The e-procurement effects model outlines the main causal variables in implementation which impact on e-procurement performance. Naturally, the model is a relatively simple schematic at this stage, but serves to provide insight into the dynamics of the process through which we have seen e-procurement drive change.
Considering how e-procurement implementation influences governance structures, we found evidence of reduced search costs leading to increased supply availability, and hence greater leverage in negotiation. We also saw an increased level of communication driving knowledge sharing between customers and suppliers. Therefore, rather than see a move towards increased market-based relationships (Barratt and Rosdahl, 2002), we found that e-procurement tends to reinforce existing hierarchical relationships among firms (Brousseau, 1990).
We also found evidence of the impact e-procurement implementation has on the total cost of acquiring goods and services. The cost of processing purchase requisitions was reduced through improvements to the procurement system, but also the reduction in maverick purchasing. Price reductions accrued from increased visibility, compliance, management information, demand aggregation, and increased leverage in negotiations.
When considering the affect of e-procurement on organizational characteristics, the most significant issue to emerge from our study was the role of internal service in e-procurement. Our analysis suggests that the reputation of the procurement function and the general disposition of an organization towards e-procurement is strongly influenced by users’ perceptions of internal service. Whilst we support the view that e-procurement implementation creates the potential to improve compliance, it is clear that compliance is far from ‘given’. The extent to which internal users are provided with support to use e-procurement appears to have a significant effect on maverick spending.
As a practical implication, managers should question the extent to which they can ‘force’ individuals to use e-procurement and focus instead on delivering e-procurement in a way that ‘encourages’ its use.
E-procurement was heralded in the literature pre-2000 as offering significant opportunities for the purchasing function and the procurement process. This paper has explored some of the operational issues surrounding implementation and roll-out in order to provide further insights to the debate in this area. It has allowed us to develop greater understanding of the factors at play in delivering the benefits attributable to system adoption and deployment.
To improve our understanding of the mechanisms and processes by which these benefits are gained, this article presented an e-procurement effects model as a foundation for ongoing research into e-procurement implementation. We believe that this model will serve as a basis for classifying existing e-procurement research and directing future collaborative and comparative work in the area.
6. Future research
By proposing a structural model of the ‘e-procurement effect’ we hope to provide a basis for future research development. Our current work is focusing on three discrete elements of this model, primarily around the mediating variables of internal service, e-procurement compliance, and supply relationships. We are also undertaking work within the private sector in order to assess the extent to which findings from this study are paralleled in a different context. Finally, we are looking to a large-scale survey to evaluate the impact of e-procurement such studies conducted around a common model allow for comparative analyses.