Exploring the Impacts of Web-Based e-Procurement on Organizational Performance

Web-enabled applications for business-to-business (B2B) procurement are not only expected to reduce the cost of purchasing process but also to alter the activities of purchasing, transform the purchasing process from an operational into a strategic activity, and provide opportunities for improving market coordination by reducing asset specificity and by making additional partners available. From organizational and inter-organizational perspectives, this study proposes a performance impact model of implementing Web-based e-procurement system for direct procurement. In the performance impact model, the strategic dimension is about partner relationship, and the operational efficiency dimension includes supplier performance, buyer performance, process integration, and process automation. Based on a survey of Taiwanese manufacturing firms, the results of this study show that the electronic execution of purchasing activities improves both of the operational efficiency dimension and the strategic dimension. The results demonstrate implementing Web-based e-procurement system not only could enhance the performance of the buyer organization but also could enhance the performance of the supplier organization and improve partner relationship management.