2.1 Overview of the Electronic Procurement Process
The Charted Institute of Procurement and Supply (CIPS) (2010) identified the six phases of e-procurement that are used in the procurement process. This is further supported by Boafo and Ahudey (2020) who outline the levels of processes in e-procurement to include: online tendering, online sourcing, online auction/reverse auction and online ordering. According to Tavares (2011) there exist stages in the procurement process and these e-platforms prevent consistent paperwork which is common in the old system of procurement. It includes
E-Sourcing- the stage where information regarding what the institution intends to procure is disseminated online to assist tenderers to have a full understanding of the contract package in other to be able to bid for the contract. E-Evaluation- the stage where suppliers are shortlisted through electronic data tendered in by them and evaluated using a computer application to obtain the particulars of every contractor as a required standard for contract award criteria. E-Award and e-contract: the stage where the contract is awarded by the public contracting authorities through an electronic platform, the e-contract awarded is then recorded into the main procurement platform to help ensure that agencies avoid the use of excessive paperwork in the processes of contract award. E-Execution is the stage where the execution of the contract award is complete and the e-platform is then used to carry out a successful assessment of the electronic processes leading to the execution of the contract. E-Evaluation and auditing: the final evaluation and auditing which is necessary for public procurement are to ensure that the resources specifically allocated achieve the desired outcomes.
2.2 Challenges of E-Procurement Implementation
According to Mohungoo et.al. (2020), procurement is vital in the recent competitive business environment and its impact on public institutions cannot be underestimated. They insist that the relevance of procurement in this contemporary business environment is still bedevilled with many challenges that need to be addressed to ensure the efficient and effective operation of the procurement unit within the organization. According to Brandon-Jones and Kauppi (2018), even though institutions have adopted e-procurement systems, there is however a widespread undeserving performance from the implementation. They maintain that the poor outcomes of these results are alluded to the inability of many institutions to transform properly the adoption of e-procurement decisions taken at the strategic level down to the individual employees’ level for acceptance.
According to Tutu et. al. (2019), the challenges of implementing e-procurement are noticed in areas such as IT infrastructure development, policy legislation and regulation, security issues, competency of procurement practitioners and government commitment. They insist that to adopt e-procurement, the management of organizations should emphasize sufficient training, education, workshops and seminars to build the capacity of procurement practitioners to be able to practice professionally for the organization to obtain the needed benefit of adopting e-procurement. This confirms the study by Steinberg (2003) who insists that the government online procurement system is abysmal in terms of adoption, thus many countries have failed in their quest to adopt e-procurement as being advocated for by world leaders. The view of Addo (2019) on the adoption of electronic procurement system indicates numerous challenges associated with the technological change in implementing e-procurement and these include: inadequate legal framework, lack of employee competencies, less technological infrastructure to merge e-commerce to other systems that are related to security in e-procurement transaction of business and information system (IS). Kalakota et al. (2001) insist that to implement e-procurement, companies must state clearly their business challenges and the gap e-procurement would solve if implemented.
The study conducted by Angeles and Nath (2007), highlighted some essential challenges of e-procurement implementation such as Poor integration of systems and standardization issues; insufficient market service and the final user refusal; unexpected or maverick buying as well as the cumbersome nature of integrating e-procurement with similar systems. Another study by Azanlerigu et al. (2015) reveals that employee incompetence, inadequate technological infrastructure, security of related procurement transaction data and inadequate legal framework hinder e-procurement implementation in the public sector. They posit that the continuous exit of employees reduces employee competency in the organization, and the lack of legal backing on e-procurement also impedes its implementation in Ghana’s public sector. According to Davila and Palmer (2002) there exist four challenges with the implementation of e-procurement systems. These challenges include internal business risk, external business risk: technology risk and e-procurement process risk. E-procurement is now mandated in many institutions but the enforcement is highly difficult which makes compliance and acceptance of the system abusive by users and so they find routes to flout the mandated procurement procedures (Croom & Brandon-jones, 2016; )
2.3 Theoretical Foundation
2.3.1 Technology Acceptance Theory
The study was supported using the technology acceptance model or the theory of planned behavior. Technology Acceptance Model (TAM) theory is proposed by (Davis, (1989)). The theory is actioned on the perceived ease of use (PEOU) and perceived usefulness (PU) to have a significant contribution to the user’s perspective Siricha & Theuri (2016). This is a theory widely adopted in many studies to comprehend the adoption of new technology in government institutions (Aboelmaged, 2010; Wahid, 2010; Davis, 2012). TAM has distinguishing features as it investigates and evaluates the impeding factors that influence the user acceptance of new technologies. This has assisted companies to increase their performance by ensuring usage and acceptance, and also providing individual differences, social inspirations, beliefs, attitudes, and situational impacts (Gupta & Gupta, 2020). This theory indicates that the usage of technology depends on the user’s feelings and the perceived advantage of the system. The individual’s positive or negative perception determines the impression of the individual towards that technological use. Several of these studies have resorted to perceived usefulness and perceived ease of use as key determinants of user technology adoption patterns. In light of these explanations, the perceived usefulness of the system was classified under the technological factors challenges whilst the perceived ease of use of the system was classified under the institutional, employee and supplier challenges respectively. This study will further explore these factor challenges of implementing e-procurement and determined the extent level of the factor challenges on government institutions in Ghana.
2.3.2 Transaction cost theory
The origin of transaction cost theory is traced in Coase’s (1937) classic article, The Nature of the Firm, where he explains markets and hierarchies as alternative structures of governance. Coase maintained that the decision between markets and hierarchies was clearly explained principally by transaction cost differences. The impediments in the implementation of the transaction cost theory were later settled by William (1975) who posits that the optimum organizational structure achieves economic efficiency. He believes that the goal of any organization is to minimize the cost associated with the transaction. The transaction cost theory is divided into transaction risk and coordination cost. Transaction cost theory could serve as a good starting point for the analysis. Transaction costs can be divided into coordination costs and transaction risk (Harrington, 2011). Previously, transaction cost theory looked at the difference between market and hierarchical governance. Coordination costs are the direct costs of integrating decisions between economic activities. Transaction risk is associated with the exposure to being exploited in the relationship (Handfield, 2013). The theory further proposes four related costs associated with the transaction cost theory. Uncertainty and asset specificity are two factors, which increase coordination costs and transaction risk, respectively (Nolan, 2009). This theory forms the basis for identifying the risk and cost aspects that serve as challenges to the adoption of e-procurement.