E-PROCUREMENT ADOPTION IN THE NIGERIAN CONSTRUCTION INDUSTRY
ABSTRACT
The focus of this study was to assess E-procurement Adoption in the Nigerian construction industry. This study followed a descriptive research design with a total of 65 respondents used for the study. The study adopted stratified sampling and questionnaires were used as instruments of data collection instruments. The obtained questionnaires data were coded and organized in excel spreadsheet and analysis done through excel and SPSS software. The results of the analysis were presented in the form of tables, charts and percentages in a manner that is both simple and comprehensive and then used to complete the research report as per the survey objectives and research questions. The study found out the benefit of electronic procurements which included visibility of spent, increases productivity, reducing costs, encourages use of technology and improved controls and that company had not adopted electronic procurement and that technology had inhibits electronic procurement in most of the organizations due to technological changes. The study further reveal that if employees do not have adequate knowledge and skills in information and communication technology, the adoption of Electronic Procurement may not be successful. The study recommends that the organizations in the industry should hire competent staffs and deploy them appropriately according to their skills and competence, change initiatives should begin and supported by the senior management so that the employees can follow suit should strengthen its internal regulations to help the organizations to adhere to code of good practice as so that they can influence the economy much better.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The construction industry is a large and complex industry with a wide range of professionals, trade associations, clients, and specialty firms all with their own agendas and allegiances (Brian and Peter, 2007). The industry is multi-organizational and heavily reliant on the exchange of large amounts of data (Akinsola, Dawood and Hobbs, 2000). Hence, it is information-hungry but notably a slow adopter of new information technology (Dawood and Sikka, 2009). The industry is currently experiencing globalization trends as its clients, partners and customers are in virtually every part of the world. According to Carvat (2011), procurement is the most essential function in a construction company since constructions involve a great deal of purchases. Construction companies have to acquire a lot of raw materials in order to complete the various projects. In this regard, the procurement personnel should be effectively chosen and supported in order to discharge this essential function in the organization. Procurement, which is the acquisition, purchase or supply of goods and services, is an important aspect of the construction industry. Many within the industry see it as a routine and repetitive processes that are labour intensive, dominated by paper works; costly but inefficient. This was before the advent of the Internet and the World Wide Web. With the introduction of internet, most businesses have embraced the use of Internet facilities to improve their performance (Brian and Peter, 2007). The increasing use of the Internet to support the execution of procurement activities in various industries gave rise to electronic (e) procurement.
Electronic procurement (e-procurement) has been labelled as a tool that can improve competence and performance while enabling simplicity and automation (Phillips & Piotrowicz, 2006; Hendrickson & Mahnke, 2005). Davila et al (2002) explained e-procurement as any technology that facilitates the acquisition of goods and services by a private or public organization over the internet, a view that is substantiated by Parida & Parida, (2005). E-procurement is very important when it comes to improving procurement performance and by extension organizational performance (Manrodt, Gibson, & Stephen, 2005). E-Procurement enhances performance of procurement by reducing transaction costs but most critically by reducing fragmentation in procurement (Musau, 2015). E-procurement is supposed to be an end-to-end solution that integrates and streamlines procurement processes in an organization (Abdi, 2012).
E-Procurement involves use of software to manage and execute procurement functions. The software used in e-procurement integrates procurement functions and creates interfaces that enable fast and cost friendly execution of activities like tendering, catalogues generation and management, supplier contracting and management, and general communication (Manrodt et al., 2005). The automation of processes helps make transactions quick, enhances relationships through more contact between procuring entities and suppliers, provides evidence of transactions, and reduces paper work and related costs among other benefits (Egbu, Vines & Tookey, 2003). Due to the numerous benefits of e-procurement, many organizations both private and public are opting for e-procurement systems
E-Procurement is the application of ICT tools that transforms the traditional processes of acquisition, purchase or supply of goods and services into electronic processes to improve competence and performance while enabling simplicity and automation (Philips and piotrowicz, 2006). Some of the benefits of e-Procurement identified are increase in process quality and quality of products, competitive advantage, improved collaboration, reduced procurement cost and managerial effectiveness (Teo, 2009). Several studies have been conducted on e-Procurement ranging from benefits, barriers and factors influencing the adoption of e-procurement. In Nigeria, Akpehe (2016) reported a good awareness among construction industry professionals. While Egidario et al (2016) also reported the awareness level and involvement of practitioners in Nigeria on e-Procurement as rather slow and low. Hence, this study intends to to assess E-procurement Adoption in the Nigerian construction industry.
1.2 Statement of the Problem
E-Procurement is more than just an online purchasing system. e-Procurement is the use of ICT tools for the acquisition, purchase, or supply of goods and services by a private or public organization through electronic processes such as e-tendering, e-awarding, e-auction, and e-sourcing. In comparison to the traditional procurement system, studies have shown that e-Procurement improves competence and performance in the construction industry globally.
In Nigeria, the awareness and adoption of e-Procurement is rather low and slow especially among contracting firms. In spite of the fact that previous researchers generally conclude that e-procurement system is effective, the question is why procurement process is still based on manual activities i.e. traditional procurement system. Despite the benefits of e-procurement and the contribution to the procurement phase of a project, there are factors and challenges that affect the wide use of e-Procurement. However, majority of the construction and consultancy firms are still skeptical of the potential benefits mainly due to limited human resources as regards the operation of the e-Procurement process. Research has shown that no extensive study has been conducted on this ineffectiveness and wide use of e-procurement in the Nigerian construction industry. In view of this gap, this study seeks to assess E-procurement Adoption in the Nigerian construction industry
1.3 Objectives of the Study
The main objective of the study is to assess E-procurement Adoption in the Nigerian construction industry. Other objectives include:
- To investigate the effects of technology on electronic procurement in Nigerian construction sector.
- To examine whether employee’s competence in information communication technology is a challenge on adoption of electronic procurement at Nigerian construction sector.
To find out the extent in which managerial commitment is a challenge on adopting electronic procurement at Nigerian construction sector.
1.4 Research Questions
This research study seeks to provide answers to the following research questions:
- What is the effect of technology on the adoption of e-Procurement in the Nigerian construction sector?
- How employee competence in information communication technology does affects e Procurement adoption in Nigerian construction sector?
What is the role of managerial commitment affect the adoption of e-Procurement in the Nigerian Construction sector?
1.5 Significance of the Study
The research work will critically concern with assessing E-procurement Adoption in the Nigerian construction industry. It is imperative to note that this research work will be beneficial.
Significantly the researcher hope that this research work will provide the major stakeholders in the Nigerian construction industry and the government with a meaningful and useful source of information in to guess to embark on e-procurement and award of contracts.
Organizations will benefit from the research finding and recommendation in the process of awarding contract and procurement. The study would enable them understand challenges that face eProcurement and the strategies that could be used to overcome such challenges. This would play a very important role in enabling managers to organize their organization’s e-Procurement processes in a manner that would result into huge benefits for the industry. Once the challenges associated with Electronic Procurement have been overcome, the organization would be able to enjoy the benefits associated with it.
It will also be useful to subsequent researcher and student who may wish to conduct further research in this field, it will served as data base for further study.
1.7 Scope of the Study
This study focuses on examining E-procurement Adoption in the Nigerian construction industry. This study also examines the factors that prevent the adoption of e-procurement in the Nigerian construction industry.
E-PROCUREMENT ADOPTION IN THE NIGERIAN CONSTRUCTION INDUSTRY
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E-PROCUREMENT ADOPTION IN THE NIGERIAN CONSTRUCTION INDUSTRY.docx
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E-PROCUREMENT ADOPTION IN THE NIGERIAN CONSTRUCTION INDUSTRY
ABSTRACT
The focus of this study was to assess E-procurement Adoption in the Nigerian construction industry. This study followed a descriptive research design with a total of 65 respondents used for the study. The study adopted stratified sampling and questionnaires were used as instruments of data collection instruments. The obtained questionnaires data were coded and organized in excel spreadsheet and analysis done through excel and SPSS software. The results of the analysis were presented in the form of tables, charts and percentages in a manner that is both simple and comprehensive and then used to complete the research report as per the survey objectives and research questions. The study found out the benefit of electronic procurements which included visibility of spent, increases productivity, reducing costs, encourages use of technology and improved controls and that company had not adopted electronic procurement and that technology had inhibits electronic procurement in most of the organizations due to technological changes. The study further reveal that if employees do not have adequate knowledge and skills in information and communication technology, the adoption of Electronic Procurement may not be successful. The study recommends that the organizations in the industry should hire competent staffs and deploy them appropriately according to their skills and competence, change initiatives should begin and supported by the senior management so that the employees can follow suit should strengthen its internal regulations to help the organizations to adhere to code of good practice as so that they can influence the economy much better.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The construction industry is a large and complex industry with a wide range of professionals, trade associations, clients, and specialty firms all with their own agendas and allegiances (Brian and Peter, 2007). The industry is multi-organizational and heavily reliant on the exchange of large amounts of data (Akinsola, Dawood and Hobbs, 2000). Hence, it is information-hungry but notably a slow adopter of new information technology (Dawood and Sikka, 2009). The industry is currently experiencing globalization trends as its clients, partners and customers are in virtually every part of the world. According to Carvat (2011), procurement is the most essential function in a construction company since constructions involve a great deal of purchases. Construction companies have to acquire a lot of raw materials in order to complete the various projects. In this regard, the procurement personnel should be effectively chosen and supported in order to discharge this essential function in the organization. Procurement, which is the acquisition, purchase or supply of goods and services, is an important aspect of the construction industry. Many within the industry see it as a routine and repetitive processes that are labour intensive, dominated by paper works; costly but inefficient. This was before the advent of the Internet and the World Wide Web. With the introduction of internet, most businesses have embraced the use of Internet facilities to improve their performance (Brian and Peter, 2007). The increasing use of the Internet to support the execution of procurement activities in various industries gave rise to electronic (e) procurement.
Electronic procurement (e-procurement) has been labelled as a tool that can improve competence and performance while enabling simplicity and automation (Phillips & Piotrowicz, 2006; Hendrickson & Mahnke, 2005). Davila et al (2002) explained e-procurement as any technology that facilitates the acquisition of goods and services by a private or public organization over the internet, a view that is substantiated by Parida & Parida, (2005). E-procurement is very important when it comes to improving procurement performance and by extension organizational performance (Manrodt, Gibson, & Stephen, 2005). E-Procurement enhances performance of procurement by reducing transaction costs but most critically by reducing fragmentation in procurement (Musau, 2015). E-procurement is supposed to be an end-to-end solution that integrates and streamlines procurement processes in an organization (Abdi, 2012).
E-Procurement involves use of software to manage and execute procurement functions. The software used in e-procurement integrates procurement functions and creates interfaces that enable fast and cost friendly execution of activities like tendering, catalogues generation and management, supplier contracting and management, and general communication (Manrodt et al., 2005). The automation of processes helps make transactions quick, enhances relationships through more contact between procuring entities and suppliers, provides evidence of transactions, and reduces paper work and related costs among other benefits (Egbu, Vines & Tookey, 2003). Due to the numerous benefits of e-procurement, many organizations both private and public are opting for e-procurement systems
E-Procurement is the application of ICT tools that transforms the traditional processes of acquisition, purchase or supply of goods and services into electronic processes to improve competence and performance while enabling simplicity and automation (Philips and piotrowicz, 2006). Some of the benefits of e-Procurement identified are increase in process quality and quality of products, competitive advantage, improved collaboration, reduced procurement cost and managerial effectiveness (Teo, 2009). Several studies have been conducted on e-Procurement ranging from benefits, barriers and factors influencing the adoption of e-procurement. In Nigeria, Akpehe (2016) reported a good awareness among construction industry professionals. While Egidario et al (2016) also reported the awareness level and involvement of practitioners in Nigeria on e-Procurement as rather slow and low. Hence, this study intends to to assess E-procurement Adoption in the Nigerian construction industry.
1.2 Statement of the Problem
E-Procurement is more than just an online purchasing system. e-Procurement is the use of ICT tools for the acquisition, purchase, or supply of goods and services by a private or public organization through electronic processes such as e-tendering, e-awarding, e-auction, and e-sourcing. In comparison to the traditional procurement system, studies have shown that e-Procurement improves competence and performance in the construction industry globally.
In Nigeria, the awareness and adoption of e-Procurement is rather low and slow especially among contracting firms. In spite of the fact that previous researchers generally conclude that e-procurement system is effective, the question is why procurement process is still based on manual activities i.e. traditional procurement system. Despite the benefits of e-procurement and the contribution to the procurement phase of a project, there are factors and challenges that affect the wide use of e-Procurement. However, majority of the construction and consultancy firms are still skeptical of the potential benefits mainly due to limited human resources as regards the operation of the e-Procurement process. Research has shown that no extensive study has been conducted on this ineffectiveness and wide use of e-procurement in the Nigerian construction industry. In view of this gap, this study seeks to assess E-procurement Adoption in the Nigerian construction industry
1.3 Objectives of the Study
The main objective of the study is to assess E-procurement Adoption in the Nigerian construction industry. Other objectives include:
To find out the extent in which managerial commitment is a challenge on adopting electronic procurement at Nigerian construction sector.
1.4 Research Questions
This research study seeks to provide answers to the following research questions:
What is the role of managerial commitment affect the adoption of e-Procurement in the Nigerian Construction sector?
1.5 Significance of the Study
The research work will critically concern with assessing E-procurement Adoption in the Nigerian construction industry. It is imperative to note that this research work will be beneficial.
Significantly the researcher hope that this research work will provide the major stakeholders in the Nigerian construction industry and the government with a meaningful and useful source of information in to guess to embark on e-procurement and award of contracts.
Organizations will benefit from the research finding and recommendation in the process of awarding contract and procurement. The study would enable them understand challenges that face eProcurement and the strategies that could be used to overcome such challenges. This would play a very important role in enabling managers to organize their organization’s e-Procurement processes in a manner that would result into huge benefits for the industry. Once the challenges associated with Electronic Procurement have been overcome, the organization would be able to enjoy the benefits associated with it.
It will also be useful to subsequent researcher and student who may wish to conduct further research in this field, it will served as data base for further study.
1.7 Scope of the Study
This study focuses on examining E-procurement Adoption in the Nigerian construction industry. This study also examines the factors that prevent the adoption of e-procurement in the Nigerian construction industry.
E-PROCUREMENT ADOPTION IN THE NIGERIAN CONSTRUCTION INDUSTRY
Attached Files