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THE EFFECTS OF E-PROCUREMENT ON OPERATIONAL EFFICIENCY

A CASE STUDY OF BAROLLE (U) LTD

CHAPTER ONE: INTRODUCTION

1.1 Background to the Study

With ever-increasing competitive pressures, growing numbers of firms use electronic procurement (e-procurement) in an attempt to reduce costs and increase profitability. Electronic procurement is a concept that describes the process of buying, selling or exchanging products, services and information using computer networks including the internet (Ken, 2003).  The e-procurement revolution is expected to enhance the status and influence of the purchasing function within organizations, E-procurement is more than just a system for making purchases online. Some companies implement e-procurement and succeed while others fail. E-procurement is about taking this process online and automating the whole procedure with the underlying aim centered on saving money. The growth of the internet and commercial web based application are offering trading even increasing operational cost saving to enterprises (Osmonbekov et al, 2002). 

Private and public sector organizations have been utilizing Information Technology (IT) systems to streamline and automate their purchasing and other processes over the past years. It is only in the past decade that e-Procurement systems have attracted attention. While there is debate about how recently e-Procurement has emerged, (Dai & Kauffman, 2001; Koorn, Smith & Mueller, 2001), there is no doubt that the use of e-Procurement provides several advantages over earlier inter-organizational tools. For example, Electronic Data Interchange has been providing automated purchasing transactions between buyers and their suppliers since it was launched in the 1960s. Enterprise Resource Planning (ERP) followed in the 1970s, and then came the commercial use of the Internet in 1980s. It was only in the 1990s that the World Wide Web the multimedia capability of the Internet – became widely enabled and provided the essential resource for the automation of procurement (Tumwesigye, 2009). 

Croom & Brandon (2004), there are various forms of e-Procurement that concentrate on one or many stages of the procurement process such as e-Tendering, e-Marketplace, e-Auction/Reverse Auction, and e-Catalogue/Purchasing, e-Procurement can be viewed more broadly as an end-to-end solution that integrates and streamlines many procurement processes throughout the organization. Businesses have realized that time and cost savings can be achieved by having a link with major suppliers through private networks such as electronic data interchange (EDI). Many businesses turned to E-procurement systems during the E-commerce  boom to control, simplify, and automate the purchase of goods and services from multiple suppliers. These products let companies aggregate suppliers’ offerings into a single catalog, manage approval processing, and control the transaction process. Businesses today are extending E-procurement beyond controlling the purchase of office supplies and goods for maintenance and repair to reap its benefits in the direct-goods arena  (Alex, 2008).

According to the U.S. Department of Education sciences, (2009), operational efficiency and management is the field concerned with managing and directing the physical and/or technical functions of a firm or organization, particularly those relating to development, production and manufacturing. Operational efficiency management programs typically include instruction in principles of general management, manufacturing and production systems, plant management, equipment maintenance management, production control, industrial labour relations and skilled trade supervision, strategic manufacturing policy, systems analysis, productivity analysis and cost control, and materials planning. Operational Efficiency traditionally relates to the production of goods and/or services separately, although the distinction between these two main types of operations is increasingly difficult to make as manufacturers tend to merge product and service offerings. More generally, operations efficiency management aims to increase the content of value-added activities in any given process. Fundamentally, these value-adding creative activities should be aligned with market opportunity (through marketing) for optimal enterprise performance

Most Companies are aware, they must make some type of transition to digital technology to remain competitive though few have the deep understanding to prove the case or make requisite investment (Mafakui, 2015). Many areas of conflict are cited between e-procurement and operational efficiency as far as purchasing is concerned, many organizations have embraced E-Procurement without understanding clearly what their expectations are. They have been seen to take it up because all their completers are, and in the end they have embraced high operational efficiency. 

1.2 Statement of the Problem 

With the growing modernity, dynamism and global village, the embracement of electronic procurement has greatly made the business purchasing operation easy and real. Accommodating e-procurement in an organization helps to minimize on its ever increasing costs, increases accessibility and transparency, ensures an efficient administration of the procurement process, new supplier discovery and paperless environment. Despite, the fact that many organizations have succeeded in adopting various mechanisms in their operations; they still faces challenges in their operations such as poor employee motivation, ineffective e-procurement practices, poor planning practices, poor communication, bureaucracy, conservativeness of employees, financial constraints, among others (Mafakui, 2015). It is therefore upon this that the researcher seeks to examine the effect of e-procurement on operational efficiency.

1.3 Research Objectives

1.3.1 General Objective

The main objective of this study is to establish the effects of e-procurement on operational efficiency.

1.3.2 Specific Objectives

To investigate the components of e-procurement used in an organization.

To determine the benefits of e-procurement on operational efficiency.

To establish the challenges of using e-procurement on the operational efficiency of an organization.

1.4 Research questions

What are the components of e-procurement used in an organization?

What are the benefits of e-procurement on operational efficiency?

What are the challenges of using e-procurement on the operational efficiency of an organization?

1.5 Scope of the study

1.5.1 Content scope

The study will focus on the effects of e-procurement on operational efficiency. It will put main emphasis on the components of e-procurement used, the benefits and challenges of using e-procurement on the operational efficiency of an organization.

1.5.2 Area

The research will be carried out at Barolle (u) ltd which is located at Plot M611 Ntinda Road – Ntinda Industrial Area, Kampala, Uganda. The company provides transportation services.

1.5.3 Time scope

The study will be carried out for a period of four months from February to May, 2017

1.6 Significance of the statement

The findings of the study will be relevant to the management of Barolle (u) ltd (strategic and operational plans) in that it will give the milestones towards integrating e-procurement as a strategy for growth and performance. 

Further researchers will also benefit from the findings of this study since it will provide additional knowledge to the already existing literature on e-procurement. The findings and gaps of this study may act as ground for further research. 

1.7 Definition of terms

For the purpose of this research, the under – listed terms are defined thus:

1.7.1 e-procurement

Presitti (2002) defined e-procurement as a technology solution that facilitates cooperate buying using internet. It has the power to transform the purchasing process because it pervades all  of the identified by the supply manager.

1.7.2 Operational efficiency 

Operational efficiency is the capability of an enterprise to deliver products or services to its customers in the most cost-effective manner possible while still ensuring the high quality of its products, service and support. 

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

This chapter reviews the existing literature put forward by different scholars and personalities on the effects of e-pocuement on opeational efficiency as well as critically analyzing the deviations in the explanations to find out the research gap in the study variables; to investigate the components of e-procurement used in an organization, to establish the benefits and challenges of using e-procurement on operational efficiency based on secondary sources like text books, internet, newspaper, report at the company, and journals.

2.1 Overview of Key Concepts in the study

2.1.1 E-procurement

Various researchers defined e-procurement differently: Parida and Parida (2005) define e-procurement as a technology solution that facilitates corporate buying using the Internet. Essentially an Internet/Intranet based purchasing application or hosted service that streamlines buying, trading partners, maximizes trade efficiency across the entire supply chain, and provides strategic e-commerce capabilities in Internet time; Process which supports the procurement and sourcing activities via Internet technologies and enables an efficient negotiation between buyers and suppliers (Gimenez and Lourenço 2004); Electronic acquisition of goods and services in a firm (Turban and King 2006); The automation of the procurement processes so that the sourcing, vendor selection, procurement processes, shipment status tracking and payments can be made in an online environment (Bhaskar 2005). 

E-Procurement refers to the use of Internet-based (integrated) information and communication technologies (ICTs) to carry out individual or all stages of the procurement process including search, sourcing, negotiation, ordering, receipt, and post-purchase review (Croom& Brandon, 2004). While there are various forms of e-Procurement that concentrate on one or many stages of the procurement process such as e-Tendering, e-Marketplace, e-Auction/Reverse Auction, and e-Catalogue/Purchasing, e-Procurement can be viewed more broadly as an end-to-end solution that integrates and streamlines many procurement processes throughout the organization. 

2.1.2 Operational efficiency

Operational efficiency of organizations is what occurs when the right combination of people, process, and technology come together to enhance the productivity and value of any business operation, while driving down the cost of routine operations to a desired level(Luanne, 2010). The end result is that resources previously needed to manage operational tasks can be redirected to new, high value initiatives that bring additional capabilities tothe organization.  Organizations must examine baseline operational processes that support the business, and then plan, implement, and support the right procedures. Being process-driven means the operations that support business activities become highly efficient. Only with well thought-out business processes in place from the ground up can an organization achieve business agility. In the way companies maintain supplier relationships, keep track of customer data, handle procurement, or manage accounting – the right processes will lead to increasing efficiency of operations while supporting growth, yet be flexible to change. Companies need to find the best way to do what they do. Agile businesses are determined in their efforts to ensure the best people create the best processes, which leverage the best and most relevant technology (Robin, 2010).

Esynch (2009), also adds that operational efficiency of any productive organization largely depends on its ability to control costs and manage the material flow in some uniform fashion. The potential of this control is again highly related to the quality of decision making information available with respect to the quantity and location of materials. Operational efficiency of organizations can be encouraged when organizations have operating systems built as part of it and that these must derive from the function of the organization itself. This assists in the setting and achievement of targets which are in turn driven by customer requirements. Arjan(2005),brings out the idea that public enterprise can explore the possibilities of taking advantage of different management techniques like cost reduction, cost control, value analysis, inventory control, budgetary control for enhancing operational efficiency of the enterprise and wherever applicable each public enterprise can set up a management service department in the complement of result oriented professionals, charged with the responsibility of suggesting suitable guidelines for operational efficiency. It involves whole companies getting organized in each department, each activity and it must work properly together. For organizations to acquire operational efficiency every single part of it must work properly together because every person and every activity affects and in turn is affected by others. Its in this way that Japanese companies have been so competitive and so successful.

2.2 Components of e-procurement

E-procurement has been able to develop its own body of language and as such regardless of its model, each has similar components that must be properly considered and managed to ensure a successful system. These components include Catalog content, Processes, User maintenance, Establishing buyer/seller relationships, Billing management, Price establishment, Data transmission, and System maintenance (Victoria, 2015).

Catalogue content; at the heart of every e-procurement process lies an electronic catalog. Similar to a traditional mail-order catalog, electronic catalogs contain detailed information on products or services available for sale. Suppliers customize the content to address the specific needs of targeted buyers. This content is manipulated and imported into a database that the e-procurement application integrates into web pages. The management of catalog data can be handled using import and aggregation tools or by outsourcing the task to companies specializing in content management. Content providers generally offer the following services:Convert catalog data into a uniform language and format, Gather and aggregate data from multiple suppliers into one catalog, Publish and maintain the product catalog (Victoria, 2015).Once a catalog is created, various cataloging strategies are used to provide access to the content. Strategies include using a centralized catalog model where the aggregated data is hosted at a central location, a distributed model where data resides at multiple sites, or a content-retrieval method where suppliers present catalog data directly to buyers (Victoria, 2015).

There are three types of catalogues that address various buyer needs: Product catalogs: Contain data on tangible items such as office products, medical supplies, rolls of steel, etc. Service catalogs: Offer professional service “intangibles” such as office maintenance services, temporary personnel services, etc. Commodity-specific catalogs: Offer specific product families or groups such as chemicals, paper, or other raw materials (Victoria, 2015).

According to Zheng (2004), content and catalogue management is the process of suppliers enabling electronic product content to be made available to buying organisations in order for them to procure goods electronically. This product content can be hosted by the buyer or supplier. It must be managed, however, in such a way that the information is reliable and available to facilitate the buyer’s requisitioning process. A successful content and catalogue management solution will ensure that the product data is good quality, and able to be configured and standardized to the buyer’s required format. Catalogues are mostly used for the procurement of frequently replenished indirect goods and services; however, depending on the content within they can also be put to great effect providing purchasing guidelines and frameworks for more infrequent, high value, complicated procurement. 

E-procurement Processes; in addition to creating an electronic catalog, existing procurement processes need to be “electrified” end-to-end to support the entire e-procurement process. This includes requisition and order management, real-time tracking and receiving, online order fulfillment, automatic billing, invoicing and payment, as well as workflow management, commerce transactions, and reporting and analysis tools (Victoria, 2015).

Note that an effective e-procurement platform must support both the buyer’s and the supplier’s business processes. It should also offer functionality that can easily be customized and configured to meet specific e-procurement requirements. In general, a successful e-procurement solution will be founded on an open, component-based model that offers easy configurability and scalability (Victoria, 2015).

User Maintenance; closely related to the two preceding process management components, user maintenance includes defining the individuals authorized to use the e-procurement system, how these users will be enrolled, and how to provide them access to the trading community. This component serves as the foundation for managing the complex buyer-supplier relationships that will occur within the marketplace.User maintenance provides tools that enable the company to control procurement, company master data organizer activities (Mburu, 2011).

E-procurement user maintenance must address two primary tasks:Establish user profiles, access rules, catalog filters, and workflow, allow for unique pricing and contractual relationships between a buyer and supplier.The steps that are vital to successful user management include; creating the buyer organization: Identifying and defining the individual buyers, how they will form buying groups, and how they will access the e-procurement process, creating the supplier organization: Identifying sellers, maintaining company profiles, and creating shipping options and other high-level parameters for supplier activities, e-procurement organization: Aggregating the entire marketplace, including buyer and supplier, to include such things as hours of operation, billing rates, etc.Additionally, user maintenance requires establishing authorization levels and associated procedures to precisely govern buyer and supplier capabilities.Three authorization levels that must be addressed are:Access to the electronic catalog: Defines who may access catalogs and how to do so; creating and editing requisitions: Defines who can create requisitions, who can edit requisitions, and who can edit accounting codes; managing orders: Defines who has access to POs and who has authorization to override shipping or billing information (Victoria, 2015).

Establishing Buyer/Seller Relationships: this component has two phases: managing supplier relationships and managing pricing.Buyers and sellers may be linked based on their previous buying relationship or based on the buyer’s unique needs. Buyers may make purchases based on negotiated contracts or choose the specific commodities they need from customized catalogs. Price lists too may be customized for a buyer or buying group. For example, prices may be established by adding filters that dynamically calculate a price as a markup or discount of the list price. Or groups of buyers may be categorized into classes with filters applied for each group (Victoria, 2015).

Billing Management; e-procurement revenues are generally based on transaction fees. A billing management system will calculate usage charges and generate and distribute statements or invoices to buyer-seller members of the e-procurement network. Suppliers may also use the billing system to calculate ordering charges or to distribute operating costs for specific orders. These functions must directly interface with back office invoicing systems to automatically generate bills (Victoria, 2015).

According to Sababu (2000), billing management involves electronic billing whenever available to expedite processing, billing of all commercial insurances, billing of all public insurance, follow-up on all incorrectly processed, underpaid, and denied claims, monthly statements, customizable reports including comprehensive monthly reportingetc.

Price Establishment; effective pricing enables buyers to negotiate the best possible deals and sellers to liquidate excess inventory. Two major pricing options are used: Dynamic Pricing and Fixed Pricing.Dynamic pricing: Allows buyers and sellers in an Internet market to trade goods and services at prices determined by market forces instead of by a predetermined price list or catalog.

An example of dynamic pricing includes business services such as auctions, reverse auctions, and exchanges.Fixed pricing: Based on a predetermined price list or catalog prices negotiated between a buyer and seller (Victoria, 2015).

Data Transmission; transmitting data over the Internet involves two facets: messaging agents and security. Data and messaging tools enable the Internet-based exchange of transactional data between different buyers andsuppliers in the e-procurement marketplace. To do this, transactions are sent via the Internet as “messages” and then integrated into a supplier’s or buyer’s back-office system, enabling financial postings that coincide with the receipt, payment, and invoicing processes. Data messaging tools are also used to cancel transactions and log failures when messages can’t be delivered within a predefined time period or following a specified number of attempts. The most important aspect of the messaging tool is that it enables real-time communication between buyers and sellers.Coincidentally, security is an important aspect of any Internet transaction. Protecting a buyer’s confidential financial information and ensuringthat only designated buyers have access to supplier product information is critical to ensuring confidence in any e-procurement system (Victoria, 2015).Data transmission involves the movement of data in form of bits between two or more digital devices. This transfer of data takes place via some form of transmission media for example, coaxial cable, fiber optics etc. (Narasimhan, 2001). 

System Management: maintaining an e-procurement system involves configuring and monitoring performance usage, average response time, transaction sources, and traffic patterns. To maximize the benefits and strategic opportunities e-procurement systems offer, this information should be used to analyze growth patterns, session times, and ultimately to fine-tune the system’s performance to fit specific market communities or technical environments.Once an e-procurement system is up and running, it’s important to monitor traffic and system security on a day-to-day basis.Inadequately designed transaction engines can result in poor marketplace performance, lack of scalability, breakdowns in security, and, ultimately, frustrated users (Victoria, 2015).System maintenance is a catchall term used to describe various forms of computer or server maintenance required to keep a computer system running properly. It can describe network maintenance, which could mean that servers are being physically repaired, replaced, or moved. Network maintenance can also mean that the software for a server is being updated, changed, or repaired. This sort of maintenance is typically performed on a regular or semi-regular schedule, often during non-peak usage hours, and keeps servers running smoothly (Wamalwa, 2003).

2.3 Benefits ofusing E-Procurement on operational efficiency 

Tomplain (2002), reveals that in certain economic time electronic purchasing has emerged as a strategy with staying power. E-Procurement is the internal based automated process of purchasing and sourcing. On line application integrates procurement and business processes and procures to streamline purchasing transaction costs and shorter fulfillment time both for materials used directly and indirectly for goods and services. Companies incorporate to conduct business.

Mburu (2011), argue that electronic buying in e-procurement is faster enough. There is no wasting time on busy telephone lines and chances of making mistakes. Errors are reduced since there is communication in frequently noisy environment, orders can placed any time, and there is no bias broker to push you. You can find a considerable amount  

Mburu (2011), contend that buyers and sellers will be around enough to warrant the financial and personal effort to establish the necessary working relationship. Additionally, all eyes on the option and the future to secure a successful purchasing operation. Electronic buying schemes have revealed sound relations between buyers and suppliers end.

Mburu (2011),put forward that electronic procurement encompasses the entire online process in developing, security delivering, servicing and payment for products and services. The economic model encourages innovation and entrepreneurship hence generating many business and consumers. Electronic buying procedure present a vertical and complex challenge to business and financial institution to develop efficient flexible and secure payment system for online buying.

Kipyegob (2012), emphasize that electronic purchasing when complimented by internet and extranet applications guarantee accessibility to inventory data bases especially of large customers, more over a cooperate employed sales representative help to access customers better decisions to regulate inventory levels are engineered that is, the line of merchandise needs/requirements to be added or disconnected or what kind of investment is needed. This is achieved simply because of electronic procurement feasibility and facilities affected through analysis that is done by internet worked/linked through the electronic data interchange (EDI) Computers.

Organization and procurement stage differ in degree of uniformity, complexity, number of people involved and movement of efforts required to make a good decision. There are basic activities that must be taken to complete a purchase. Buyers have always had to follow some basic steps. Advancements have provided an alternative to an endless time taking purchase stages because formerly processing a purchase order regardless of the value, size and importance of the item in question required on to strictly follow suits.

Many businesses turned to E-procurement systems during the E-commerce  boom to control, simplify, and automate the purchase of goods and services from multiple suppliers. These products let companies aggregate suppliers’ offerings into a single catalog, manage approval processing, and control the transaction process. Businesses today are extending E-procurement beyond controlling the purchase of office supplies and goods for maintenance and repair to reap its benefits in the direct-goods arena (Kipyego, 2012).

Tomplain (2002), reveal that in certain economic time electronic purchasing as emerged as a strategy with staying power. E-Procurement is the internal based automated process of purchasing and sourcing. On line application integrates procurement and business processes and procures to streamline purchasing transaction costs and shorter fulfillment time both for materials used directly and indirectly for goods and services. Companies incorporate to conduct business.

Tam (2002), stress that Public Trading Exchange (PTE) on electronic market places continues struggling administrative procures and attracting of key suppliers. A public trading exchange is a web based net work point of contact that facilitates internal and external communication through interact and extra-net applications respectively. Normally this communication and collaboration that is to among limited place approved group of member companies in a private electronic market to place this highest essentially with easy accessibility and process integrated within enterprises, companies automatic tactical supply and share supply requirement availabilities  and securities.

Greunen (2010) contend that buyers and sellers will be around enough to warrant the financial and personal effort to establish the necessary working relationship. Additionally, all eyes on the option and the future to secure a successful purchasing operation. Electronic buying schemes have revealed sound relations between buyers and suppliers end. He further put forward that electronic procurement encompasses the entire online process in developing, security delivering, servicing and payment for products and services. The economic model encourages innovation and entrepreneurship hence generating many business and consumers. Electronic buying procedure present a vertical and complex challenge to business and financial institution to develop efficient flexible and secure payment system for online buying.

Whereas Flynn, Huo,and Xhao(2010), emphasize that electronic purchasing when complimented by internet and extranet applications guarantee accessibility to inventory data bases especially of large customers, more over a cooperate employed sales representative help to access customers better decisions to regulate inventory levels are engineered that is, the line of merchandise needs/requirements to be added or disconnected or what kind of investment is needed. This is achieved simply because of electronic procurement feasibility and facilities affected through analysis that is done by internet worked/linked through the electronic data interchange (EDI) Computers.

Greunen (2010), states that by employing electronic data interchange, facilities data exchange represents wide range of business transaction documents with a clearly stated or procedure that has to be followed by individual companies which subscribes to EDI (Electronic Data Interchange) facilities. This type of arrangement is a clear example of automation of electronic procurement. An already formatted data is transmitted over net work links directly between computer without paper document or human intervention because of established protocol by suppliers, manufactures and buyers however, it is worthy stating that direct net work links between the computers the trading parties are not widely used because of fear of confidentiality and security.

Greunen (2010), asserts that consumers/users can compare products features and prices at a mere look at them and make  requisitions/place orders and make purchase online with a purchasing and number via the system link to EDI (Electronic Data Interchange) such link up through direct communication with supplier, buyers can obtain price quotes, determined availability of items in suppliers stock transmit a purchase order, obtain a follow up information about any changes in purchases requirement caused by schedule revision obtain service information and sends letters and memorandum instantly. The closer mutual relationship with suppliers is likely to become the norm rather than the exceptional over the next decades importing for reading change in manner in which buyers and suppliers cope to deal.

Flynn, Huo and Xhao (2010), another factor is information quality. Information quality is seen to capture the e-commerce (web) content issue. In the context of e-procurement success, web content should be personalized, complete, relevant, easy to understand, and secure if one expect buyers or suppliers to initiate transactions via the Internet and to return to the site on regular basis. There are three constructs that are posited in this service quality dimension which are trust, perceived risk and perceived ease of use. 

2.4 Challenges using E-Procurement on operational efficiency of an organization

Where as e-procurement promises to make procurement processes easier, its implementation in developing countries like Uganda seems to be more of a dream than a reality. This is mainly because of the challenges that arise from using the traditional system of procurement. These challenges are detailed below;

First of all, E-procurement is not practical in Uganda because there is no enabling law that can govern its use. It is important to note that even drafting of the current Ugandan procurement framework took some time, so drafting another one governing e-procurement would probably even take a longer time given the complexities that may be involved. Without a law in place, the introduction of e-procurement would even present greater challenges. There must be a legal framework in place that details how the system will run in government entities and how the private entities will relate to them in that environment.

E-procurement involves such processes like e-ordering and e-tendering. In such a case, there can arise a problem of e-evidence especially in cases where a procurement official can claim that he /she mailed the bids or an order yet he did not. In such a case there may be no evidence to prove that the official actually mailed the document. In other words, it is not a reliable system given that the procurement processes is largely dependent on deadlines (Tumwesigye, 2009).

Weele (2005), another challenge of implementing e-procurement is connected to cultural aspects. Its introdreuction would create a real challenge because it would not be easy for the people involved to easiley accept it having been used to the old system. Getting used to the new system would probably take some years before it is really accepted by the people.However if the system is to be changed, one way of solving this cultural problem would be the introduction of change management programmes before and after the introduction of the new system which would help to orient the concerned parties through it. This would enable them to cope when the new system is finally introduced.While most procurement-software vendors are positioning their products as supply-chain-ready, they still have work to do to support complex B-to-B trading relationships. 

Implementation of e-procurement is not practical in Uganda today largely because there is no capacity to operate a full fledged e-procurement system. To smoothly operate it, there is need for all prospective suppliers to be web enabled. This means that they ideally must have websites and must be connected to the internet all the time. This is not possible because one can find that so many prospective suppliers don’t even own computers let alone know how to operate one. This means that there is no competence to run such a system in a country like Uganda. A very small percentage of Ugandans can afford an internet connection (Alex, 2009).

Tumwesigye (2009), another challenge that would be faced would be that of signat. There is need of signatures on many documents as they move from one level to another especially in public procurement. The intrdoduction of e-procurement would create a big challenge ures in this area, it could bring about forgery if great care is not taken.

Tumwesigye (2009), further argues that implementing e-procurement is connected to cultural aspects. Its introduction would create a real challenge because it would not be easy for the people involved to easiley accept it having been used to the old system .Getting used to the new system would probably take some years before it is really accepted by the people.

2.5 Conclusion

E-procurement constitutes a very important information technology managerial tool that has the potential of improving and integrating various functions across the organization. This internal integration can enhance the current performance of an organization as well as improve the future performance of the organization. E-procurement can also help drive future confidence in the face of both internal and external risk. E-Procurement can reduce quality costs by making sure that selected suppliers deliver a product of service that does not exceed extensive quality control.  E-Procurement can also reduce quality costs by making sure that the components bought do not load to complaints on the user department or final product to the customer. The literatures reviewed to the components of e-procurement used in an organization, the benefits and challenges of e-procurement on operational efficiency.

CHAPTER THREE

METHODOLOGY

3.0 Introduction

This chapter presents the research methodology which include; Research design, study population, study area, instruments of data collection, data processing, Study  instruments, sources of data and data  analysis.

3.1 Research design

The research will employ a descriptive research design. The design will exploit both qualitative and quantitative approaches. Qualitative approach will include use of interviews, while quantitative approaches will involve use of descriptive statistics that will be generated inform of frequency tables, graphs, and Charts. Qualitative and quantitative approaches will be adopted to enable the researcher get and analyze information concerning respondents’ opinions about e-procurement and operational efficiency.

3.2 Study Area

The research will be carried out at Barolle (u) ltd which is located at Plot M611 Ntinda Road – Ntinda Industrial Area, Kampala, Uganda. The company provides transportation services.

3.3 Study population

Study population is a complete set of individuals, cases or objects with some common observable characteristics. The sample population consists of 100 staff. The population will include the sales representative, procurement department, and transportation department, and other employees holding familiar and unfamiliar titles but are deemed to be suitable stakeholders for generating relevant data to the problem which will be under investigation

3.4 Sample size

The sample size will consist of 60 respondents from the study area and these will be selected as follows;

Table 3.1: Showing Sample size

Source: Primary Data

The study will use a sample size selected 60 respondents because it will be enough for the study to obtain reliable information. In addition, it will help the researcher to finish her study in time.

3.5 Sampling method

Sampling is a definite plan determined before data collection for obtaining a sample from a given population. It involves three decisions: who to be sampled, how many people to sample, and how to obtain the sample. 

The stratified sampling will be used to arrive to the people to include in the study. It’s a method in which the population is divided into a number of divisions and a sample is drawn from division and such sample makes us the final sample. Using this method, respondents will be grouped into separate homogenous group of subjects with similar characteristics. Purposive Sampling involves deliberate selection of particular units of the population for constituting a representative sample. It involves convenience and judgmental sampling. Judgmental sampling or purposive sampling – The researcher will choose the sample based on who will be appropriate for the study. 

3.6 Data collection methods and instruments

Questioning method

The researcher will use the questioning method whereby she will draft to respondents structured questions. This method will be used because some respondents may have no time to sit down and answer during interviews.

A questionnaire guide will be used and this will be inform of close ended in nature and this will allow the study respondents to fill the questionnaire in the study field. The questionnaire method of data collection will be used because of being cheap and that the method collects responses with minimum errors and high level of confidentiality.

Interviewing method 

An interview is a conversation where questions are asked and answers are given. Interview refers to a one-on-one conversation with one person acting in the role of the interviewer and the other in the role of the interviewee.

An interview guide will be drafted with a set of questions that the researcher asked during an interview and this will be structured (close ended) in nature. Interview guide will be used by the study since the methods helps in the collection of more data as it allows the interaction of both the researcher and the respondents. 

3.7 Data collection procedure

The study will observe all procedures followed in research. Using the letter of introduction obtained from the Research Coordinator, School of management and Entrepreneurship, the researcher will be introduced to every respondent reached at, fully explaining the purpose of research. After getting their consent, she will set a program with the respondents on when the questionnaires will be administered and date for the interview sessions will be set. The researcher also will build the confidence of the respondents by assuring them that their views will be confidential and will be used only for academic purposes.

3.8 Validity and reliability of research instruments

There are no scientific principles which would guarantee a valid and reliable questionnaire, but there are ways in which this can be pursued. First, the items in the questionnaire should be based on prior research whenever possible. Due to this, in this study most of the questions will be to be based on prior research. Secondly, the questionnaire should be pre-tested (Malhotra & Birks 2007).

3.8.1 Validity

To test the construct validity, citations of all sources where materials and evidence of material collected from will be provided. The supervisor will review the questionnaires and approve them.  

3.8.2 Reliability

When conducting research, the researcher will try to act as neutral as possible in order to avoid being bias. The researcher will be also conscious about the type of questions to ask.

3.9 Data analysis

The data collected will be edited for accuracy, completeness and to find out how well the answered questionnaires will be and this will be done in line with the questionnaires. The edited data will be coded. Coding will involve assigning numbers to similar questions from which answers will be given unique looks to make the work easier. In this case Ms-excel will be used to analyze the coded data.

3.10 Data Presentation

Presentation of data will involve use of tables, pie-charts and graphs that will be generated from the questions relevant to the study variables. Interpretation and discussion of the results will be done as the researcher will explain the strength of the study variables basing on the frequencies and percentages, charts and graphs. 

3.10 Limitations of the Study

The study will be faced with a problem of not finding all respondents in the study area especially the employees who go to field as a group. The researcher however will arrange with them to fix for her an appropriate time in order to collect reliable and valid information from them for the study.

The study also will be expensive in terms of stationary. However the researcher will mobilize funds from her friends and family members for the study to be completed successfully in time with the help of her supervisor.

The researcher further will face a problem of some respondents not providing information for the study as information relating to the study variables, however to this, researcher will explain to them that the information will be only for the academic purpose while making them to understand the study variables. 

QUESTIONNAIRE FOR RESPONDENTS

Dear respondents,

I am Nakibuye Vivian, Reg No. 12/U/11226/PLD/PD, a student of Kyambogo University pursuing a Bachelor’s Degree in Procurement and Logistics Management.  I am carrying out research on the effect of electronic -procurement on operational efficiency, A case study of Barolle (U) ltd. I humbly request you to spare some few minutes of your time and answer these questions below. The study is strictly for academic purposes and will be treated with utmost confidentiality. Your cooperation is highly appreciated. 

Section A: Background information

Note: For each of the questions, tick against your response or write your response in the blank space provided.

1.Gender

1. a) Female
2. b) Male
3. Age range
4. a) Less than 30yrs b) 30-39yrs
5. c) 40-49yrs d) 49-50yrs
6. e) over 50yrs
7. Level of education
8. a) Secondary b) Diploma
9. c) 1st Degree d) Masters
10. Period you have served in this organization 
11. a) Less than 2 years b) 2-5 years
12. c) 6-10 years d) Over 10 years

5.In which department do you work?

a)Production b) Finance c) Sales

1. d) Stores d) Procurement

Section B: The components of e-procurement used in an organization

6. What do you understand by e-procurement?

1. A procedure that involves the use the internet for procurement of goods.
2. The business of purchase and sale of goods and services using an electronic based system on the internet.
3. The business to business or business to consumer purchase and sale of supplies, work and services through the internet as well as other information and networking systems.

7. Has your organization implemented e-procurement in its operations?

   Yes                             No

9. In what ways has your organization applied e-procurement in its operations?

1. e-tendering
2. Enterprise Resource Planning
3. e-sourcing
4. e-reverse auctioning
5. e-informing

8. Which of the following components of e-procurement does your organization use?

1. Catalog content
2. Processes
3. User maintenance
4. Buyer/seller relationships
5. Billing management
6. Price establishment
7. Data transmission
8. System maintenance

10. How effective are these components to your organization?
11. a) Very effective 
12. b) Not at all
13. How can your organization improve on these components?

Staff Training

Improving quality of Software

Others

Section C: The benefits of e-procurement on operational efficiency

12. What are the reasons of using e-procurement in your organization?

1. To outcompete other organizations
2. Stock reduction
3. Reduction of quality cost
4. Ensure customer satisfaction
5. Increase flexibility in business
6. Enhancing inter-organisational coordination
7. Increase competitive sourcing opportunities

13. Does your organisation benefit from using electronic procurement?

  Yes                                    No 

14. How does your organisation benefit from using e-procurement?

1. Leads to cost reduction      
2. Leads to better service delivery      
3. Enables the organization to streamline processes      
4. Facilitates real time response to customers      
5. Guarantees real time response to the market      
6. Improves transparency in the procurement process      
7. It improves the flow of information      
8. It leads to competitive bidding and sourcing 

15. How has e-procurement enhanced operational efficiency?

1. Reduced on lead time
2. Reduced documentation
3. Improved information flow
4. Reduction in operating costs

Specify…………………………………………………………………………………………………………………..

Section D: Challenges of e-procurement on operational efficiency

16. Does electronic procurement pose any challenges to your organisation?

  Yes                                  No

17. What challenges does e-procurement pose to your organisation? 

1. Alot of documentations involved
2. Lack of capacity to operate a fully fledged e-procurement system
3. Limited finances
4. Lack of skill among employees
5. Conservativeness by some employees
6. Longer lead time.
7. difficulty in aligning the system to the organisation’s policies.

Specify……………………………………………………………………………………………………………………..

18. How has your organisation tried to minimise the challenges faced?

1. Employ skilled personnel
2. Increase funding
3. Training of the employees
4. Involving the top management in all departments.
5. Others 

Specify……………………………………………………………………………………………………………………

THANK YOU FOR YOUR TIME