PUBLIC E-PROCUREMENT ON SMALL AND MEDIUM ENTERPRISE

Abstract

This study was on Public E-Procurement on Small and Medium Enterprise. Four objectives were raised: To establish the effect of online customer service on performance of small and medium size enterprises, to establish the effect of organizational culture on performance of small and medium size enterprises, to determine the effect of environmental barriers on performance of small and medium size enterprises and to assess the effect of technological integration on performance of small and medium size enterprise. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Jumia, Lagos Hypothesis was tested using Chi-Square statistical tool (SPSS).

Chapter one

Introduction

1.1Background of the study

In a competitive and globalized business environment, corporate sectors and business houses need to be at breast with new technological developments as well as manage reduction of operational costs while meeting the organizational goals and objectives (Shaw &Subramaniam, 2012). The coming of innovative intrusion into the commercial center, have made e-showcases in each business segment. This cleared route for a quicker network somewhere in the range of business to business (B2B) trades. The advantages of web based obtaining not just show instances of the expenses of funds yet in addition enhance the manner in which organizations work (ibid). It encourages them to manage a picked couple of providers with better purchasing vital and in addition cut down the organization costs. The present mechanical business world has swung to an electronic obtainment framework (Pushmann 2005). EProcurement has conveyed to unmistakable quality as of late by the advancement and commercialization of web. Notwithstanding the client situated procurement of the web, e-procurement is honed through electronic markets and electronic data interchange (EDI). Croom& Brandon-Jones, (2004) define E-procurement as alludes to the utilization of web based data and correspondence advances (ICTs) to do individual or all phases of the acquisition procedure including sourcing, arrangement, requesting, receipt, and post purchase audit. While there are different types of e-procurement that focus on one or numerous phases of the procurement procedure, for example, e-tendering, e-commercial center, eauction/reverse and e-catalogue/purchasing, e-procurement can be viewed broadly as a the end arrangement that incorporates and streamlines numerous acquisition forms all through the organization/institution. This incorporates the This incorporates the results of Davenport (2008) who concluded that e-procurement implementation involves a mixture of different models. E-procurement system basically revolves around intranets and extranets which consist of both the hardware and software that can be self-developed or acquired through third party software providers of esourcing suite (Handfield& Robert 2011). The e-procurement systems are designed to allow the procurement manager to oversee the sourcing cycle, track spend, and apply authority over contract administration in a safe domain. It requires a venture by the purchasing association and requirement for intermittent refreshing and also preparing of clients. The e-tools are basically the Electronic Data Interchange EDI, Internet and Extranet. The web-based EDI commonly used by SMEs is basically designed to allow electronic communication between the buyer and supplier which include request for quotation, processing online payments and tracking product related information. It also involves real time monitoring of inventory and automatic order placement by the buyer’s computer, online catalogues, emails and e-auctioning (Clara 2009). E-marketplace or commonly known as E-shop is another e-procurement platform mostly utilized by small and medium size organizations and individuals. It operates on three major models of SMEs which are the sell-side system which contains products or services of one or more suppliers e.g. Jumia Product information is placed on the site and buyers can access the information with ease and at a low cost. Secondly is the buy-side system which unlike the sell-side systems they are controlled by the buyers and are tied to intranet and extranets. The third model is the third-party marketplaces which consist of independent firms that neither buy nor sell goods but seek to facilitate the electronic purchasing process through value enhancement e.g. Alibaba.com and walmart.com (Memba et-al 2012). In Ireland a research by the Global Entrepreneurship monitor (2005), discovered that people beginning/starting and planning new organizations expanded to 9.8 percent up from 7.7 percent in 2004 which is equal to very quarter of a million people in 2005. The report further proposed that there is an expansion in the extent of the populace in the 25-44 ages bunches thinking about enterprenual activities. Regionally, the adoption of E-procurement of SMEs is viewed as a viable approach to sustainable development because it suits the resources in Africa. MSEs are the main source of employment in developing countries and comprise of over 70% of African business operations. They contribute to over 50% of African employment and GDP. In Nigeria, MSEs contributed an estimated 37 per cent of the GDP (SMEDAN, 2011). In developing nations, for example, Kenya, it needs extensive innovation movement and benchmarks to realize acquisition. The business networks too don’t have the activity in changing practices to grasp e-procurement. This has enormously influenced the SMEs.

Statement of the problem

Adoption of e-procurement is thought to be a way to empower organizations to contend on a worldwide scale, with enhanced effectiveness, and nearer client and provider connections. It is hence pleasant that SMEs should consider Information and Communication Technology (ICT) as an important approach in business to grasp high ground from the overall markets. Also, ICT is an advantage of SME’s which may help them to get to information remembering the true objective to update its power. Today’s business world has been significantly affected by (ICT) and the determination of ICT among business far reaching. Appropriation of ICT especially in procurement, organization is rapidly changing overall era, work, business procedures and trade and use plans in and among undertakings and buyers (Memba, Gakure & Karanja, 2012). The recent trend of growth of SMEs in Nigeria, has led to increased competition among the business to business. This has seen SMEs expanding rapidly to cater for increased demand. The expansion is accompanied by massive movement of online services in procurement. This requires efficiency in the procurement process through which can be achieved through implementation of Eprocurement. SMEs have to contend numerous challenges such as lack of capital and stiff competition from more established firms which hinder them from being profitable, growing and staying in business (McIntire, 2012). With increased E-procurement activities SMEs shall be able to address these challenges, these activities are expensive and require specialized knowledge that these SMEs do not have. This inability to market their goods and services has led to numerous negative impacts on SMEs especially on their sales volumes, customer service, market awareness, branding and product and service promotion. These effects can also be felt on a macro level by the employees that work in these companies and the economies that they operate in due to loss of employment and taxes.

Objective of the study

The objectives of the study are;

1. To establish the effect of online customer service on performance of small and medium size enterprises
2. To establish the effect of organizational culture on performance of small and medium size enterprises
3. To determine the effect of environmental barriers on performance of small and medium size enterprises
4. To assess the effect of technological integration on performance of small and medium size enterprise

Research hypotheses

The following research hypotheses will formulated

H0: there is no effect of online customer service on performance of small and medium size enterprises.

H1: there is effect of online customer service on performance of small and medium size enterprises.

H0: there is no effect of technological integration on performance of small and medium size enterprise

H2: there is effect of technological integration on performance of small and medium size enterprise

Significance of the study

The study will be beneficial to students and business owners. The study will give a clear insight Public E-Procurement on Small and Medium Enterprise. The study will also serve as a reference to other researcher that will embark on the related topic

Scope and limitation of the study

The scope of the study covers pubic e-procurement on Small and Medium Enterprise

The researcher encounters some constraints which limit the scope of the study namely:

The research material available to the researcher is insufficient, thereby limiting the study

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Definition of terms

e-precurement: E-procurement is the business-to-business or business-to-consumer or business-to-government purchase and sale of supplies, work, and services through the Internet as well as other information and networking systems, such as electronic data interchange and enterprise resource planning.

SME: Small and medium-sized enterprises or small and medium-sized businesses are businesses whose personnel numbers fall below certain limits

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