Case Study: A Study on the Impact of E-Procurement on Indian Industries

AbstractElectronic procurement (e-procurement), in recent years, has been used as a means to reduce costs significantly. It enables volume purchases, allows wider choice of buyers and suppliers, improves quality, delivery, reduces paperwork and lowers administrative costs. This study analyzes the impact of e-procurement on the purchasing process of Indian Industries. It also aims to quantify performance benefits that can be achieved by adopting e-procurement. The study is part of an extensive web based survey which gathers information on 360° view of e-procurement from the perspectives of buyer, seller, service/solution provider and academicians/ trade bodies to gain an insight into the shift from traditional procurement ways to the adoption of e-Procurement by the industries. The critical factors of success are examined. Six major impact dimensions especially on the efficiency, effectiveness, transparency, competitive advantage and green supply chain are precisely set out. The key contribution of this study consists of a specific measurement framework for each impact dimension achieved by model called as EPPMM (Electronic Procurement Performance Measurement Model). The study includes 108 buyers, 105 sellers, 65 service providers and 80 academicians as the domain experts of which 56 buyers, 53 sellers, 52 service providers and 54 academicians' response were taken as a sample. The data is analyzed using MS Excel. There is a significant association between the impact of eprocurement on buyer, seller, service provider and academician. The results obtained from analysis regarding the overall impact, impact on buyer, seller, service provider and academician state that 77.3% of Indian Industries are satisfied with and support eProcurement technology, where as 79.1% of buyer, 76.09% of seller, 77.2% of service provider and 77.3% of academician are satisfied with and support e-procurement technology.Keywords: E-Procurement, positive impacts, technological challenge, performance benefits, performance measurement approach, EPPMM mode (Electronic Procurement Performance Measurement Model). IntroductionProcurement Process: Procurement or purchasing activities are presented as a process of supply chain management. In a typical supply chain, materials or products flow from up-stream to down-stream while the information flows in both directions. The process of managing these supply systems is called supply chain management (SCM). According to the Council of Supply Chain Management Professionals, SCM encompasses the planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities. It also includes coordination and collaboration with channel partners which can be suppliers, intermediaries, third party service providers and customers. In essence, supply chain management integrates supply and demand management within and across companies.A purchasing process can range from strategic buying, transactional buying or spot buying. In the first, the main objective is to establish long-term relationship between customers and suppliers and requires a careful vendor selection and a long-term agreement on the supply management. Next, transactional buying implies repetitive purchases with the same vendor, based on yearly blanket orders or outline agreements. Finally, spot buying occurs when urgent requests come out and all the pre-qualified suppliers are not capable of fulfilling them. Procurement has become a strategic source for firms to compete since most corporations spend between 50 to 80 percent of sales on goods and services.Procurement may differ between the acquisition of materials to incorporate in products or services and indirect goods to support and maintain company non core activities.E-Commerce and Procurement: Advances in information technology have had a huge impact on the evolution of supply chain management. As a result of such technological advances e-commerce emerged, allowing supply chain partners to work closer and share the realized returns among the partners to improve individual firm performance and overall profiability. …