Companies Utilize Information Technology Tools Management Essay

August 2, 2017 Information Technology

Companies utilize information engineering tools such as E-procurement to automatize concern procedures. E-procurement is non merely an of import tool for planetary operations but besides for domestic operations like SME ‘s.

E-procurement in SME ‘s has non received much attending by research workers, nevertheless engineering is get downing to catch up with some SME ‘s chiefly because of the accent on supply concatenation direction in operations ( planetary and domestic ) .

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Harmonizing to Kim and Shunk ( 2004 ) , acceptance of e-procurement is non something that can be immediately plugged in by bing workplace and it is non a simple matter.Its acceptance requires alterations, updates, replacing and versions to their current systems throughout the substructure.


As most of bing research findings on e-procurement version are focused on big administrations, there is the demand for research workers to prove whether these findings can besides be used for SME ‘s as there are cardinal differences in the manner SME ‘s and big organisations operate.

Furthermore the arrangers of e-procurement in big administrations such as Cisco, and Chevron have demonstrated significant betterment in several ways e.g. improved control of seller relationship, high service degree and decreased monetary values from cardinal providers ( Panayiolou et al 2004 ) . However e-procurement acceptance poses many challenges for SME ‘s. One of the challenges is the deficiency of consciousness of e-procurement and how it can impact administrations public presentation.

1.2 RESEARCH Question

There are few research inquiries that need to be answered:

How is e-procurement being used in the administration?

What are the factors driving administrations ‘ buying activities to follow e-procurement?

What are the challenges administrations ‘ face in the acceptance of e-procurement?

What are the benefits confronting administrations in the acceptance of e-procurement?

1.3 AIM

The purpose of this research is to critically research e-procurement in SME ‘s, detecting the drivers, challenges every bit good as benefits encountered in its acceptance.

1.4 Aim

To accomplish the purpose, a set of aims have been identified:

To derive apprehension of e-procurement.

To measure the usage of e-procurement.

To place and measure the factors driving administration to follow e-procurement.

To place and measure the challenges of e-procurement.

To eventually place, measure and come to conclusion on the benefits of e-procurement.


The buying map has undergone a transmutation procedure from being a clerical map to a strategic map. The usage of e-procurement. has been a cardinal enabler in doing administrations strategic concern maps by cut downing the clip taken to finish undertakings and leting buying agents like providers to concentrate on more value added activities ( Rajkumar, 2001 ) . This has changed the manner concern is conducted.

Reviewing the background of e-procurement shows that a company may non be able to accomplish an incorporate supply concatenation. Therefore e-procurement acceptance poses a great challenge in accomplishing the full potency of supply concatenation direction in SME ‘S.

The usage of e-procurement has generated great exhilaration among administrations because of its possible to cut down procurance cost and better strategic sourcing. However small research has been focused on SME ‘s and the benefits they derive from e-procurement.

Harmonizing to Love et Al, 2001. Many SME ‘s frequently can non afford the complicated transition from paper based procedure to an electronic procedure.

Furthermore, e-procurement is going an built-in portion of many big administrations concern scheme, yet many SME ‘s have been slow in some instances reluctant to encompass electronic criterions and I.T ( Waldt and Drumond, 2002 ) .

Based on the foregoing, the principle of this research is to research the acceptance of e-procurement by SME ‘S, placing the drivers, possible challenges and benefits. This research will lend to the cognition base of e-procurement acceptance to both the research worker and houses. It will

besides aid to understand how e-procurement is being adopted by SME ‘S in the UK.


This research will be an added value to the information given in the country of e-procurement. It will besides turn to spreads that exist in the country of survey among SME ‘S. This survey besides serves as a beginning of information for both big administrations and little medium enterprises that make usage of e-procurement.

Some SME ‘s have started utilizing e-procurement as a buying tool for efficiency, therefore the relevancy of this research is to cognize how administrations like SME ‘S migrate from a traditional theoretical account to an e-based procurance theoretical account.


Small Medium Enterprises ( SME ‘s ) are enterprises that employ less than 250 staff. They have an one-year turnover of about ?50 million and one-year balance sheet of about ?43 million ( European Commission, 2003 p.5 ) .

Table 1: Categorization of Small Medium Enterprises

Company Class





& lt ; 10

& lt ; 50

& lt ; 250

Bend over




Balance sheet




( Beginning: European committee, 2003 )

From table 1.2 below, the figure of concern in the 0-49 size set increased by 23 % compared to medium and big concerns.

Table 2: Categorization of employees in SME ‘s across private concerns


Old ages

0-49 Employees

( Micro )

50-249 Employees

( Medium )

250+ employees

( Large )














% alteration

23 %

6 %

5 %

( Beginning: Corporate statistics, FSB Scotland, 2009 )

This shows that SME ‘s history for the bulk of all private concern and they are an of import subscriber to the growing in the economic system ( FSB, Scotland, 2009 ) .


This subdivision provides theoretical background for this research by reexamining other research and academic findings.

First, I review definitions of the term e-procurement and the assorted e-procurement tools available.

Second, I discuss the motive for following e-procurement, what benefits have been achieved and challenges towards the acceptance of e-procurement in an administration.

2.1 Electronic-procurement definition

The usage of electronic procurance has changed the manner concerns operate. It can be used to supply chances for purchasers every bit good as providers to entrees buying webs, spread outing the choice of merchandises and doing information more gettable.

Teo and Lai, 2009 defined e-procurement as a tool for streamlining corporate buying procedures by extinguishing traditional paper based paperss such as purchase orders and requisition signifiers to a more strategic procedure. In add-on, Tatsis et Al, 2006 defined e-procurement as the integrating, direction, mechanization, optimisation and enablement of an administrations procurance procedure utilizing electronic tools and engineerings.

Harmonizing to Neef, 2001, e-procurement means a elephantine leap forward in the long sought where the supply concatenation becomes a uninterrupted, uninterrupted procedure widening from the purchaser through selling spouses. He subsequently went to state that e-procurement is a major enabler of supply concatenation direction intending it is a critical tool when covering with providers.

From the definitions given, the research worker wishes to give its ain definition of e-procurement. E-procurement can be defined as a engineering designed to get or buy goods and services by the administration for its operations through the cyberspace.

2.2 E-procurement tools

Most of the commonly used e-procurement tools in administrations are e-auction/e- rearward auction, e-tendering, e-sourcing, e-catalogue, e-marketplace. However two will be discussed because of clip length.

2.2.1 E-auction or change by reversal e-auction

For companies to stay cost competitory in the market, they must cut down the cost of their constituents and stuffs by sourcing from least cost providers. One manner of accomplishing this is through unfastened command via the cyberspace utilizing a tool called E-auction

E-auction besides known as E- contrary auction is defined as an online and existent clip auction between the purchasing company and two or more providers ( Carter et al, 2004 ) . This type of tool has been increasingly adopted by houses as a buying tool.

Figure 1:

Guinepero and Eltantawy, 2004, stated that the usage of E-auction can offer many advantages to purchasers every bit good as providers, e.g. monetary value decrease. The decrease in monetary value can increase the productiveness of the purchaser and with the usage of e-auction, the purchaser can hold entree to many providers at the same clip.

In add-on to the monetary value decrease, E-auction enables the provider to sell goods and services to a figure of known or unknown purchasing administration within a short clip frame ( De Boer et Al, 2002 ) . However the usage of E-auction has some drawbacks such as hazard of relationships between the purchaser and the marketer ( Tassabehji, 2010 ) . This has limited the manner most companies implement or follow e-auction.

2.2.2 E-marketplace

An e-marketplace is defined as an intermediary where trades can be done between the purchaser and the marketer. It can be regarded as an organizational platform that allows participants to interchange information about monetary value and merchandise specification ( stockdale and standing, 2004 ) .

Harmonizing to Ghazaly, 2005, he identified major benefits for purchasers and Sellerss when utilizing e-marketplace such as cost decrease, addition

efficiency in their supply concatenation e.g. having bringings merely in clip ( J.I.T ) . However, challenges exist when utilizing e-marketplace among SME ‘s such as cost and funding. Cost includes planning, securing hardware and package, care, security and ordinances.

Adapting e-marketplace requires ample clip, nevertheless the successfull acceptance of e-marketplace can cut down challenges and enhance companies net incomes.

2.3 Drivers of e-procurement

A figure of companies are interested in utilizing e-procurement as one of their buying tools. There are factors that motivate or drive administrations to follow e-procurement. Harmonizing to Harrigan et Al, 2008 the usage of progressing engineering from a paper based system to a more strategic system was identified as a major driver for following e-procurement. However Heywood et Al, 2002 further emphasized that improved truth, reduced order rhythm clip and increase productiveness can take to the acceptance of e-procurement.

Consequently, Yu et Al, 2008 identified cost as a major driver when following e-procurement. His survey showed that administrations use e-procurement to be able to cut down costs and increased efficiency which consequence in better supply concatenation direction. Furthermore, he identified other drivers that influence purchasers or Sellerss in their determination to follow e-procurement such as existent clip response andreduced rhythm clip.

In line with this, the chief factor driving administrations towards acceptance of e-procurement is recognizing the possible benefits that can be achieved ( Min and Galle, 2003 )

2.4 Challenges in following e-procurement

Despite several benefits, administrations still face challenges when following e-procurement. Such challenges have been identified by assorted research workers. Table 1 shows what research workers have identified as the challenges that administrations face when following e-procurement. These

include: negative impact on trust, trueness and committedness, and Price force per unit areas ( Ya-Wen Yu et Al, 2008 ) .

Gunasekaran and Ngai, 2005 survey identified assorted challenges that administrations face when following e-procurement such as deficient resources, deficiency of motive of people, opposition to new engineering and deficiency of top direction support.

Furthermore Davilia et Al, 2003 in deepness survey revealed some challenges associating to the acceptance of e-procurement.Such challenges were categorised into two factors ; Internal factors, such as deficiency of resources within the administration and external concern challenges such as deficiency of critical mass of providers accessible through the administrations e-procurement system.

In contrast, Harrigan et Al, 2008, farther survey grouped the challenges of e-procurement into four classs viz. internal integrating, external integrating, engineering integrating and security. Examples of such challenges faced by administrations when following e-procurement are ; deficiency of apprehension of the e-procurement system, issue of trust among providers, system to system integrating within and between administrations and eventually exchange of critical informations over the cyberspace.

Table 3: challenges of E-procurement



Lack of security

Eadie et Al, 2007 ; Gunasekaran and Ngai, 2008 ; Farzin and Nazhad, 2010.

Lack of trust among providers

Stephen hawkings, 2004 ; Eadie at Al, 2007 ; Gunasekaran and Ngai, 2008.

Lack of top direction support

Gupter and Palmer, 2003 ; Eadie at Al, 2007 ; Gunasekaran et Al 2009.

Lack of accomplishments and cognition among employees

Gupta and Palmer, 2003, Gunasekaran et Al, 2009 ; Caniato et Al, 2010.

2.4 Benefits of following e-procurement

The acceptance of e-procurement has transformed from a traditional procedure to a more strategic process.Various research workers identified different benefits that SME’s ‘s face when following e-procurement. Roche ( 2001 ) suggested that the existent clip information and supply concatenation integrating are benefits of following e-procurement. However Panayiotou et Al 2004 survey identified better pricing from cardinal providers, improved services and shorter order rhythm as a cardinal benefits of e-procurement.

Pushmann and Alt ( 2005 ) stated that e-procurement enables companies to deconcentrate operational procurance procedures and centralise strategic procurance processes as a consequence of the higher supply concatenation transparence. He farther stated that strategic procurement trades with administrative everyday work such as single minutess, change overing buying petitions into buying orders or guaranting the right allotment of bills are received.

Harmonizing to Minahan, 2001, he identified process efficiency as a cardinal benefit for e-procurement where order fulfilment clip can be shortened and stock list degrees are reduced. However, Attaran ( 2001 ) grouped the benefits into three classs: 1 ) Strategic advantages including organizational alterations and market advantage 2 ) high purchase chances such as bettering relationship with bing providers ; and 3 ) operational advantage such as efficient buying.

E-procurement systems enable houses to be more expeditiously and accurately able to capture and aggregate how much they are passing in assorted countries, leting the house to convey what may be important purchasing power purchase to market ( Presutti Jr, 2003 ) .

Furthermore e-procurement has the possible to streamline inefficient procurance procedure by taking eventually the manual paper based

traditional procurance system ( Ronchi. 2005 ) . Traveling on and stating that e-procurement can better an administration return on investing. However Heywood et Al, 2002 believed that e-procurement can offer houses adequate benefits to be considered a scheme to competitory advantage.

A sum-up of benefits, as identified by literatures is shown in Table 1.

Table 4: Benefits of e-procurement



Price Decrease

Parayioutou et Al, 2004 ; Croom and Brandon-jones, 2005 ; Gunasekaran and Ngai, 2008 ; Ronchi et Al, 2010.

Decrease in order rhythm clip

Parayioutou et Al, 2004 ; Gunasekaran and Ngai, 2008 ; Farzin and Nezhad, 2010.

Improvement in provider relationship

Parayioutou et Al, 2004 ; Gunasekaran and Ngai, 2008.

Improved stock list direction

Sohal and Savic, 2005 ; Croom an Brandon-Jones, 2007 ; Farzin and Nezhad, 2010.


This subdivision of the research will sketch the attacks used to be able to transport out these surveies and besides to integrate schemes used for the assemblage information. Furthermore the information method used will be explained and justified.

This subdivision besides show what methods will be used to be able to accomplish the overall purposes and aims.


As the purpose of the research is to set about an exploratory survey on the acceptance of e-procurement in SME ‘s. The research worker proposes to utilize explorative survey. Harmonizing to Sekeran 2000, the attack enables the research worker to obtain a good appreciation of the phenomena of involvement and to hold an in deepness cognition and apprehension of the the unsmooth good theory edifice and hypothesis testing. In line with this, Saunders, Lewis and Thornhill, 2009 further stated that exploratory survey is utile when a research worker lacks a clear thought or cognition of the job that will be met during the survey.


Research design is the manner of planning processs for carry oning surveies so as to acquire a valid findings ( Hussey and Hussey, 1997 ) . Harmonizing to Saunder et Al, 2009, Saunders surveies identified assorted research design

that can be used such as instance survey, studies, experiment, descriptive anthropology and archival research.

Bryman and Bell ( 2011 ) defines a instance survey as a scheme that is adopted as a individual instance concerned with certain types of inquiries ; “ how ” , “ why ” , “ where ” and “ who ” . He besides defines a multiple instance survey as a instance survey that combine more than one instance.

In line with this survey, the research worker proposes to utilize multiple instance surveies so as to be able to compare the findings from each instance, and develop and generalize theoretical apprehensions of the findings.


Harmonizing to Greener, 2008, there are two chief attacks that a research worker can utilize to prosecute its survey. These are the deductive and inductive attack

Deductive attack is a survey in which a conceptual and theoretical construction is developed and so tested by empirical observation ( Hussey and Hussey,1997 ) . Cooper and Schindler, 2003, farther stated that it is a signifier of illation that asserts to be conclusive, the decision must follow from the grounds given. This grounds are to connote the decision and stand for a cogent evidence. In line with this deductive research ( besides known as conjectural deductive method ) involves the statement of an hypothesis and the decision drawn from it, the aggregation of appropriate informations and being able to prove it ( Baker, 2003 ) .

Inductive research is a survey in which a theory is developed from the observation of literature ( Hussey and Hussey, 1997 ) . It helps be able to better understand the nature of the job ( Saunder, Lewis and Thornhill, 2009 ) . Easterby-Smith et Al, 2002, suggested two grounds for set abouting inductive attack. First, it enables the research worker to take a more informed determination on the research subject. Second, it helps the research worker think about the which research attacks will work and which will non. Harmonizing to Saunders et Al, 2009, it is possible to utilize the two attacks when carry oning research, nevertheless differences need to be identified so as non to confound the research worker.

Table 5. Differences between Deductive and Inductive attack



Need to explicate insouciant relationships between variables

A close apprehension of the research context

Collection of quantitative informations

Collection of qualitative informations

The application of controls to guarantee cogency of informations

A more flexible construction to allow alterations of research accent as the research progresses

The necessity to choose samples of sufficient size in order to bring forth decisions

A realization that the researchr is portion of the research procedure.

Beginning: Saunders, Lewis, Thornhill, 2009

To accomplish the overall purpose and aim, the research worker tends to utilize both attacks so as to hold an in deepness apprehension of the research subject and besides to find if facts about acceptance of e-procurement in SME ‘s in other parts such as Hong Kong and other countries of the South East have been realised in SME ‘s in the UK.

3.4 Beginnings OF DATA

There are two chief ways of sourcing informations viz. secondary and primary informations.

Sekaran and Bougie ( 2010 ) defined secondary informations as information gathered by other literatures other than the research worker carry oning the current survey. The research worker tends to utilize on-line literature on e-procurement from articles and diaries.

Primary informations is defined as information obtained first manus by the research worker on the assorted subjects of involvement of the survey. For the intent of this survey, the research worker tends to utilize questionnaires and interviews gotten from respondents of multiple administrations.


In line with this survey, the research workers will be utilizing a questionnaire and interview as ways of roll uping informations.

3.5.1 Questionnaires

A questionnaire is a list of carefully structured inquiries chosen from considerable proving with a position of arousing dependable responses from a chosen sample ( Hussey and Hussey, 1997 ) . Questionnaires are written set of inquiries to which respondents record their replies. It is an efficient informations aggregation mechanism where the research worker knows precisely what is required and how to mensurate the variable of involvement ( Sekaran,2000 ) . Harmonizing to Saunders et Al, 2009, there are different types of questionnaires ; viz. web based questionnaires, postal or mail questionnaires, and bringing and aggregation questionnaires.

In line with this, the research worker tends to utilize a web based questionnaire called Survey Monkey ( which is a free package that allows research workers to plan their ain questionnaires ) . To be able to analyze the information, the research worker will utilize charts and graphs to compare each respondents.

The chief advantage of directing the questionnaire online is that respondents can finish it at their ain convenience, nevertheless there might be low return rates and the research worker might non be able to roll up the precise informations that are required to reply the research inquiries and achieve the purposes and aims ( Saunders et al, 2009 ) .

3.5.2 Interview

An interview is a purposeful conversation between two or more people, necessitating the interviewer to set up apprehension, to inquire brief inquiries to which the interviewee will be willing to react and listen attentively ( Saunders, Lewis, and Thornhill 2012 ) . There are three different types of interview viz. structured, semi structured and unstructured interview. Sekeran, 2003, defined structured interview as those conducted when it is known at the beginning what information is needed. A semi structured interview identifies to the research worker, a list of subjects and perchance some cardinal inquiries that need to be covered ( Saunders et Al, 2012 ) . Unstructured interview is the antonym of structured, where the research worker does non travel into the interview room with a precise inquiry to be asked of the respondent ( Sekeran, 2003 ) .

In this survey research worker will be carry oning a semi structured interview.A face to confront interview will be administered because the research worker will hold an in-depth apprehension of the research subject. The interview will be recorded. However, if the interviewee rejects the car recording, notes will so be taken.


There are assorted ways of analysing informations, Saunders et Al, 2012 identified qualitative and quantitative informations analysis.

Denzin and Lincoln, 2003 defined qualitative informations analysis as a research method that emphasizes on the qualities of entities and on procedures and significances that are non by experimentation examined or measured in footings of measure, sum or frequence. In contrast quantitative informations analysis is the measuring of variables and the analysis of numerical informations ( Denzin and Lincoln, 2003.

The differences between the two analyses are summarized below in Table 4.

Table 6: Differences between quantitative and Qualitative



Derived from Numberss

Expressed in words

Collection consequences in numerical and standardised informations

Collection in non standardised informations necessitating categorizations into classs

Analysis conducted through the usage of diagrams and statistics

Analysis conducted through the usage of conceptualisation

Beginning: Saunders et al, 2012

The research worker tends to utilize quantitative and qualitative informations. The research worker has proposed to utilize quantitative informations techniques to be able to analyse the information on the questionnaires. The research worker will so utilize the qualitative informations techniques to analyse the informations raised in the interview.


The initial mark population for the research will be SME ‘s in the UK. Hair, Bush and Ortinau, 2011 defined mark population as a group of persons that are of import to the research. It is of import to put up a mark population to hold a direct focal point and to easy hold information entree required for this research.


To be able to carry on the survey, the research worker needs assorted resource stuffs such as entree to the several administrations and company databases. Furthermore, when carry oning interviews, the research worker will necessitate an audio recording equipment.

Finally, the research worker will necessitate entree to the university computing machines, the schools database for journal articles and the library for text books.

5.0 Ethical Consideration

Ethical motives refers to the rightness of the research workers ‘ behaviour in relation to the rights of those who become the topic of the research workers ‘ work, or are affected by it ( Saunders, Lewis and Thornhill, 2003 ) .

In this survey, as the research worker conducts the interviews and gives out questionnaires, there will be full consent by the person before roll uping informations and carry oning an interview. Furthermore, there will be a confidentiality and namelessness understanding between the research worker and the organisations.. Finally the research worker will procure the information collected, whether company ‘s informations or informations from the questionnaires so no 3rd party will hold entree to it.

6.0 Decision

In decision, the survey for the proposal has set out an overview for the research subject, purpose and aims. It has besides provided with suited methods used to accomplish the purpose and aims. Nowadays SME ‘s are altering their systems to a more strategic procedure, utilizing e-procurement as a buying tool. Yet it is ill-defined as to what extent some SME ‘s are using e-procurement. Using multiple instance surveies with a assorted research attack will supply an in-depth penetration on the administrations utilizing e-procurement.


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