ABSTRACT

Research Question

This term paper seeks to address pivotal research questions centered around the "Influence/Effect of
E-Procurement Practices on Supply Chain Performance." The study aims to unravel the intricate
dynamics of several key e-procurement practices and their consequential impact on the overall
efficiency and effectiveness of supply chain operations. The following research questions will guide
the investigation:

i. What are the effects of E-Payments on Supply Chain Performance?

ii. What are the ways of E-Tendering effects of Supply Chain Performance?
iii. What is the role of e-Invoicing on Supply Chain Performance?
iv. What is the importance of E-CRM/ERP on supply chain Performance?

These research questions are carefully crafted to delve into the nuanced aspects of each e-
procurement practice and its implications on supply chain performance. The findings will not only
contribute to the academic understanding of this dynamic field but will also offer practical insights
for businesses aiming to leverage e-procurement strategies to enhance their overall supply chain
efficiency and competitiveness.

Supply chain is a network of people and businesses that work together to move resources like
commodities, services, money, and data from their origin to their final destination (Rudberg &
Ekeskär, 2020, p. 2). The network of companies that cooperate to provide a good or service to end
users is known as a "supply chain," and its members are referred to by that term. Consumers,
wholesalers, retailers, manufacturers, and other vendors are all links in the supply chain. The supply
chain also includes facilities for warehousing and delivery of goods. Each and every commodity that is
exchanged on the market for consumer goods passes through a series of business-to-business
transactions on its journey from its beginnings as a raw material to its completion as a consumer
good (Nastase & Felea, 2013, p. 75). The collaborative efforts of all the participants in a supply chain
are depicted in Figure-1, which explains how Supply Chain Management (SCM) may reach its full
potential. Supply Chain Orientation (SCO) requires assurance, dedication, dependency, organizational
harmony, top management support, agreed-upon SCM visions and critical procedures, and
acceptance of a leadership role within the supply chain. Additionally, ambition to have a leadership
role in the supply chain is required. If members of the supply chain fail to resolve these issues, SCO
will be negatively impacted and the supply chain as a whole will struggle to reap the benefits of SCM
(Janné & Rudberg, 2020, p. 72).

To sum up, supply chain management (SCM) refers to the supervision of goods, information, and
finances as they progress from supplier to manufacturer to wholesaler to retailer to customer
(Cooper et al, 1997). Supply Chain Management (SCM) entails the synchronization and consolidation
of these movements, both internally and externally, among many organizations. The primary
objective of a well-functioning SCM system is to minimize inventory levels, while ensuring that
products are readily accessible when required.

a. The evolution of e-procurement

Following World War II, the Soviet Union severed the infrastructure connections to West Berlin,
resulting in the enclave relying solely on airlift for the delivery of supplies and sustenance. The
shipping manifests for these crucial supply deliveries were presented in various formats and
occasionally, even in numerous languages. Consequently, the task of documenting the movement of
food and supplies became extremely challenging (Varadharajan, 2020). Sgt. Edward A. Guilbert faced
the exceptional task of transporting provisions by air into Berlin, which had been isolated from
Western Europe by the Soviet Union in 1948. He pioneered a method of electronic communication
for coordinating shipping supply chains within the Army (Kiser, 2023). He devised a standardized
manifest system that could be delivered via telex, radio-teletype, or telephone, facilitating the
transportation of around two million tons of supplies until 1949. Guilbert implemented his idea of
transferable standardization in civilian settings during the 1960s. The initial adopters of this approach
were transportation companies operating in rail, aviation, road, and maritime sectors, which
ultimately led to the development of the initial electronic data exchange (EDI) standards during the
1970s (Varadharajan, 2020). Electronic Data Interchange (EDI) refers to the electronic transfer of
business data, information, and documents between computer systems of different businesses, using
a defined format. This movement utilizes a structured data format that enables the transfer of data
across computer-supported business applications in different locations without the need for manual
rekeying. This very sophisticated method of conducting commercial transactions is rapidly becoming
the standard practice in various sectors of the corporate realm (Iyengar, 1999, p. 86). Due to the
quick advancement of EDI, which facilitated efficient information exchange and enhanced inventory
management, even major manufacturing companies such as Ford and General Motors required their
suppliers to implement this method. This resulted in decreased expenses and increased accounting
capabilities (Varadharajan, 2020). EDI has gained significant popularity for its efficient transmission of
procurement documents, such as purchase orders, invoices, shipping alerts, and more, straight to a
vendor or another stakeholder's computer (Iyengar, 1999, p. 86).

Image Source: https://www.spiceworks.com/supplychain/procurement/guest-article/the-evolution-

of-procurement-where-it-was-and-where-it-is-going/

While EDI facilitated the flow of information, it did not fully optimize procurement procedures. There
were numerous deficiencies in the process of ensuring the availability of materials to meet the
demand. Materials requirement planning (MRP) was implemented at this stage. A crucial indicator of
service quality is the industry's ability to provide the desired item within the specified timeframe.
Delivering orders past a guaranteed delivery date will lead to a decline in customer satisfaction and,
ultimately, a decrease in market share (Sahu & Nishad, 2015). MRP systems empower procurement
professionals to ascertain the specific type, number, and timing of requirements, along with
conducting calculations to establish when and in what quantity a purchase order should be initiated.
Therefore, the implementation of Material Requirements Planning (MRP) provided a highly efficient
method for strategically managing resource needs, ensuring timely completion of tasks and desired
service levels, all while saving expenses (Adarsh, 2020, p. 21)
Despite initial promise, MRP (Material Requirements Planning) encountered limitations and revealed
associated implementation challenges. Data integrity challenges, such as inaccurate bills of material
and lead time data, prompted the creation of MRP II. MRP II facilitated the integration of
supplementary information exchanges with finance, marketing, and other departments. The
enhanced integration boosted the organization's planning skills, enabling procurement leaders to
determine capacity and manpower requirements more effectively. Most importantly, it enabled
managers to acquire immediate input from the shop floor, which may be used to make necessary
adjustments to plans (Varadharajan, 2020).

MRP II has revolutionized the perspective on production planning and the integration of many
divisions within the manufacturing business. The successful incorporation of MRP II has resulted in
the maintenance of reliable and precise data, leading to the advantages such as enhanced precision,
uniformity and effectiveness in managing the organization, enhanced oversight and supervision over
operations, providing flexibility to modify internal processes to align with evolving market conditions,
provides capacity to integrate internal adjustments based on customer feedback, expedites and
consistent access to information for expedited decision-making and enhanced management of cash
flow and capital(Ganesh, et al., 2014):

Finally, ERP was developed as an extension of MRP and MRP II, taking into account all the essential
resources such as human resources, sales, and financial departments that are crucial for the
enterprise's success (Kurbel, 2013, p. 45)ERP is a strategic instrument that consolidates and optimizes
different activities and data of an organization into a unified system, enhancing the efficiency of the
firm and enabling it to gain a competitive advantage in an unpredictable business climate (Mbohwa
& Madanhire, 2016, p. 226). During the early 1990s, businesses acknowledged the necessity for all
departments inside a manufacturing firm, including production, supply chain, and supporting
departments, to work together in order to achieve the organization's vision and goals. In order to
achieve sustained growth and development, it is imperative that all departments within a company
coexist and work at the same level of efficiency and productivity, while ensuring a continuous flow of
information (Adarsh, 2020, p. 23)

ERP pretty much linked every part of a company together, but it also had some problematic features.
When it first came out on the market in the 1990s, buyers quickly saw how useful it could be and
started using it in the late 1990s. This early use of technology raised the level of buying to a whole
new level, and it's still going in the same direction today (Varadharajan, 2020). The Internet made
buying easier in many ways, such as by giving people access to a large pool of suppliers, helping them
find the best deals, speeding up the process, making it easier to access purchasing documents, and
putting all information about suppliers in one place. This also meant that present strategies and ways
of buying things had to be changed to fit the new technology (Varadharajan, 2020)

The Internet has changed the way businesses buy things in new ways. It has recently become a major
factor in helping many businesses become much more productive. When companies offer "e-
procurement solutions," they're advertising that their services can help manufacturers save a lot of
money on the things that go into making things. How well manufacturers buy their materials and
other inputs often affects how much they get done generally (Ageshin, 2001). Business-to-business
(B2B) marketplaces, electronic supply chains, trading hubs, and trading communities are some other
names for e-procurement sites. Basically, they are Web-based networks where one or more
companies try to find the cheapest providers. To put it simply, e-procurement does the same thing
that tendering did before the Internet: it helps companies find the best goods and services at the
lowest prices while making sure that they meet technical and other (tender) requirements. E-
procurement solution providers are changing the process in more ways than just computerizing and
automating it by putting it on the Web (Ageshin, 2001).

Motivating Factors for E-procurement

The advantages of investing in E-procurement can be categorized as tangible (directly quantifiable)

and intangible (indirectly quantifiable). The tangible advantages of e-procurement are that it allows
for the automation of the purchasing process, hence minimizing errors and reducing the time
required for human data entry. Additionally, it facilitates the electronic settlement of invoices,
thereby promoting timeliness and fostering a positive credit standing. Additionally, it reduces costs
through strategic sourcing and guarantees that only vendors that satisfy the company's standards are
included in the system. Additionally, the reduction of inventory is facilitated by implementing just-in-
time delivery, where the stock system is integrated with the supplier and a predetermined threshold
is established to commence the order process. Additionally, it helps to decrease the number of
employees required, as there is minimal stock to be controlled. All employees are participating in the
purchasing process, which means that the procurement team just needs to be minimal in order to
maintain the supplier database (Kariuki, 2014, pp. 11-12)

Cost savings is one of the primary motivations for implementing electronic procurement (Siddiqui, et
al., 2022). The advent of the Internet has altered certain value chain propositions and procedures.
The expeditious distribution of information, low cost, and low barrier to entry of this technology
enable a smooth extension of processes across organizational boundaries. There is a shift from initial
skepticism to an acknowledgment of the value that e-procurement brings to businesses; whether
through actual cost savings, process enhancements, or enhanced management (Jooste & van Schoor,
2003).

For instance, sustaining an excess-sized supplier network is one of the topic under associated
expenses for procurement. By primarily relying on catalogue expenditure for e-procurement, firms
have the ability to exercise control over the specific companies from which they make purchases.
This leads to a subsequent consequence of a diminished pool of suppliers (Kariuki, 2014, p. 12).
Furthermore, Acquiring excessive amounts can be considered under one of the associated expenses
for procurement. E-Procurement enhances organizations' ability to effectively manage their
procurement processes. By conducting data analysis, organizations have the ability to decrease their
expenditure per product category (Jooste & van Schoor, 2003, p. 5). Finally, against lack of
standardization, every product category adheres to a consistent procedure in E-procurement, from
approval to requisitioning (Paľová & Vejačka, 2022, p. 244)

E-tendering

E-Tendering, or electronic tendering, refers to the process of conducting tendering activities through
online platforms. E-Tendering simplifies the process of locating providers. E-Tendering refers to the
utilization of the internet to transmit requests for information and pricing to suppliers, as well as to
receive responses from them. E-Tendering encompasses the electronic and secure process of
announcing calls for tenders, receiving tender submissions, submitting bids, and announcing the
tender awards, all conducted online. E-Tendering is being widely recognized as an essential
component of electronic procurement systems in both public and private sectors, due to its capacity
to enhance efficiency, openness, non-discrimination, and accountability (Shehu & Sunmola, 2021, p.
1586). RFQ (request for quotation), RFT (request for tender), and e-bidding are integral components
of E-tendering. In the present day, it is common for prominent organizations and companies to
handle numerous procurement requirements. Consequently, they have recognized the need to
replace the traditional paper-based tendering process with a modern and automated e-tendering
system. This system encompasses various stages such as tender specification, social media
advertising, tender aggregation, and evaluation. (Siddiqui, et al., 2022, p. 206). Each step and logic of
e-bidding is explained in below figures:

Project owners extend an invitation to tender to suppliers, contractors, and sub-contractors. The
initial phase of the procurement process is defining the scope of work, establishing the selection
criteria, and setting the submission date. Suppliers, contractors, and sub-contractors utilize the e-
tendering platform to submit their tenders. The platform guarantees the secure storage and
convenient accessibility of all entries for project owners. Project owners assess the proposals
received and prioritize them according to a predetermined set of criteria. This stage is crucial in the
procurement process and serves to guarantee the attainment of the highest value for the money
spent. Upon the completion of the review process, project owners bestow the contract upon the
favored supplier, contractor, or sub-contractor. The e-tendering technology securely maintains the
contract and allows project owners to efficiently oversee the procurement process in real-time
(Waithaka & Kimani, 2021, p. 45). The process is described briefly in below figures:
This is how e-tendering affects supply chain management: E-tendering obviates the necessity for
paper-based submissions and diminishes the duration needed to finalize procurement processes.
This leads to expedited contract approval and project initiation. It expands the procurement process
to a broader range of suppliers, contractors, and sub-contractors, hence enhancing competition and
reducing expenses. Furthermore e-tendering mitigates the inherent risk of human mistake associated
with paper-based tendering. It guarantees the accuracy, consistency, and currency of all information.
Additionally e-tendering offers a safe and transparent procurement procedure that mitigates the
danger of corruption and minimizes the probability of fraud. (Eadie, et al., 2006, pp. 108-109)

Mini Case Study: A survey was held in Kenya, specifically a place called Kericho Country as a province
and following questions were asked to employees (80 nos) who were working in procurement,
finance and accounts and IT departments of companies in that region (Rotich, et al., 2015, p. 48)
SA = Strongly Agree, A = Agreen, N = Neutral, D = Disagree, SD = Strongly Disagree

Based on given results, it has been determined that the implementation of e-tendering has facilitated
quicker submission of tender papers by potential suppliers. This is due to the fact that e-tendering
has minimized the need for physical paperwork in the procurement process, instead promoting the
storage of data in software. Consequently, it significantly reduced the duration of the tender cycle by
enhancing the selection of providers through the prior specification of tender performance. This, in
turn, drastically diminished the expenses connected with the tendering process. Additionally, there
was a perception that e-bidding has enhanced the transparency of the procurement process and has
also improved the accuracy and efficiency of the tendering process (Rotich, et al., 2015, p. 49).

The study also aimed to determine the current state of procurement performance. This evaluation
was based on statements that described the procurement performance indicators. In addition, the
study evaluated the supplier performance and procurement cycle to provide a comprehensive
description of the variable. The results of this assessment were then reported in Table 4.2 (Rotich, et
al., 2015, p. 50).

The results presented in table 4.2 indicate that e-tendering has greatly enhanced the procurement
process due to its advantages, including increased efficiency, transparency, and cost effectiveness
(Rotich, et al., 2015, p. 50)

Electronic Payment & Invoice:

A complex supply chain enables the firm to successfully manage this process at a reasonable cost.
The advancement of e-payment technologies and robust computer networks have enhanced supply
chain management. Some caompnies rely on manual financial management methods, using paper-
based cash and cheque payments for invoices related to raw materials, machinery, parts, equipment,
and other items sold to customers. This poses a risk, particularly when cheques bounce for products
received by customers. As a result, the flow of cash becomes stagnant, causing various obstacles due
to the lack of available funds. It is worth noting that cheque bouncing issues are commonly
encountered in business. The other party often requests additional time for payment, as it is
challenging to recover payment from them, especially in the context of a business that operates on
credit. When the maturity date of a cheque arrives, it may bounce for various reasons, resulting in
payment delays. These delays, in turn, cause other activities to be postponed. Due to a lack of
available cash, companies are unable to accept more orders and meet market demand, which can
lead to the emergence of competitors and damage company reputation. E-invoicing facilitates
prompt and efficient payment to suppliers, vendors, and other parties, improving overall
effectiveness (Siddiqui, et al., 2022, p. 205). Thus, e-invoicing allows customers, suppliers and
vendors to make a practice of doing cashless payments against the goods and services by through
cards, internet facility or through the mobile banking. Through this staff can more focus on time
increased sales, supplies, product management inventory and stock availability, planning ,maintain
the shipping status of product and satisfying the requirement of the stakeholders and the customers,
e-invoicing saves stuff from entering the amount data against the product again and again, deposit
cheques and wait for the clearance, following up with bank and customers on daily basis (Kimmons,
2017, p. 440)

Like e-invoicing, E-payment reduces the risk associated with payment transactions for companies. It
enables them to receive and make payments promptly with just a click. Additionally, it allows
companies to securely store payment information from various sources. For instance, when a supply
chain department receives raw materials for manufacturing a product, they can immediately send
the invoice data to their finance department for verification. The finance department can then make
the payment according to the agreed terms. Similarly, when the company sells a product to a
customer, they can send a payment reminder when the payment maturity date approaches. This
ensures that the company receives the payment promptly. Nevertheless, an electronic payment
system reduces the physical separation between the purchaser and vendor. The implementation of
E-payment revolutionized the supply chain process. The adoption of e-payment methods not only
enhances business-to-business payments but also facilitates the flow of business. Many companies
worldwide are increasingly adopting e-payment processes to aid supply chain management. This
allows them to invest their time in managing shipping criteria, introducing innovation in planning,
and reducing the risk of errors in order to prevent inventory wastage. Additionally, e-payment
methods streamline the manual payment process. Studies have shown a positive relationship
between these improvements and the effectiveness and efficiency of supply chain operations
(Siddiqui, et al., 2022, p. 205)

Mini Case Study: The study aimed to determine the impact of e-payment on the performance of
supply chain management in Kisii County. This section provides the results of inquiries made on e-
payment. The participants provided their replies using a five-point Likert scale, with 5 indicating
strong agreement, 4 indicating agreement, 3 indicating neutrality, 2 indicating disagreement, and 1
indicating strong disagreement. The findings are presented in Table 3. The results indicate that a
majority of respondents agreed that money transfers between virtual accounts often took a few
minutes (mean = 4.22, standard deviation = 0.821). The majority of respondents agreed that e-
payment has effectively reduced the risk of loss and theft, with a mean score of 4.95 and a standard
deviation of 0.329. Additionally, the majority of respondents strongly agreed that all money transfers
can be conveniently performed at any time and from any location, with a mean score of 3.95 and a
standard deviation of 0.88. The majority of respondents agreed that e-procurement had improved
transparency, resulting in a decrease in costs associated with corruption (mean = 4.19, standard
deviation = 0.811). In general, the majority of respondents agreed with the assertions about e-
payment, with an average score of 4.33. However, there was variation in the replies, as indicated by
a standard deviation of 0.710 (Rasugu, 2021, p. 59)

In the past, conventional means were employed to deliver the invoice to the purchaser. In
conventional distribution methods, invoices are disseminated concurrently with the delivery of
products, or by postal services, or by means of personal exchange. Nevertheless, these conventional
approaches had numerous disadvantages. The primary limitations of these conventional approaches
encompass time-intensive procedures, costly delivery expenses, and human fallibility, such as
instances of incomplete information on invoices, during the management of these invoices (Ali, 2016,
p. 19).
On the other hand, the implementation of an electronic invoice system integrates the complete
operational life cycle of the supply chain. This includes activities such as invoice creation,
transmission to relevant departments, payment receipt, and financial bookkeeping, all of which occur
exclusively through an electronic or computerized system from inception to completion. What E-
invoicing Means for Supply Chain Management With e-invoicing, you can better handle your work
because it saves you money, makes things easier, speeds up payments, saves paper, protects your
data better, is better for the environment, and encourages real-time proof (Siddiqui, et al., 2022, p.
207).

Mini Case Study: 40 employees who were working in procurement, financial, logistics department
located in Kenya-Kissi country replied following questions from the scale 1 to 5 after their companies
transformed their processes from invoicing to e-invoicing:

Based on the findings, a significant number of participants concurred that the services in question
were automated, with a mean score of 4.41 and a standard deviation of 0.686. The majority of
respondents agreed that e-invoicing provides the capability to handle client information and billing
through a single application (mean=4.27, std deviation=0.732). Additionally, the majority of
respondents strongly agreed that e-invoicing has improved the speed of deliveries (mean=4.41, std
deviation=0.686). The majority of respondents agreed that e-procurement had improved inventory
management methods in county offices, with a mean of 3.95 and a standard deviation of 1.129. In
general, the majority of respondents agreed with the assertions about e-tendering (mean=4.26).
However, there was variation in the replies, as indicated by a standard deviation of 0.808 (Rasugu,
2021, p. 59)
Electronic CRM

In order to ensure the profitability of any organization or company, it is imperative to establish and
maintain a strong customer connection by consistently providing customers with their desired
products or services and satisfying their needs to encourage repeat purchases. Understanding
consumer preferences and dislikes is crucial, and this task is often carried out by the sales, marketing,
and supply chain departments (Siddiqui, et al., 2022, p. 208).

Electronic customer relationship management (E-CRM) is the implementation of CRM objectives

through the use of Internet-based technologies, including discussion rooms, forums, emails, and
websites. It is a coordinated and well-structured CRM process that automates marketing, sales, and
customer service operations (Almir & Lalović, 2011, pp. 47-48). An effective electronic customer
relationship management (E-CRM) system enhances process efficiency, improves customer
interactions, and empowers organizations to tailor products and services to satisfy the unique
requirements of each customer. Electronic customer relationship management (ECRM) is significantly
propelled by the widespread availability of internet connectivity across multiple platforms, including
laptops, mobile devices, desktop computers, and televisions. Customer satisfaction with supply chain
services directly impacts the profitability of the procuring agency and supply chain department. E-
CRM is the core of the procurement function and has a significant effect on procurement
performance (Rouse, 2023)

The implementation of an E-CRM system in the supply chain department facilitates the maintenance
of customer records, enabling efficient analysis of ongoing items, products, and services. The
availability of customer need and want data in supply chain facilitates planning and production teams
in maintaining inventory levels and satisfying customer demands. This eliminates forecasting errors
and prevents the loss of unnecessary stock, which is currently out of stock in the market. Failure to
have accurate information regarding market trends can result in customer attrition and subsequent
company failure. By possessing accurate information regarding customers' preferences, aversions,
and purchasing patterns, we can effectively meet customer needs and increase the profitability of
the business or organization. The availability of high-quality data has enabled us to enhance our
services in accordance with customer requirements and purchasing patterns, resulting in a steady
increase in business revenue and greater product and service efficiency. The positive correlation
between CRM and supply chain management has been established in numerous studies (Siddiqui, et
al., 2022, pp. 208-209).

Mini Case Study: A study was performed in Kenya that expands upon the foundations of customer
relationship management (CRM) theory, this study investigates the correlation between electronic
CRM (e-CRM) and the electronic loyalty (e-loyalty) of electronic customers (e-customers) within the
financial industry. The existing body of study concludes that the independent variable (e-CRM) has an
effect on the consumer e-loyalty of a bank by examining the three phases of a service transaction
cycle: pre-transaction, during-transaction, and post-transaction. E-customer e-loyalty, which pertains
to user behavior and purchase patterns, strong preferences towards the bank, and the circumstances
surrounding service consumption or procurement, is the dependent variable (Oumar, et al., 2017, pp.
684-685)
Fort his study, Likert’s scale was referred that means 1 equals to “Strongly Disgaree” and 5 equals to
“Strongly agree”. The findings indicate that the participants' level of agreement with the majority of
the characteristics varied from neutral to strong, as all mean scores exceeded 3.0. The results suggest
that there is a direct and positive correlation between e-CRM transaction features and customer e-
loyalty. The loyalty of customers is significantly impacted by their perceptions of satisfaction;
therefore, this must be accounted for in electronic banking services relationships (Oumar, et al.,
2017, p. 691)

E-Sourcing

E-sourcing refers to the strategic actions undertaken by procurement professionals to develop,

manage, and oversee a contract that complies with regulations. This process encompasses several
stages of the purchasing process, such as specifying requirements, conducting electronic requests for
information (e-RFx), electronic tendering (e-Tender), electronic auctions (e-Auction), evaluating and
negotiating contracts, as well as tracking, predicting, and monitoring cost reductions. Organizations
can employ enabling technologies in the e-Sourcing field to strategically source goods and services in
a scalable manner, even in regions that were previously overlooked by the buying department
(Bialas, et al., 2016, p. 76). The procurement process involves making crucial decisions on the
selection of commodities and services, including determining what to purchase, the quantity to be
purchased, the choice of suppliers, and the effective management of supplier relationships. The
organization has the most potential to influence the cost, structure, and overall efficiency of its
supply chain. Effective strategic sourcing necessitates a comprehensive procedure that automates
the entirety of the sourcing process, encompassing order planning, RFQ (Request for Quotation)
creation and dissemination, RFQ assessment, offer formulation, offer evaluation and selection,
negotiation, settlement, and order execution (Lee, et al., 2001, pp. 2-3)

Case Study:
The case study included interviews with procurement managers and procurement specialists of the
hospital, interviews with suppliers as well as observations. The first step was to identify a hospital in
Greece, which had implemented and utilized e-Enabling Technologies as part of its procurement
processes. For this purpose, two of the leading e–Sourcing and e-Purchasing technology suppliers in
Greece (cosmoONE and Business Exchange) were contacted regarding their clientele and a hospital
was identified that was on the list of both suppliers, namely the General Hospital KAT (GHK) in
Athens, Greece. The General Hospital KAT is a public hospital and is considered to be the largest
hospital for injuries in Greece specializing in injury-related and orthopedic. The second step was to
conduct semi-structured interviews with the GHK procurement manager who was in charge of the
implementation of these projects, with the procurement department business experts who were
using the relevant tools and with the technology-supplying vendors. The interviews were based on
open-ended questions addressing the following subject areas: a) aspects of the pre-existing situation,
b) benefits/issues of the new solution c) user acceptance d) management support. The third step was
to observe the traditional process of sourcing and purchasing in GHK as well as the new process of
planning and conducting e-Sourcing and e-Purchasing events and transactions. The fourth step was
to gather relevant data in order to draw conclusions on the status and the benefits of e-Sourcing and
e-Purchasing technologies adoption in the Greek healthcare sector (Bialas, et al., 2016)

The procurement department of GHK is responsible for the procurement of consumables (such as
pharmaceutical products, implantable products, other medical supplies, medical gases, food and
beverage and non-medical items), the procurement of durable goods (such as medical/surgical
equipment, furniture, MRO items) and the procurement of services (such as cleaning, security,
maintenance). The process of sourcing starts with the forecast-based planning and budgeting of the
procurement items based on the previous year’s needs and consumptions. After gaining approval for
the plan by the supervising authorities, the realization of the plan starts with conducting calls for
tenders. After assessing the offers, contracts are awarded to the selected suppliers. Following the
signing of the contracts, procurement activities for the abovementioned goods and services are
executed with reference to the existing contracts. Unforeseen procurement needs such as special
requests for specific patients or vaccines for flu outbreaks are handled on a case by case basis,
following a special approval process. The process of tendering and evaluating the suppliers’
quotations is highly bureaucratic and time-consuming due to public nature of the hospital. Drug and
supply shortages occur because a single -even insignificant- error in the procedure can lead to
objections by competing suppliers nullifying the whole process so that all steps have to be reinitiated.
Agreed upon prices, whether related to contracts or to out-of-contract buying, have to be in line with
the price observatory maintained by the HPC (Health Procurement Committee), a governmental
agency reporting to the Greek Ministry of Health and Social Security (Bialas, et al., 2016, pp. 79-80)

The problems identified were:

• Lengthy procedures for planning and approving the yearly procurement plans and corresponding
budgets.

• Legislative hurdles due to the large number and complexity of relevant laws.

• Huge variety of products due to evolution of technology and science.

• Different technical specifications among public hospitals for the same products.

• Lack of data standardization.

 • Obstacles due to easiness of lawsuit filing regarding contract award procedures from competing
vendors.

• Large product price variations between different hospitals.

• Lack of tools and reports to control the consumption of goods and services within the hospital.

• Lack of systems integration.

In order to address some of these issues, GHK decided to implement e-Enabling technologies for
procurement in a two-phased approach. The first phase entailed the implementation of e-Sourcing
tools and the second phase would expand into e-Purchasing technologies. For this purpose, leading
suppliers for procurement e-Enabling technologies based on ASP (Application Service Provider)
models were selected and provided the tools necessary as well as facilitated the new processes.
Firstly, it was decided which procurement items would be sourced using the new technologies, based
on criteria like simplicity of products and repeatability of procurement processes. The suppliers were
informed regarding the new procedures on e-RFx and e-Auctions, received access to the electronic
platforms and participated in an online training session. Following that, mock auctions were held, in
order to make sure that the suppliers felt comfortable with the tool and that there were no technical
issues. Finally, the real e-Auctions were held, typically lasting one hour, with an automated two
minute extension in case bids were made in the last two minutes of the session. Currently, as part of
the second phase, GHK is in the process of evaluating options for the e-Purchasing tools, that should
support purchase requisition creation and approval processes as well as purchase order processing
through the access of online catalogs, which will be created based on the awarded contracts of the
HPC. The drivers for the introduction of e-Sourcing and e-Purchasing activities at the GHK were the
expected cost savings due to lower purchase prices and reduced administrative costs, the reduced
purchasing cycle times, the streamlining and standardization of the procurement processes resulting
in freeing up resources for more value added procurement activities and the improved ability in
regards to monitoring and controlling these activities. The successful implementation of the e-
Sourcing tools was attributed among others to the high user acceptance and upper management
support, as was pointed out in the interviews held. The abovementioned expectations were met to
some extent after the successful implementation of e-Sourcing tools, namely e-RFx and e-Auctions,
however it should be noted that the adoption of these technologies was not followed up by
organizational and process changes. Thus, the strategic impact of e-technologies on SCM
effectiveness and patient safety in a healthcare setting could not be verified. The cost of the
implementation of e-Sourcing tools did not represent a barrier, as it was very low due to the fact that
GHK utilized solutions readily available by ASP vendors and did not perform any type of business
process reengineering. The perception of the involved stakeholders (procurement personnel,
procurement managers, upper management) regarding the implementation and the outcome of
these initiatives was positive (Bialas, et al., 2016, p. 81)
More specific, GHK managed to:

Generate cost savings.

• Drastically reduce the average time between the invitation and the response from the supplier.

• Significantly increase the average number of invitations by tender.

As part of the analysis, data were collected for a time period spanning over two years, starting in
2012, when the e-Sourcing tools were implemented. During this period 105 e-Auctions were
executed and resulted in cost savings in the amount of approx. 63.500 €, which represent a cost
savings ratio of about 6,5%. The average time between the invitation and the response from the
supplier fell drastically from a few days to one day and the average number of invitations by tender
increased almost twofold to 5,7 as can be seen in Table 1 (Bialas, et al., 2016, p. 82).

Methodology:

This study employed a descriptive research methodology. The study's target group consisted of the
owners of all registered and licensed small and medium-sized enterprises (SMEs) in Cape Town. The
study employed a stratified random selection technique to choose small and medium-sized
enterprises (SMEs) to participate. In addition, standardized questionnaires were employed to gather
primary data. The data was further evaluated using the quantitative analysis approach.

DATA ANALYSIS, FINDINGS AND DISCUSSION

The study included a sample of 97 individuals who were either owners or managers of registered and
licensed small and medium-sized enterprises (SMEs) located in Cape Town. Below tables Show main
characteristics of the interlocutors.

Number of Companies 97
Number of Companies filled Questionnaire 86
Number of Companies did not filled Questionnaire 11
 Respnse Rate %88.66

Gender of the Participants

Male %65.1
Female %34.9

Business Life
Less than 5 years %44.2
5-10 years %32.6
More than 10 yeras %23.3

Number of Employees
Less than 10 %9.3
10-20 %39.5
21-30 %32.6
31-40 %16.3
More than 50 %2.3

Descriptive Analysis for SME’s

The participants in the survey were requested to indicate their degree of concurrence on several
claims pertaining to the utilization of e-procurement techniques. In this study, a 5-point Likert scale
was used, where a score of 1 indicated no extent, a score of 2 indicated a minor extent, a score of 3
indicated a moderate extent, a score of 4 indicated a significant extent, and a score of 5 indicated a
very large extent.

Electronic Tendering:

The participants were instructed to indicate their degree of agreement on several statements
pertaining to e-tendering and other performance measures. A 5-point Likert scale was utilized, with 1
representing no extent and 2 representing a small extent. The number 3 represented a moderate
extent, whereas the number 4 represented a great extent, and the number 5 represented a very vast
extent. The findings were displayed in table 2.

According to the average score of 3.500 (with a standard deviation of 1.071), respondents strongly
believe that e-tendering has significantly improved customer satisfaction in the firm. Gunawardhana
et al. (2012) discovered a direct correlation between e-tendering and other company performance
indicators, such as customer satisfaction, that showed good results. The participants had a neutral
stance towards the statement suggesting that e-tendering has enhanced a firm's profitability, as
evidenced by a mean score of 3.314 (standard deviation = 1.277). In addition, the participants
expressed a lack of opinion about the statement suggesting that e-tendering has contributed to the
expansion of the business's market share. The mean value is 3.233 with a standard deviation of
1.299.

The participants reached a consensus, with a mean value of 3.512 (standard deviation = 1.176), that
e-tendering enhances the competitiveness of the procurement process. According to the data, the
respondents had a neutral opinion on the statement that e-tendering improves accessibility and
enhances the procurement process, with a mean of 3.333 and a standard deviation of 1.305. The
participants had a neutral response towards the statement stating that e-tendering allows the firm to
perform online screening and selection of suppliers, with a mean of 2.826 and a standard deviation
of 1.108. Furthermore, the respondents had a neutral stance (mean = 2.535, std. dev. = 1.134)
regarding the statement suggesting that e-bidding enhances transparency and openness in the
tendering process. Eadie et al. (2007) suggested that e-tendering facilitates improved communication
among various stakeholders in the procurement process, hence enhancing transparency and
openness. The participants expressed dissent over the assertion that their organization had an online
supplier contract management system that helps tendering procedures. The average value is
represented by a mean of 2.219 with a standard deviation of 1.424.

E-sourcing

Participants were instructed to indicate their degree of agreement with various assertions regarding
the impact of e-sourcing on the various performance indicators inside their firms. The findings were
shown in table 4.
Based on a mean of 3.733 (with a standard deviation of 1.451), respondents strongly agreed that
esourcing had significantly enhanced corporate performance. The results of this study align with the
findings of Oteki et al. (2018), which suggest that using e-sourcing allows organizations to save
money in their supply chains, improve the accessibility of important business information, and
decrease the time needed to complete procurement operations. The participants expressed a neutral
stance on the statement that e-sourcing has led to an increase in their enterprises' market share,
with a mean value of 3.291 (standard deviation = 1.147). Moreover, with a mean of 2.930 (standard
deviation = 0.992), participants displayed a moderate level of agreement with the statement
suggesting that E-sourcing has led to an improvement in customer satisfaction.

The respondents concurred that e-sourcing had provided a cost-effective method for procuring
items. The data is represented by a mean value of 3.895 with a standard deviation of 1.406. The
findings of Mora-Monge et al (2010) align with the results, indicating that the use of e-sourcing
technology allowed firms to decrease expenses associated with procurement operations and
effectively mitigate mistakes in the sourcing and ordering processes.

Moreover, the participants concurred that e-sourcing has effectively mitigated delays in the sourcing
procedure and has significantly enhanced the pace of processing. The suggested value is 3.721 with a
standard deviation of 1.048.

E-Invoicing

The participants were also requested to indicate their degree of agreement with several assertions
regarding the impact of e-invoicing on the various performance indicators inside their organizations.
The results were shown in table 6.
From the results, participants agreed by a mean of 3.791 (std. dv = 1.139) that e-invoicing has
increased the profitability of the business. As indicated with a mean of 3.326 (std. dv = 0.999),
respondents were moderate on statement that e-invoicing has increased customer satisfaction.
These findings differ with Waganda (2018) findings that e-invoicing has significant effect on customer
satisfaction. The participants disagreed on the statement that e-invoicing has increased market share
of the businesses. This is indicated with a mean of 2.256 (std. dv = 1.031).

Participants strongly agreed that e-invoicing had significantly improved data security at their
organization, as evidenced by a mean score of 3.977 (standard deviation = 1.414). In addition, the
participants concurred that e-invoicing has effectively decreased delays and significantly enhanced
promptness in settling invoices by suppliers, as evidenced by a mean score of 3.628 (standard
deviation = 1.063). Nevertheless, the participants expressed a moderate level of agreement about
the notion that e-invoicing has decreased delays and significantly enhanced the promptness of
invoice payments by suppliers. The suggested value is 3.465 with a standard deviation of 1.048. The
findings support Waganda's (2018) assertion that the adoption of e-invoices has allowed supply chain
firms to save expenses, streamline invoicing procedures, expedite payment processing, and enhance
data protection.

This study determines that e-tendering has a favorable impact on the performance of small and
medium-sized enterprises (SMEs) in Cape Town, however this impact is not statistically significant.
Nevertheless, the majority of small and medium-sized enterprises (SMEs) do not own an online
system for managing supplier contracts, which would streamline the process of soliciting bids.
Evidence has shown that the use of e-tendering leads to enhanced customer satisfaction and a
moderate gain in both market share and profitability for firms. The use of electronic invoicing has a
favorable and substantial impact on the performance of small and medium-sized enterprises (SMEs)
in the Cape Town Region. A study has shown that the use of e-invoicing resulted in enhanced
business performance and a moderate improvement in customer satisfaction and market share. The
study further confirmed that e-invoicing significantly improved data security in firms and minimized
delays, hence greatly promoting promptness in invoicing settlements by suppliers. The utilization of
electronic payment methods has a beneficial and substantial influence on the performance of small
and medium-sized enterprises (SMEs) in the Cape Town Region. Furthermore, the study
demonstrated that epayment facilitates the reduction of transaction costs, enhances transparency,
and decreases the time required to pay suppliers.