Moving Procurement Systems to the Internet: The Adoption and Use of E-Procurement Technology Models

By Antonio DavilaMahendra GuptaRichard J. Palmer
2002| Working Paper No. 1742

This paper reports the results of a research project addressing the current state of e-procurement technologies. It analyzes which companies are moving fast into these technologies, how experimentation is taking place to learn about the business opportunities that may emerge through these technologies, the risks and benefits associated with them, and the expected evolution of e-procurement technologies in the near future. Predictions few years back indicated that e-procurement technologies would grow exponentially over the first half of the decade. However, these expectations have not been met. Current e-procurement technologies are in their developmental infancy and a dominant design is still unavailable. The results of our survey indicates that the final equilibrium may include several technologies, each one serving a different segment of the market. This multiplicity of solutions is likely to further delay the transition of the industry to its growth stage. Companies are approaching e-procurement technologies with very different strategies based upon the perceived risks and benefits associated with the technology and their competitive position and environment. We identify two main types of companies. The first type is moving aggressively to adopt e-procurement technologies, frequently experimenting with various solutions. The second type adopts a more conservative strategy by selectively experimenting, typically with one technology. This latter group relies on these limited experiences to provide the capabilities to move quickly into the technology as a dominant design emerges. The survey results suggest that e-procurement technologies will become an important part of supply chain management and that the rate of adoption will accelerate as aggressive adopters share their experiences and perceptions of low risk.