Understanding Digital Transformation of Procurement Through E-Procurement Systems Implementation: Business Partner Relationship Perspective

Introduction

In recent years, the notion of digital procurement is emerging. Digital procurement represents a concept that involves automation of procurement process using e-procurement systems that incorporate smart analytical tools like big data and data mining solutions(Srai & Lorentz, 2019). Digital procurement supported by electronic procurement (E-procurement) further represents a key element of Business-to-Business (B2B) e-commerce (Gunasekaran et al., 2009). In particular, e-procurement systems reflects an application of e-commerce technologies to support a buying organisation’s purchasing activities (Garrido-Samaniego et al., 2010). In recent years, however the notion of e-procurement systems is undergoing an evolution as it is emphasising on the incorporation of “smart” IT systems (Schmidt et al., 2015). According to Glas & Kleemann (2016), smart systems automatically recognise demand for a certain material and from that, independently generate a purchase order that is transmitted to the respective supplier without any necessary human interference. Hence, digital e-procurement extends the traditional e-procurement systems. These systems can provide operational as well as strategic benefits to buying organisations and their suppliers (Rahim & Kurnia, 2014; Tai et al., 2010). However, mere implementation of e-procurement systems does not guarantee those benefits (Pearcy & Giunipero, 2008). This is because realisation of benefits is largely influenced by the way e-procurement systems implementation process is undertaken by buying organisations (Ilhan & Rahim, 2017). Hence, the importance of e-procurement implementation process cannot be underestimated. Although, there currently exists a rich body of literature on e-procurements systems, a large portion of the literature is concerned with several issues like identifying those factors that affect a buying organisation’s decision to implement these systems (Hardy & Williams, 2008), e-procurement implementation challenges (Hardy & Williams, 2008), e-procurement use (Muriuki et al., 2019; Soliman et al., 2005), and the benefits arising from e-procurement systems implementation (Oliech & Mwangangi, 2019; Rahim & Bantwal, 2012). In contrast, understanding the activities involved in implementing an e-procurement system in organisations has received inadequate attention from the eBusiness scholars. A comprehensive literature review on e-procurement systems conducted by Schoenherr & Tummala (2007) further supports this view. It is thus not clearly known: a) what activities buying organisations generally undertake when implementing an e-procurement system to link with suppliers, and b) how those activities are influenced (Rahim & Bantwal, 2012).

Against this backdrop, this book chapter reports a research project that seeks to address the following research question:

• RQ: What influences an organisation to choose the key activities involved in digitally enabled e-procurement systems implementation process?

This research question is answered by examining the e-procurement systems implementation experience of an Australian organisation, analyse its experience in terms of seven activities involved in e-procurement systems implementation process undertaken by that organisation, and explain selection of these activities using business relationship as a theoretical lens.