Whether E-procurement could benefit Small business in term of production cost and also how to increase the adoption of e-procurement in UK

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TABLE OF CONTENTS

LITERATURE REVIEW1

2.1. Introduction1

2.2. What is e-procurement?2

2.3. Adoption of E-procurement by European Countries4

2.4. The impact of E-procurement to production cost to buying side business5

2.5. The Impact of E-Commerce Method on the Sales of a Business7

2.6. Small Businesses8

2.7. Small business adoption of E-procurement10

2.8. Benefits associated with E-procurement13

2.9. Barriers associated with E-procurement15

2.10. The requirement of become successful when adopting E-procurement Technology17

2.11. Conclusion20

REFERENCES22

LITERATURE REVIEW

2.1. Introduction

This chapter has presented the information being research for the purpose of providing the background to the research topic. The adoption rate and the impact of e-procurement technology on small business in UK will be discussed in this chapter.

To research the impact of E-procurement technology on business, there are a number of journals that have been studied. The journals that have been studied for this research study are all related to the e-procurement technology. International Journal of Electronic Commerce and Information systems Management are the two examples that offered research related to this study. The journals have a major focus on the procurement technology and discuss the ways in which the e-procurement has been adopted in Hong Kong.

Konings and Roodhooft (2002) seek to obtain the adoption rate of e-procurement and to examine the impact that e-procurement on the total factor productivity in Belgium. Tatsis et al., (2006) concluded that the use of e-procurement could lead to cost saving and reduced cycle times by providing information in a timely manner also improvement of communication and coordination. Gunasekaran and Ngai (2008) examined the adoption rate of e-procurement in Hong Kong and highlighted the perceived barriers in the implementation of e-procurement. He furthermore introduced a model that specifically designed for the e-procurement adoption. However, these researches have not specifically focused on the impact of E-procurement and adoption rate of small business in UK. At present limited studies is related to E-procurement in small business although SMEs play a main role in the economy and supply chains.

2.2. What is e-procurement?

The process of procurement is one where companies purchase goods and services from different suppliers. The goods and services can be direct or indirect, depending on the nature and requirements of the business. Costs of procurement can be very high; therefore, companies negotiate with their suppliers for discount contracts. When a company is devising a strategy to reduce its costs, procurement plays an important part of the strategy (Sirmon and Lane, 2004, p. 306).

In the past, the concerned departments used various methods for the purchase of goods and services needed by the company. The most basic of these methods was placing orders for goods and services over the phone, mail, or fax. In the past few decades, the advent of Electronic Procurement has changed the way companies purchase their goods and services.

In the earlier years, E-procurement technology is defined as “any technology designed to facilitate the acquisition of goods by a commercial or a government organisation over the internet, (Brunnelli, ...