At the tactical level, it is

expected that e- purchase freeing the resources of business to be used in

the activities of strategic nature.

Cheng et al. (2004) noted that how the performance of a purchasing service

could be better remains uncertain. In lot of business organizations B2B

cases for e-procurement based on the possibility of a number of services,

e.g. reducing the prices, lowering transaction costs, good implementation

and processing and quick supply. However, research in the later part has

query whether the e-procurement is really an unattractive duckling (Hawking

et al. 2004).

In an early experimental studies and confirmed Carr and Pearson (1999) that

the procurement strategy has had a positive impact on the financial

performance of the company. Encourage, may establish cooperative relations

long-term with its main suppliers (Carr and Pearson, 1999) are also

companies that make long-term planning and consider purchasing as

strategic.

Oslomobekov et al. (2002) reported that electronic tools (e-commerce)

provided the chance to improve both factors of the buying procedure:

aspects and communication of the transaction. The investigations

established that these applications and solutions put great impact on the

e-business processes concerned with procurement. Firms reported:

• According to Davila et al. (2003), Lin and Hsieh (2000), Radovilsky

and Hegde (2004), Croom and Johnston (2003) and Subramaniam & Shaw

(2002) lowering price.

33

• decrease in rotation time or order time of purchases (Lin and Hsieh

2000, Radovilsky and Hegde 2004, Davila et al. 2003,)

• decrease in suppliers turn over (Davila et al., 2003)

• raised turnover of supplies by large firms (Muffattoand Payaro,

2004)

• saving in costs of inventory (Subra Maniam & Shaw, 2002)

• purchasing prices decrease (Davila et al. 2003).

The internal clients need very few documents. However, according to Croom

and Johnston (2003) exception can be found in increase in the levels of

service to internal customers, which were obtained based on the reduction

in cost and compliance in process plus satisfaction of customers.

Frohlich and MT (2002) in his study has established that the current belief

is that integrating Internet-based supply chain with upstream suppliers and

downstream customers (called "e-inclusion") was better than methods

traditional forms of doing business. This proposal has not been verified,

however, and even we knew little about what are the barriers upstream,

internal and downstream to the implementation of e-inclusion.

Puschmann and Alt (2005) stated that although e-procurement has greatly

simplified the process of procurement and harmonization for indirect goods,

many companies have many solutions for e-purchase. For consolidated supply

solutions, the paper emphasized for a global procurement plan, alignment

and unification of different e-procurement tools throughout the purchase

process and emphasis for architectures of embedded systems. Firms also have

to understand that not uniform e-procurement tools exist and that key

success elements were "non-technical" in nature.

34

Rashid and Al-Qirim (2002) noted that SMEs are increasingly the importance

of its input to the public economy in kind and cash e.g. wealth created and

labor employed.

Lot of organizations are looking to find for new methods to lower the costs

especially attached with procurement, generally result in heave factor of

cost in commercial transactions (Da Vila et al 2003, Vaidya et al 2006). In

general terms, the market plays an increasingly strategic, often linked not

only to obtain value for money, but also intrinsically linked to the

delivery of the strategic objectives of the organization (Smith and Hobbs,

2001).

Confidence in suppliers is second in importance in affecting adoption of

electronic procurement by SMEs. The Internet can be beneficial to the SMEs

to a great limit especially as a tool of communication to implement and

make closer relationships with their suppliers. However, without full

control, full utilization of the same will not be made (Rashid and Al-Qirim

(2002).

We recognize the benefits SMEs can bring - but the trend toward reduction

programs providers and mutual relations with a few key suppliers generally

work in favor of SMEs (Smith and Hobb, 2001).

According To Smith & Hobb (2001), e-Procurement is slowly making an impact

on both public and private sectors, although propaganda has probably run

ahead of real success. The procurement card, however, is certainly in terms

of taking off reception and Its use. These Developments bring New

Opportunities for SMEs and innovative; they can also cause problems for the

35

less progressive, and e-initiatives are potentially reviews another driver

towards greater aggregation, larger contracts, the biggest suppliers, and

the dis-intermediation "Intermediaries" in the supply chain ((Rashid and

Al-Qirim (2002).

H2: e-Procurement and gaining strategic value are positively related in private sectororganizations

2.3 Perceived Benefits with e-Procurement

Literature in the field of supply chain management and modern e-procurement

on several benefits of e-procurement (Presutti 2003, Panayiotou and others,

2004 and Edmiston, 2003) has identified the literature preceding the main

benefits of e-procurement, such as; supply reduction and cost-and time-

saving offers, a simple process orders , less paperwork, less repetition,

which is the minimum of bureaucratic processes and standardized documents,

line reports, and clear and transparent processes to ensure fulfilment of

rules and regulations for procurement, and reduce mistakes, and information

accessibility easier. Preceding studies also suggest improved quality in

purchases can be obtained through e-procurement (Angstrom 0.2008).

In addition, electronic procurement has proven good for easy assignment of

contracts and thus facilitating procurement professionals to concentrate

their efforts on vital strategic issues, said Pana Yiotou et al. (2004). In

particular, the adopting of e-systems by governments can deal much and

bitterly with organizational work, making the purchase system more

organized than any system based on this paper, with a equivalent income

36

noteworthy savings (Mitchell, 2000, Panayiotou et al., 2004 & Carayannis et

al., 2003).

E-purchases positively add to the decision making process for which

relevant information is carefully prepared, stamped and kept through mostly

mechanical models which make all transactions and standardized follow-up

measure. Keep track of all means take advantage of bidding your information

to get better prices. Companies can concentrate on their business partners

and agreements / contracts (extracted from www.epiqtech.com /

procurement.htm e-05.24.2014) the most rewarding business.

According to an article downloaded from the website

http://www.epiqtech.com/e-procurement.htm, well managed e-procurement "more

intelligent supply" to reduce inventory levels. Know the number of

products, prices and offers points of contact can help companies make an

agreement while other suppliers are efforting to collect their data of

relevance.

Brack (2000) noted that the benefits of e-procurement are largely used in

the supply chain management and e-procurement studies with a great impact,

that the electronic procurement function has transformed the traditional

supply previously sidelined in a competitive arsenal. Buyers showed that

the transition of e-shopping on paper resulted in a decrease of 5% to 10%

on the purchase cost, 25% to 50% reduction in stock levels, a reduction of

5 days of the cycle time, a saving of U.S. $ 77 in demand by administrative

costs (Brack, 2000).

According to Min & Galle (2003)& Roth (2001) large e-purchases advantages

consist of:

37

savings in cost and success increase in the ROI (return on

investment) operations less paper, reducing the sequence time of

order and decrease following stocks because of the rapid spread of

the order related to the information;

Just-in-Time (JIT) inventory and purchasing processes);

Raise the efficiency of the SCM by getting actual data on

availability of product, inventory levels, despatch status,

manufacturing needs;

Helping out in mutual planning between business partners in the SCM

by providing information to each other with regard to demand

forecasts and schedules of production and the activities of the

supply chain utter;

Effective link information customer demand, upstream SCM, whilehelping operations supply chain anagement "pull".

Croom (2000) and Sigala (2003c) noted that the advantages of e-purchases

include; the lowest administrative costs, inventory and purchase price;

reduced cycle of re-order time; strengthening teamwork with suppliers, work

efficiency plus multi-channel operations.

Thong (1999) showed that the positive perceptions of the benefits of

information and communication technology have led to the adoption of

information and communication technology. According to Drew (2003) many

of the managers have rejected the idea that e-trading could be helpful in

their work as they do not have an plan of the possible benefits of e-trade,

while Walc Zuch and others. (2000) found that the big hurdles to the

implementation and use of the Internet is the fears and perceptions that

the Internet would lead to increased efficiency and lower costs of

38

management only. Research found early on e-procurement (minimum and Galle,

2003) and the belief regarding the perceived advantages, risks and costs of

e-procurement tools have a significant impact on the adoption of it. Each

tool includes e-purchases of various risks, investments and costs. Although

the adoption of Business to Business exchanges in the auction market, and

purchasing consortium across present networks requires limited costs,

software and e-procurement consists a greater investment.

H3: Adoption of e-Procurement brings multiple profitable benefits to businesses.

2.4 Employees Willingness to Adopt e-Procurement System

Victorious efforts to e-procurement, a variety of factors must be

considered significant by an organization which consist of: acceptance of

the system by the operators; confidence; utility and risk perception;

training, implementation and process consistency, support for the elderly,

KPI performance monitoring, feedback and revision and selection practice of

e-procurement system.

The user acceptance of new information system has the effect of a very

large and deep public use and the adoption of a successful system (Sochi,

Walter, in 1999. Venkatesh et al, 2003) . It was suggested Ghatani Al and

King (1999) that the use of the system is measured and a significant

improvement in the indicator of the acceptance of the IT. Davis (1993)

39

noted that end-user satisfaction and acceptance is key to success or

failure of IT system. Likewise, Pikkarainen, Pahnila and Karjaluoto (2004)

that the acceptance of users and use of the system determines the

usefulness or feasibility of the system. Knowing the elements that are

acceptance by the user of IT is without any doubt of wellbeing of both

researchers and academics in various sectors, as well as technology buyers

for big firs (Dillon, Morris; 1996).

According to (Bedell, 2002), with the introduction of modern technology in

the workplace, the effectiveness of an e-system for procurement depends on

its implementation and regularly used by professionals. Such as e-systems

of procurement are self-service instrument to which the end-users sometimes

show reluctance to use. Professionals are required to stick to agreement of

purchase of items contracted only 65% of the time, resulting 22% of

businesses fail reductions likely costs of compliance with the terms of the

contract (Aberdeen, 2006). Maintenance requires a broader base of other

functions of the company's suppliers and e-procurement system should

facilitate accessibility to a wide range of firms. Many suppliers in

particular and small firms in general do not possess all the required IT

infrastructure and required capital for adoption of e-systems for

procurement (Singer; 2003).

Mose et al. (2013) noted that the commitment of senior management, the

willingness of employees to use the e-procurement system, the availability

of staff to e-procurement success, performance measurement regular e-

procurement, the observation procurement directives have been adopted by

companies large scale manufacturing in Nairobi, Kenya.

40

Organizations adopt e-procurement because of the countless advantages:

integration benefits tap scan, improve the efficiency of supply, cost

management and disposal of supply errors (Done et al, 2011, the European

Union, 2012 & Reddick, 2004). Efficiency are generated from the adoption of

e-procurement technologies that enable transaction process less error, and

buying more efficient (Singh and Punia, 2009). Many organizations are

looking for new ways to reduce procurement costs generally represent the

largest item of cost of doing business (Vaidya et al 2006. Da Vila et al

2003).

The rate of adoption of e-procurement systems, much less than the initial

expectations (Forrester Research, 2000 & Da Vila et al 2003). In Australia,

for example, is trading only 10 per cent of big companies in Australian

through the form of e-systems (Steen and Haw King 0.2004). At this moment,

there was little evidence of the benefits of e-procurement implementation

from the participation of multiple / stakeholders in the e-procurement

systems present challenges to measure the impact (Subramaniam and Shaw

2002).

H4: e-Procurement and willingness of employees is positively related for successful adoptionof the system.

41

CHAPTER 3

THEORETICAL FRAMEWORKThis chapter provides an overview of the theoretical framework of

importance and adoption of e-procurement and its integration with supply

chain management in the private sector of the country. The framework was

developed to facilitate in the explanation of the key concepts for the

study questions and led to the practical investigation and evaluation of

system performance evaluation.

The theoretical framework was used as a tool to evaluate the chances of

success of e-Procurement and Supply Chain Management Integration: private

sector perspective in Pakistan to a reasonable level of confidence, because

it was also one of the outcomes of study. Thus, in this regard, this

research aims to create a viable evaluative model that paved the way for

the comprehensive study of important concepts, construction and dimensions

of variables for the development of hypotheses. The hypothesis on the

association between the different dimensions of the dependent and

independent variables were established as the theoretical framework has

been developed for the study. Three hypotheses have been developed for the

purpose of this study and were then examined in the experimental phase of

this study. The theoretical framework has been developed, and proposals are

made and from the testable hypothesis were established in this study that

they were all considered mandatory for this study.

The study’s theoretical framework was made after a thorough examination of

the available secondary data on the importance of e-Procurement and Supply

42

Chain Management Integration: private sector perspective. The study’s

theoretical framework consisted of two types of variables, which were

termed as dependent variables and independent variables. The independent

variable was e-Procurement, with its dimensions - need, will, know-how and

the perceived benefits, the dependent variables were important dimensions -

success of e-procurement system, the use of Internet, technology

infrastructure, and strategic value of e-procurement, the adoption of an e-

procurement system and employees of employee satisfaction / dissatisfaction

with the use of e-procurement. The result of the study focused on

organizational performance was not measured as it was considered beyond the

scope of this study. Figure 3.1 shows the connection between all variables

studied in this research effort. The critical review of the literature on

the size of each independent variable and dependent and the arguments of

the study respondents about their perceptions of e-procurement has

identified the contextual framework. The following section discusses the

theoretical framework of the study.

3.1 General Description of the Framework

This study was designed to examine the relationship with reference to the

interdependence of e-procurement and organizational productivity and

profitability and employee satisfaction / dissatisfaction with the use of

e-procurement, in particular in the private sector of Pakistan. The

theoretical framework has helped to develop three hypotheses regarding the

relation among the dependent and independent variables dimensions, which

have been empirically tested in this study. In the importance of the study

of an e-procurement system has been considered as the independent variable.

43

Adopting E-Procurement

Strategic Value

Employees’ Willingness to

adopt e-procurement

Perceived Benefits with E-

Procurement

TechnologicalInfrastructure

, Technology infrastructure, the strategic value of success and adoption by

employees and the satisfaction of the use of e-procurement are the

dependent variables in this study. General description of the theoretical

framework is developed in the next section.

The literature on e-procurement to formulate the theoretical framework was

discussed in Chapter 2. Consequently, the adoption of the organization of

an e-procurement system and employee reactions have been used in this study

to examine the element of its importance in the sector of private sector in

Pakistan. Therefore, the relationship between the dimensions of the

adoption and satisfaction of the organization had been proposed in the next

section to investigation.

INDEPENDENT VARIABLES &DEPENDENT VARIABLE

Figure 3.1: Conceptual Framework

Source: Adapted from Chan and Lee (2003)

44

3.3 Summary

The theoretical framework developed in order to study "the importance of e-

procurement and integration of the management of the supply chain;

prospective private sector in Pakistan: a study of private sector

organizations of Pakistan "has been shown in Figure 3.1.It provides a basic

source of depicting how the need for e-procurement felt, how the system was

adopted by the organizations, what is the perceived value, how the

strategic value can be created by the adoption of e-procurement,

perceptions of e-procurement and employee satisfaction over the adoption of

the system of employees e-procurement in organizations.

The review of previous studies on the importance of e-Procurement and

Supply Chain Management Integration: perspective of the private sector in

Pakistan and theoretical framework has paved the way for the formulation of

hypotheses that were used to guide the search further. The following

chapter highlights the research methodology of the study tested the

hypothesis for this study.

45

CHAPTER 4

RESEARCH METHODOLOGYThe process of research methodology and data collection that must be

followed for the empirical test of the proposed theoretical framework in

the previous chapter is described in this chapter. Methods of accurate and

appropriate research, in addition to the collection of reliable data were

considered essential to the topic under study. This study examined the

importance of e-procurement and its integration with the management of the

supply chain; private sector prospective in Pakistan. A brief review of the

objectives of the research that have already been mentioned in the first

chapter is listed in the following section before discussing the research

design and methodology.

4.1 Overview of Research Objectives

The primary objective of this study was to add to the existing knowledge to

understand well about the e-procurement and its integration of supply

management and its relationship with employee satisfaction with using the

system in the private sector firms of Pakistan. The main objective of the

study was to provide a complete understanding of e-procurement in the

private sector organizations, practice the concept to achieve the strategic

objectives of the organization. In addition, information on the linkages

between thoughts about e-procurement and the satisfaction of its use of the

employee provided. The main objectives of the study were as described in

the next section as follows:

46

1. to study and determine the importance of e-procurement in private

sector organizations particularly.

2. to find out strategic value for organizations on adopting e-

procurement system in private sector organizations.

3. to study and explore the perceived benefits for businesses with e-

procurement adoption in the context of private sector organizations

of Pakistan.

4. to study and explore the reasons for willingness/unwillingness of

employees to adopt e-procurement system.

The research also completed the space by contributing to the existing body

of knowledge that may be of interest to both practitioners and researchers.

After discussing the objectives of the study, the following section

highlights the research design of the study in the reference, and the

causes for the choice of the explanatory way for this study.

To achieve the objectives of this study, the use of a combination of

multiple case study and survey. In the first phase, will be conducted

several detailed case studies with different individuals and managers

involved in the use of e-procurement systems in 10 private-sector firms of

the country (Pakistan) from various industries to assess the impact of e-

procurement and explore what constitutes success in this context, to assess

whether there is success and how / Why were obtained systems. The proposed

framework research (Figure 3.1) directing this stage. From the knowledge

gained from case studies, and measures of success will be determined from

e-procurement tool will be developed to objectively measure of success.

A preliminary survey on the adoption of e-procurement, use and perceived

47

impact was undertaken in the twin cities of Islamabad and Rawalpindi,

Pakistan. Ten face to face discussions / interviews with IT managers,

business managers and procurement analysts were conducted. In addition,

the representative of e-procurement provider who participated in helping

the establishment of an e-procurement solution in the cities was also

consulted. Transcripts of interviews are under analysis. However,

preliminary analysis of data collected from documentary sources in addition

to interviews show that the adoption of e-procurement is mainly due to

efficiency gains by reducing transaction costs and the elimination of

practices individualistic buy. There is evidence that employees initially

resisted using the system now appreciate the value of the system. However,

it did not affect the relationship with suppliers, and the introduction of

e-procurement system. It is necessary to collect additional data and

analysis to better understand the impact of e-procurement system, and the

relationship between organizations and their suppliers and determine the

degree of employee satisfaction with e-procurement systems. And will also

conduct further case studies to further explore the experience of the

adoption of the various organizations Pakistanis e-procurement through

measures of success can be determined.

All organizations interviewed for this study used the Internet in various

forms since it was considered beneficial by organizations they need some

form of system based on which organizations can gather and share

information and approach websites their business interests. Organizations

are ten different industries and had significantly different tasks and work

processes. Because of their diverse industry, these organizations have also

used different classifications of e-system which provided a significant

depth to the study.

48

4.2 Overview of the Research Design

Saunders, Lewis and Thornhill (2009) noted that research is "Something that

people undertake to find things in a systematic manner, which increases

their knowledge."

The research plan is considered a detail procedure to search. According to

Rubin (1989), the research design is defined as: "A strategy that the

theory can be tested at least indirectly."

In line with the definitions of design research, there were several aspects

that should be covered in this study. These include management theory,

level of analysis, the focus of the theory, the range of theory, the unit

of analysis, the period of the study, the sampling unit, the purpose of the

research and the method of data collection, etc. the following section

discusses the essential elements that constitute the research plan of this

study. This study aimed to investigate the importance of e-procurement and

its integration with the management of the supply chain; Prospective SMEs

in Pakistan.

Factor analyzes were conducted for the purpose of this study to determine

whether the items in each dimension variables are components of a common

construct. For this purpose, a method of factor analysis of the main

components was used. Measures "mean" and "standard deviation" were used to

identify the importance of e-procurement and its integration with the

management of the supply chain; Prospective SMEs in Pakistan.

49

The research questions also include the inquiry of the relationship between

e-procurement and SCM in relation to the private sector. After verifying

the wholeness and correctness of data, it was put in Excel, coded,

tabulated and analyzed using a SPSS (Statistical Package for Social

Science) for analysis to investigate importance of e-procurement and its

integration with the management of the supply chain; Prospective SMEs in

Pakistan.

4.3 Research Methodology

Through developing a research methodology systematically solution of a

given problem is found. It not only depends on the methodology of the

research but also due consideration is given to the research context and

the logical aspects of the methods devised for the research. It is also

justified that why no use of other techniques which can assess the results

either by the researcher himself or others was made.

In general, research has been classified into two categories with regard to

the collection of quantitative and qualitative data say. In the type of

quantitative research, the data are in the form of numbers. On the other

hand, data collection qualitative research takes the form of words or

images. These two research approaches employ many research techniques such

as inquiry and maintenance etc. (Neuman, 2006). The following paragraphs

provide a summary of the research methods used by researchers studying

aspects related to the importance of e-procurement.

And inspired by the research methodology used in previous studies on e-

procurement and supply management integration of the chain as described

above, data were collected in the form of numbers; The study therefore fell

50

under the domain of quantitative research. Corresponding to the

quantitative aspect of the study, the survey method was adopted and a

questionnaire was used for this study. Groves et al. (1996) also supports

the approach adopted by arguing that "surveys produce information that is

inherently statistical in nature."

It was also noted that the functions related to "design, measurement and

sampling" looked at researchers in the field of quantitative research as

deductive approach forces on the heavy planning before collection and

analysis (Neuman, 2006) data.

The issue of research in the advanced study of basic knowledge on the world

of business by focusing on the support of existing theories related to e-

procurement.

In the world, the Internet is used in almost all organisms and everyone had

the usefulness of the Internet in a certain context. The question under

discussion in the study had little attention on a specific problem. She

added value to existing knowledge, advancement of general knowledge in the

specific discipline of importance of e-procurement and to provide

information for practitioners and researchers. The study provided the

foundations for knowledge. Therefore, basic research also called pure

research was undertaken with the academic and scientific community as a

primary audience.

4.4 Population

Population is the professional private sector organizations such as food,

paper products, chemicals, petroleum, rubber, transportation equipment,

51

metal products, hardware, textiles and electrical equipment throughout

Pakistan.

4.4.1 Sampling Plan

4.4.1.1 Sampling units

A list of potential participants from 100 professionals in ten

different standard industrial codes was selected in the twin cities of

Rawalpindi and Islamabad. The industries are: petroleum, paper

products, hardware, rubber, transportation equipment, textiles,

chemicals, fabricated metal products, food products and electrical

equipment. One hundred surveys were presented to professionals and

property management Purchasing / Procurement. Participants were

informed of the objectives of the research. Completed questionnaires

were collected by the survey participants, after four days in an

attempt to increase the response rate.

4.4.1.2 Sample size

Due to time constraint it was planned to take the sample of 100 people

for the study.

4.4.1.3 Sampling Technique

Procedure was used for the sampling of the research is convenience

sampling is probabilistic. Under this way, the sample is chosen based

on the access of the population and the accessibility of samples.

However, it is guaranteed to consist of a sample of reasoned judgment

to obtain the professional information having practical knowledge of

the subject, and can effectively respond to the survey questions.

52

4.4.1.4 Measures and Instruments

The instrument used in this research consists of survey questions.

Survey questions will be provided on the basis of the company /

organization say the unit of analysis is undertaken. This way of

research leads to knowledge of the point of sample to topic of the

thesis.

4.4.1.5 Data collection

In this research, data were gathered by primary and secondary research

methods. Secondary and Primary data are beneficial in the present

study. Primary data were collected through questionnaires. Secondary

data were collected before the primary research. Articles on the

importance of e-procurement and supply chain integration were uploaded

by open source and studied. The coming step was to identify variable by

studying different articles written by various writers. Out of these

the theoretical framework has been developed. Based on the theoretical

framework developed in terms of the questionnaire was designed.

53

CHAPTER 5

CRITICAL ANALYSIS OF COLLECTED DATAThe study focused on measuring the adoption and the importance of e-

procurement and its integration with the management of the supply chain;

prospective private sector of Pakistan. This chapter of the study provided

empirical examination of independent variables (technological

infrastructure, strategic value, the perceived benefits with E-Procurement,

employees will adopt e-Procurement system) and the dependent variable

(adoption of e-Procurement). This chapter also tested the hypothesis

related to the independent variables. The first part of the chapter

presented the results for the respondents and the remainder presented

results related to the objectives of the study, including hypothesis

testing.

In the study of the unit of analysis was the private sector companies /

organizations selected (10 professionals, managers, business owners who had

known each / e-Procurement process suffered). Organizations selected

private sector were contacted by the researcher to determine whether these

organizations have the infrastructure for e-system, are they believe that

e-procurement is of strategic importance for their organization, they get

perceived benefits with e-procurement systems, and the behavior of such

employees their willingness / refusal to adopt e-procurement. The majority

of organizations were approached by the use of personal contacts to

participate in the investigation, provided that their identity not be

disclosed to the study. After their will, the researcher assigned to the

point in the contact organizations. The contact person was informed in

54

detail on the objectives of the study, a questionnaire and method of

promotion. The representative of the organization has contributed to the

circulation, production and collection of the questionnaire respondents in

their respective organizations.

The study data were collected from organizations of food, paper products,

chemicals, petroleum, rubber, transportation equipment, metal products,

hardware, textiles and equipment electrical. The initial difficulties of

the scene were confronted reach the point in contact organizations that

organizations were reluctant to host the researcher for study.

Organizations have also been found reluctant to allow access to their

procedures and evaluation systems.

A total of 100 questionnaires were distributed to purchasing / procurement

professionals, managers of the supply chain and owners of private sector

organizations located in Rawalpindi and Islamabad for the size of the

sample 100. The questionnaires were distributed at random by the contact

person for purchasing managers, supply chain managers and owners. The

contact person in each organization has also provided five additional

copies of questionnaires to compensate questionnaires returned incomplete

or not. Of the 100 questionnaires, 100 fully completed questionnaires were

received back by the researcher who makes the 100% rate of response.

5.1 The Demographic Profile

Out of the 100 respondents, 85% (n=85) were male and the remaining 15 %

(n=15) of the respondents were female. With regard to the age of the

participants of the study, the biggest group (n= 31, 31% ) was in the 46-50

years age group. The second biggest group (n= 23, 23%) was in the age

55

group of 41-45 years. The third biggest group (n= 22, 22%) fell in the 51-

55 years age group. The fourth biggest group (n=20, 20%) fell in the 36-40

years age group and a negligible proportion (n= 4, 4%) indicated age within

the 31 – 35 years i.e the youngest age group (Appendix II).

5.2 Analysis & FindingsAll information received through questionnaires were put into SPSS

(Statistical Product and Service Solutions) for examination. A detailed

response from all participants is attached in tabular form. The descriptive

analysis was performed for each question and the responses were analyzed in

depth. Descriptive statistics show that all respondents were aware of the

thesis.

5.2 Factor Analysis

The factor analysis procedure was used to summarize the results from the

answers. The factor analysis procedure was used primarily to determine

whether the elements of each dimension of the dependent and independent

variables are elements of a common construction. For this purpose, a method

of factor analysis of the main components was used. This procedure has

mainly allowed researchers to determine if the items manufactured

saturation factors representative that they could be considered part of a

single building. Factor analysis of the dimensions of independent and

dependent variables are discussed below.

5.2.1 Technological Infrastructure for Adopting E-Procurement

56

Five constructs were used to represent the independent "technology

infrastructure" variable. The results of findings on the variable are

as follows:

5.2.1.1 Standard Deviation

This variable carried 0.6 as its standard deviation which shows

that the data collected is reliable and if collection is repeated

similar results will be generated.

5.2.1.2 Correlation

The correlation of this variable with the dependent variable is

0.870. It is positive relationship which means if one increase

there is a probability of around 87% that the dependent variable

will change.

5.2.1.3 Regression

The regression of this variable is 0.757 which is a very

significant value. This means that the dependency of the

dependent variable on the independent variable is around 75% and

if a change occur in independent variable it will also change the

ratio of dependent variable the probability of is 75%.

5.2.2 Strategic Value with E-Procurement

Five constructs were used to represent the Independent Variable

“Strategic Value”. The results of findings pertaining to the variable

are as under:

5.2.2.1 Standard Deviation

57

The standard deviation of this variable is 0.5 which proves that

the data collected is unreliable and if collection is repeated

similar results will be generated.

5.2.2.2 Correlation

The correlation of this variable with the dependent variable is

0.833. It is positive relationship which means if one increase

there is a probability of around 83% that the dependent variable

will change.

5.2.2.3 Regression

The regression of this variable is 0.694 which is a significant

value. This means that the dependency of the dependent variable

on the independent variable is around 70% and if a change occurs

in independent variable, it will also bring a change in the other

variable e.g. dependent variable and the probability of the same

is 80%.

5.2.3 Perceived Benefits with E-Procurement

Five constructs were used to represent the Independent Variable

“Technological Infrastructure”. The results of findings pertaining to

the variable are as under:

5.2.3.1 Standard Deviation

The standard deviation of this variable is 0.4. This means that

the data collected is reliable and if collection is repeated

similar results will be generated.

5.2.3.2 Correlation

58

The correlation of this variable with the dependent variable is

0.895. It is positive relationship which means if one increase

there is a probability of around 89% that the dependent variable

will change.

5.2.3.3 Regression

The regression of this variable is 0.801 which is a very

significant value. This means that the dependency of the

dependent variable on the independent variable is around 80% and

a change in the independent variable will bring a change in the

dependent variable and the probability of the same is 80%.

5.2.4 Employees’ Willingness to Adopt E-Procurement

Five constructs were used to represent the Independent Variable

“Technological Infrastructure”. The results of findings pertaining to

the variable are as under:

5.2.4.1 Standard Deviation

The standard deviation of this variable is 0.6. This means that

the data collected is unreliable and if collection is repeated

similar results will not be generated.

5.2.4.2 Correlation

The correlation of this variable with the dependent variable is

0.751. It is positive relationship which means if one increase

there is a probability of around 75% that the dependent variable

will change.

5.2.4.3 Regression

59

The regression of this variable is 0.564 which is moderate value.

This means that the dependency of the dependent variable on the

independent variable is around 56% and a change in the

independent variable will bring a change in the dependent

variable and the probability of the same is 56%.

Below table of SPSS data analysis show composite statistics of the

hypothesis tested through collection of data from the survey

participants:

TechnologicalInfrastructure

(H1)

Standard Deviation

.619

Correlation .870Regression .757

Strategic Value Creation(H2)

Standard Deviation

.553

Correlation .833Regression .694

Perceived Benefits(H3)

Standard Deviation

.481

Correlation .895Regression .801

Employees Willingness forAdopting

(H4)

Standard Deviation

.600

Correlation .751Regression .564

Figure 5.1: SPSS Data Analysis Table

5.3 Summary

60

The data of the survey proved that all of the companies that responded to

the use of e-procurement applications for one reason or another.

Oppositely, firms visited suppliers’ website to explore their strengths for

e-procurement. The data reflect the fact that the commitments of the sample

used, and practical applications, and one on the basis of e-procurement to

a greater extent than ever before to integrate e-procurement applications.

This result is reliable with preceding research with European companies

(Frohlich and Westbrook, 2002, Cagliano et al. 2003). Specifically,

according to the participants in this study using existing technologies on

the Internet to search for suppliers cheap, and visit the sites of

suppliers and access online lists of goods and issue purchase orders on the

sites of suppliers to a greater extent than they have done for the

development of an integrated plan of the supply chain and production

schedule, and cooperation with suppliers on issues of product design, or to

reach a cross-functional harmonization.

The main advantages attached with e-procurement to lower costs on

administrative and purchase processes. Although the reduction of the costs

is significant, however existed studies indicated that the use of

integration of e-procurement tools not only has the possible to increase

profitability and reduce costs, but also to enhance flexibility in

operations and add positively to the design of high quality products

(Folinas et al. 2004). It is likely that the final results will establish

more durable and most powerful with respect to the acts of the overall

supply chain than mere cost savings for the company to purchase only.

It is likely that applications use a sole process on the basis of e-

procurement is more common in the overall example using integration

61

applications, because the first works without difficulty, require little

investment with regard to finance and high risk. Visit the websites of

suppliers and get online index, and put orders on the web-sites of

suppliers and sources of low-cost tools just plain can be used to create

companies with e-procurement. Instead, the integration between or within

society are more complex and carries risks. For example, companies seeking

to work together with firms on design matters that a many risks and

challenges, including vagueness about the abilities of providers, and

distribution of personal information, and matters neighboring scholarly

property. Coordination between functional and can be difficult, because it

needs that people from different departments within a sole company, with

different points of view, to work towards a common goal. Finally, the

development of composite supply chain is the most difficult because it

engages many companies. Featuring a complete integrated information sharing

and confidence levels (Folinaset al.2004), which is not easy to achieve in

many cases, especially when it came to many suppliers supply chain and

multiple and senior clients. Things to complex above integration, even when

performed through traditional ways, when one consider the use of IT to

complete these functions, companies face more challenges that can result

hesitation.

These new difficulties in employee training, causing costs to adopt e-

procurement tools, the consent of business associates to put investment in

security and technology issues concerning to EDT (electronic data

transfer).

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CHAPTER 6

CONCLUSIONThe research study examined the importance of e-procurement and its

integration with the management of the supply chain; Prospective private

sector of Pakistan. This chapter of the study provided a summary of the

objectives of the study, the hypothesis established there and the main

findings of the study. He also emphasized the evaluation of the involvement

and the importance of this research. Challenges and limitations that were

encountered were also discussed subsequently. The final recommendations

offered a futuristic perspective for the study.

The initial portion of the research examined the theoretical ideas related

to the need to move from the traditional practice of e-procurement, the

significance of e-procurement adoption by employees, satisfaction /

dissatisfaction employees, strategic value to the organization of the

private sector in detail. The research results offer realistic implications

for multiple stakeholders. Mediator organizations (such as e-market) level

can support use of e-procurement in Small and Medium Enterprises by showing

them the advantages of adopting e-purchasing and implementation of measures

to strengthen confidence in the application of technology (e-market

increasingly). Providers can enhance the confidence of its customers, for

example, to instantly respond to the request of customers and provide

technical support to support them to transfer to e-chain. The government

facilitates through many supportive ways to meet the needs of SMEs, such as

the adoption of regulations and laws of e-commerce, education problems of

63

SMEs in the implementation of electronic-commerce by facilitation in terms

of tariff and completeness of IT and communications tools and equipment.

In addition to the practical implications and conclusions of the theory are

also implications for future research. It is based on trust that it plays a

role in shaping the behavior of the adoption of e-purchases. Factors of

the technology can be integrated in the relationship between buyer and

seller. This result stresses upon that over and above technical

specifications, one should address the social aspect of the mode (e-

procurement) when studying the adoption of the model or the deployment of

modern and new ideas. Surveyors must pay special attention to this element

if the use of the new idea in question has more than one stakeholder (the

buyer and seller in the case of the adoption of e-procurement).

Simplification of the phenomenon could be raking must be a shade of

research discovered. We can say that this should be a good parsimonious

theory. It is significant but hard to achieve equilibrium between the two.

To conclude, we need to consider the adoption of innovation into account

not only the type of the novelty, but also a integration of stakeholders.

This led to the study’s objectives formulation, questions, and theoretical

framework. The primary study objectives theme is discussed in the next

section.

6.1 Study Objectives

There are a number of studies have discussed the benefits of the Internet,

the relationship between Business to Business and B2C e-trade, e-

procurement, the integration of the supply chain and e-procurement adoption

by the private sector. However, very limited studies have investigated the

64

importance of the implementation of e-procurement and its integration with

the management of the supply chain of the private sector in particular

prospective Pakistan. Therefore, this study aimed to determine the same.

Objectives mentioned in the following paragraphs guided study regarding the

e-procurement implementation in the private sector organizations in

Pakistan.

The first objective of the study was to determine the importance of the

technological infrastructure for the implementation of e-procurement in the

private sector organizations. The second objective of the study was whether

the e-procurement is any strategic value to the business organizations of

Pakistan. The third aim of the research was to establish the perceived

benefits with e-procurement in the corporate organizations of the country.

The fourth and final goal of the study was to investigate and explore the

behaviour (willingness / unwillingness) of employees to adopt e-procurement

in the private sector of Pakistan. The objectives of the study were the

basis for the development of the hypothesis described in the next section.

6.2 Study Hypotheses

Based on the available documentation on the technological infrastructure

necessary for e-procurement, strategic value for businesses, the perceived

benefits with e-procurement and the willingness of employees to implement

and made the e-procurement system a success; the objectives of the study

led to the formulation of hypotheses listed in the following paragraph.

The first hypothesis showed that the implementation of e-Purchases is

highly dependent on the technological infrastructure. The second hypothesis

derived from the study assumes that the acquisition of the strategic value

65

of e-Procurement is not positively related organizations in the private

sector. The third hypothesis stated that the implementation of e-Purchases

provides multiple benefits for profitable businesses. The fourth hypothesis

of the study stated that e-Procurement and the willingness of employees are

not positively correlated with the successful adoption of the system.

6.3 Key Findings

The study aimed to contribute to the awareness of technological

development, its advantages and creation / implementation of a system of e-

procurement by business entities of Pakistan. In this aspect, the study

focused only on the type of technological infrastructure is necessary for

E-Systems, how the strategic value can be created by the implementation of

the system of e-procurement, what are the perceived benefits and

effectively made with e-procurement and what is the behavior / response of

employees regarding the implementation of an e-procurement system in the

private sector organizations of Pakistan. Four hypotheses have been

developed to identify the linkage between the independent and dependent

variables of the research. The methodology used in the research was the

investigation. The existing literature on the Internet, e-procurement, e-

commerce and business organizations switching system for the award of

traditional markets electronic procurement system gave broad support for

the use of this method.

6.4 Implications

66

The private sector organizations in Pakistan need best practices to improve

organizational productivity and profitability. The empirical results of

this study should help organizations in the private sector of Pakistan;

identify strategies for unbeaten adoption of e-procurements and gaps in

their existing procurement practices. It can also help policymakers make

decisions for the organization of markets more defined and well informed.

In addition, changes in the practices of the organization of supply can

lead to a considerable improvement in the efficiency or performance of

organizations and employees jobs working e-procurement.

Conducting a study on the willingness of employees to move from traditional

procurement practices of e-procurement system and their perceptions of the

advantages of e-procurement created awareness of the potential benefits of

the system for employees allowing them to make calculated decisions and

competent in the relevant context. On the other hand, it would help members

of the organization to evaluate and improve their performance in order to

plan a soft transition and from traditional to electronic channels.

The research effort is practically beneficial to organizations who believe

in dynamism and hard to get rid of a procurement system stereotypical

markets. By understanding the attributes of successful e-procurement;

organizations can learn the attributes of successful e-procurement through

training. In addition to the above consequences for the study of the

significance of this study is discussed in the next section.

Previously, the importance and effectiveness of e-procurement were

evaluated using traditional approaches to survey its individual aspects.

67

This study examined the effectiveness of the whole process of adoption of

e-procurement.

6.5 Significance/Justification of ResearchThe research on the adoption of e-system and related issues in the

potential private sector in Pakistan adds to the body of knowledge because

the study in question has been studied in a limited way in the previous

literature. In addition, there are few studies on the subject the business

context of Pakistan. Therefore, the research makes significant theoretical

addition to the existing body of knowledge available on this subject.

E-Procurement is one of the most important and most commonly used practices

in the supply chain. However, there was a concern that, despite its

importance, and the extensive use of high spending by organizations,

dissatisfaction with the system is a commonly observed phenomenon. Due to

which, employees see their efforts on e-system vain effort. A few studies

have been conducted on the use of electronic technology in the context of

Pakistan. This study expanded the relevant documentation relating to the

adoption of e-procurement, its importance for businesses and employee

behavior and the perception of its usefulness in the context of Pakistan.

Thus, this study has contributed significantly to the existing literature

on the subject.

Another reason for the study is that individual variables related to e-

procurement have been studied, but the e-procurement and SCM as a global

system has never been discussed. This report explores the e-procurement and

SMC as a whole and providing a valuable theoretical contribution to the

existing literature.

68

Significance of the research is proven from the fact that all existing

research was held in technologically developed countries and as such the

results of these studies cannot be implemented in Pakistan in true letter

and spirit due to differences in the criteria of economic, cultural and

social development. This study was conducted in the social, cultural and

economic condition of Pakistan, which is differs from western countries,

providing the theoretical addition of the available research on this topic.

In addition, the established reason to conduct this examination about the

corporate sector of Pakistan is that the sector carries enhanced importance

in the manufacturing and services fields in the world and adds to the work,

and tax revenues, and economic power and progress of the market economy and

adopted Pakistan as the business sector as the main product of services and

goods since its inception. Therefore, it was seen to conduct the study in

the private sector as a viable option. And this study will help to improve

the implementation of policies and performance of organizations in the

private sector of Pakistan to e-procurement. Thus, private sector

organizations of Pakistan greatly benefit assessment study procurement

practices based on the findings of the study, and thus make adjustments in

the areas concerned.

6.6 Limitations

The effort made by the researcher on the adoption of e-procurement and

related issues has some limitations. To draw correct conclusions and make

generalizations based on the results of the study; it is considered

important that these limitations and gaps must be exposed. Therefore, the

limitations of the study are explained in the next section.

69

Information on e-procurement in private companies was not public domain.

In addition, the employees’ busy time table did not allow researchers to

interact with each and every employee for the purposes of theresearch.

Therefore, the appeal was only on information that has been received by the

survey.

The study was limited to investigating importance and adoption of e-

procurement and its integration with the management of the supply chain in

the private sector prospective of Pakistan by the study; evaluation systems

procurement and how the computer has been used in organizations was beyond

the scope of the study. Furthermore, the result was not measured as it was

also not included in the scope of the study.

The timing of the study was also one of the important questions.

Longitudinal study could produce optimal results because it would have

involved a complete survey of e-procurement in the private sector

organizations over a period of time. However, the time limitations and

resources prohibit the consideration of this approach.

The theoretical foundations of e-procurement and the supply chain

management in private sector organizations have long been recognized.

However, the practical adoption of e-procurement in all private sector

organizations is even now at an immature stage in the world. The phenomenon

of e-procurement in the private sector of Pakistan and its strategic value

has not been previously studied in Pakistan, making it difficult for

researchers to obtain data relating to the research question.

70

Another limitation faced by the researcher was on access to private sector

organizations. It should be noted that the majority of private sector

organizations were not comfortable to allow access to a stranger at their

workplace. Employees of the organizations surveyed were also reluctant to

speak openly about the policies and procedures relating to electronic

procurement markets or in their organizations. In addition, respondents

were found pressurized due to heavy workload which did not allow them to

freely express their opinion on the evaluators. It was a very important

aspect that limits the disclosure of information relating to the practices

of e-procurement system in private sector organizations, and has been a

challenge for researchers.

Due to geographical research was limited to employees of private sector

organizations in Islamabad and Rawalpindi area. In addition, selection,

private sector organizations was based on the use of information technology

and e-procurement in the data collection. Further research on the subject

in industries across Pakistan can present interesting findings on the

effectiveness of e-business practices in private sector organizations of

Pakistan.

In addition to the foregoing words, only organizations offering services to

the private sector of Pakistan have been the subject of study. The

manufacturing industries in the private sector of Pakistan are not

considered for the study. The sample, therefore, should not be considered

representative of the private manufacturing sector of Pakistan. Research

effort in manufacturing can provide different results, therefore, this area

is considered ripe for research on the subject.

71

The high percentage of males in the study could be another limitation of

this study. This study sample cannot be considered representative of women

employees working in private sector organizations of Pakistan. Given the

limitations and gaps above for the present study, following section deals

with suggestions for future research.

6.7 Further Research

Technology is advancing day by day and with it we see a radical change in

productivity generated by IT. Mobile technology has improved access to

information, delivery and sharing of these two strategies, goals,

objectives and future plans and personal business. The advancement of IT

has transformed the market and has not only buyer and seller, but also

business partners and customers.

Your search is limited due to the fact that nothing has been done to study

the affiliation among the use of different types of e-procurement tools and

operating results. Further research may investigate the linkage between e-

procurement integration and business results, such as enhanced

communication, and operational quickness, and improve the design of the

product / service, and global supply chain performance. In addition, it

can be regarded as results of this study on the use of e-procurement by

evaluating the commercial motives for the adoption of specific applications

of e-procurement on the other hand. In other words, why do companies

implement different e-system tools? In addition, no effort is made to

analyse whether the companies that presently use e-procurement tool basic,

simple operation has plans to improve the electronic systems and the

adoption of more integration tools of e-procurement in the future. Finally,

72

and this is based on a prospective study on speculation about the company's

impact on the use of e-system sector. And can be considered as the role of

the business sector by offering more of the survey professionals to what

extent the elements of the industry, such as competitiveness, and the need

for competence, and the use of the global impact of technology acceptance,

e-procurement.

Both faculties of practitioners and academicians show great interest in the

value given to companies adopting Internet-based technologies to improve

the performance of the supply chain. In addition, good researches on the

key role of networks inter and intra company in the effective SCM exists.

Yet, the study of the use of Internet-ITs to achieve the networking of the

supply chain has been mainly restricted to the boundaries of western firms.

In addition, literatures have led to e-business for the types of systems

based on the theoretical basis or on the results of the case studies.

Although this exploratory study, it provides empirical data initial value

to support the idea that the tools of e-procurement can be classified

according to their ability to facilitate the integration of the SCM and

adds to the literature by investigating the real practices of the

companies’ e-procurement across a variety of industries.

6.8 Recommendations

Keeping in view the benefits and usages of easy and accessible internet,

using IT system, digital data processing, cutting down the costs, getting

competitive edge, increasing productivity and profitability, the firms

(whether SMEs or large companies) should adopt the new trends in the field

of procurement. Few recommendations are offered below:

73

Maximum use of internet is to be done to remain abreast with new

developments in the corporate world.

Modernized ways of interacting with contemporary industry,

suppliers and customers may be adopted to the reduce the lead time,

know the strength of other firms, reach to distant suppliers in

short time, get feedback of the end customers and remain in link

with distribution channels.

E-Procurement may be fully adopted to meet the challenges of

cutting costs and increase profitability.

The entire necessary infrastructure may be made available which is

necessary for switching from traditional way of procurement to e-

procurement.

Employees be educated and motivated to adopt e-procurement in

letter and spirit to get full advantage of the IT arena for their

business entity.

E-Procurement may be fully integrated with other supply chain

systems to make it integral part of it and get full advantage out

of it.

6.9 Summary

The current difficult economic conditions have forced organizations to

focus on the adoption of new ways to reduce costs and add to their skills,

productivity and profitability. Thus the transition from conventional means

of procurement for e-procurement systems in general and the integration of

e-procurement with the management of the supply chain, in particular

remains a practical resource the most important and the activities of the

organization. While investigating the importance and adoption of e-

74

procurement and its related factors in the private sector of Pakistan; he

recognized and established that to make an effective tool for increasing

business efficiency and reduce the costs of e-procurement system, it is

important that employees must accept the profitable process for both

organization and employees. Better employee perceptions about the adoption

of e-procurement, higher would be the level of employee satisfaction in the

procurement process and the use of computer platforms, which ultimately

lead to improved productivity and profitability and employee capabilities.

This study has contributed new perspectives on the assessment of the

importance and adoption of e-procurement for business. Only private sector

organizations in the Twin Cities "Rawalpindi and Islamabad" Pakistan have

been the subject of this study. This can restrict the capability to take a

broad view of the results of research. Being the capital of the country and

close to the capital, both the cities of Islamabad and Rawalpindi fall

under the aegis of expensive cities across the country, thus these elements

throw an impact on individual perceptual filters that affect on the

implementation of e- system or the use of computer platforms. Thus, further

studies in the future covering the subject employee perception on the

adoption of e-procurement in their employers' organizations can consider

expanding the respondents from the other parts of the country.

75

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AppendixI – Employees Questionnaire

Questionnaire

I am an MBA student at Bahria University Islamabad and conducting a researchstudy on “Importance & Adoption of e-Procurement and its Integration with SupplyChain management (SCM); Private Sector prospective in Pakistan” I have designedthis questionnaire to collect data from Purchase/Procurement professional, SupplyChain Managers and owners working in different sectors. The information you areproviding will be treated as highly confidential. Please accept my gratitude inadvance for your anticipation and honest feedback. Your individual responses willbe kept confidential. Your participation is highly regarded and appreciated.

Hashmat AliMBA 5-DDepartment of Management SciencesBahria University Islamabad Cell No. 0306-5441148.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-

Section-I: Demographic section

1. What is your age bracket (years)?26-30 31-35 36-40 41-45 46-50 51-55 56-60

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2. What is your level of Education?Intermediate Bachelor Master MS/M. Phil PhD

3. What is your Profession?Govt. Service Private Service Own business Partner of business

4. Do you have computer?Yes No

5. Do you have access to computer?Yes No

6. Do you use internet?Yes No

7. How often do you use internet?Daily Weekly twice weekly Fortnightly

Monthly

8. What is your Job status?

Owner Supply Chain Manager Purchase Manager Non-managerial

Section II: Please indicate the extent of your agreement with the following statement on a 5-point scale.(Please circle your answer)

1 2 3 4 5▼ ▼ ▼ ▼ ▼

StronglyDisagree Disagree Neutral Agree Strongly Agree

TI-1 Do you agree your organization has sufficient ITinfrastructure to remain innovative?

1 2 3 4 5

TI-2 Compared to rivals within our industry, ourorganization has the foremost in available ITsystems and connections (e.g., ADSL, VDSL, ATM,SDV)?

1 2 3 4 5

TI-3 Flexible electronic links exist between ourorganizationand external entities (e.g., vendor,customers).

1 2 3 4 5

TI-4 Our organization utilizes open systemsnetworkmechanisms to boost connectivity(e.g.,

1 2 3 4 5

87

ATM, FDDI) .TI-5 New locations or acquisitions are quickly

assimilatedinto our IT infrastructure1 2 3 4 5

TI-6 Technology is used to make the process ofordering and paying for goods easy andefficient.

1 2 3 4 6

TI-7 There are very few identifiable communicationsbottlenecks within our organization.

1 2 3 4 6

SV-1 E-system assists us more in developing our core competencies.

1 2 3 4 5

SV-2 E-procurement helps us more to improve ourstrategic position in themarket.

1 2 3 4 5

SV-3 E-procurement assists us more in increasing our competitive advantages.

1 2 3 4 5

SV-4 E-System assists us more in increasing our speedto market.

1 2 3 4 5

SV-5 E-procurement systems allow more efficientintegration of supply chains and provide betterorganization and tracking of transaction recordsfor easier data acquisition.

1 2 3 4 5

SV-6 E-system adoption ensures the focus shifts froma cost savings mode to a growth focused mode.

1 2 3 4 5

SV-7 Do you agree that e-Procurement functionsupports the overall objectives of theorganization?

1 2 3 4 5

SV-8 1. Due e-procurement adoption difficulty ofmaintaining innovative approaches to costreduction reduces.

1 2 3 4 5

SV-9 1. Going online result in raising the awareness andprofile of the Procurement organization.

1 2 3 4 5

SV-101. One of the benefits of e-procurement is bringingthe value-add Procurement to the business.

1 2 3 4 5

PB-1 1. Adopting e-system keep us aware of keyinitiatives early enough to get involved in theprocess.

1 2 3 4 5

PB-2 2. E-system continues to align the Procurementstrategy with the overall corporate strategy.

1 2 3 4 5

PB-3 Due e-systems adoption we can exploit suppliercapabilities to enhance product/process/serviceinnovation.

1 2 3 4 5

PB-4 6. By adopting e-Procurement system we can measureour performance in financial terms to showbottom line savings and top line growth.

1 2 3 4 5

PB-5 Due to faster exchanges of information and 1 2 3 4 5

88

delivery of goods and services, e-procurementalso promotes shorter product-developmentcycles.

PB-6 The costs of buying or selling as well asbarriers to market entry have significantly beenlowered as operation costs are reduced.

1 2 3 4 5

PB-7 Businesses can easily use preferred suppliernetworks, and there is better balance of powerbetween buyer and seller given that informationis much more available.

1 2 3 4 5

PB-8 Transactions can be standardized and all bidsfor products and services can be tracked moreeasily, allowing business owners to use suchknowledge to obtain better pricing.

1 2 3 4 5

EW-1 Our procurement personnel are knowledgeableabout the keysuccess factors that must go rightif ourorganization is to succeed.

1 2 3 4 5

EW-2 Our procurement personnel are encouraged to learn newtechnologies.

1 2 3 4 5

EW-3 Our IT personnel closely follow the trends in currenttechnologies.

1 2 3 4 5

EW-4 The strategies of the Procurement Department andour organization’sstrategies are well aligned.

1 2 3 4 5

EW-5 Our procurement personnel understand ourorganization’spolices and plans.

1 2 3 4 5

EW-6 Our procurement personnel are willing to adoptinnovative ways of procurement (e-procurement).

1 2 3 4 5

EW-7 Our procurement personnel are encouraged tolearn about new online business functions.

1 2 3 4 5

EW-8 Our procurement personnel are able to interpret businessproblems and develop appropriate technicalsolution.

1 2 3 4 5

EW-6 Our procurementare cross-trained to supportotherIT services outside their primary knowledgedomain(e.g., programmers trained to supporttelecommunications).

1 2 3 4 5

EW-7 The knowledge management capacity of e-procurement (capturing data, producing reports, etc.) gives procurement personnel greater strategic influence on business direction.

1 2 3 4 5

EP1 I fully know and understand the term “e-procurement”?

1 2 3 4 5

EP2 Are you convinced that e-procurement is 1 2 3 4 5

89

important; it cuts the costs and add to theprofitability of organizations?

EP3 Are you convinced that both professionalism andmotivation are equally important for adopting e-procurement?

1 2 3 4 5

EP4 E-Procurement can add to the profitability of SMEs and can create strategic value for them.

1 2 3 4 5

EP5 An employee with average academic record but having excellent IT skills can perform better ine-procurement.

1 2 3 4 5

90

Appendix – II – SPSS Data Sheet

Perceived Benefits with e-Procurement

Descriptive StatisticsMean Std.

DeviationN

EPavg 4.25 .435 100PBavg 4.24 .481 100

CorrelationsEPavg PBavg

Pearson Correlation

EPavg 1.000 .895PBavg .895 1.000

Sig. (1-tailed)EPavg . .000PBavg .000 .

NEPavg 100 100PBavg 100 100

Model Summaryb

Model R R Square Adjusted RSquare

Std. Error ofthe Estimate

Change StatisticsR SquareChange

F Change df1 df2

1 .895a .801 .799 .195 .801 393.361 1 98a. Predictors: (Constant), PBavgb. Dependent Variable: EPavg

91

92

93

Technological Infrastructure for Adopting e-Procurement

Descriptive StatisticsMean Std.

DeviationN

EPavg 4.25 .435 100TIavg 4.06 .619 100

CorrelationsEPavg TIavg

Pearson Correlation

EPavg 1.000 .870TIavg .870 1.000

Sig. (1-tailed)EPavg . .000TIavg .000 .

NEPavg 100 100TIavg 100 100

Model Summaryb

Model R R Square Adjusted RSquare

Std. Error ofthe Estimate

Change StatisticsR SquareChange

F Change df1 df2

1 .870a .757 .755 .216 .757 305.329 1 98a. Predictors: (Constant), TIavgb. Dependent Variable: EPavg

94

95

96

Strategic Value Creation with e-Procurement

Descriptive StatisticsMean Std.

DeviationN

EPavg 4.25 .435 100SVavg 4.21 .553 100

CorrelationsEPavg SVavg

Pearson Correlation

EPavg 1.000 .833SVavg .833 1.000

Sig. (1-tailed)EPavg . .000SVavg .000 .

NEPavg 100 100SVavg 100 100

Model Summaryb

Model R R Square Adjusted RSquare

Std. Error ofthe Estimate

Change StatisticsR SquareChange

F Change df1 df2

1 .833a .694 .691 .242 .694 221.876 1 98a. Predictors: (Constant), SVavgb. Dependent Variable: EPavg

97

98

99

Employees Willingness for Adopting e-Procurement

Descriptive StatisticsMean Std.

DeviationN

EPavg 4.25 .437 99EWavg 4.23 .600 99

CorrelationsEPavg EWavg

Pearson Correlation

EPavg 1.000 .751EWavg .751 1.000

Sig. (1-tailed)EPavg . .000EWavg .000 .

NEPavg 99 99EWavg 99 99

Model Summaryb

Model R R Square Adjusted RSquare

Std. Error ofthe Estimate

Change StatisticsR SquareChange

F Change df1 df2

1 .751a .564 .559 .290 .564 125.308 1 97a. Predictors: (Constant), EWavgb. Dependent Variable: EPavg

100

101

102