To be or not to B2B: Evaluating managerial choices for e-procurement channel adoption

E-procurement systems are computer systems and communication networks through which firms buy and sell products. We identify two types of e-procurement systems: extranets and e-markets. Extranets connect the buyer and its suppliers with a closed network, while e-markets create open networks for buyer and supplier interactions. The differences between them lie in system implementation costs, marketplace benefits, and the extent of supplier competitive advantage that develops due to information sharing. In this article, we develop a new theoretical model to analyze the adoption of e-procurement systems from the buyer’s perspective, to explore the set of conditions under which the buyer will prefer to procure via an electronic market instead of using proprietary extranet connections. The primary finding is that a buyer will adopt an e-market approach when the supplier’s competitive advantage derived from access to strategic information is modest compared with the marketplace benefits less the channel costs. In addition, we find that the buyer is likely to have a bigger trading network with an e-market than with an extranet in order to capture the greatest available benefits. Overall, this study offers guidelines for managers to design and select e-procurement channels to fit different procurement needs.     

Multidisciplinary approach to defining public e-procurement and evaluating its impact on procurement efficiency

Utilising the methodology of content analysis, this study uses a multidisciplinary approach to define public e-procurement. Various aspects of e-procurement have been discussed from information systems, supply chain management, electronic commerce/electronic government, and public procurement to come up with an integrated definition of public e-procurement. Following this, e-procurement assimilation has been defined and its impact on procurement efficiency has been evaluated. Following the confirmatory factor analysis in structural equation modelling, dimensional level analysis in ANOVA has been undertaken for the three forms of e-procurement technologies namely e-tendering, e-catalogue management systems, and e-marketplace. The results show the positive and significant impact of the assimilation process on procurement efficiency.     

Auction-Based Mechanisms for Electronic Procurement

Auction-based mechanisms are extremely relevant in modern day electronic procurement systems since they enable a promising way of automating negotiations with suppliers and achieve the ideal goals of procurement efficiency and cost minimization. This paper surveys recent research and current art in the area of auction-based mechanisms for e-procurement. The survey delineates different representative scenarios in e-procurement where auctions can be deployed and describes the conceptual and mathematical aspects of different categories of procurement auctions. We discuss three broad categories: 1) single-item auctions: auctions for procuring a single unit or multiple units of a single homogeneous type of item; 2) multi-item auctions: auctions for procuring a single unit or multiple units of multiple items; and 3) multiattribute auctions where the procurement decisions are based not only on costs but also on attributes, such as lead times, maintenance contracts, quality, etc. In our review, we present the mathematical formulations under each of the above categories, bring out the game theoretic and computational issues involved in solving the problems, and summarize the current art. We also present a significant case study of auction based e-procurement at General Motors.     

A hybrid mechanism for heterogeneous e-procurement involving a combinatorial auction and bargaining

We discuss the design of a hybrid mechanism for e-procurement, which implements a multi-attribute combinatorial auction, followed by a bargaining process to achieve desirable procurement transaction outcomes. For the auction phase of the mechanism, we discuss incentive-compatible bidding strategies for suppliers, and how the buyer should determine the winning suppliers. In the follow-on bargaining phase, the buyer can implement a pricing strategy that views the winning suppliers as though they are in different groups. We develop a model and derive decision conditions for the buyer to formulate procurement strategy in this context. Our most important finding is that, compared with the classical Vickrey–Clarke–Groves mechanism, the proposed mechanism improves the transactional social surplus, by including the possibility of post-auction bargaining. We also consider the likelihood that such a hybrid mechanism will be able to provide sustainable business value so long as there is reasonable symmetry in bargaining power between the buyer and the supplier. We offer some thoughts on how to extend this research with approaches from behavioral economics and experimental methods.     

A multi-agent based system for e-procurement exception management

E-procurement has become an important function of enterprise information systems. The process of e-procurement includes the automatic definition of product requirements, search and selection for suppliers, negotiation and contracting with suppliers. However, the adoption of e-procurement encounters various uncertainties from internal and external environments, such as inventory failure, sharp increased demand, and delivery delay. In this paper, we propose a novel agent-based architecture for an e-procurement system in which agent technology is applied to deal with the internal and external uncertainties. Through the collaboration and interaction between different agents, the architecture that we propose can enhance the flexibility to handle unexpected exceptions, thus leading to agile procurement management. To valid the feasibility of our approach, a case study has been conducted to investigate how our agents collaborate to manage the inventory failure exception which occurs in restaurant e-procurement.     

Determinants of choice of semantic web based Software as a Service: An integrative framework in the context of e-procurement and ERP

The ever increasing Internet bandwidth and the fast changing needs of businesses for effectiveness with the partners in the procurement chain and is leading organizations to adopt information systems infrastructures that are cost effective as well as flexible. The question seems to be: what is driving organizations to go in for Software as a Service (SaaS) based e-procurement and ERP, rather than the packaged model of software provisioning? Whereas there have been studies reporting technology, cost, quality, network externalities and process as the main variables in the utility function of the user, but most of the studies have modelled either one or two in the their models. The study is exploratory in nature and tries to identify, classify and rank dimensions affecting SaaS sourcing decisions. In this study, we developed an integrative framework to identify the determinants of choice of SaaS in the specific context of SaaS based e-procurement and ERP. The framework was then analyzed using the extended Analytic Hierarchy Process (AHP) method suggested by Liberatore (1987) and the relative importance and the weights of the criteria identified using data collected on 8 users and 9 service providers of SaaS based e-procurement and ERP. Although the analysis helped in identifying quality and costs as the two most important determinants of choice of SaaS based e-procurement and ERP, but the other criteria such as network externality benefits, technology and process were also found to be significant determinants of choice.     

The trust model of enterprise purchasing for B2B e-marketplaces

Electronic commerce and online marketplaces have rapidly become critical transaction channels. Many studies of online marketing have focused on the purchasing behaviors of general buyers. However, many business to business (B2B) e-marketplaces allow professional procurement personnel from various businesses to electronically search for and purchase commodities; this facilitates price referencing and helps procurement personnel complete the tasks associated with direct purchasing functionalities. Despite this trend, few studies have examined the purchasing behavior of procurement personnel in B2B e-marketplaces. To fill this research gap, this study examines the relationships between trust in intermediaries and sellers; trust in commodity information; and the online purchase intentions of the procurement personnel in B2B e-marketplaces. This study also investigates the mediating effect of perceived value on the relationship between trust in commodity information and online purchase intention. The results indicate that the relationship between trust in commodity information and online purchase is mediated by perceived value. In addition, both intermediary trust and seller trust positively and significantly influence trust in commodity information, and intermediary trust positively influences seller trust. This finding is a valuable reference for professionals working in B2B e-marketplaces.     

电子商务环境下的供应链采购策略研究

采购管理是供应链企业降低成本、提高竞争优势的重要环节。论文利用单周期连续型报童模型分析和比较了电子采购策略和传统采购策略的利益机制,量化了Internet在供应链采购管理中的作用。     

政府采购信息化建设的现状和思考

政府采购信息化建设对于推动政府采购的发展具有十分重要的意义,电子化采购是政府采购的新趋势,本文从几个方面提出了推行政府采购信息化的重要性,并对现阶段存在的问题进行分析,提出了一些合理的解决办法。     

An e-government framework for assessing readiness for public sector e-procurement in a lower-middle income country

ABSTRACT

Governments globally are leveraging information and communication technology (ICT) growth towards improving the quality of public procurement services for socio-economic development. However, the extent of its application differs across nations. Notwithstanding the extant theoretical and empirical literature on IT for development, knowledge on how to assess readiness for adopting a full e-procurement system in the public sector of lower and lower-middle income countries (LMICs) begs for understanding. With the narrative of Ghana, we address this gap by drawing on the institutional and economic theory and the United Nations E-Government Development Index towards a holistic framework beyond the dyad of linear website functionalities and internet focus of prior e-government adoption models. Elite interviews gathered from multiple cases from Ghana’s public sector reveals the key readiness determinants for a full public sector e-procurement system. This study has significant implications for shaping the process-oriented management of government e-procurement projects towards socio-economic development in LMICs amid their complex institutional and socio-technical environments.     

Assessing critical functional and non-functional requirements for web-based procurement systems: a comprehensive survey

World Wide Web (WWW)-based electronic commerce has emerged as a mean to conduct business transactions that were previously handled through traditional interorganizational systems, phone, fax, on-site visits, or mail. Today, electronic procurement (e-procurement) accounts for most of the volume and value of the business transactions conducted over the Internet. As of yet, however, little or no research has assessed the functional and non-functional requirements sought for the WWW-based systems used to support the procurement process. This paper, presents findings of a survey of 133 corporate buyers from about 130 companies on the use of readily available web-based systems for business-to-business transactions and the requirements perceived to be critical to the effective support of supply chain operations.     

Multi-agent collaboration for B2B workflow monitoring

Business-to-business (B2B) applications environments are exceedingly dynamic and competitive. This dynamism is manifested in the form of changing process requirements and time constraints. However, current workflow management technologies have difficulties to solve the challenges problems, such as: how to deal with the dynamic nature of B2B commerce processes, how to manage the distributed knowledge and recourses, and how to reduce the transaction risk. In this paper, a collaborative multi-agent system has been proposed. Multiple intelligent agents in our system can work together not only to identify the workflow problems, but also to solve such problems, by applying business rules, such as re-organizing the procurement and the transaction processes, and making necessary workflow process changes.     

The Adoption of Electronic Procurement in Singapore

The emergence of new Internet technologies has far-reaching ramifications on the way business is conducted. Notably, it has given rise to e-commerce, which is the transaction of business via the Internet. Recognizing the importance of the Internet as a powerful business tool, many Asian companies have moved quickly to take advantage of electronic commerce. This study explores the role of business-to-business e-commerce, with an emphasis on e-procurement among companies in Singapore. It examines the impact of Internet-based technology on the buyer side of the procurement function, how e-procurement is helping organizations to enhance their competitiveness and the challenges to its adoption. The study also presents the findings from a survey conducted to gain insight into the adoption of e-procurement among companies in Singapore. Specifically, it seeks to uncover the prevalence of and extent to which companies in Singapore are adopting e-procurement, the benefits reaped and the barriers encountered in the course of implementation.     

A study of B2B e-market in China: E-commerce process perspective

In China, B2B electronic markets are still in their early stages of development. The lack of basic business infrastructures has delayed the development of e-markets. The intervention and support of government and IT firms was needed to provide technical support and services to e-markets. We developed a conceptual model to aid in evaluating value creation strategy in B2B e-market; it can also be used to determine the complexity of such activities in Chinese B2B e-markets. Based on a case study of two Chinese e-markets, a process-oriented approach was found to be more suitable in modeling the value creation and therefore was selected. The model addressed two major factors: the transaction process and controlling complexity. The crucial value creation activities and strategies in the four phases of the transaction process are identified, and the controlling complexity of these activities is evaluated in the model. Our results offer an approach for studying the dynamic structure of e-commerce processes while focusing on the special issues of e-market development in China.     

Supplier behavior modeling and winner determination using parallel MDP

Behavioral uncertainty of a supplier is a major challenge to a buyer operating in e-procurement setting. Modeling suppliers’ behavior from past transactions, estimation of possible future performance and integrating this knowledge with the winner determination process can bring a new dimension to procurement process automation. We propose a states-space model to capture the uncertainty involved in long-term supplier behavior. The states represent the performance level of a supplier. This behavioral aspect is then integrated with the winner determination process of a multi-attribute reverse auction for efficient supplier selection using parallel MDP. We also propose an implementation framework to collect the feedback on supplier, generate an aggregate performance score and integrate it with the winner determination process. The performance aggregation and winner determination with help of Markov decision process effectively uses the past performance information. In addition, it updates performance information in regular invervals and allevates the problem of maintaining a long history. We compare the MDP-based selection with that of performance score-based selection through a simulation experiment. It is observed that our scheme gives better buyer utility, selects best suppliers and fetches better quality product. The benefits realized through these attributes to the buyer increases the efficiency of the MDP-based selection process.     

The added value of Planning Support Systems: A practitioner’s perspective

Planning Support Systems (PSS) are geo-information based tools to support planning. Since the term PSS appeared for the first time in the late 1980s it has evolved into a serious academic subfield. In this debate, little systematic attention has been paid to the added value of PSS for planning practice. In particular the perspective of users requires more empirical attention. This paper attempts to fill this gap by answering the question: What is the practitioner’s perception of the added value of PSS? In doing so we first develop a conceptual framework including the most important added values of PSS observed in the literature. Next, we describe an empirical study of the MapTable PSS, a support tool that is relatively frequently used in the Netherlands. Fifteen interviews were conducted and a Group Decision Room workshop was organized in order to systematically gather perceptions of users about the added value of this PSS. Added values that particularly emphasized are improved collaboration and communication among stakeholders, something which resonates with recent trends in planning. The added value of a better informed outcome is, somewhat surprisingly, considered less important. In order to deepen our understanding, we recommend more research in different contexts and with different tools.     

The agent-based negotiation process for B2C e-commerce

B2C e-commerce is becoming more widespread as more people come to recognize its convenience and its ability to rapidly respond to requests and as more products and services become available. However, many electronic marketplaces, especially in the business-to-consumer, are in essence some kind of search engine where buyers look for the best product in a database of products offered by sellers. Usually, such e-marketplaces do not use agent technology at all although agents could significantly improve the services provided both for the buyers and the sellers. Further, negotiation capabilities are essential for B2C e-commerce systems. In an automated negotiation, intelligent agents engage in broadly similar processes to achieve the same end. In more detail, the agents prepare bids for and evaluate offers on behalf of the parties they represent with the aim of obtaining the maximum benefit for their users. Nevertheless, in the current situation, price is the only criterion by which agents are created. This factor is easy to measure and automate. However, the criteria for advanced transactions need to be elaborated, for example, details of giveback and dividend. In this paper, we present a multiple-attributes negotiation model for B2C e-commerce, which deploys intelligent agents to facilitate autonomous and automatic on-line buying and selling by intelligent agents while quickly responding to consumers. These include a 4-phase model, information collection, search, negotiation, and evaluation. We also apply fuzzy theory and analytical hierarchy process to develop the system interface to facilitate the user inputs. Finally, an example of the notebook purchasing process is illustrated.     

B2B Procurement and Marketplace Transformation

Emerging web technologies and systems have started a revolutionary path that will have a profound impact on procurement processes and systems, especially in the area of indirect procurement and the management of operating resources. In fact, what started as more narrowly focused procurement systems only a couple of years ago, has transformed into a web of technologies, markets, and business strategies that have ramifications well beyond the purchasing function. The focus of this paper is on the marketplace structure, functionality and capabilities of systems, and key factors that buyers need to take into consideration when transforming their procurement processes. Contents management, markets, standards, and outsourcing are important problems that are discussed in this paper.     

Develop a negotiation framework for automating B2B processes in the RosettaNet environment using fuzzy technology

The electronic trade between enterprises becomes more popular due to the rapid development of electronic commerce. Under the electronic business environment, in order to make the trade process smoother and faster, most enterprises adopt industry standards, such as EDI and RosettaNet, for developing electronic business platforms to transact business processes. These standards and platforms can help both trading sides to control and facilitate the business processes and validate the document format. However, these processes still need human efforts to make decisions, which might cause business losses due to time delay or human error during the process. In order to solve the problem, this study takes a step further to propose a negotiation framework for automating the B2B processes. This study chooses RosettaNet purchase order management processes as an example to implement automated negotiations on Biztalk platform. In order to evaluate the negotiation behavior of the opponent, two fuzzy membership functions, preference degree and opponent’s concession degree, are proposed to develop 25 levels of fuzzy rules to determine better offers to help to reach a settlement more responsively and dynamically. Experiment results show that our approach can help B2B transaction effectively.     

A case-based procurement advisory system for construction

The selection and use of an appropriate procurement system are fundamental to the success of a construction project. However, the procurement selection process involves the analysis of complex and dynamic criteria such as cost certainty, time certainty, speed, flexibility, etc. Procurement selection is, therefore, plagued with uncertainty and vagueness that is difficult to be represented by a generalized set of rules. In reality, decisions in procurement selection are usually derived from intuition and past experience. Case-based reasoning (CBR) appears to be an appropriate approach to meet the requirements of the procurement selection process because of the value of experiential knowledge. This paper reviews the practicality and suitability of a CBR approach for procurement selection through the development of a prototype case-based procurement advisory system. In this prototype system, procurement selection cases are represented by a set of attributes elicited from experienced procurement experts. The system is powered by a fuzzy similarity retrieval mechanism, which gives a greater accuracy than the normal similarity retrieval process. The results indicate that the CBR approach can suitably model the characteristics of construction procurement selection, and provide an indication of potential outcomes to any apparently suitable procurement methods.