A Process-Based Analysis of E-Procurement Adoption, Abu-ELSamen (2010)

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A Process-Based Analysis of e-
Procurement Adoption
a b b
Amjad Abu-ELSamen , Goutam Chakraborty & David Warren
a
Department of Marketing , Faculty of Business, University of
Jordan , Amman, Jordan
b
Department of Marketing , Spears School of Business, Oklahoma
State University , Stillwater, Oklahoma, USA
Published online: 20 Nov 2010.
To cite this article: Amjad Abu-ELSamen , Goutam Chakraborty & David Warren (2010) A Process-
Based Analysis of e-Procurement Adoption, Journal of Internet Commerce, 9:3-4, 243-259, DOI:
10.1080/15332861.2010.526489
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Journal of Internet Commerce, 9:243–259, 2010
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DOI: 10.1080/15332861.2010.526489
A Process-Based Analysis of e-Procurement

Adoption
AMJAD ABU-ELSAMEN
Department of Marketing, Faculty of Business, University of Jordan, Amman, Jordan
GOUTAM CHAKRABORTY and DAVID WARREN

Downloaded by [The Aga Khan University] at 05:11 15 December 2014
Department of Marketing, Spears School of Business, Oklahoma State University, Stillwater,

Oklahoma, USA
This article develops a model to explain the factors that impact

the adoption of electronic procurement techniques from a business
customer’s perspective. The model was drawn from a comprehen-
sive investigation of literature that addresses various issues in
electronic procurement (e-procurement) adoption. Data were
obtained from corporate Web site visitors of power tool companies
in the construction industry in United States. A total of 399 com-
pleted surveys were used for analysis. After a series of exploratory
and confirmatory factor analyses, it was found that e-procurement
drivers and barriers can be classified into three groups: perceived
drivers, perceived internal barriers, and perceived information
barriers. Multiple regression analysis results show that, in general,
perceived drivers were the main predictor for adoption of
e-procurement techniques. Internal and information barriers,
however, were significant when business customers are engaged
in a new buying situation. For e-procurement solution providers,
this study provides insights about how to overcome customers’
potential barriers to e-procurement adoption. Results implications,
research limitations, and future research are also discussed.
KEYWORDS barriers, buying situations, drivers, e-procurement

adoption
Address correspondence to Amjad Abu-ELSamen, Assistant Professor of Marketing,

Department of Marketing, Faculty of Business, University of Jordan, Amman, 19942, Jordan.
E-mail: a.abuelsamen@ju.edu.jo
243
244 A. Abu-ELSamen et al.
INTRODUCTION
Enhancement of business processes including procurement management

has become a strategic priority in most organizations (Presutti 2003). Procure-
ment process typically include pre-qualification of suppliers, generation
of requests for proposals, evaluation of the proposals, and then selection
of a supplier based on firm’s internally established criteria. The outcome
is a contract agreement where order, delivery, and payment routine are
established and executed. This is followed by an assessment of supplier
performance (Presutti; Sain, Owens, and Hill 2004).
Purchase=procurement processes have become costly activities for
business. Thus, it is natural for firms to want to reduce costs via adoption of
rapidly proliferating information technology, such as the Internet, that leads

to electronic procurement (e-procurement; Dai and Kauffman 2002). Indeed,
this electronic migration of procurement is facilitating information sharing and
process integration between business customers and their suppliers. How-
ever, there exists little consensus on how to measure value that can be derived
from such technology-enabled procurement processes. As a result,
e-procurement solutions have evolved as a comprehensive process of estab-
lishing agreements for the acquisition of products or services (contracting)
or purchase products or services in exchange for payment (purchasing) elec-
tronically. Thus, e-procurement employs various elements to facilitate corpor-
ate buying by utilizing a number of communication media, such as electronic
data interchange (EDI), e-mail, and the Internet. They also include diverse
activities, such as electronic ordering, electronic submission of tenders, and
electronic mail between buyers and sellers (Chakraborty, Lala, and Warren
2002, 2003; Kheng and Al Hawamdeh 2002; Moon 2005). Davila, Gupta, and
Palmer (2003) indicated that e-procurement strategy facilitates the acquisition
of goods and services over the Internet using technologies such as business-to-
business (B2B) auctions and market exchanges that focus on automating
workflows, consolidating and leveraging organizational spending power,
and identifying new sourcing opportunities over the Internet.
e-Procurement has, in recent years, been used as a means to signifi-
cantly reduce costs, because it typically reduces transaction costs and man-
ages the inventory in a more efficient manner. Given the potential benefits
of the Internet and other Web-related technologies to revolutionize the pro-
curement process, numerous companies worldwide have already adopted
e-procurement in an attempt to leverage this technological infrastructure.
In an ISM=Forrester Research Report (2001–2003), seven out of ten firms in
the U.S. market were reported to have engaged in online procurement
of strategic items and critical services (Bartels, Hudson, and Pohlmann
2003). Despite the aforementioned potential benefits, some studies have
highlighted the risks associated with using e-procurement techniques, such
as security issues and the cost of new technology platform (Hawking et al.
Analysis of e-Procurement Adoption 245
2004; Kheng and Al Hawamdeh 2002; Kein, Fraizer, and Roth 1990; Morris,
Stahl, and Herbert 2000; Sigala 2003).
Although the advantages of e-procurement suggest that firms should
migrate from traditional to Internet-based technologies, the fact that some
firms are showing a decreasing tendency to e-procurement adoption is
intriguing (Davila et al. 2003). While the previous research has examined
the perceived drivers and barriers of e-procurement adoption and has found
empirical evidence to support its claims, most of these studies have exam-
ined these factors separately and have ignored how their influence may vary
depending on other factors, such as the complexity of buying situation and
firm size. This is important, because organizations realize differential values
for adopting e-procurement techniques depending on their size as well as
the buying situation (i.e., straight, modified, and complex). That is, a firm’s
likelihood of adopting e-procurement may depend on its size and buying
situations. Therefore, the objective of this research is to address this gap
in the literature by building a model to specify the perceived drivers and
perceived barriers of adopting e-procurement techniques from a business
customer perspective and then empirically testing whether such an adoption
varies based on buying situations.
The rest of the article is organized as follows. First, previous work within
the e-procurement literature is reviewed and summarized. Second, hypoth-
eses regarding the antecedents of e-procurement adoption are developed.
Third, the contingency theory is used to explain how the adoption of
e-procurement techniques varies with respect to the type of buying situation.
Then, the proposed model is tested empirically using survey data from
business customers in construction industry, and the results and their
implications are discussed.
LITERATURE REVIEW AND CONCEPTUAL DEFINITIONS
This study examines the effect of various factors on the adoption of

e-procurement. As the research framework in figure 1 shows, the following
four factors are identified to have an effect on the adoption of e-procurement
in organizations. These factors include (1) perceived barriers=costs, (2) per-
ceived drivers=benefits, (3) firm size, and (4) complexity of buying situation.
The choice of the theoretical constructs in this model was determined
through an extensive literature review as well as informal conversations with
various procurement executives in the power tools industry.
Barriers=Costs of e-Procurement Adoption

The successful adoption of e-procurement depends on the barriers present
in the system. Identifying such barriers is an integral part of the major
FIGURE 1 e-Procurement adoption.
managerial function in developing the right pathway for the adoption of

e-procurement. The barriers could stem from infrastructure, strategy, people,

culture, etc. (Gunasekaran and Ngai 2008).
For example, Bingi, Mir, and Khamaleh (2000) found that the major con-
cerns that face electronic commerce adoption are the absence of the techno-
logical infrastructure needed to support business operations, information
security, and privacy of exchange. Moreover, Kheng and Al Hawamdeh
(2002) reported that the amount of required investment and the inadequate
in-house skills are the main barriers that Singaporean companies faced in
implementing e-procurement techniques. Similarly, Subramanian and
Shaw (2004) indicated that firms’ perceived uncertainty regarding resource
availability and perceived difficulty of integrating new systems with legacy
IT system can hinder firms’ e-procurement adoption.
Hawking and colleagues (2004) continued this stream of research,
finding that the lack of integration of firms’ IT systems with those of business
partners negatively impact adoption of e-procurement techniques. Further-
more, the difficulty in performance evaluation is quite visible in the
e-procurement context, as managers may lack the information needed to
evaluate partner capabilities (Bingi et al. 2000). This is especially evident
when suppliers may be hesitant or even unable to meet business customers’
systems’ integration requirements without guarantees of future revenue
streams (Sigala 2006). Based on this review, it is hypothesized that:
H1: There is a negative relationship between business customers’

perceived barriers and the adoption of e-procurement techniques.
For a summary of the barriers found in the literature and their refer-
ences, see table 1.
Drivers=Benefits of e-Procurement Adoption

There is also a large body of literature that delineates the benefits of adopting
e-procurement practices as a solution for managing the order process.
TABLE 1 Perceived Barriers=Cost of Adopting e-Procurement Techniques
Barriers=cost Reference
Changing the way people work Kheng and Al Hawamdeh (2002)

Lack of top management support Kheng and Al Hawamdeh (2002)
Inadequate in-house technological infrastructure Kheng and Al Hawamdeh (2002)
Inadequate IT personnel (in house) Kheng and Al Hawamdeh (2002)
Concerns about security of information exchange Bingi et al. (2000)
Inadequate technological infrastructure of Bingi et al. (2000)
business partner
Concern about privacy of information exchange Bingi et al. (2000)
Concern about data confidentiality Bingi et al. (2000)
High technological implementation cost Kheng and Al Hawamdeh (2002)
Lack of IT system integration with the partner Hawking et al. (2004)
Lack of corporate strategy with respect to Rajkumar (2001)
e-procurement
Hawking and colleagues (2004) found empirical evidence for the importance
of Internet-based procurement in Australian markets. They showed that
companies adopt e-procurement techniques to improve market intelligence
and to reduce the operational and inventory cost. Davila and others
(2003) reported that companies that use e-procurement technologies
save 42 percent in purchasing transaction costs due to the simplification in
the purchase process and the reduction in purchasing cycle time, which in
turn, increases flexibility and provides more up-to-date information at
the time of placing a purchase order. Additionally, Bartezzaghi and Ronchi
(2003) found that Web-based technology helps in increasing market
efficiency in terms of supplier search, supplier selection, contract negoti-
ation, and purchase price.
Thus, e-procurement tends to leverage the bargaining power of compa-
nies willing to establish contracts with their preferred suppliers. As a result,
the overall maverick buying will be lower and the purchase from
non-contracted vendors will be less (Tatsis et al. 2006; Venkatesan 1992).
Based on this discussion, it is hypothesized that:
H2: There is a positive relationship between the business customers’ per-

ceived benefits and the extent of adopting e-procurement techniques.
For a summary of the drivers found in literature and their references, see
table 2.
Complexity of Buying Situation and Procurement Adoption

The literature classifies buying situations into three main categories: straight
rebuy, new task, and modified rebuy (Kotler 2000; Robinson, Faris, and Wind
1967). The straight rebuy is characterized by reordering on a routine basis
TABLE 2 Perceived Drivers=Benefits of Adopting e-Procurement Techniques
Drivers=benefits Reference
Low price Kheng and Al Hawamdeh (2002); Davila et al. (2003)

Shorter cycle time for order Subramaniam and Shaw (2004); Davila et al. (2003)
completion
Reduce maverick buying Davila et al. (2003)
Increase accuracy of ordering Subramaniam and Shaw (2004)
Low inventory carrying cost Hawking et al. (2004)
Increase accuracy of planning Rajkumar (2001)
Greater selection of suppliers Bartizzaghi and Ronchi (2003)
Easy to switch among suppliers Bartizzaghi and Ronchi (2003)
Easy to try new suppliers Bartizzaghi and Ronchi (2003)
Low transaction cost Kheng and Al Hawamdeh (2002); Davila et al. (2003)
Improved visibility of supplier Hawking et al. (2004)
product
Better inventory management Konicki (2002)
Better decision making Hawking et al. (2004)
Improved market intelligence Hawking et al. (2004)
that requires little information search and entails less perceived risk on the
part of buyers. On the other hand, new task occurs when buyers purchase
strategically important products for the first time. Buyers typically perceive
high risk and engage in extensive information search in such situations.
Finally, the modified rebuy is either an upgraded straight rebuy or formerly
a new task that has become familiar with buyers over the passage of time. In
modified rebuy situations, buyers may become active in searching for new
information compared to straight rebuy situations, because due to specifi-
cation modification, they may find that perceptions of risk have increased
or they may feel there is an opportunity for cost reduction.
As the buying situation moves from straight rebuy to new task, the pur-
chasing task becomes more complex. Buyers need more information from
their suppliers and usually set up a joint team to design the new task buy
(Sain et al. 2004). Hence, when the buying situation becomes more complex,
the benefits sought from adopting the e-procurement techniques are
expected to be less, and the cost incurred in the adoption are expected to
be higher.
The rationale for this prediction is based on the contingency theory.
Speckman and Stern (1979) asserted that the degree of buying center mem-
bers’ involvement in the procurement process is contingent upon the buying
situation. For example, compared to the routine buying situation, when the
buying situation is complex and new, it is expected to have additional invest-
ment in human and physical assets and in the time spent to design the new
task. Furthermore, it is expected in B2B contexts that face-to-face and per-
sonal selling are the main communication mechanisms between the custo-
mers and their suppliers, especially in situations where the consequences
of the purchase behavior are severe and where no prior experience in the
purchase situation is available (which the case of a new task purchase). As a

result, adopting e-procurement techniques is likely to be less. Therefore, it is
hypothesized that
H3: The complexity of the buying situation will moderate the influence of
the perceived barriers=drivers on the adoption of e-procurement
techniques such that the more complex the buying situation, the
greater will be the influence of the perceived barriers=drivers on
the adoption of e-procurement techniques.
Firm Size
Examining the effect of firm size on technology adoption is motivated by the

fact that firms vary based on their financial resource availability and mana-
gerial skills. Firms with a large workforce are more likely to adopt
e-procurement than smaller-workforce firms due to the differences in infor-
mation processing capacity, bargaining power, and availability of financial
resources (Sigala 2006). Managers of large companies believe that they have
a greater differential in value (i.e., benefits outweigh cost) than smaller com-
panies for adopting e-procurement. Hence, e-procurement adoption can
imply greater scalability for the business process in larger organizations.
Therefore, as is consistent with previous literature, it is important to control
for the firm size when testing for e-procurement adoption (Wu, Mahajan, and
Blasubramanian 2003).
e-Procurement Adoption
Many of the common conceptualizations of technology adoption have deli-
neated whether companies have adopted the techniques or not and=or if
they plan to adopt these techniques in the future or not (Hausman and Stock
2003). These conceptualizations, however, suffer from problems due to
uniqueness for EDI adoption and inability to take into consideration the
unique nature of the industry and the buying situation where the adoption
occurs. Therefore, the existent conceptualizations were modified to incor-
porate a company’s perception of information technology usage and
e-procurement usage.
RESEARCH DESIGN
Study Context and Sample Selection

Data for the main study were obtained from corporate Web site visitors of a
power tool company in the construction industry located in the Midwest
region of the United States. The company corporate Web site was used to sol-
icit visitors to participate in a Web-based survey. A total of 1,003 responses
were obtained but many contained missing data scattered across questions.
Thus, 399 fully completed surveys were used for analysis. The survey asked
a battery of questions about e-procurement drivers, barriers, etc., and a few
firm-specific and responder-specific (such as job function) questions. Of the
respondents’ job functions, about 17 percent were company owners, 10 per-
cent were material=purchase managers, and 7 percent were site supervisors.
About 74 percent of the respondents are from companies that have less than
200 employees; whereas 26 percent of respondents are from companies that
have more than 200 employees. These background variables of respondents
and responding firms generally match the known characteristics of the cus-
tomer base of the power tools company.
Instrument Development
Whenever possible, items that delineate the variables of interest in the study
were adopted from B2B and technology adoption literature with appropri-
ate modification for use in the construction industry context. To check for
items’ representativeness and appropriateness, all measures were exten-
sively pre-tested via several interviews with the managers of the power tool
company.
PERCEIVED BENEFITS=DRIVERS
Fourteen items were used to capture the different benefits sought from
adopting e-procurement techniques. These items were adapted from
Hawking and colleagues (2004), Kheng and Al Hawamdeh (2002), and
Bartezzaghi and Ronchi (2003). A representative item is ‘‘e-procurement
results in reducing transaction cost.’’ Respondents rated their agreements
with statements using a 7-point Likert scale anchored as ‘‘strongly disagree’’
to ‘‘strongly agree.’’
PERCEIVED COSTS=BARRIERS
Twelve items were adopted from the literature to measure the perceived
costs=barriers variable. These items were adapted from Bingi and colleagues
(2000), Kheng and Al Hawamdeh (2002), Rajkumar (2001), and Hawking and
others (2004). A representative item is ‘‘difficulty of e-procurement arises
from inadequate technological infrastructure.’’ Consistent with previous
literature, these measures were treated as reflective to be able to specify
the model using the confirmatory factor analysis (CFA). Respondents rated
their agreements with statements using a 7-point Likert scale anchored as
‘‘strongly disagree’’ to ‘‘strongly agree.’’
TYPE OF BUYING SITUATIONS

A single item was used to measure this variable. Respondents selected the
type of buying situation business customers are involved in (i.e., straight,
modified, and new task). This item was adapted from Kotler (2000), and
Robinson and colleagues (1967).
FIRM SIZE
A single item to measure the total number of employees was used to measure
the firm size. This item was adapted from Wu and colleagues (2003).
ADOPTION OF E-PROCUREMENT TECHNIQUES

A 3-item scale was used to measure this variable. These items were adapted
from Kauffman and Mohtadi (2004), Power (2002), and Hausman and Stock
(2003) by making appropriate modifications. Respondents were asked to rate
on a 7-point scale anchored from ‘‘far below average’’ to ‘‘far above average’’
with statements about their organization’s IT use, e-procurement use, and
amount of spending on e-procurement compared to the industry average.
ANALYSIS AND RESULTS
Data Reduction and Reliability Estimate

The analysis started by examining the data structure and dimensionality using
exploratory factor analysis (EFA) and reliability analysis (Cronbach’s alpha).
The EFA results showed that items measuring the perceived drivers, per-
ceived barriers, and e-procurement adoption loaded on four factors instead
of three, as hypothesized. The four-factor model explained 64.88 percent
of the total variance and presents a cleaner and more interpretable solution
than the hypothesized three-factor model.
In the four-factor model, the first factor contains items related to per-
ceived drivers. The second factor contains nine items of the perceived bar-
riers (referred to hereafter as internal barriers). The third factor contains
three items of information concerns of perceived barriers (referred to here-
after as information barriers), and the fourth factor contains three items of
e-procurement adoption.
An examination of the pattern matrix of the EFA showed that all items
had loadings greater than 0.4 except the ‘‘overall spending’’ and ‘‘hard to
retain a relationship.’’ The item ‘‘overall spending’’ has a low communality
of 34.3 percent, producing a drop in item-to-total correlation by 18 percent
and reducing Cronbach’s alpha by 4 percent. The item ‘‘hard to retain a
relationship’’ also caused a drop in the item-to-total correlation by 8 percent
and reduced Cronbach’s alpha by 2 percent. Based on these diagnostics, these
items were deleted from the subsequent analysis. The EFA was re-conducted
along with the measurement reliability statistics after deleting the two items.
All loadings in this EFA were above 0.4. Cronbach’s alpha was as follows:
0.97 for perceived drivers, 0.93 for the internal barriers, 0.95 percent for the
information barriers, and 0.77 for e-procurement adoption.
Assessment of the Measurement Model

In this stage of the analysis, the theoretical three-factor model was tested with
a four-factor model (with items assignment to factors as found in EFA) and a
five-factor model (the only difference is that the items tapping the
e-procurement adoption were separated into two factors). The reason for
including the last model is the relatively low reliability coefficient for the
e-adoption of 0.76. All tests were carried out using CFA.
The three models are evaluated by comparing their performances
according to the value of v2, df, composite fit index (CFI), root mean square
error of approximation (RMSEA), and square root mean error (SRMR)
(table 3). As can be seen from table 3, it is evident that both the four- and
five-factor models perform better than the three-factor model. This is indi-
cated by the lower value of v2, the higher value of CFI, and the lower value
of RMSEA compared to the three-factor model. To whether the four- or
five-factor model is the best, the v2 difference test was performed between
the two models. The v2 difference of 0.38 on 2 df is well below the critical
value of 5.99 at p < .05. This non-significant difference favors the more par-
simonious model with the highest df, which is, in this case, the four-factor
model. Therefore, the four-factor model is used for the subsequent analyses.
Assessment of Constructs’ Validity

Additional evidence provided by or derived from the CFA results suggests
that the resulting measures are reliable and valid (refer to table 4 for details.)
More specifically, the relatively high composite reliabilities and average vari-
ance extracted (AVE) provide evidence in support of the measures’ reliability
(Fornell and Larcker 1981; Gerbing and Anderson 1988). Furthermore, an
indication of the measures’ convergent validity is provided by the fact that
all factor loadings are significant and that the scales exhibit high levels of
internal consistency (Fornell and Larcker; Gerbing and Anderson).
TABLE 3 Models’ Comparison
v2 df CFI RMSEA SRMR
Three-factor model 2,217.80 321 0.94 0.13 0.055

Four-factor model 1,459.08 318 0.098 0.044
Five-factor model 1,458.54 316 0.099 0.044
TABLE 4 Composite Reliability and AVE
Std. Composite
Construct Items loading reliability AVE
Perceived 0.97 0.68

drivers
Reducing transaction cost 0.76
Reducing price 0.79
Reducing inventory cost 0.77
Reducing cycle time for order 0.82
completion
Increasing order accuracy 0.84
Reducing maverick buying 0.75
Better inventory management 0.87
Increasing planning accuracy 0.89
Increasing the visibility of suppliers’ 0.82

products
Supplier selection 0.81
Improving marketing intelligence 0.88
Better decision making 0.89
Easy to switch to new suppliers 0.81
Easy to try new suppliers 0.82
Internal 0.93 0.63
barriers
Inadequate in-house technological 0.82
infrastructure personal
Inadequate in-house IT personal 0.85
Inadequate technological infrastructure of 0.90
business partner
Lack of IT system integration with the partner 0.89
Changing the way people work 0.76
Lack of top management support 0.75
Lack of corporate strategy 0.76
High technological implementation cost 0.55
Information 0.91 0.83
barriers
Concerns about security of information 0.90
exchange
Concern about privacy of information 0.97
exchange
Concern about data confidentiality 0.94
e-Adoption IT use 0.73 0.78 0.64
e-Procurement use 0.87
To establish the evidence for the discriminant validity among the con-
structs, the shared variance among the constructs was compared with the
AVE from each construct. The discriminant validity is established between
two constructs if the AVE of each one is higher than the shared variance.
Comparing the shared variance and AVE values are shown in table 5; the
results indicate a support for the discriminant validity among all the con-
structs in the proposed model.
TABLE 5 Shared Variance and AVE for Each Latent Variable
Shared variance
Perceived drivers Perceived internal barriers AVE
Perceived drivers 97%

Perceived internal barriers 0.21 93%
Information barriers 0.08 0.50 91%
e-Adoption 0.18 0.025 64%
Regression Analysis
Having purified and validated the measurement model, summated rating
scales were formed for each construct by averaging the scores on the items
belonging to each construct. The hypotheses were tested using a multiple
regression model. The overall model is statistically significant for both depen-
dent variables (p-value for the ANOVA F statistic is less than .000). The inde-
pendent variables together explained 16 percent of the variance in
e-procurement adoption. Based on the t-tests of regression coefficients in
table 6, the perceived drivers and perceived barriers had statistically signifi-
cant effect e-procurement adoption, whereas information barriers did not
have any statistically significance effect.
To test for the moderation effect of complexity of the buying situation,
two dummy variables were created representing the new and straight rebuy
situations, as well as interaction terms for each independent variable crossed
with the two dummy variables, and they were included in the regression
model (table 7). The overall regression model is statistically significant for
both dependent variables (p-value for the ANOVA F statistic is less than
.001). The independent variables together explained around 17 percent of
the variance in e-procurement adoption. The main effect of perceived drivers
continues to remain statistically significant in this model. None of the interac-
tion terms including the perceived drivers are significant.
Interestingly, the results show significant interaction effects of internal
barriers by a new buying situation and information barriers by a new buying
situation. Thus, the effect of both perceived internal barriers and perceived
information barriers were qualified by the type of buying situation business
TABLE 6 Regression Results (Dependent Variable: e-Adoption)
B t Sig. R2 F
Overall model .000 15.90% 24.52

Perceived drivers 0.34 8.43 .000
Perceived barriers –0.14 –2.36 .019
Perceived information barriers 0.04 0.40 .408
TABLE 7 Test for Interaction
B t Sig. R2 F
Overall model 0 17.40% 6.38

Perceived drivers 0.38 3.68 0.00
Perceived barriers 0.00 –0.01 0.99
Perceived information barriers –0.08 –0.67 0.51
Drivers * new 0.31 1.24 0.22
Drivers * straight 0.15 0.59 0.56
Barriers * new –0.65 –1.95 0.05
Barriers * straight –0.47 –1.44 0.15
Information * new 0.52 2.23 0.03
Information * straight 0.29 1.14 0.25
Straight 0.01 0.03 0.98
New task –0.19 –0.74 0.46
Size –0.01 –0.21 0.83
customers are involved in. That is, business customers’ perception of internal
barriers and information barriers appear to influence their adoption of
e-procurement only when they are in a new buying situation.
The firm size was included in this regression model. Although firm size
appears to have no statistically significant effect on the dependent variables
(p ¼ .83), the F statistic for the R2 difference between models with firm size
and models without firm size was significant, and therefore, it was left in
the model as a control variable.
DISCUSSION
The purpose of this study was to develop a process-based analysis for factors
that influence the adoption of e-procurement techniques in the B2B market
and examine how the influence of these factors vary with regard to the
complexity of the buying situation. Based on a review of academic and trade
press literature, three factors were identified that might influence
e-procurement adoption. The significance of these factors was then tested
in explaining e-procurement adoption of B2B customers in the construction
industry. Several interesting results emerged from this study. The relative
importance of the significant factors in explaining the variability of
e-procurement adoption, as captured by the partial correlation coefficients,
indicate that in the context of this study, perceived drivers is the most impor-
tant factor. This is followed by internal barriers, then information barriers.
The implication here is that the bottom line of e-procurement adoption rests
in enhancing the perception of benefits sought from adopting e-procurement
techniques.
Regarding the individual relationships in the hypothesized model, the
results showed that these relationships were not all at the same direction.
It was found that the perceived drivers have a significant positive effect on
e-procurement, supporting H2. This finding is well supported in industrial
marketing literature (Davila et al. 2003; Hawking et al. 2004).
In contrary to what was hypothesized, it was found that the relationship
between the perceived barriers (the internal and information barriers) and
e-procurement adoption was insignificant, thus rejecting H1. The results
indicate that the influence of both perceived internal barriers and perceived
information barriers was qualified by the type of buying situation that
business customers are involved in. Business customers’ perception of
internal barriers and information barriers appear to influence their adoption
of e-procurement only when they are in a new buying situation. This unique
finding is a major contribution of this research to the extant knowledge.
Furthermore, although previous studies supported the influence of firm

size on e-procurement adoption, it was found that firm size has no statisti-
cally significant direct effect. However, it turned out to be useful as a control
variable in this research. The effect of the firm size variable needs to be
viewed in the context of this data, where 74 percent of respondents are from
small-sized firms.
MANAGERIAL IMPLICATIONS
The value potential of e-procurement has significant implications for indus-

trial marketers. It is imperative for the marketing managers to fully realize
what drives their business customers to adopt and exploit the benefits of
e-procurement techniques. The results from this study can provide organiza-
tions with a better understanding of factors associated with the adoption of
e-procurement, which will be a useful reference for them to develop appro-
priate e-procurement strategies. Specifically, the results showed a trend of
cost reduction as a primary driver that marketers should emphasize in com-
municating with their customers. This is compatible with previous research
(Sigala 2006), indicating that the main barrier to technology adoption lies
in the concerns of achieving lower cost or more revenues. This influence,
however, should be examined with caution. It appears that business
customers consider the barriers of e-procurement adoption only when faced
with a new purchase situation. This makes sense from a pragmatic point of
view, because both the potential risk and the extent of information search
and processing tend to be higher in these situations.
The implication is that industrial marketers should try hard to reduce
their customers’ perception of the potential adoption barriers in new pur-
chase situations. Vendors of e-procurement solutions are provided with
insights into the factors that are significantly associated with e-procurement
adoption. Equipped with this information, vendors can thus devise more
effective and efficient promotion strategies for their e-procurement software.
For example, industrial marketers can help their customers in reducing the
technical barriers by providing their customers with qualified training pro-
grams and technical support needed to fully utilize the benefits.
Further, it is essential to provide evidence for non-adopters that the new
technology will not undermine the security and privacy requirements of their
organizations. This can be achieved through enhancing trust between buyers
and suppliers as well as establishing physical evidence that demonstrates the
new platform security (Sigala 2006).
LIMITATIONS AND FUTURE RESEARCH

This study, like any other study that attempts to use real-world data
from actual customers in an industry, has some limitations. The model was
tested in a single context—customers from the construction industry in North
America. Thus, replicating the results in future research in different industries
would be important to increase the generalizability of the results. Addition-
ally, given the recent evidence that B2B buyers differ in their perceptions
of supplier’s Web sites between North America and Europe, future empirical
research should investigate this model separately for buyers=sellers from
different continents (Chakraborty, Srivastava, and Warren, 2005).
Second, it is possible that hierarchal relationships among the inde-
pendent variables in the model exist, although these were not hypothesized
in the model. These relationships are worth examining in future research. For
example, it is possible that firm size interacts with the perceived barriers and
drivers. Third, it is important for the industrial marketers to understand
how to reduce the business customers’ perception of the different perceived
barriers. Examining the influence of trust and commitment between buyers
and sellers along with the constructs in the proposed model may provide
such insights in future research.
Finally, only three antecedents of e-procurement adoption were exam-
ined in the article using the contingency theory to keep the model tractable
and the data collection task manageable. Clearly there are many other
variables that could influence a firm’s decision to adopt e-procurement.
Future research should examine the influence of other variables, such as a
firm’s IT experience, perhaps using different theories, such as resource
dependency and technology adoption frameworks.
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A Process-Based Analysis of e-Procurement

GOUTAM CHAKRABORTY and DAVID WARREN

Department of Marketing, Spears School of Business, Oklahoma State University, Stillwater,

This article develops a model to explain the factors that impact

KEYWORDS barriers, buying situations, drivers, e-procurement

Address correspondence to Amjad Abu-ELSamen, Assistant Professor of Marketing,

Enhancement of business processes including procurement management

rapidly proliferating information technology, such as the Internet, that leads

LITERATURE REVIEW AND CONCEPTUAL DEFINITIONS

This study examines the effect of various factors on the adoption of

Barriers=Costs of e-Procurement Adoption

FIGURE 1 e-Procurement adoption.

managerial function in developing the right pathway for the adoption of

e-procurement. The barriers could stem from infrastructure, strategy, people,

H1: There is a negative relationship between business customers’

Drivers=Benefits of e-Procurement Adoption

TABLE 1 Perceived Barriers=Cost of Adopting e-Procurement Techniques

Changing the way people work Kheng and Al Hawamdeh (2002)

H2: There is a positive relationship between the business customers’ per-

Complexity of Buying Situation and Procurement Adoption

TABLE 2 Perceived Drivers=Benefits of Adopting e-Procurement Techniques

Low price Kheng and Al Hawamdeh (2002); Davila et al. (2003)

purchase situation is available (which the case of a new task purchase). As a

Examining the effect of firm size on technology adoption is motivated by the

Study Context and Sample Selection

tomer base of the power tools company.

TYPE OF BUYING SITUATIONS

ADOPTION OF E-PROCUREMENT TECHNIQUES

ANALYSIS AND RESULTS

Data Reduction and Reliability Estimate

Assessment of the Measurement Model

Assessment of Constructs’ Validity

TABLE 3 Models’ Comparison

v2 df CFI RMSEA SRMR

Three-factor model 2,217.80 321 0.94 0.13 0.055

TABLE 4 Composite Reliability and AVE

Perceived 0.97 0.68

Increasing the visibility of suppliers’ 0.82

TABLE 5 Shared Variance and AVE for Each Latent Variable

Perceived drivers Perceived internal barriers AVE

Perceived drivers 97%

TABLE 6 Regression Results (Dependent Variable: e-Adoption)

Overall model .000 15.90% 24.52

TABLE 7 Test for Interaction

Overall model 0 17.40% 6.38

Size –0.01 –0.21 0.83

Furthermore, although previous studies supported the influence of firm

The value potential of e-procurement has significant implications for indus-

LIMITATIONS AND FUTURE RESEARCH

Bartels, A., R. Hudson, and T. Pohlmann. 2003. ISM=Forrester report on technology in

Bartizzaghi, E., and S. Ronchi. 2003. Internet supporting the procurement

Morris, A., A. Stahl, and R. Herbert. 2000. e-Procurement: Streamlining processes to

Sigala, M. 2003. Investigating the e-factors impacting e-commerce adoption by

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