ELECTRONIC PROCUREMENT PROCESSES AND ITS IMPACT ON FIRM PERFORMANCE (A CASE STUDY OF DRIVER VEHICLE AND LICENSING AUTHORITY) 1 CHAPTER ONE INTRODUCTION 1.1 Background of Study The concept of procurement has gained much prominence in recent years as a way of gaining competitive advantage in the market (Koellinger, 2016). For procurement, the primary goals are to provide the required customer service level in a specific market segment and to minimize total supply chain investment costs (Gunasekaran, Patel & McGaughey, 2014). Maximizing service efficiency and procurement costs require that superfluous operations must be eliminated. Information and communication technology (ICT) has the power to fundamentally change the lives of much of the world’s population (Kurien & Qureshi, 2011). Information technology (IT) is defined by Laudon and Laudon (2011) as a set of interconnected components that acquire, analyze, store, and disseminate data to aid users' decision-making. Businesses and organizations use information technology to achieve their objectives, which includes both hardware and software, as well as the knowledge that goes with it. Organizations are increasingly relying on Information and Communication Technology (ICT) to improve the efficiency of their operations (Laudon & Laudon, 2011). Technology has an impact on many corporate and government activities, as well as how individuals live, work, and interact in a variety of ways. As more organizations seek ways to manage their supply chains, technology such as ERP systems, electronic payment systems, and bar codes are becoming more prevalent (Gunasekaran, Patel & McGaughey, 2014). One of the most important aspects of running a business is keeping track of information across the supply chain. When procurement processes are efficient, customers, suppliers, and the firm as a whole benefit. Technological solutions are used in distribution and procurement management to increase efficiency and eliminate waste in value chains (Capgemini, 2018). Organizations may utilize Material 2 Requirements Planning (MRP) to manage supplier networks, increase traceability, and manage distribution networks. Businesses must employ effective procurement management to be competitive on the global arena (Christopher, 2011). Rather than the fragmented systems that have characterized many organizations, the globalization of procurement processes have compelled companies to seek out better and more interconnected systems that link procurement competencies, multiple procurement strategies, implementation processes, and procurement capabilities to coordinate materials entering and leaving the company (Capgemini, 2018). Preliminary needs analysis, contract award, contract administration, and final payment comprise the public procurement process (Asabere, Oppong & Sarpong, 2012). As a result of the use of procurement technology, a company's agility, operational efficiencies, cycle time reduction, and ability to deliver items on time may all be improved (Gunasekaran et al., 2014). Increased customer service, reduced expenses, and streamlined procurement chains may all be achieved by integrating technology into current processes (Capgemini, 2018). Technology must be incorporated into current policies, processes, and personnel in order to be truly successful. Human and material movement can be profoundly altered by technological advancements (Gunasekaran et al., 2014). Technology is potentially an important enabler of change in social and organizational practices, thus affecting the demand for transport in spatial and temporal terms (Capgemini, 2018). The availability of products on the market is critical in any sector. A lack of availability of the items generally results in a decrease in sales since clients may simply choose another product or brand (Kurien & Qureshi, 2011). It is only possible to supply the market with the commodities it needs by making and sending the correct products at the right time. A procurement management system supported by technology is the only way to meet these important business performance requirements (Christopher, 2011). 3 The adoption of technology solutions is important in order to make the purchase process less burdensome (Lysons & Farrington 2016). The ever-changing business climate influences the competitive environment in which organizations compete. An organization's survival depends on its ability to outpace the competitors. Incorporating technology into the procurement process helps to strike a balance between meeting consumer demands and keeping costs under control to maximize revenues (Kurien & Qureshi, 2011). Procurement goals are primarily associated with quality, reduction of financial and technical risks, and protection over competition and integrity in the system. It is common for non-procurement aims to include economic, social, and political objectives. Increasing procurement's efficiency is a tall order, since the market structure, regulatory framework, and political climate that buyers must contend with provide various obstacles (Thai, 2014). It is therefore crucial to examine developments in procurement practices specifically e-procurement. With the Ghanaian government being the largest procurement entity in the country, such a study in the public sector is of dire importance. 1.1 Problem Statement Today's procurement procedures are extremely convoluted, including a plethora of physical and informational interactions to make sure that the correct things are delivered to the right location at the right time at a reasonable price (Capgemini, 2018). Nearly every aspect of a business may be supported and improved by ICT's strong and advanced technological solutions (Klein & Rai, 2009). Many businesses in today's dynamically competitive world have embraced new procurement trends by implementing cutting-edge technologies. Many businesses are implementing cutting-edge technological solutions to get a competitive edge in today's global market (Evangelista & Sweeney, 2016). However, due to the complexity of some of these tools, it is not strange to find certain key employees kicking against its adoption especially within public sector institutions. Advocating for a shift in procedures can be challenging since most employees are accustomed to doing things a certain way. E-procurement research has been done at the local level. 4 With many state-owned enterprises across the country, not all are involved in procurement activities. Driver Vehicle and Licensing Authority (DVLA) is one of the state-owned enterprises that does quite a number of procurement activities. Many studies have looked at the impact of e-procurement in Ghana (See Ameyaw, Mensah & Osei-Tutu; 2012; Boateng; 2013; Boateng & Evelyn, 2017). However, the impact of e-procurement in state-owned enterprises has gotten less attention. Furthermore, most state-owned enterprises trail behind privately owned organisations when it comes to the adoption of technological solutions (Boateng & Evelyn, 2017). It is therefore essential to find out whether the benefits accrued from e-procurement amongst state-owned enterprises is the same as that amongst privately owned organisations. Also, more studies on e-procurement in Ghana has been amongst privately owned organisations and not on state-owned enterprises. To address this gap, this study focused on the impact of electronic procurement process o firm performance. 1.2 Objectives of the Study The general objective of this study is to assess the impact of electronic procurement process and its impact on firm performance using Driver Vehicle and Licensing Authority (DVLA) as case study. The study was guided by the following specific objectives. 1. To identify the procurement technology tools employed by DVLA. 2. To establish the challenges associated with the type of e-procurement tools employed at DVLA. 3. To examine the effect of technology on the procurement performance of DVLA. 1.3 Research Questions The study was guided by the following questions. 1. What are the procurement technology tools employed by DVLA? 2. What are the challenges associated with the type of e-procurement tools employed at DVLA? 3. What is the effect of technology on the procurement performance of DVLA? 5 1.4 Significance of the Study The findings of this study can be applied entirely to the e-procurement process of public sector institutions in the country. The findings of the study will also provide policy framework to management of Driver Vehicle and Licensing Authority to adopt measures to administer sound procurement process. Also, findings of the study will assist management of Driver Vehicle and Licensing Authority and other public sector institutions to utilize the best e-procurement practices as will be suggested throughout this study. Academicians and researchers will benefit from this study as it will assist them in developing theoretical framework and add up to the existing knowledge of literature for academic purposes. 1.5 Scope of the Study This subsection focuses on content scope, time scope and geographical scope. Concerning content scope, this research focuses on electronic procurement processes and its impact on firm performance within the public sector. Driver Vehicle and Licensing Authority (DVLA) was chosen as the case study. In terms of time scope, this study looked at a 5-year period, specifically the years 2017–2021. In terms of geographical coverage, this study was conducted in Ghana's Greater Accra Region. 1.6 Limitations of the Study Almost every field research encounters some challenges, this study was no exception. The study covered only one public sector organization in Ghana specifically DVLA. Therefore, not being able to generalize the results to be obtained can be considered as a limitation. The study will be narrowed down to a few executives and management employees, from whom primary data will be acquired. This is also a drawback since the information that may be collected may have certain biases. To address this constraint, the study will use objective questionnaires for all participants in order to decrease personal views. 6 1.7 Organization of the study The study is presented in five chapters. Chapter one gives an introduction to the study, the background, the problem statement, research questions and the research objectives. It included the purpose and significance of the study. Chapter two focuses on the literature review and theoretical framework of the study. Chapter three describes the research design that is used, the target population and the sampling procedure. It also describes the data collection procedure and data processing and analysis. Chapter four describes the actual sample used and its characteristics. It also presents, analyzes and discusses the findings of the study. Chapter five gives an overview of the entire research. It includes the summary and conclusion of the study as well as recommendations based on the key findings of the study. 7 REFERENCES Ameyaw, C., Mensah, S. & Osei-Tutu, E. (2012). Public Procurement in Ghana: The implementation challenges to the Public Procurement Law 2003 (Act 663). International Journal of Construction Supply Chain Management, 2, 55-65. Apiyo R.K., & Mburu, K.M. (2012). The Role of ICT tools in procurement performance. An Unpublished MBA Project, University of Nairobi. Bitner, M. Brown, S. & Meuter, M. (2010). Technology infusion in service encounters. Journal of the Academy of Marketing Science, 28(1), 138-149. Boateng, R. (2013). The Challenge of Taking Baby Steps in E-governance in West Africa. In: Proceedings of the UGBS Conference on Business and Development, April 8-9, Accra, Ghana: University of Ghana Business School Boateng, N, and Evelyn, B, (2017). 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