Master of Business Administration Executive
Faculty / School
School of Business Studies (SBS)
Year of Award
Faisal Jalal, Visiting Faculty, Institute of Business Administration
MBA Executive Research Project
In the public sector procurement value creation against any expenditure is critical, particularly in the case of third world countries such as Pakistan. For this public sector procurement efficiency, value for money, competition, transparency, and visibility are of paramount importance. Most of the previous research has highlighted benefits of the Electronic Procurement System on overall supply chain performance and existing literature seems unable to answer specific parameters that drive these benefits. Therefore, this study evaluates the impact of implementation of the electronic procurement system in a public sector organization engaged in the exploration and production of oil and gas on parameters of competitiveness, efficiency, responsiveness, transparency, and visibility. Further, this research also evaluates that this automation initiative of the electronic system is as per the corporate and procurement strategies of the company. Lastly, this study evaluates challenges and barriers for this implementation and compliance of this system with procurement regulatory authority rules.
The research methodology consists of both qualitative and quantitative research. For qualitative research eighteen (18) interviews and two (02) focus groups were conducted with the staff of the procurement department of the company under study. For the quantitative survey, questionnaires were floated to the staff of the company and 301 respondents submitted their responses. More than Fifty percent (50%) responses were from the procurement department and the remaining from the end users who are the internal customers of the procurement department.
The findings suggest that the implementation of the electronic procurement system is challenging in public sector organizations working under umbrella of procurement regulatory authority. The new system brings a few implementation challenges such as integration with the existing system, lack of IT knowledge in staff as well as resistance to change behavior.
The findings further suggest once implemented it improves competition, enhance procurement`s efficiency and responsiveness. The increase in efficiency and responsiveness may also be due to an increase in competition. In an electronic procurement system, human errors are less which avoids unnecessary corrections, this also increases efficiency. More than 95% of respondents in quantitative survey agreed that electronic procurement systems increase competition, efficiency, and responsiveness of the procurement.
The study also reveals that the electronic procurement system increases the visibility and transparency of the whole bidding procedures as all activities are through secured system and logged in as well for future reference. Apart from major activities all communication and documentation are also stored on the server and accessible on an any-time and any-where basis. Approximately 97% of respondents in quantitative research agreed that visibility and transparency increase with electronic procurement systems.
In addition to the above findings, the evaluation of the tenders and subsequently, approvals to management are also issued and granted electronically which makes the approval highly authentic with hardly any chance of tampering/alterations. To add further, most of the respondents agreed that electronic procurement systems reduce possible risk and frauds during the whole procurement procedure.
All in all, the primary research endorses the secondary research and indicates that implementation of the electronic procurement system in public sector companies is advantageous. In addition to it, this research further provides specific parameters which makes electronic procurement system an attractive initiative for public sector company. These factors are efficiency, responsiveness, competition, visibility, and transparency, and reduction of risk and frauds.
In view of this research, further implementations of the electronic procurement system in public sector organizations of Pakistan are recommended. This study also intends to provide basis for the further research on the impact of the electronic procurement system on the parameters and factors not covered in this study.
Rehman, F. (2023). Impact of Electronic Procurement: A case study of a public sector company engaged in the exploration and production of Oil and Gas (Unpublished graduate research project). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/research-projects-emba/573
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