Mateja Podlogar, M.Sc.25 October, 2002 Merkur Day A Model of Electronic Commerce Critical Success...

25 October, 2002 Merkur DayMateja Podlogar, M.Sc.

A Model of Electronic Commerce Critical Success Factors in Procurement Process

M.Sc. Mateja Podlogar, Teaching AssistanteProcurement Laboratory, eCommerce Center,

Faculty of Organizational Sciences,

University of Maribor, Slovenia

[email protected]

http://eCom.fov.uni-mb.si


Procurement process and Electronic Commerce

Payment tosupplier

Takingdelivery

OrderingMaking acontract

Vendorselection

Bidding

Info searchabout

possiblesupplier's

requisitionrequest

Buyer Supplier

Procurement

Purchasing

Supply Chain

Supplier 1

Supplier 2

Supplier n

Supplier'ssuppliers


Buyer Supplier

Reduce costs

Closer relationships between buyers and suppliers

Improve business-executing quality

E-Commerce promises great opportunities

Reduce time

B u s i n e s s p r o c e s s r e d e s i g n


Problem definitions

The problem of the electronic commerce critical success factors ignorance in the procurement process.

The efficient electronic commerce introduction into the process.

The procurement process - a strategically importance to enterprises' business processes.


Goals of the Research

A Model of Electronic Commerce Critical Success Factors in Procurement Process.

Research questions:What are the electronic commerce factors in procurement process?

What is the importance of each electronic commerce factor in procurement process?

What is the connection and dependence among these factors?


Research Methodology - empirical study

Literature review.

Interviews in five large enterprises in Slovenia

Procurement, logistics and informatics managers from three different enterprises tested the questionnaire.

250 large enterprises with web page and the highest revenues in Slovenia.

The questionnaires returned by the 133 respondents.


Limitations

e-Commerce between a buyer and a supplier,

Procurement process between a buyer and a direct supplier,

250 large enterprises with web page and the highest revenues in Slovenia.


Research model

Electronic commercebenefits in

procurement process

impactview

impact

Electronic Commerce

Factors

Time

PROCUREMENTPROCESS

ProcurementProcess

Participants

Costs

Simplicity

The number oftransactions


The questionnaire

Three parts:Respondents and enterprises data,Electronic commerce experiences and Electronic commerce critical sucess factors (time, costs, simplicity and the number of transactions)

Second part:Please provide the existence and/or future plans for Electronic Commerce strategy and its definition in your enterprisePlease indicate whether your enterprise has a Director/Manager of Electronic Commerce: Does your enterprise use ERP (Enterprise Resource Planning) system (SAP, Oracle Business Suite, Baan, Navision, Kopa ERP, MAOP – MCR solutions, your own solution)?


Electronic Commerce Experiences– Electronic commerce strategy


Electronic Commerce Experiences – Director/Manager of Electronic Commerce

No54,1%

Yes29,3%

Don't know5,3%

Plans to have him/her after 12/2003: 3,8%

Plans to have him/her by 12/2003: 7,5%


Electronic Commerce Experiences – ERP (Enterprise Resource Planning) system use

No12,0%

Yes75,2%

Don't know3,8%

Plans to useafter 12/2003: 3,0%

Plans to useby 12/2003: 6,0%


A model of critical success factors in procurement process

Electroniccommerce

benefits in theprocurement

process

0,925

Business preparation time

Business implementation time

Time ofbusiness data

processing

0,836

Business preparation costsCosts of

business dataprocessing

Business preparation simplicitySimplicity ofbusiness data

processing

The number of transaction in connectionwith transportation and payment

The number of transaction in connectionwith taking delivery

The number of transaction inconnection with bidding

The number of transaction in connectionwith ordering from supplier

Group of factors

The number oftransaction ofbusiness data

processing

0,588

0,804

0,537

0,848

Procurement process

0,894

0,885

Business implementation costs

0,890

0,771

Busienss implementation simplicity

Main factors


First group of factors:

Time of business data processing

Time of access to vendors' goods orcatalogs

Time of ordering from vendor

0,815

0,754

Time of access to vendors' inventorydata

Time of vendors' access to buyerinventory

0,567

0,566

Businessimplementation time

Business preparationtime

Time of businessdata processing

Electronic commercebenefits in the

procurement process

Time of vendors selection

Time of payment to vendor

Time of order tracking

Time of inventory turnover

0,711

0,591

Time of search for transporters

Time of transport ordering

Time of receiving of delivery dataannouncement

Time of delivery receiving Time of reclamation solving

0,823

0,870

0,880

0,784

Time of taking delivery

Time of possible supplier'srequisition request

Time of bidding

Time of replacement of supplier

0,726

0,834

0,681

0,646

0,725


Second group of factors:

Costs of business data processing

Costs of access to vendors'inventory data

Costs of vendors' access to buyerinventory

Costs of payment to vendor

Costs of order tracking

Costs of inventory warehousing

0,617

0,558

0,688

Businessimplementation costs

Business preparationcosts

Costs of businessdata processing


procurement process

0,593

0,444

Costs of searching for transporters

Costs of transport ordering

Costs of receiving of delivery dataannouncement

Costs of delivery receiving Costs of reclamation solving

0,859

0,845

0,876

0,817 0,672

Costs of taking delivery

Costs of possible supplier'srequisition request

Costs of bidding

Costs of replacement of supplier

Costs of access to vendors' goods orcatalogs

Costs of ordering from vendor

0,823

0,848

0,698

0,850

0,691

Costs of vendors selection


Third group of factors:

Simplicity of business data

processing

Simplicity of possible supplier'srequisition request

Simplicity of bidding

Simplicity of replacement ofsupplier

Simplicity of access to vendors'goods or catalogs

Simplicity of ordering from vendor

0,862

0,888

0,694

0,820

0,652

Simplicity of access to vendors'inventory data

Simplicity of vendors' access tobuyer inventory

0,547

0,636

Businessimplementation

simplicity

Business preparationsimplicity

Simplicity ofbusiness data

processing


procurement process

Simplicity of vendors selection

Simplicity of payment to vendor

Simplicity of order tracking

Simplicity of inventory management

0,741

0,610

0,645

Simplicity of search for transporters

Simplicity of transport ordering

Simplicity of receiving of deliverydata announcement

Simplicity of delivery receiving Simplicity of reclamation solving

0,819

0,860

0,808

0,717

Simplicity of taking delivery

0,736


Fourth group of factors:

The number of transaction in connection with business data processing

The number of transaction inconnection with possible supplier's requisition request

The number of transaction inconnection with bidding

The number of transaction inconnection with access to vendors' goods or catalogs

The number of transaction inconnection with ordering from vendor

0,567

0,736

0,834

0,860

0,772

The number of transaction inconnection with access to vendors' inventory data

The number of transaction inconnection with vendors' access to your inventory

The number of transaction inconnection with payment to vendor

The number of transaction inconnection with order tracking

The number of transaction inconnection with search for transporters

The number of transaction inconnection with transport ordering

The number of transaction inconnection with receiving of delivery data announcement

0,830

0,822

0,540

0,723

The number of transaction inconnection with receiving of supply order from vendor

The number of transaction inconnection with receiving of invoice from vendor

0,839

0,763

0,813

The number of transaction inconnection with receiving of order acknowledgment from

vendor

0,812

0,829

The number oftransaction in

connection withtransportation and

payment


connection withtaking delivery


connection withbidding


connection withordering from

supplier

The number oftransaction of business

data processing

Koristielektronskegaposlovanja v

procesuoskrbovanja


Conclusions

In a practical sense, it is very important to know findings in connection with electronic commerce that are important for its development and implementation.

Researchers may give importance only to those factors that are found as really important ones.

Second practical contribution is that planning, implementation and expanding of e-Commerce in procurement process give some suggestions on how to become more efficient and effective.

Knowing e-Commerce factors contribute to finding new business opportunities and also to the enterprise competitiveness.

Mateja Podlogar, M.Sc.25 October, 2002 Merkur Day A Model of Electronic Commerce Critical Success...

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