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E-procurement in
E-procurement in small and SMEs: facilitators
medium sized enterprises; and impact on
performance
facilitators, obstacles and
effect on performance 839

Cristóbal Sánchez-Rodríguez Received 19 December 2018

Revised 25 June 2019
School of Administrative Studies, York University, Toronto, Canada 2 October 2019
Accepted 21 October 2019
Angel Rafael Martínez-Lorente
Faculty of Business Sciences,
Universidad Politécnica de Cartagena, Cartagena, Spain, and
David Hemsworth
Nipissing University, North Bay, Canada

Abstract
Purpose – The purpose of this paper is to analyze e-procurement in small and medium-sized enterprises
(SMEs) and its relationship with top management support, IT obstacles and strategic purchasing and the
effect of e-procurement on performance (procurement performance and business performance).
Design/methodology/approach – The hypotheses were tested using a sample of 199 managers from
SMEs in manufacturing.
Findings – The results indicated a significant relationship between e-procurement in SMEs and top
management support, IT obstacles and strategic purchasing. Similarly, the authors found a positive
relationship between e-procurement and procurement process performance and business performance.
Practical implications – The findings stress to SME managers, the need to pay attention to top
management support, IT obstacles and strategic purchasing when implementing e-procurement. Similarly,
it provides evidence of the benefits of e-procurement on procurement process performance and
business performance.
Originality/value – This study fills a gap in the literature regarding e-procurement in SMEs and its impact
on performance. SMEs constitute a significant part of today’s economies and e-procurement can significantly
impact the performance of these organizations.
Keywords Small-to-medium-sized enterprises, E-procurement, Survey, Strategic purchasing
Paper type Research paper

1. Introduction
E-procurement is an e-business capability (Devaraj et al., 2007) that combines the use of
information technology and purchasing resources in processing purchasing orders,
exchanging information with suppliers and supporting purchasing decisions (Ordanini and
Rubera, 2008). Companies increasingly recognize that applying information technology to
their procurement processes can yield significant competitive advantage. Indeed, a recent
report by the Boston Consulting Group indicates that 9 of the top 20 Fortune 500 companies
mention in their annual reports that digital technologies are crucial for their procurement
operations (Högel et al., 2018). Benefits of e-procurement include reduction of the time
required to process purchase orders, reduction in costs associated with managing
purchasing orders and payment to suppliers, reduction of transaction errors, and improved
data accuracy and information quality (Bahaddad et al., 2018; Costa et al., 2013). According
Benchmarking: An International
to some estimates, e-procurement could render material cost savings of 5 to 10 percent, Journal
productivity increases of 30 to 50 percent, and substantial improvements in innovation, Vol. 27 No. 2, 2020
pp. 839-866
quality, speed, and risk management (Högel et al., 2018). Moreover, a recent report by the © Emerald Publishing Limited
1463-5771
McKinsey consulting group indicates that chief purchasing officers expect a 40 percent DOI 10.1108/BIJ-12-2018-0413
BIJ increase in annual savings, 30 to 50 percent less time spent on transactional sourcing,
27,2 and a 50 percent reduction in value leakage because of digital procurement programs
(De la Boulaye et al., 2017). Despite these enticing benefits, e-procurement is still
predominantly exploited by larger firms rather than by small and medium-sized enterprises
(SMEs) (Zeller and Drescher, 2017; Gunasekaran et al., 2009).
The study of e-procurement has received considerable attention in the literature (see
840 Table I) although most studies analyze e-procurement in the context of large businesses (e.g.
Chang et al., 2013; Ibem et al., 2018; Ronchi et al., 2010; Tai et al., 2010; Teo et al., 2009;
Schoenherr, 2008; Soares-Aguiar and Palma-dos-Reis, 2008). In fact, only three studies to
date have analyzed e-procurement in SMEs (Hassan et al., 2017; Gunasekaran et al., 2009;
Archer et al., 2008) revealing a significant gap in the literature.
The study of e-procurement in SMEs is important for several reasons. First, SMEs are
responsible for a significant part of todays economies. For example, in the European Union
alone 99 percent of all enterprises are SMEs and create about 85 percent of new jobs
(European Commission, 2019). Second, the potential of e-procurement to contribute to the
overall profitability of these organizations is very significant (Preez and Folinas, 2019). One
needs not to forget that one-dollar savings in procurement costs results in a direct
contribution to the bottom line. Thus, this research tries to fill an important gap in the
literature and increase our understanding of e-procurement in SMEs. More specifically, this
research proposes a model to analyze the relationship between e-procurement and three
enabling factors (top management support, IT obstacles and strategic purchasing). Top
management support often plays a critical role in SMEs because top management typically
holds the ownership of the company and tends to be more directly involved in company
investment decisions (Thong, 1999). Additionally, IT obstacles are important for SMEs
because they could thwart any efforts to adopt and use a new information technology
(Thong, 1999). Strategic purchasing is relevant to SMEs because of the critical importance of
purchasing decisions for these organizations due to their limited availability of resources
(Conrnelius du Preez and Folinas, 2019). Thus, this paper proposes to answer the following
research questions:
RQ1. Is top management support related to e-procurement in SMEs?
RQ2. Are IT obstacles related to e-procurement in SMEs?
RQ3. Is strategic purchasing related to e-procurement in SMEs?
RQ4. Is e-procurement related to procurement process performance in SMEs?
RQ5. Is e-procurement related to business performance in SMEs?
This research is intended to help decision and policy makers in their understanding of
e-procurement and its impact on performance. Also, IT vendors might find the results of this
study useful for marketing purposes. In the next section we elaborate upon our
conceptualization of e-procurement and present the research model and hypotheses to be
tested. Section 3 describes the research methodology. The results are presented in Section 4,
contributions to theory and practice in Section 5 and conclusions in Section 6.

2. Literature review and hypotheses development

Although there is a paucity of research regarding e-procurement in SMEs, three articles are
key to understanding its current state. In the first study about e-procurement in SMEs,
Archer et al. (2008) identified the perceived importance of barriers to the adoption of internet
business procurement and supply chain solutions. Using survey data from 173 Canadian
SMEs, Archer et al. (2008) found that lack of management leadership, lack of knowledge,
and resistance to change are the most often barriers identified by SME managers, all of
which point toward the role of top management support. Although some studies have found E-procurement in
that top management support has a positive influence on e-procurement (Teo et al., 2009; SMEs: facilitators
Soares-Aguiar and Palma-dos-Reis, 2008; Rai, Tang, Brown and Keil, 2006) the evidence is and impact on
not conclusive in both large organizations (Wu and Ross, 2007) and SMEs (Hassan et al.,
2017). Some authors have argued that IT obstacles (e.g. IT budget constraints and the use of performance
IT legacy systems) could play a role in the lack of relationship between e-procurement and
top management support (Wu and Ross, 2007). Thus, the need to also consider the 841
relationship between IT obstacles and e-procurement when analyzing top management
support and e-procurement.
In the article by Gunasekaran et al. (2009) they used a framework developed by
Gunasekaran and Ngai (2008) to examine e-procurement in SMEs. This framework
describes five elements relevant to e-procurement adoption and use: current status
and readiness of companies for E-procurement, benefits of e-procurement, critical success
factors, future organizational performance and barriers to e-procurement implementation.
Gunasekaran et al. (2009) found that the most important barrier to e-procurement is the
lack of priority by management. This lack of priority points again to the critical role
that top management support plays in SMEs, but it also points toward the strategic
importance of the purchasing function in SMEs, which we intend to analyze in this paper.
The more significant the role that purchasing plays in an organization, the more of
a priority it becomes for management. Thus, the need to further complement the
analysis of e-procurement and top management support with the consideration of
strategic purchasing.
Gunasekaran et al. (2009) also reported that SMEs do not perceive sufficient benefits
from e-procurement. Although empirical evidence has shown that e-procurement has a
positive impact on performance in the context of large organizations (e.g. Mishra et al., 2007,
2013; Wu and Ross, 2007), no study to date has analyzed the relationship between
e-procurement and performance in the context of SMEs.
In a more recent study, Hassan et al. (2017), using data from 151 SMEs in the
manufacturing sector in New Zealand, analyzed the relationship between e-procurement
and top management support, perceived benefits of using e-procurement, external
pressure from suppliers and competitors, and compatibility with e-procurement. They
found no evidence of significant relationship between e-procurement and top management
support, but a positive relationship between e-procurement and perceived benefits of
using e-procurement, e-procurement and external pressure from suppliers and
competitors, and e-procurement and compatibility with e-procurement. However, due to
the operationalization of compatibility with e-procurement, it is not possible to
differentiate the individual effects of strategy, IT infrastructure and organizational values
on e-procurement. Therefore, the analysis of the relationship between e-procurement and
top management support, IT obstacles, and strategic purchasing requires the
consideration of each one of these concepts individually.
The further analysis of the literature (see Tables I and II) lead to the following
observations. First, that e-procurement has received considerable attention in the literature
and is a relevant topic of investigation. Second, that the extent of literature about
e-procurement in SMEs is very limited and lacking in empirical studies. Third, that the
evidence about the influence of top management support on e-procurement in SMEs is mixed
and requires further investigation. Fourth, that the relationship between strategic purchasing
and e-procurement is important but has not been empirically validated. Fifth, that there is a
lack of evidence about the effect of e-procurement on performance in the context of SMEs (see
Table II). Therefore, this paper proposes a research model (see Figure 1) to evaluate the
relationship between e-procurement and top management support, IT obstacles, and strategic
purchasing, and between e-procurement and performance.
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842

Table I.

impact on
performance
e-procurement and
Recent literature on
S. Author(s) and Unit of Approach
No. year Research objective analysis adopted Setting Major finding

1 Aboelmaged Predicts e-procurement adoption through Firm
(2010) integrating the constructs of the
technology acceptance model and the
theory of planned behavior
2 Altayyar and Identify external factors driving the
Beaumont- adoption of e-procurement
Kerridge (2016)
3 Angeles and Pursue the understanding of current
Nath (2007) business-to‐business e-procurement
practices by describing the success
factors and challenges to its
implementation in the corporate setting
4 Archer et al. Identifies and measure the perceived
(2008) importance of barriers in SMEs to the
adoption of internet business
procurement and supply chain solutions
5 Batenburg Explores national differences in adoption Country Survey
(2007) of e-procurement among European
countries
6 Chang et al. Discuss the relationship between e-
(2013) procurement and supply chain
performance
Survey 312 manufacturing, Behavioral intention toward e-procurement
commercial, and technology is mainly determined by user’s attitude,
services companies in and additionally influenced by perceived
United Arab Emirates usefulness and subjective norm
Firm Interview 4 selected Saudi Nine external factors relevant to adoption of e-
Arabian SMEs procurement: government support, own postal
addresses and delivery service, providing secure
and trustworthy online payment options, low cost
and high-speed internet connection, IT-related
educational programs, supplier’s willingness and
readiness to participate or exert pressure,
competitor’s pressure, policy and regulations, and
business and national culture of the country
Firm Survey 185 members of the Factor analysis resulted in three e-procurement
Institute for Supply success factors (SF): supplier and contract
Management and the management, end-user behavior and e-
Council of Logistics procurement business processes, and information
Management and e-procurement infrastructure
Firm Telephone 162 manufacturing, Online supply solutions are used to reinforce long-
survey distribution and term relationships, good procurement practice,
retailing in Canada developing trust with trading partners, improving
customer service, and sharing useful information
with supply chain partners. Technological barriers
are important to e-procurement adoption
3,475 organizations E-procurement adoption is lower in countries with
from seven different high uncertainty avoidance and higher when the
European countries nation attitude toward change is favorable
Firm Survey and 108 Taiwanese Partner relationships, information sharing, and
interview enterprises supply chain integration can represent the
processes through which e-procurement
contributes to supply chain performance

(continued )
S. Author(s) and Unit of Approach
No. year Research objective analysis adopted Setting Major finding

7 Costa et al. Analyses public e-procurement Public Survey Portuguese public Entities’ administrative level influences e-
(2013) implementation service sector procurement implementation, which is influenced
office by innovation adoption process
8 Devaraj et al. Analyses the impact of eBusiness Supply Survey Manufacturing There is no direct benefit of e-Business
(2007) technologies on operational performance chain companies technologies on performance, however, these
technologies supported customer integration
9 Gunasekaran Identifies the perceived critical success Firm Questionnaire 74 businesses in Hong Critical success factors include adequate financial
and Ngai (2008) factors and perceived barriers regarding Kong support, availability of interoperability and
the implementation of e-procurement standards with traditional communication
systems, top management support and
commitment, understanding the priorities of the
company, and having suitable security systems
10 Gunasekaran Explains the current state of E- Firm Survey 39 SMEs in the Respondents did not perceive benefits from
et al. (2009) procurement in SMEs and to examine southwest US in e-procurement. The main barriers to e-procurement
those factors that influence e- manufacturing, implementation were: it was not a priority,
procurement adoption commercial, and insufficient skills, IT and security concerns. Most
services important critical success factors: top management
involvement and support, streamlined approvals
and workflow, close collaboration with suppliers,
clear accountability for buying in the
organizational structure, centralized control and
management of e-procurement initiatives,
communication between participants, content
management, and IS specialists with internet skills
11 Hassan et al. Clarifies the differences between factors Firm Survey 151 small and medium Breadth of use of e-procurement is influenced by
(2017) affecting the breadth and the depth of e- enterprises (SMEs) in perceived relative advantage of using e-
procurement the manufacturing procurement, plus external pressure from suppliers
sector in New Zealand and competitors to use e-procurement. However,
depth of e-procurement use is driven by
compatibility of e-procurement with organizational
values, practices, technology infrastructure, and
strategy

(continued )
843
and impact on
E-procurement in

Table I.
performance
SMEs: facilitators
 BIJ
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844

Table I.
S. Author(s) and Unit of Approach
No. year Research objective analysis adopted Setting Major finding

12 Mishra et al. Analyses the antecedents of Firm Survey 412 US manufacturing Procurement-process digitization is positively
(2007) e-procurement adoption and impact on firms related to internet use in search. Organizational
performance perceptions of technological uncertainty is
positively related to internet use in OIC. Diversity
of organizational procurement knowledge, and
organizational perceptions of volume uncertainty
are marginally related to internet use of in search.
Procurement-process digitization, and supplier
sales process digitization are marginally related to
internet use in OIC
13 Mishra et al. Examines the interrelationship between Firm Survey 412 US manufacturing The impact of procurement integration competence
(2013) two hierarchically structured functional firms on performance is completely mediated by digital
capabilities pertinent to the procurement competence
organizational procurement process, and
the impact of these capabilities on the
procurement process performance
14 Quesada et al. Investigates the impact of e-procurement Firm Survey 368 firms from Institute E-procurement usage positively affects managers’
(2010) technologies on procurement practices for Supply perceptions of both procurement practices and
and procurement performance Management procurement performance
15 Rai, Determines whether the assimilation of Firm Survey 166 US firms; large and The level of e-procurement assimilation was
Patnayakuni e-procurement increases procurement SMEs closely related to procurement productivity.
and Seth (2006), productivity and which factors influence Greater levels of e-procurement assimilation were
Rai, Tang, its assimilation associated with higher levels of top management
Brown and Keil support and greater IT sophistication
(2006)
16 Ronchi et al. Introduces a value assessment Process Survey and 6 case studies of large The presented value assessment methodology is
(2010) methodology for e-procurement system interview companies useful to researches and practitioners alike
supporting an IT purchasing process
17 Smart (2010) Explores the business case for Firm Business case Three case studies in Identified 18 drivers and a further 17 inhibitors
e-procurement approach three UK most of which are technology related. Drivers for
manufacturing e-procurement can be allocated into key categories:
companies control, cost, process, roles and suppliers

(continued )
S. Author(s) and Unit of Approach
No. year Research objective analysis adopted Setting Major finding

18 Soares-Aguiar Analyses the adoption of e-procurement Firm Survey 240 large companies in IT infrastructure, IT expertise, B2B know-how,
and Palma-dos- and several facilitators Portugal in firm size, trading partner readiness, perceived
Reis (2008) manufacturing, success of competitor adopters, and extent of
commerce, and services adoption among competitors are significant e-
procurement adoption facilitators
19 Tai et al. (2010) Analyses the impact of e-procurement on Firm Survey 137 large firms in The electronic execution of purchasing activities
different performance measures Taiwan improves both the operational efficiency dimension
(operational, tactic, and strategic) and the strategic dimension. Furthermore,
partnership has a positive impact on supplier
performance and buyer performance
20 Tatsis et al. Studies the state and development of Firm Case study 4 large organizations in The uptake of e-procurement has been slow and
(2006) e-procurement in the Greek food and research food and drink industry reveals some important impediments, such as the
drink industry in Greece uncertainty of the technology and its benefits, the
lack of infrastructure and skills and the traditional
nature of the industry
21 Teo and Lai Examines various factors associated Firm Survey 141 large firms in Different dimensions of e-procurement usage have
(2009) with the adoption of e-procurement Singapore different relationships with performance
22 Teo et al. (2009) Examines various factors associated Firm Survey 141 large firms in Firm size, top management support, perceived
with the adoption of e-procurement Singapore indirect benefits, and business partner influence
are positively and significantly to e-procurement
adoption
23 Toktaş-Palut Investigates the effects of the barriers Firm Case study Single case study in Barriers (benefits) of e-procurement systems have
et al. (2014) and benefits of e-procurement systems research Turkish retailer negative (positive) effect on the e-procurement
on the decision to adopt e-procurement adoption decision for the company. In addition, it is
found that the effect of benefits on the adoption
decision is higher than that of the barriers
24 Tsikriktsis et al. Investigates empirically antecedents of Firm Survey 338 service firms Only internal barriers have a negative impact on
(2004) the adoption of web-based processes adoption of e-processes, while barriers related to
(e-processes) by service providers customers do not have a significant impact

(continued )
845
and impact on
E-procurement in

Table I.
performance
SMEs: facilitators
 BIJ
27,2

846

Table I.
S. Author(s) and Unit of Approach
No. year Research objective analysis adopted Setting Major finding

25 Vaidya and Discusses several aspects of public Public Field survey 240 professionals in Confirms the positive and significant impact of the
Campbell (2016) e-procurement service and Australia assimilation process on procurement efficiency
office structured
web-based
questionnaire
26 Wu and Ross Analyses the antecedents and outcomes Firm Survey 114 US manufacturing Top management support has no relationship with
(2007) of e-procurement adoption and develops companies e-procurement adoption
an integrative model Normative pressures and organizational learning
ability have a positive relationship with
e-procurement adoption
Theoretical E-procurement facilitators/ Empirical evidence: (*significant relationship with
E-procurement in
framework obstacles e-procurement) SMEs: facilitators
Large organizations SMEs and impact on
Technology, Technology: Angeles and Nath (2007) (a, b, d); Archer et al. (2008) (a, b, performance
organization, IT challenges/obstacles Gunasekaran and Ngai (2008) (a, b, c, d, e); Gunasekaran
environment (a) IT expertise c, d, e); Mishra et al. (2007) (b, d); et al. (2009) (a, b, c, d, e);
(TOE) (b) IT infrastructure Rai, Patnayakuni and Seth (2006), Hassan et al. (2017)(b*) 847
(c) IT knowledge/skilled Rai, Tang, Brown and Keil (2006)
personnel ( f*); Soares-Aguiar and
(d) System integration with Palma-dos-Reis (2008) (a*, b*, c, d);
business partners Tatsis et al. (2006) (b, c); Teo et al.
(e) Security and (2009) (a, b); Toktaş-Palut et al.
authentication (2014) (a*, b, e)
( f ) IT sophistication
Organization Gunasekaran and Ngai (2008) (a); Archer et al. (2008);
(a) Top management support Mishra et al. (2007) (a*); Rai, Gunasekaran et al. (2009)
(b) Organizational learning Patnayakuni and Seth (2006), Rai, (a, b, c); Hassan et al.
ability, Tang, Brown and Keil (2006) (a*); (2017) (a, b, c*)
(c) Cultural elements, Soares-Aguiar and Palma-dos-Reis
organization and strategy (2008) (a); Teo et al. (2009) (a*);
Toktaş-Palut et al. (2014) (a); Wu and
Ross (2007) (b*);
Environment: Wu and Ross (2007)*; Soares-Aguiar Hassan et al. (2017)*
Influence from competitors and Palma-dos-Reis (2008)*;
business partner influence Mishra et al. (2007);
Soares-Aguiar and Palma-dos-Reis Table II.
Summary of
(2008)*; Teo et al. (2009)*;
theoretical basis for
Resource- Impact of e-procurement on: Chang et al. (2013); Devaraj et al. top management
based view Purchasing process (2007); Mishra et al. (2013)*; Rai, support, IT obstacles
(RBV ) performance Patnayakuni and Seth (2006), Rai, and strategic
Tang, Brown and Keil (2006)*; purchasing
Tai et al. (2010)*; Quesada et al. relationship with
(2010); Teo and Lai (2009); e-procurement, and
Vaidya and Campbell (2016); impact of
Wu and Ross (2007)* e-procurement
Business performance Tai et al. (2010)* on performance

Top
management
support H1 Procurement
process
H4 performance
H2
IT obstacles E-procurement
H5
Business
H3 performance
Strategic
purchasing

Control variables: Figure 1.

Industry type Proposed research
Size model
BIJ The model in Figure 1 has its theoretical foundation in the resource-based view (RBV ) of the
27,2 firm, which argues that firms attain competitive advantage by building and developing
internal and external capabilities that are difficult to imitate by competitors (Peteraf, 1993;
Barney, 1991).
According to this theory, e-procurement is an e-business capability (Devaraj et al., 2007)
that incorporates not just transactional purchasing capabilities – such as the ability to
848 process purchase orders, send purchase orders to suppliers electronically, and send
electronic payments to suppliers – but also the ability to communicate and collaborate with
suppliers by sharing relevant supply chain information such as, inventory and production
scheduling information (Hassan et al., 2017; Tai et al., 2010; Wu and Ross, 2007). These
resources and capabilities can be acquired in marketplaces and/or developed inside the firm.
Due to the relatively low barriers to imitation and acquisition by other firms, an IT-based
advantage tends to diminish quickly. In contrast, the RBV emphasizes sustainability
protected by resource embeddedness; i.e., resource complementarity and co-specialization
(Powell and Dent-Micallef, 1997). Resource complementarity represents an enhancement of
resource value and arises when a resource produces greater returns in the presence of
another resource or capability than it does alone. Co-specialization refers to a resource single
specialised use. E-procurement, as an e-business capability combines the use of information
technology resources and purchasing resources (Devaraj et al., 2007), which meets the
requirements of the RBV as an organizational capability, thus making it difficult to emulate
by competitors, and thereby be a source of competitive advantage. Thus, we expect a
relationship between e-procurement and performance.

2.1 Top management support and e-procurement

Top management support involves securing the financial resources and the leadership
necessary to develop an organizational culture conducive to the change and innovation that
is derived from the adoption of new IT (Thong, 1999). Top management support tends to
play a critical role in SMEs because top management typically holds the ownership of the
company and tends to be more directly involved in company investment decisions (Gupta
and Barua, 2018; Nguyen et al., 2015; Thong, 1999). Similarly, senior management in SMEs
tends to be more involved in day-to-day operations than in larger organizations, approving
payments to suppliers, following up on receivables, checking on inventory, managing the
purchase of large machinery, or getting directly involved in the negotiation of large
purchases. Smaller firms also have fewer middle management and the reporting lines from
employees to upper management are typically direct. Thus, top management in SMEs
generally tends to play a larger role in decision making than in large corporations.
The support of top management has been identified as being of importance in the adoption
and use of information systems in SMEs (Nawi et al., 2017; Nguyen et al., 2015; Alshamaila
et al., 2013; Ramdani et al., 2009; Thong, 1999). As such, e-procurement is unlikely to occur
without the approval and active support of top management. Top management is expected to
facilitate the adoption and use of e-procurement and conversely, the lack of top management
support is viewed as an important challenge to e-procurement (Toktaş-Palut et al., 2014).
The support of top management can reduce interdepartmental conflict and build the
consensus necessary among management and employees to facilitate the adoption and use of
e-procurement (Wu and Ross, 2007). Top management support is also necessary for
organizations to engage in advanced purchasing practices such as supplier development
(Govindan et al., 2010), supplier involvement in product design (Feng and Zhao, 2014) and
environmental supply management (Gattiker and Carter, 2010). As an advanced
purchasing practice, we would expect top management support to be positively related to
e-procurement in SMEs. Empirical evidence has reported top management support to be a
determinant in the adoption of IT innovations such as performance measuring systems
(Singh and Arora, 2018) and cloud computing (Raut et al., 2018). Thus, the following E-procurement in
hypothesis was formulated: SMEs: facilitators
H1. Top management support is positively related to e-procurement in SMEs. and impact on
performance
2.2 IT obstacles and e-procurement
IT obstacles (e.g. technological factors) refers to various elements that could make the 849
adoption and use of a new IT tool more difficult. These can take many forms but typically
include limited financial resources for the acquisition of IT systems, lack of technical
expertise and competence in the IT department, problems with compatibility with other IT
systems, the complexity of use and maintenance of IT applications and lack of an IT
infrastructure (Kumar and Kansara, 2018; Raut et al., 2018). In the case of e-procurement,
IT obstacles include factors such as lack of: financial resources for the acquisition of
e-procurement technology, technical expertise and competence in the IT department,
compatibility with other IT systems. As well the complexity of the use and maintenance of
IT applications, the existence (or non-existence) of an IT infrastructure, and the lack of
integration with systems from suppliers are also frequently cited IT obstacles (Toktaş-Palut
et al., 2014; Ramdani et al., 2009; Tsikriktsis et al., 2004).
The existence of IT obstacles is viewed as an important challenge to the adoption of
supply chain practices (Kumar and Kansara, 2018). Similarly, research in the context of
large organizations has shown that some elements of IT obstacles having a negative
influence over e-procurement. For example, Soares-Aguiar and Palma-dos-Reis (2008) and
Rai, Tang, Brown and Keil (2006) found that IT competence and IT sophistication, both
proxies for lack of IT obstacles, were positively associated with greater levels of
e-procurement. Given SMEs’ limited financial and technical resources, it is expected that
IT obstacles will exert a significant influence on e-procurement, limiting their adoption
and use. Thus, we propose that IT obstacles will have a negative relationship with
e-procurement in SMEs:
H2. IT obstacles are negatively related to e-procurement in SMEs.

2.3 Strategic purchasing and e-procurement

The IT literature generally accepts that the adoption of new IT systems should be initiated
by a strategic planning process (Rainer et al., 2017), which, in the context of the purchasing
function, is conceptualized by the concept of strategic purchasing. It refers to the process
of planning, implementing, evaluating, and controlling strategic and operating purchasing
decisions toward opportunities consistent with a firm’s long term goals and capabilities
(Carr and Pearson, 1999). Strategic purchasing is relevant to firms of all sizes, and
particularly SMEs (Pressey et al., 2009) given their limited resources and the need to
ensure that purchasing decisions and investments are aligned with the firm’s overall
strategic priorities.
It is expected that Strategic purchasing exerts a positive influence on e-procurement in
SMEs. Lith et al. (2015) using evidence from a multiple case study reported that the adoption of
IT/IS in purchasing may stimulate the move of a purchasing function from a tactical role to a
more strategic role. In addition, strategic purchasing should precede the adoption of new
purchasing practices and investments and, in any case, not be delayed beyond the start of
such investments (Narasimhan and Das, 2001). In this regard, Carr and Pearson (1999) found
evidence that strategic purchasing precedes the implementation of strategically managed
buyer-supplier relationships and evaluation systems. Chen et al. (2004) reported that
strategic purchasing precedes the establishment of close communication links with suppliers.
BIJ Lawson et al. (2009) also found that strategic purchasing should precede the initiation of
27,2 supplier integration activities. Thus, the following hypothesis was formulated:
H3. Strategic purchasing is positively related to e-procurement in SMEs.

2.4 E-procurement and procurement process performance

850 Procurement process performance encompasses improvements in purchasing
performance including cost reduction, lead time, quality and inventory (Mishra et al.,
2013). E-procurement is expected to improve procurement process performance by
reducing the time and cost required to process purchase orders, eliminate transaction
errors and improving information quality (Gardenal, 2015; Costa et al., 2013; Ronchi et al.,
2010; Gunasekaran and Ngai, 2008; Tatsis et al., 2006). Initial evidence from the literature
suggests a positive relationship between e-procurement and procurement process
performance. For example, Wu and Ross (2007) found a positive relationship between
efficiencies gains in purchasing and e-procurement. Mishra et al. (2013) also found a
positive effect of e-procurement on e-procurement process performance. Quesada et al.
(2010) obtained a similar result when analyzing the relationship between e-procurement
and procurement performance. Tai et al. (2010) studied the performance impact of web-
based procurement and found a positive effect of web-based procurement on supplier
performance, buyer immediate performance and buyer organizational performance.
Chang et al. (2013) found a significant relationship between e-procurement and supply
chain performance mediated by information sharing, supply chain integration, and
partner relationships. More recently, Modgil and Sharma (2017) found that the use of IS
have a positive effect on operational performance mediated by supply chain management
practices. Thus, we propose the following hypothesis:
H4. E-procurement is positively related to procurement process performance in SMEs.

2.5 E-procurement and business performance

Business performance encapsulates improvements in a firm’s overall productivity and
financial performance. Benefits of e-procurement that go beyond improvements in
procurement process performance could include the reduction of manufacturing costs due to
better coordination of manufacturing activities between buyer and supplier (Vaidya and
Campbell, 2016; Devaraj et al., 2007), and increased customer satisfaction due to fewer
procurement errors. Both effects would have a positive contribution to a firm’s overall
business performance. Similarly, improvements in information quality dues to the use of
e-procurement could result in better decision making and, thus, contribute to the overall
effectiveness of an organization. Initial evidence in large organizations suggests that
web-based e-procurement can increase a buyer’s organizational performance (i.e. total
procurement costs and product quality) (Tai et al., 2010). A similar relationship is expected
in the context of SMEs. Thus, we propose the following hypothesis:
H5. E-procurement is positively related to business performance in SMEs.
The model presented in Figure 1 is further enhanced with the consideration of two control
variables: size and industry type. Larger companies may have a higher performance
because of the economies of scale (Rai, Patnayakuni and Seth, 2006). The number of
employees is used as a control variable in measuring the size of the company in this study.
Moreover, since It could be possible that different manufacturing industries could display
different levels of performance (Porter, 1979), the type of industry has also been included as
a control variable.
3. Research method E-procurement in
3.1 Data collection SMEs: facilitators
The sampling frame for the study consisted of SMEs although the definition of what and impact on
constitutes SMEs is not clear (Anastasia, 2015). For example, the North American
Industry Classification System and Industry Canada define SMEs as having 500 or less performance
employees. The European Union defines SMEs as businesses with less than 250
employees, revenues of less than 50 million Euros, and balance sheet of less than €43m. 851
The New Zealand Centre for SMEs research defines SMEs as a business that employs
from 6 to 99 employees. Academics often would use one of these standards or develop
their own. For example, Kim et al. (2017) defines SMEs as businesses with less than 200
employees, and Hassan et al. (2017) defines SMEs as less than 100 employees.
Accordingly, this study defines SMEs as enterprises with less than 500 employees but
more than 50. We did not include businesses with less than 50 employees as they tend not
to be intensive users of e-procurement (Hassan et al., 2017). Therefore, the population for
the study consisted of SMEs enterprises in manufacturing (50 to 500 employees) that had
been in operation for at least 5 years and included in the Spanish SABI (Iberian Balances
Analysis System) database (3,814 firms in total).
Data from a convenience sample of 200 firms were collected for this study via telephone
survey according to a modified version of Dillman’s (1978) total design method. Firms
composing this sample were randomly selected and then contacted by telephone. Surveys
were completed by telephone and no reminders were used. The data collection phase was
conducted over the period of one month approximately and concluded when the total
number of completed surveys reached 200. However, due to missing values, one completed
survey had to be discarded resulting in a final total of 199 valid responses or 5.2 percent of
the total population.
Companies revenues were from €684,000 to €543,846,000, with a mean of €44,371,000 and
a median of €18,990,000. Senior purchasing managers were the more appropriate to provide
information about the issues in this research and included VPs of purchasing, directors of
purchasing and purchasing managers among other titles. Sample respondents are described
in Table III. All of them had enough seniority in their companies to know about their firms’
e-procurement and performance. Table III also shows industry type in the sample along
with the number of employees and respondent’s job title.
Two of the most common potential threats to survey research are non-response bias and
common-method bias. In order to assess non-response bias, we compared company size by
number of employees and operating income in the population and in the participating
sample. The results of the analyses of variance (ANOVA) indicated that there were no
significant differences between sample and population in either of these two areas. With
respect to common-method bias and as suggested by Podsakoff et al. (2003), a statistical
analysis to determine any relationships was undertaken. We performed Harman’s
single-factor test to see if the majority of the variance can be explained by a single factor.
An exploratory factor analysis (principle components, no rotation) was conducted using all
six of the constructs. The first component accounted for 35.3 percent of the variance, which
is less than the recommended 50 percent threshold, indicating that common-method bias
was not a problem.

3.2 Construct measurement and validation

Respondents were asked to rate each of the six main constructs on multi-item scales (Table
AI) using a five-point ordinal scale (1 ¼ strongly disagree to 5 ¼ strongly agree) their degree
of e-procurement adoption and use, and drivers of and barriers to e-procurement and
performance. E-procurement use was measured using Wu and Ross’s (2007) empirically
validated scale ( five items). Top management support toward IT was measured according
BIJ Type of industry Sample %
27,2
Furniture 55 27.6
Metal-mechanical 38 19.1
Food and beverages 34 17.1
Plastics 19 9.5
Textiles 11 5.0
852 Electronic-electricity 9 4.5
Printing 7 3.5
Automobile 5 2.5
Chemicals 8 4.0
Othera 13 6.5
Total 199 100
Number of full-time employees
50–99 89 45
100–249 60 30
250–500 50 25
Total 199 100
Respondent’s job title
VP of purchasing 14 7
Director of purchasing 91 46
Purchasing manager 84 42
Otherb 10 5
Total 199 100
Note: a“Other” included firms in the following industries: Aeronautical, Leather, Ceramic, Building,
Table III. Appliance, Pharmaceutical, Railway, Medical, and Naval; b“Other” included HR manager, quality manager,
Sample description and marketing director

to Wu and Ross’s (2007) top management emphasis validated scale (three items). Strategic
purchasing was measured using Carr and Pearson’s (1999) validated scale ( four items).
The IT obstacles scale (ten items) was specifically developed for this research based on
Toktaş-Palut et al.’s (2014) e-procurement barriers. Procurement process performance was
based on Mishra et al.’s (2007) validated scale for procurement process performance ( five
items). The measurement of business performance was based on Afshan et al. (2018) and
González-Benito’s (2007) using a five-point scale from 1 (significantly decreased over the last
three years) to 5 (significantly increased over the last three years) (three items).
The means and standard deviations are listed in Table IV. Examination of the individual
responses established that nearly all the respondents agreed with the statements (item scores
above the scale median score of 3.00), indicating that, overall, the companies in the sample
made a considerable use of the practices listed in Table IV. Specifically, medium-sized
businesses seem to use e-procurement to support purchasing transactions (creating
purchasing orders and managing the payment of suppliers), and to a lesser extent for
collaboration with suppliers. These results are similar to previous research by Hassan et al.
(2017) and Gunasekaran et al. (2009), who found also low levels of e-procurement in SMEs.
Among the e-procurement software applications used by the firms in the sample
(Table V ), the means indicated that purchasing software applications were the most widely
used, followed by ERP software, and supply chain management software. Other applications
such as corporate purchasing portals, extranets, e-auctions, e-marketplaces, digital
dashboards and data mining were scarcely adopted and used by businesses in the sample.
3.2.1 Construct validation. Before testing the theoretical model presented in Figure 1, the
psychometric properties of the scales used to measure the six latent constructs of the study
were first established. In order to accomplish this, we performed tests of reliability,
Code Construct/Item Mean SD CFA Std loadings
E-procurement in
SMEs: facilitators
Top management support toward IT (Reliability α ¼ 0.87, r ¼ 0.85, AVE ¼ 0.84) and impact on
tms_1 3.46 0.770 0.86
tms_2 3.49 0.834 0.80 performance
tms_3 3.59 0.810 0.85
IT obstacles (Reliability α ¼ 0.97, r ¼ 0.77, AVE ¼ 0.71)
ito_1 1.16 0.526 0.88 853
ito_2 1.16 0.465 0.84
ito_3 1.17 0.480 0.85
ito_4 1.17 0.493 0.89
ito_5 1.18 0.490 0.79
ito_6 1.20 0.538 0.88
ito_7 1.17 0.490 0.91
ito_8 1.15 0.443 0.94
ito_9 1.17 0.472 0.89
ito_10 1.19 0.493 0.90
Strategic purchasing (Reliability α ¼ 0.86, r ¼ 0.62, AVE ¼ 0.70)
SP_1 3.50 0.745 0.69
SP_2 2.89 0.837 0.54
SP_3 3.27 0.742 0.66
SP_4 3.28 0.710 0.99
E-procurement (Reliability α ¼ 0.94, r ¼ 0.75, AVE.75)
EP_1 3.06 1.036 0.71
EP_2 2.82 1.072 0.82
EP_3 2.69 0.939 0.93
EP_4 2.65 0.962 0.95
EP_5 2.59 0.877 0.93
Procurement process performance (Reliability α ¼ 0.93, r ¼ 0.68, AVE ¼ 0.75)
PPP_1 3.40 0.665 0.91
PPP_2 3.37 0.668 0.90
PPP_3 3.42 0.690 0.85
PPP_4 3.33 0.644 0.90
PPP_5 3.32 0.633 0.86
PPP_6 3.43 0.631 0.68
PPP_7 3.58 0.661 0.68
Business performance (Reliability α ¼ 0.94, r ¼ 0.81, AVE ¼ 0.73)
Table IV.
BP_1 3.90 0.586 0.89
Means, construct
BP_2 3.94 0.524 0.79 reliability estimates,
BP_3 3.88 0.546 0.92 average inter-item
BP_4 3.87 0.550 0.95 scale correlations and
Notes: r is the average inter-item correlation among scale items. All coefficients were significant po 0.01 measurement loadings

Mean SD

Purchasing management software 4.24 0.87

Enterprise resource planning software with purchasing management module (SAP, Oracle, JDEdwards) 3.81 0.90
Supply chain management software (SCM) 2.50 1.33
Corporate intranet portal for purchases 1.19 0.67
Extranet for our suppliers 1.06 0.37
E-auctions 1.03 0.27
E-marketplaces 1.04 0.29
Data mining software 1.08 0.42 Table V.
Digital dashboards 1.08 0.48 E-procurement tools
BIJ inter-item and inter-scale correlations, confirmatory factor analysis (CFA) (Anderson and
27,2 Gerbing, 1988), and tests of convergent and discriminant validity. With respect to the CFA,
multiple fit criteria were used to assess the appropriateness of the measurement models
tested (Hair et al., 1995; Bollen and Long, 1993).
3.2.2 Scale reliability. Scale reliability provides a measure of the internal consistency and
homogeneity of the items that make up a scale (Churchill, 1979) and was calculated using
854 Cronbach’s α. As Table IV illustrates, the Cronbach’s α reliability estimates ranged between
α ¼ 0.86 (strategic purchasing) and α ¼ 0.97 (IT obstacles). All six scales displayed
composite reliability values in excess of the 0.70 recommended threshold (Churchill, 1979),
providing strong evidence that the scales we used were reliable for this population.
3.2.3 Inter-item, inter-scale and inter-follower correlations. The inter-item and inter-scale
correlations were calculated for each set of items within each of the six scales. As reported in
Table IV, the average inter-item correlations for the six scales range between r ¼ 0.68
(procurement process performance) and r ¼ 0.85 (top management support). All inter-items
for each scale were significantly correlated ( p o0.01) within their corresponding scales and
above the recommended value of r ¼ 0.3 (Hair et al., 1995), indicating a strong inter-item
relationship among the measurement variables for each of the six constructs.
The inter-scale correlations (see Table VI) were calculated using the SEM x-measurement
(CFA) model and the pairs of constructs and their associated measurement variables. The
inter-scale correlations were significant ( po 0.01) ranging between r ¼ 0.0 (non-significant)
and r ¼ 0.58.
3.2.4 Convergent validity. Convergent validity is demonstrated when a set of alternative
measures, accurately represents the construct of interest (Churchill, 1979). Assuming model fit,
if all the individual factor loadings are significant, then the indicators are effectively
converging to measure the same construct (Anderson and Gerbing, 1988). This was assessed
by using a CFA of the six constructs and by reviewing the model fit of the level of significance
for each of the factor loadings. Although the CFA model’s χ2 was significant
( χ2 (480) ¼ 730.26, p o0.001), the fit indices for the CFA indicated a reasonable
fit (The χ2/df ¼ 1.52, RMSEA ¼ 0.051, CFI ¼ 0.98, IFI ¼ 0.98, NNFI ¼ 0.98, RFI ¼ 0.95), with
values above or equal to the recommended minimum levels ( χ2/dfo3.0, RMSEAo0.08,
CFIW0.90, IFIW0.90, NNFIW0.90, RFIW0.90) (Chau, 1997). The standardized loadings for
the indicators ranged between lx ¼ 0.59 and lx ¼ 0.99 and all were highly significant
(tW2.576; po0.01). The AVE for each of the constructs listed in Table IV were above 0.7,
indicating a substantial amount of commonality among the constructs’ measurement items,
and that greater than 50 percent of the measurement variables’ variance is explained by the
construct. Thus, since the loadings of the measurement items on their associated constructs
are all significant, the majority of the measurement variable variance is being explained by the
construct (AVE), and a high level of inter-item correlation (see Table IV, Section 4.2.3), it is
implied that each construct demonstrates convergent validity.

E- Procurement process Business Top management IT Strategic

procurement performance performance support obstacles purchasing

EP 1
PPP 0.47 1
BP 0.35 0.22 1
TMS 0.51 0.46 0.44 1
IT −0.23 −0.07 (NS) −0.39 −0.33 1
Table VI. SP 0.44 0.41 0.37 0.58 −0.13 (NS) 1
Inter-scale correlations Note: All correlations significant p o 0.05 except for those labeled NS (not significant)
3.2.5 Discriminant validity. Discriminant validity among the latent variables and their E-procurement in
associated measurement variables can be assessed by fixing (i.e. constraining) the SMEs: facilitators
correlation between pairs of constructs to 1.0, then re-estimating the modified model
(Segars and Grover, 1993). This procedure essentially converts a two-construct model into a
and impact on
single-construct model. The condition of discriminant validity is met if the difference of performance
the χ2 statistics between the constrained and standard models is significant (1 df ).
The χ2 difference tests (see Table VII) were all significant, which indicates that discriminant 855
validity exists between all pairings of the six constructs.

4. Results
The theoretical model presented in Figure 1 was estimated using the entire (n ¼ 199) data
set. Prior to assessing the study’s hypotheses, the model’s overall fit had to be established
(Bollen and Long, 1993). The χ2 statistic was significant ( χ2 ¼ 756.36, df ¼ 489, p o0.01).
With respect to the fit indices, the χ2/df ¼ 1.55 and RMSEA had a value of 0.053, below the
recommended maximums of 3 and 0.08 (Chau, 1997), respectively. The fit indices CFI ¼ 0.98,
IFI ¼ 0.98, NNFI ¼ 0.98, RFI ¼ 0.95 were all above the minimum acceptable 0.94 level (Chau,
1997). Thus, the model appears to fit reasonably well.
The test of the proposed hypotheses is based on the parameter estimates of the structural
model presented in Figure 2. The LISREL coefficients between latent variables give an
indication of the relative strength of each relationship ( Jöreskog and Sörbom, 1993). Each of
the five hypotheses was tested at the significance level of p o0.05. All 33 measurement
variables loaded significantly ( p o0.05) on their respective constructs (e-procurement, top
management support, IT obstacles, strategic purchasing, e-procurement, procurement
process performance and business performance).
The first hypothesis (H1) asserts that top management support has a positive direct
significant relationship with e-procurement. As Figure 2 shows, the path relating these two

χ2 statistic
Unconstrained model (df ) Constrained model (df ) Difference p-value

E-procurement with
Procurement process performance 124.23 (53) 1,389.74 (54) 1,265.51 0.000
Business performance 42.99 (26) 500.32 (27) 457.33 0.000
Top management support 37.89 (19) 263.90 (20) 226.01 0.000
IT obstacles 146.35 (89) 660.27 (90) 513.92 0.000
Strategic purchasing 59.91 (26) 376.07 (27) 316.16 0.000
Procurement process performance with
Business performance 83.05 (43) 583.80 (44) 500.75 0.000
Top management support 64.79 (34) 247.07 (35) 182.28 0.000
IT obstacles 181.23 (118) 854.59 (119) 673.36 0.000
Strategic purchasing 89.21 (43) 351.74 (44) 262.53 0.000
Business performance with
Top management support 30.09 (13) 191.31 (14) 161.22 0.000
IT obstacles 125.35 (76) 347.43 (77) 222.08 0.000
Strategic purchasing 40.46 (19) 399.04 (20) 358.58 0.000
Top management support with
IT obstacles 111.48 (64) 186.39 (65) 74.91 0.000
Strategic purchasing 35.48 (13) 117.79 (14) 82.31 0.000
IT obstacles with Table VII.
Strategic purchasing 125.92 (76) 266.14 (77) 140.22 0.000 Discriminant validity
BIJ Top R 2 = 0.21
27,2 management
support 0.22** Procurement
process
0.45** performance
–0.13**
IT obstacles E-procurement
ns
856 0.32**
Business
0.43**
performance
Strategic ns
purchasing R 2 = 0.11

Control variables:
Industry type
Figure 2.
Size
Estimated
structural model
Notes: ns, non significant. **p < 0.01

constructs was positive and significant (standardized γ1 coefficient ¼ 0.22; t ¼ 3.15,

po0.05), thus providing strong evidence supporting H1. This indicates that a higher
(lower) level of top management support of IT is associated with higher (lower) levels of
e-procurement. The second hypothesis (H2) asserts that IT obstacles have a negative direct
significant relationship with e-procurement. As Figure 2 shows, the path relating these two
constructs was negative and significant (standardized γ2 coefficient ¼ −0.13, t ¼ −2.03,
po0.05), thus providing strong evidence supporting our second hypothesis. Thus, higher
(lower) levels of IT obstacles are associated with lower (higher) levels of e-procurement.
The third hypothesis (H3) posits that strategic purchasing has a positive significant
relationship with e-procurement. As Figure 2 shows, the path relating these two constructs
was positive and significant (standardized γ3 coefficient ¼ 0.43, t ¼ 5.56, po0.05), thus
providing strong evidence supporting H3. Thus, higher (lower) levels of strategic purchasing
are associated with higher (lower) levels of e-procurement. The fourth hypotheses (H4) posits
that e-procurement has a positive direct significant relationship with procurement process
performance. As Figure 2 shows, the path relating these two constructs was positive and
significant (standardized β1 coefficient ¼ 0.45, t ¼ 5.04, po0.05), thus providing strong
evidence supporting our fourth hypothesis. Thus, higher (lower) levels of e-procurement are
associated with higher (lower) levels of procurement process performance. The fifth
hypothesis (H5) posits that e-procurement has a positive direct significant relationship with
business performance. As Figure 2 shows, the path relating these two constructs was positive
and significant (standardized β2 coefficient ¼ 0.34, t ¼ 4.36, po0.05), thus providing strong
evidence supporting H5. Thus, higher (lower) levels of e-procurement are associated with
higher (lower) levels of business performance.
Measures such as path coefficients, which indicated the strengths of the relationships
between dependent and independent variables, as well as the R2 value, which represented
the amount of variance that was explained by the independent variable, were used to assess
the proposed relationships. In essence, the R2 value was a measure of the predictive power of
the dependent variable in the model (Hair et al., 1995). Together the R2 and the path
coefficients indicated how similar the model implied by the data is to the theoretical model.
The R2 value for the e-procurement use construct was R2 ¼ 0.25, procurement process
performance R2 ¼ 0.21 and business performance construct R2 ¼ 0.11. Each of these values
represents a magnitude that we would reasonably expect among these constructs. (For
example, an R2 of 0.11 indicates that 11 percent of the business performance construct
variance is accounted for by the e-procurement construct). Although, these percentages of E-procurement in
explained variances might initially seem small, one needs to consider that there are other SMEs: facilitators
variables that are not included in the model that could explain each of the dependent and impact on
constructs (e-procurement, procurement process performance and business performance).
For example, business performance is affected by decisions made by the different performance
departments that make up a company (e.g. marketing, finance, operations, human resources,
etc.). Decisions by the purchasing department are but just a small subset of all of a 857
company’s decisions, therefore, it would be reasonable to expect that decisions in
purchasing (e.g. using e-procurement) would only affect a small portion of a company’s
business performance. These results have several theoretical and managerial implications
which are discussed next.
An ANOVA was conducted to determine if industry type impacted procurement process
performance and business performance. The results indicated that the type of industry had
no effect on either construct. Similarly, a correlation between number of employees and the
two constructs procurement process performance and business performance. No significant
correlation was found. These control variables were not modeled in the SEM but where
included in the figures for conceptual clarity.

5. Discussion
Overall, the data analysis seems to support the proposed model, suggesting that top
management support of IT, strategic purchasing and IT obstacles are three key elements
that affect the development of e-procurement. The results extend previous literature in
e-procurement in SMEs either by providing evidence of a relationship that was not
previously found in the literature (top management support and e-procurement; Hassan’s
et al. (2017) and by providing empirical evidence of relationships which had not been
previously tested in the context of SMEs (strategic purchasing and e-procurement; and
e-procurement and performance; Archer’s et al. (2008) and Gunasekaran’s et al. (2009).
More specifically, the acceptance of H1 evidences that top management leadership plays
a critical role in the development of an e-procurement capability in SMEs. In line with
previous findings in large firms (Teo et al., 2009; Wu and Ross, 2007; Rai, Tang, Brown and
Keil, 2006), the support of senior management toward IT is necessary to provide the
leadership and resources that investment in new IT requires. This result also is in contrast
with recent literature in SMEs (Hassan et al., 2017) and validates the critical role of top
management support in e-procurement in SMEs.
A second major factor affecting the development of e-procurement in SMEs is the
existence of IT obstacles, as evidenced by the acceptance of H2. According to this result, IT
obstacles work as a major deterrent to e-procurement in SMEs. Elements such as the lack of
flexibility of the new e-procurement system to match the current purchasing process, the
lack of integration with other systems including systems from suppliers, the complexity of
the new system, security concerns, lack of IT expertise, lack of understanding of the benefits
and costs of e-procurement, limited financial resources for the acquisition, and insufficient
training of employees, all have a negative influence on e-procurement. These are all
important IT obstacles that need to be considered by SMEs when trying to develop
e-procurement within their firm. This finding is in line with previous research (Toktaş-Palut
et al., 2014; Soares-Aguiar and Palma-dos-Reis, 2008; Rai, Tang, Brown and Keil, 2006) and
extends Hassan et al.’s (2017) by providing evidence of the significance of IT obstacles for
e-procurement in SMEs.
Strategic purchasing was also found to contribute positively to the development of
e-procurement. The results from H3 suggests that the higher the status given to the
purchasing function in SMEs (i.e. purchasing participates in the strategic planning process
of the firm, has a formal planning process, and has a plan that is aligned with the strategic
BIJ priorities for the firm), the more likely the business is to develop e-procurement. One could
27,2 argue that the more important the purchasing function becomes, the more scrutiny it
receives from senior management and the higher the expectation that it will deliver excellent
service. This can drive the purchasing department to look at ways to improve and innovate
and consequently lead to the adoption and use of e-procurement. This important finding has
not been previously reported in the literature. It is also in line with Mishra et al.’s (2013)
858 capability hierarchy argument, by evidencing that strategic purchasing, as a higher-level
capability, is linked directly to e-procurement, a lower level capability, and that the influence
of strategic purchasing over performance is mediated by the lower level capability. Senior
management support of IT also ensures that e-procurement investments are aligned with
the strategic goals of the firm. This finding also provides further support to Maguire et al.’s
(2007) claim that SMEs can gain competitive advantage using information and
communication technologies and that there are also advantages to SMEs in using an
integrated strategic approach. Furthermore, it also extends Hassan et al.’s (2017) study by
differentiating and isolating the effect of strategy on e-procurement.
The results of H4 showed that e-procurement in SMEs has a significant positive effect on
procurement process performance. As such, e-procurement leads to performance gains in
the reduction of purchasing processing costs (i.e. administrative costs), reduction in prices,
reduction in purchasing-transaction errors, decreased purchasing cycle time (i.e. time to
complete a purchase order from issuing to payment to vendor), and reduced inventory levels
and costs. This finding is in clear contrast with Pavic’s et al. (2007) study which indicated
that SMEs use some form of internet technology in running their day-to-day businesses
but most of them are not creating value by using e-business. according to our findings
e-procurement is able to create significant value to the purchasing function in SMEs.
H5 indicated a positive relationship between e-procurement and business performance.
This result indicates that the performance gains derived from e-procurement go beyond the
immediate gains in procurement process performance to include a firm’s business
performance in the form of increased productivity, return on assets and return on
investment. This result provides support to the resource based-view of the firm and more
specifically to the idea of e-procurement as a complementary capability that can lead to a
sustained competitive advantage.
The study has valuable implications for managers. For example, the results highlight the
importance of senior management leadership in the development of e-procurement in SMEs.
Therefore, senior management in SMEs needs to understand that the adoption and
development of e-procurement is dependent on their direct involvement in leading such
initiatives, guiding them and making the necessary resource commitments. The positive
relationship between strategic purchasing and e-procurement is also a reassurance to
managers at SMEs that the development of e-procurement is facilitated by the strategic
importance of the purchasing function. SMEs in which the purchasing function does not
enjoy a strategic status, but who are interested in developing e-procurement should realize
that they are lacking a major facilitating factor of e-procurement. This can be achieved by
integrating e-procurement with the strategic objectives of the firm and not to implement it as
an isolated technology solution for the purchasing department. Strategic planning in
purchasing should play a critical role in the adoption of e-procurement technology.
Managers in SMEs should not overlook the negative influence of IT obstacles in
developing e-procurement. Failing to take them into consideration could thwart any
e-procurement initiative. Management should be aware of these IT obstacles and do what
they can to minimize them. For example, providing training to employees will increase their
knowledge of e-procurement and result in higher acceptance and its use. Similarly, hiring IT
expertise and modernizing the company’s IT infrastructure can help to deal with the lack of
integration with other systems and security concerns that the adoption of e-procurement is
associated with. Being aware of these obstacles and acting on them should increase the E-procurement in
chances of developing effective e-procurement. SMEs: facilitators
This paper provides managers with evidence of the positive relationship between and impact on
e-procurement and performance in the context of SMEs and therefore, helps to overcome
one of the main obstacles for SME managers in adopting e-procurement (Gunasekaran performance
et al., 2009; Pavic et al., 2007). More specifically, the study findings reveal that
e-procurement contributes to improved purchasing performance in terms of reduced 859
purchasing costs, reduced cycle time, reduced purchasing errors and increased inventory
turnover. In addition, e-procurement also contributes to a firm’s overall profitability in
terms of increased return on investment, return on sales, reduced production costs and
increased overall productivity.
This study has also valuable implications for policy. Given SMEs’ low adoption of
e-procurement, it might be advisable for policy makers to provide more education about the
value and benefits of e-procurement and promote the development of skills that would
facilitate the adoption of e-procurement by SME, such as top management leadership skills
and strategic planning skills.

6. Concluding remarks
While e-procurement has received considerable attention in the literature, its study in the
context of SMEs has not been addressed in enough detail. The goal of this research was to
fill this gap in the literature by empirically testing a model for the development of
e-procurement in SMEs that included top management support toward IT, IT obstacles and
strategic purchasing. In addition, the model also relates e-procurement to procurement
performance and business performance. The proposed model was tested using survey data
from a sample of 199 SMEs in manufacturing in Spain. According to the results pertaining
to this article’s five research questions, top management support toward IT, IT obstacles
and strategic purchasing are all relevant factors when adopting e-procurement by SMEs.
More specifically, in relation to our first research question (RQ1), we can conclude that the
support of senior management toward IT is necessary to provide the leadership and
resources that investment in new IT requires. IT obstacles were also found work as a major
deterrent to e-procurement in SMEs (RQ2). It can be concluded that elements such as the
lack of flexibility of the new e-procurement system to match the current purchasing process,
the lack of integration with other systems including systems from suppliers, the complexity
of the new system, among others have a negative influence on e-procurement. The results
also lead us to conclude that strategic purchasing is a significant contributor to the
development of e-procurement in SMEs, therefore, answering RQ3. Additionally, this
research showed that e-procurement has a positive impact on procurement performance as
well as business performance and it can be concluded that the performance gains derived
from e-procurement go beyond the immediate gains in procurement process performance
(RQ4) to also increase a firm’s business performance (RQ5) adding considerable value to
SMEs procurement function. Thus, the five aspects of the research undertaken support the
model presented in Figure 2.
At this point, it is important to acknowledge some limitations in the study which also
provide opportunities for future research. There are additional factors that are also relevant
to e-procurement in SMEs that could have been included such as having close relationships
with suppliers. Though the constructs developed in this study exhibit acceptable reliability
for the purposes at hand, future research should refine them and consider adding new
indicators. Also, inferences in this study are based on cross-sectional data which make
causal claims difficult; a longitudinal study could help solve this problem. A data set with
multiple informants from the purchasing department and from other functional areas at
each organization could also enhance the validity of the findings. Despite these limitations,
BIJ this study paves the way for researchers and managers to more fully understand the
27,2 development of e-procurement in medium-sized businesses and its relationship with
performance. Furthermore, similar to Altayyar and Beaumont-Kerridge (2016), this study
could be extended by considering the effect of external factors on e-procurement adoption in
SMEs, and the effect of using additional information technologies such as cloud computing
or business analytics in SMEs.
860
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Appendix E-procurement in
SMEs: facilitators
and impact on
E-procurement performance
1. To what extent does your company use information technology tools in managing
the following purchasing activities (1 no use, 5 intensive use)
EP1 Electronic ordering to suppliers 1 2 3 4 5 865
EP2 Electronic payment to suppliers 1 2 3 4 5
EP3 Provide online materials inventory information to our suppliers 1 2 3 4 5
EP4 Provide specific online information about product specifications that our
suppliers must meet 1 2 3 4 5
EP5 Provide online production planning information to suppliers 1 2 3 4 5
Top management support toward IT
2. Indicate to what extent you agree with the following statements:
(1 totally disagree, 5 totally agree)
TMS1 The support of top management was decisive in providing the financial
resources needed to implement purchasing management IT tools 1 2 3 4 5
TMS2 Top management considers the adoption and use of IT tools (including
electronic procurement) as a priority in our firm 1 2 3 4 5
TMS3 Top management considers that our firm must adapt itself to the new IT
trends 1 2 3 4 5
Strategic purchasing
3. Indicate to what extent you agree with the following statements: (1 totally disagree,
5 totally agree)
SP1 Senior management in purchasing is directly involved in our firm’s strategic
planning process 1 2 3 4 5
SP2 The purchasing department has a documented long term plan (at least two
years) 1 2 3 4 5
SP3 This long term purchasing plan responds to the strategic priorities of the firm 1 2 3 4 5
SP4 Purchasing professionals have a good understanding of our firm’s strategic
objectives 1 2 3 4 5
IT obstacles
4. To what extent have the following statements represent or have represented
obstacles in the implementation of purchasing management IT tools in your firm.
Indicate your level of agreement or disagreement (1 totally disagree, 5 totally
agree):
ITO1 Lack of flexibility of the new purchasing IT system to replicate the current
purchasing process 1 2 3 4 5
ITO2 Lack of integration with other IT systems such as the accounting or
inventory management systems 1 2 3 4 5
ITO3 Problems related with the security of the new IT system 1 2 3 4 5
ITO4 Lack of integration with the IT systems of suppliers 1 2 3 4 5
ITO5 High costs of training purchasing personnel in the new
IT system 1 2 3 4 5
ITO6 Lack of knowledge of the advantages and benefits of the new IT system for
our firm 1 2 3 4 5
ITO7 Lack of financial resources to acquire the new IT system 1 2 3 4 5
ITO8 Lack of previous experience in the implantation of similar
IT tools 1 2 3 4 5
ITO9 Lack of qualified technical personnel necessary to implement the new IT
system 1 2 3 4 5
ITO10 Complexity of operation and maintenance of the new
IT system 1 2 3 4 5
Table AI.
(continued ) Primary measures
BIJ Procurement process performance
27,2 5. The use of purchasing management IT tools has (indicate your level of agreement
or disagreement) (1 totally disagree, 5 totally agree):
PPP1 Reduced the cost of processing purchase orders (efficiency) 1 2 3 4 5
PPP2 Reduced the duration of the purchasing ordering cycle ( from release of the
purchase order to the issuing of the payment to the supplier) (efficiency) 1 2 3 4 5
PPP3 Reduced inventory levels (effectiveness/efficiency) 1 2 3 4 5
866 PPP4 Reduced prices paid for purchases (effectiveness) 1 2 3 4 5
PPP5 Reduced errors in purchase transactions (effectiveness) 1 2 3 4 5
PPP6 Increased the reliability of information in the purchasing department 1 2 3 4 5
PPP7 Increased the conformance of purchase orders (effectiveness) 1 2 3 4 5
Business performance
6. Evaluate how the following indicators have changed over the last three years
compared to your competition (1 ¼ decreased significantly, 5 ¼ increased
significantly)
BP1 Overall productivity 1 2 3 4 5
BP2 Company’ overall production unit costs 1 2 3 4 5
BP3 Return on assets (ROA) 1 2 3 4 5
Table AI. BP4 Return on investment (ROI) 1 2 3 4 5

Corresponding author
Cristóbal Sánchez-Rodríguez can be contacted at: sanchezc@yorku.ca

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