The impact of e-procurement on the profitability of listed construction firms

Thesis Overview

<p> <b></b></p><p><b>INTRODUCTION</b></p><p><b><b>1.1 &nbsp; &nbsp; &nbsp; Background to the study</b></b></p><p><b><b></b></b></p><b><b><p>Electronic procurement (e-procurement) has been<br>labelled as a tool that can improve competence and performance while enabling<br>simplicity and automation (Phillips &amp; Piotrowicz, 2006; Hendrickson &amp;<br>Mahnke, 2005). Davila <i>et al </i>(2002) explained e-procurement as any<br>technology that facilitates the acquisition of goods and services by a private<br>or public organization over the internet, a view that is substantiated by<br>Parida &amp; Parida, (2005).</p><p>&nbsp;The e-procurement value chain comprises indent<br>management, e-tendering, e-auctioning, vendor management, catalogue management<br>and contract management. Indent management is the workflow involved in the<br>preparation of tenders.</p><p>Profitability is<br>defined as the operating income divided by sales, as a measure of<br>profitability. Whether you are recording profitability for the past period or<br>projecting profitability for the coming period, measuring profitability is the<br>most important measure of the success of the business. A business that is not<br>profitable cannot survive. Increasing profitability is one of the most<br>important tasks of the business managers. Managers constantly look for ways to<br>change the business to improve profitability.</p><p>Supply Chain Managers are to<br>take into account the effects of IT and know how to make a commercial case for<br>electronic procurement. Today,<br>businesses are increasingly demanding in terms of decisions to be taken with<br>regard to e-procurement and to manage the huge number of influences and<br>pressures. However, in spite of huge<br>stress on the benefits associated with e-procurement, research on the topic is<br>lacking with regard to the integration theory of strategic choice. </p><p>The present procurement<br>process consists of traditional manual procedures that are slow and even slower<br>systematic process of purchasing entries (Hawking et al., 2004)</p><p>Most developing and developed countries<br>governments would like to implement public e-procurement technology in such a<br>way, as to enhance transparency and accountability in business procurement<br>processes. The basic principle of the procurement is straightforward: to<br>acquire the right item at the right time with the right price. The process<br>should be open, objective and transparent. However, corruption in public<br>procurement processes leads to problems such as lack of accountability and<br>transparency, lack of political control and auditing, weak professionalization<br>of the bureaucracy and many more.</p><p>&nbsp;To overcome these concerns relating to<br>corruption in the government procurement, information and communication<br>technology (ICT) can play an important role to reduce corruption by promoting<br>good governance (Bertot,Jaeger &amp; Grimes, 2010), enhancing relationships<br>between government employees and citizens tracking activities, monitoring and<br>controlling the government employees and reducing potentiality of corrupt<br>behaviours. ICT enabled technology especially public e-procurement plays an<br>important role for minimizing the risk of corruption in public procurement<br>processes (OECD, 2008).</p><p><b>1.2 </b><b>&nbsp; &nbsp; &nbsp; Statement<br>of the problem</b></p><p><b></b></p><b><p>Just<br>like every other concept in business and management E-procurement is also faced<br>with some problem as regards making goods and materials available to the<br>organizations at when needed which includes:</p><p>The challenges involved with e-<br>procurement. The most important of these bothers on how best to employ the use<br>of IT in this era of communication revolution to enhance the procurement<br>process.</p><p>Poor skill and in<br>professionalism of staffs<br>of an organization need to acquire the necessary skills that can enable them to<br>operate effectively and efficiently while using the new e-procurement system if<br>staff is not adequately trained, they may not be able to own the e-procurement<br>system and this may contribute to failure.</p><p>The success of<br>e-procurement also depends on communication to the users the organization<br>adopting an e-procurement system must be able to communicate this information<br>to the users distorted communication of information may lead to<br>failure of the system.</p><p>Behavioural uncertainty<br>arises because web retailers (suppliers) have the chance to behave in an<br>opportunistic manner by taking advantage of the distant and impersonal nature<br>of e-commerce in this context e -procurement and the buyer’s inability to<br>monitor adequately all transactions it is important for organizations to ensure that<br>all the perceived risks are handled properly to ensure success of the<br>e-procurement project</p><p><b>1.3 </b><b>&nbsp; Objective of the study</b></p><p><b></b></p><b><p>The<br>main objective of the study the impact of E-procurement on the profitability of<br>listed construction firms, other specific objectives includes to:</p><p>i. &nbsp; &nbsp; &nbsp;To determine the importance of e-procurement<br>on the profitability of listed construction firms in Nigeria. </p><p>ii. &nbsp; &nbsp;To find out the effect of e-procurement staff<br>training on the profitability of listed construction firms in Nigeria.</p><p>iii.To<br>examine the impact of e-procurement facility maintenance on the profitability<br>of listed consumer firms in Nigeria.</p><p>iv. To<br>identify the behavior (willingness/unwillingness) of employees to adopt<br>e-procurement in listed construction firms in Nigeria.</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; </p><p><b>1.4 &nbsp; &nbsp; &nbsp; Research hypotheses</b></p><p><b></b></p><b><p>In<br>order to achieve the objective, the following research Hypotheses are<br>formulated and assessed:</p><p>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<br>i. &nbsp; &nbsp; H0:<br>E-procurement adoption has no significance on profitability in construction<br>firms in Nigeria</p><p>&nbsp; &nbsp; &nbsp; <br>ii. &nbsp; &nbsp; Hi: E- procurement adoption has<br>significance on profitability of consumers firm in Nigeria.</p><p><b>1.5 &nbsp; &nbsp; &nbsp; Scope of the study</b></p><p><b></b></p><b><p>This<br>study is restricted to Construction <br>companies in Kaduna. it also<br>focuses on the E-procurement and its impact on productivity and<br>it covers a period of (2009-2014) The study will also be limited to the subject<br>matter The study aimed to provide a complete and analysis of the importance of<br>e-Procurement and Supply Chain Management Integration, private sector<br>perspective in Nigeria through a theoretical framework developed. Therefore,<br>the first step of the research was to undertake a complete study of all factors<br>relevant with the subject matter that guided the experiential examination of<br>e-procurement implementation on listed construction firms in Nigeria.</p><p><b>1.6 &nbsp; &nbsp; Significant of the study</b></p><p><b></b></p><b><p>The study will be of<br>benefit to construction firms as it can be used to get more knowledge on<br>factors affecting the use of E-Procurement. The knowledge will also be used by<br>such firms to use E-Procurement to reduce cost and increase profits. The<br>research will be of benefits to Scholars interested in conducting research in<br>e-Procurement and related areas as a source of reference. The policy makers on<br>Procurement in both the private and public sectors will find this study useful<br>in policy formulation.</p><p>This<br>study intends to explore the practical significance of e-procurement in<br>reference to corporate organizations in economic growth and bringing more<br>employment opportunities for the nation, has motivated the researcher to<br>explore the importance of e-procurement and integration with the supply chain<br>management of the private and public sector in Nigeria.</p><p>The<br>study will also provide the public with firsthand information and knowledge on<br>e-procurement.</p></b></b></b></b></b></b></b> <br><p></p>