University of Illinois at Urbana-Champaign

Project Description

The objectives of our research project are (1) to develop a process-based measurement of B2B e-procurement value, and (2) to determine the effects of process and organizational factors on B2B e-procurement value. This research will provide organizations with the insights to precisely measure the economic impact of B2B e-procurement and where they occur in the organization. We have developed an analytical model of the value of e-procurement and how this value is affected by conditions relating to the business process, organization of business units, and business partners. To validate our analytical findings and to extend our knowledge of the underlying e-commerce dynamics, we propose a survey of B2B procurement managers and measure the economic impact at the process-level. To this end, we are developing a survey instrument through We will send this survey to a mailing list of procurement managers which has been obtained from a leading industry association. The analysis of survey response will help us establish the critical success factors to realize the maximum value from e-procurement systems.

Project Abstract

Use of Internet and Web for business-to-business (B2B) e-commerce is expected to enhance inter-organizational coordination and result in significant economic benefits. However, many organizations that have implemented such systems are highly uncertain about the extent to which the benefits are realized. B2B managers in charge of implementing Web-based systems face a tough task as internal business units and participating supply-chain partners demand to know the precise economic advantages of the new system over the existing ones, such as EDI. In the research community, even though the overall benefits of Web-based systems are established, there is a need to understand the conditions that lead to different levels of benefits among different organizations, and even among different business units within the same organization. The objective of our research is to contribute to this understanding by investigating, analytically and empirically, the economic impact and value of Web-based B2B systems. Using Web-based procurement of non-production goods and services as a case of B2B e-commerce, we propose a framework for the value of the Web to a buyer organization. This framework is based on existing research findings on IT value and inter-organizational information systems (IOS), but considers the critical role of process characteristics in explaining the differences in value. We also have to take into account the ability of the Web to impact the entire supply-chain, also called the “extended enterprise.” Our propositions relate to the effects of process, organization and supply-chain on the level of realized value from Web-based procurement. Our analytical model captures the economic benefits of the Web as a function of the demand, price, transaction costs, and the critical factors discussed in our framework. Results show that in most cases, process type and complexity are important determinants of the benefits, but they need to be considered with demand, process centralization and supply chain fragmentation. The empirical part of our research proposes to validate the analytical model and provide a cross-sectional perspective of the economic impact of Web-based procurement. We have completed a pre-test of our survey instrument to verify the reliability of the measures and readability of the questionnaire. After refining the questionnaire, we propose to use a survey development firm called to build and distribute the survey. We will use a national mailing list of procurement managers obtained from a well known purchasing managers association for data collection. This survey will not only help validate our hypotheses on economic impacts, but can throw critical insights into the characteristics of organizations that have successfully adopted e-procurement.

Surveys released for this project:
eprocurement measurement 77
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