IT Infusion and its Performance Impacts: An Empirical Analysis of eProcurement in the Service Industry

This paper examines the infusion of e-procurement applications along two dimensions of usage – intensity and organizational acceptance – and tests the relationship between use and procurement performance. Drawing upon the resource-based view of the firm, this paper tests the relationship between select organizational resources and e-procurement infusion in the context of procurement of indirect materials and services. The research model is estimated with survey data obtained on 193 organizations from the service sector. Data are analyzed using structural equation modeling. The results suggest that while organizational integration and business knowledge of IT managers are significantly related to only organizational acceptance of e-procurement, procurement process readiness and organizational slack resources are related to both the dimensions of e-procurement infusion. Our results also show that both dimensions of e-procurement infusion are positively related to procurement performance while their interaction effect on performance is negative. Theoretical and practical implications of these results are discussed.