Electronic business is the process which uses Internet technology to simplify certain company processes, improve productivity and increase efficiency. Enterprises, which endeavor to have a success in doing business electronically, should simplify sub-processes, namely: receiving of delivery data (shipment announcement), possible supplier’s requisition request, transport ordering, reclamation solving and bidding.
Luleå tekniska universitet
Industriell ekonomi och samhällsvetenskap
Industrial marketing and e-commerce
Author: Sara Faraji Jalal
Keywords: e-Commerce; e-Procurement;
Abstract: Electronic business is the process which uses Internet technology to simplify certain company processes, improve productivity and increase efficiency. Podlogar (2006) points some facts about process reengineering that are strongly connected to the process simplification, including: awareness of technology opportunities, ability to achieve process effectiveness, readiness for e-procurement collaboration, satisfaction and positive e-procurement experiences sharing and environment changing response.
The groups of factors discussed above explore simplicity of business data processing with regard to processes that are necessary for the execution of the entire procurement process. These processes may capture (1) possible suppliers requisition request, (2) replacement of supplier, (3) bidding, (4) access to suppliers goods or catalogs, (5) access to suppliers inventory data, (6) suppliers access to your inventory, (7) ordering from supplier, (8) payment to supplier, (9) order tracking, (10) search for transporters, (11) transport ordering, (12) receiving of delivery data announcement, (13) delivery receiving, (14) reclamation solving and (15) inventory management. In a questionnaire, factors based on all the above processes, were explored.
For all factors, I used a five point Likert-type scale ranging from (1) “Does not significantly simplify” to (5) “Significantly simplifies”: medium choice (3) was “No impact”, also included the choice (0) “Don’t know” for respondents who don’t want to express an opinion of particular item. Only one answer was possible in each item. The sample chosen in this study was randomly selected from the enterprises database that is provided by Chamber of Commerce, Ministry of Industry and Industrial Management Institute (100 top companies selected in 2005), also all big enterprises chosen in public stock market in Iran form many industries such as oil and gas, automotive, energy, transportation, finance, metal and steel, electrical, some services industries and etc. The reason for this choice is due to the fact that unfortunately in Iran there are few or even no enterprise that has fully implemented e-Procurement system in their organizations. However, most of them are in the early stages of thinking and expanding their systems into e-Procurement considering the evolution that is happening in the business community.
Prior to the survey starting, twelve procurement, logistics and computer science managers from three different enterprises (Automotive, Steel, Energy industries) tested the questionnaire. Based on the test, errors and possible misunderstanding were considered and corrected. In Iran, about 250 big enterprises were selected and the questionnaires were distributed directly to the procurement manager, logistic manager and information manager of their enterprises and it was emphasized that people who will fulfill the questionnaire are in the role of a buyer who want to procure goods. I received 138 responses, of which 124 were valid and completed, considering 49.6 percent response rate. More than 90% of the respondents answered the questionnaire had experience above 10 years in the relevant field and this point is the adequate work experience of the respondents that will ensure the accuracy of the information they provided in the study. The variables were subjected to principal component analysis as the extraction method, varimax rotation with Kaiser Normalization as a technique of rotation to examine both the individual variables and the relationships among them.
It is noticeable that possible suppliers requisition request, bidding and order tracking are important variables according to the both Iranian and Slovenian managers. Although payment to suppliers is very important from Slovenian experts, but we see that from Iranians managers point of view this variable has almost least importance. That may come true, since in Iran electronic payment has not become so common so far and always payments is done manually and traditionally or through Letter of Credits for procurements through banking systems. On the other hand, transport ordering, receiving of delivery data announcement and reclamation solving have a high percentage of importance from Iranians managers’ point of view while, Slovenian managers don’t believe so. This fact again relates to the logistics system in Iran.
The lack of information through the transportation of good from abroad and less digital system for track and tracing has made big problems for companies to reduce the time of transportation of the goods. Therefore, they believe that if they have some digital facilities to track and trace the importation, such as GIS systems, GPS systems, digital regulations for customs clearance and customs duties or etc, they can arrange the transportation faster and they can be announced of delivery and shipment of the goods with more speed and more accuracy. Also again, because of the problems in logistics, procurement departments of companies may face inefficiencies in transportation and their goods loss during the transportation. So, electronically they can arrange reclaiming of loss as well and this will simplify the process and reduce wasting time.
Comparing the model of factors Iran and Slovenia by representing each variables loadings, we notice the similarity of the both models and it shows that the variables to be simplified in the procurement process by e-Commerce in the world is somehow the same. Just depending on the situation of logistics or e-Commerce infrastructure may differ in some variables. The models indicate that the perceptions in both countries regarding the simplifying procurement process by e-Commerce can be the same with a bit difference from what is concluded from the results.
In order to prepare better for e-Procurement and implement it more successfully, we understood from this research that one of the most important e-Commerce factors for this purpose is process simplifying by reengineering them. The developed model represents useful data and important findings at the practitioner level and for academic researchers. At the first stage, it is important to identify findings associated with electronic commerce in procurement process that are important for its development and implementation. Distinguishing the significant electronic commerce variables in procurement process as well as the degree of their impact and significance on the procurement process will allow new business models to be developed. As mentioned reengineering in simplifying the business process in e-Commerce will lead to capturing more opportunities and benefits in e-Commerce.
Based on responces, we can conclude that e-Commerce in the procurement process simplifies the separate sub-process of procurement. Enterprises, which endeavor to have a success in doing business electronically, should simplify sub-processes, namely: receiving of delivery data Announcement (shipment announcement), possible supplier’s requisition request, transport ordering, reclamation solving and bidding.
___________________________________________________________
Read the full thesis: LTU-PB-EX-07048-SE.pdf