AN ASSESSMENT OF E-PROCUREMENT INTERNAL ADOPTION CHALLENGES FOR SMEs IN TANZANIA

CHAPTER ONE BACKGROUND INFORMATION 1.0 Introduction E-procurement is and element of e-commerce which began around 1965 in America when consumers were able to withdraw money from Automatic Teller Machine (ATM) and make purchases with a credit card where vender electronically verified payment and big corporate managed procurement and controlled inventory (USCIB 1998) since 1995 the development has been overwhelming. It is estimated to be growing at a rate of 10% per month reaching 40 million people in 160 countries around the globe. Information technology came to Tanzania as early as 1956 where the public works departments under the British administration introduced the hand-punch input device for computer cards (Sawel 1999).It was used to capture data everywhere .In 1965, the country first full scale computer processing facility was installed at the ministry of Finance. In his study Rein et al (1993) revels that there is no ground and concrete measures of the adoption of e-commerce technology and there is little understanding among SMEs in developing countries like Tanzania. Although ICT came early in Tanzania but still ecommerce took place later as it has been stated above by United State Information Bureau (USCIB) The study conducted by Fuller and Jenkins (2000) in e-commerce benefits in SMEs realized the six benefits: Time based competitive advantage, productivity improvement, business re-engineering, and empowerment of individual employees, creating & maintaining business relationship, and reaching new market. E-procurement is the technology-enabled acquisition of goods and services required by an organization at the best value obtainable. The goal is the right product or service, at the right place, at the right time, at the right price in the most efficient manner possible. The ecommerce relates to commercial transaction of goods and services conducted electronically between parties mainly through the open international networks system. That is parties

interact electronically rather than by physical exchange or physical contact ( Beda and Kajiba 2000 ) Supply chain management (SCM) has exploded as a managements major concern over the last years, since with the exploitation of new Information and Communication Technologies (ICT) and in particular of Internet the potential to revolutionize, streamline and enhance supply chain operations has flourished (Patterson, Grimm and Corsi, 2003; Cagliano, Caniato and Spina, 2003). Specifically, e-procurement has been identified as an important element of e-business operational excellence for large firms (Barua, Konana, Whinston and Yin, 2001). In Tanzania many ICT initiatives are simply not viable at present due to a number of factors: outdated institutional frameworks, poor infrastructures, inefective payment system, and technological skills. In Tanzania private institutions, the practice of e-procurement has been incorporated into the individual company policy for the past five years there have been arguments for effectiveness among those, which use e-procurement. In the year 2005, 46% of the private institutions that employed e-procurement managed to cut costs and the percentage increased up to 52% in the year 2007 (Daily News, 2009). Then, by reviewing the literature on ICT adoption challenges as well as the few studies in e-commerce and e-procurement adoption challenges, potential factors determining the adoption challenges of e-procurement in the SMEs adoption behavior from a buyer-seller relationship perspective were identified. The significance of these factors on the adoption challenges of e-procurement were tested by gathering data from SMEs in Dar es salaam Ilala municipality. Data provide useful information about the challenges affecting eprocurement adoption in SMEs challenges from a buyer-seller relationship perspective SMEs stand for small and medium enterprise and sometimes is used synonymous with Micro, small and medium enterprises (MSMEs).There is no universally accepted definition of SMEs.Different countries use various measures of size depending on their level of

development to categorize enterprises .The commonly used criteria are number of employees, total investment and sales turnover.Mininstry of industry and trade ( MIT,2003 ) In Tanzania the vast majorities of businesses are Small and Medium Enterprises (SMEs) rather than large enterprises (LEs) and account for major economic growth, jobs and assets. In the past decades the SMEs has witnessed exponential growth, resulting in increased competition on such global scale.It is estimated that they generated more than 50% of Gross Domestic Product (GDP) (Admassie and Matambalya ibid 2002) According to Lyatuu and Sawere ( 2007 ) it is revealed that SMEs play a pivot role in the national effort to eradicate poverty. This study intends to identify the internal challenges in organizational adoption of eprocurement in SMEs in Tanzania, where Dar es salaam-Ilala municipality was chosen as a case study. This is because Dar es salaam is among the region in Tanzania where most users of information communication technology are found, since internet technology is more concentrated in Dar essalaam and Arusha compared to other region (Nelienger ibid 2003) 1.1 Context of the Study Mlinga (2007) defines procurement as the activity of assessing, buying of works, goods and service. Procurement includes some activities that start with the identification of need and ends with the delivery of the material, works or service required is public wherever this process is performed by any one public organization or wherever it is performed on their behalf or funded by public organization. As such, it is carried out in both public and private sectors. It is, according to Mlinga (2007), the acquisition of goods or service at the best possible total cost of ownership in the right quantity, at the right time, of the right quality, from the right source and to the right place. The process is referred to as e-procurement, when the exercise is done with the assistance or use of the ICT, tools and it is referred as electronics procurement (e-procurement).The processes of carrying out the procurement function have been undergoing various reforms

over the years in different parts of Africa. In all parts where reforms have been undertaken, the central objectives of such have been to increase transparency and efficiency in the process of procurement. The reforms have also aimed at combating corruption in the public procurement system as corroborated by Kenya, Uganda and Nigeria where experience has shown that it is a major hindrance in the attainment of value for money in the use of public funds. From one press release If there is a one-stop solution to eradicating corruption in Asia's public procurement systems, E-procurement is it. That's what regulators from India, Indonesia and South Korea said in recent interviews with Supply Chain IQ. Growth in business-to-business e-commerce remains strong as information and

communications technologies (ICTs) continue to transform organizations interactions with their suppliers and customers .Supply-side activities such as electronic procurement (e procurement) have been identified as a key area where information systems (IS)-enabled innovations are likely to yield significant benefits for organizations (European Commission 2005b 2006, Laub, 2001). Its a collaborative procurement of goods, works and services using electronic methods in every stage which will bring in efficiency and transparency by monitoring and control in procurement process, bring in economies of scale through aggregation of demand, reduce cost of doing business for both government and suppliers and establish level playing field and fair competitive platform for the suppliers, of which this can be achieved only through effectively use of e-procurement. Thus in this study the researcher was assessing the internal organization challenges for adoption of e-procurement. 1.2 Emerging Challenges Sheya (1992),when referring to information technology evolution in Tanzania, cautions about ICT policy and strategies in the country. He mentioned that there was an imbalance in ICT series due to the fact that Tanzania being one of the developing countries had not reached a high stage in ICT application. Poor infrastructure, lack of funds, inadequate service facilities, lack of training, poor ICT knowledge/skills, and lack of commitment

towards ICT are among the problems that affect effective use and application of ICT,eprocurement being one of the element. ICT use and application in most government institutions in Tanzania in the 1980s and 1990s was generally low. Most of the computers were neither used effectively nor to full capacity. This condition has been attributed by factors such of lack of adequate skills, knowledge, experience, pace of technology change and resistance to change. To date, the situation is still the same in some institutions ( Ngomuo 1999) Moreover SMEs are often the main driver for a countrys economic growth. However, as the number of SMEs increases, competition increases, which then results in a decrease in prices, customer base, or both. This in turn will erode existing profits, creating less incentive for people to start SMEs. This dynamic is captured by balancing feedback loops where the greater the number of SMEs, the greater the competition, resulting in a slower rate of growth for SME. ICT can thus play a very important role because it can help SMEs both create business opportunities and combat pressures from competition. Appropriate ICT can help SMEs cut costs by improving their internal processes, improving their product through faster communication with their customers, and better promoting and distributing their products through online presence. Given the benefits that ICT can bring to SMEs, SMEs in most developing countries including Tanzania still have been slow to adopt it.SMEs still use basic communication technology such as fixed phone line and fax, and only few use CRM softwa,meanwhile, their counterparts in developed countries are using advanced ITs. One cause of limited adoption is the lack of dynamism between ICT firms and SMEs outside of the ICT sector. ICT firms have not provided goods and services tailored to SMEs in the past because demand from SMEs has been low. However, their demand is low in part because ICT products available in the market are too complex and expensive. Thus more studies need to be conducted on this area and its application in our SMEs for the development.

1.3 Statement of the Research problems SMEs have a critical role to play in national economy. Despite the advances in information and Communication Technology which lead to innovation of electronics commerce and acceptance by large organization of such technologies the same level of adoption is not evident among SMEs ( Bonde and Burn 2002 ). In keeping abreast with the technological development in the world, in general, and Tanzania, in particular, few, large enterprises (LEs) private organizations in Tanzania have introduced the use of e-procurement. The introduction of this procurement has lead to significant change in terms of efficiently and cost. According to Lovelock (1996), in todays increasingly competitive environment, the quality and quantity (in terms of the length of time and the numbers of places) of service that an organization renders are critical to its success. Indeed, the procurement department and organization mission is to provide quality and competitive products that reflect the value for money. The mission of the procurements department,role of SMEs in national economy,importance of implimenting e-procurement in an organisation and all else which has been said above made the researcher develop some keen interest in this study in general, and Tanzania, in particular. This lack of abundant research and findings has resulted in the failure by people to properly understand, what are the internal organisation adoption challenges, how are the challenges affect the eprocurement adoptin in an organizations especially SMEs which contributes much to national economy , therefore the study will be on assessing the internal organizational challenges facing the SMEs in adapting e-procurement.

1.4. Research Question. The researcher wanted to answer a number of questions.

1.4.1. The Main Research Question The main research question is What are the internal challenges facing SMEs in adopting e-procurement in Tanzania? 1.4.2. Specific Research Questions i. ii. iii. What are the organizational internal challenges of e-procurement adoption for SMEs? What are internal technological challenges of e-procurement adoption for SMEs? What are internal environmental challenges of e-procurement adoption for SMEs? 1.5 Research objectives The study is designed to achieve the following general and specific objectives. 1.5.1. The Main Research Objectives The general objective of the study is to address the internal challenges faced by

organizations in implementing the e-Procurement .Secondly assess the internal challenge organization in adopting the e-procurement and finally, measures that could be applied to solve the problem.

1.5.2. Specific Research Objectives i. To determine the internal organizational factors that limit e-procuremnt.

ii. To determine the internal technological factors that limit e-procurement. iii. To identify environmental factors encountered by organizations related to use of eprocurement. 1.6. Significance of the Study The researcher hope the study will be of benefit to the following: Business entities. The findings from this study are expected to provide better understanding of the factors which hinders e-procurement adoptions in SMEs and other business entities. Academicians. The findings of the study are also likely to help procurement academicians to discover issues which need research and actually carry out research on them. This will also add value to the body of knowledge in bridging the gap between theories and practices of the application of e-procurement in SMEs. Regulators and the government The finding will provide useful understanding to SMEs and policy makers of the factors that are setback, supportive, influencing and accelerating the adoption of e-procuremnt Also they can be useful in developing countries context to increase conducive environment for adoption of e-procurement by SMEs The results of the study are likely to encourage the government and responsible authorities to take necessary action to address challenges facing the procurement practitioners so as to bring about an easily implement able legal framework in this area of the study. Research of this form is required before government policies can be formulated that seek to increase the adoption rate among SMEs and other organizations.

1.7 Scope of the Study

The research is a case study that will involve only few organizations which are based in Dar-es-Salaam. And the topic of the study covers e-procurement and internal organization challenges for SMEs. 1.8 Limitations of the study The limitations that hinder the researcher to conduct his study efficiently are: (a)Time limit The time provided for study is not enough to collect all the necessary information. The situation is worse because the researcher is a part time student who carries out his normal duties with his employer. In order to mitigate the effect of time constraint, the researcher has settled for a case study that will limit him to one organization within Dar-es-Salaam. (b) Insufficient funds The study will require a lot of money in order to obtain all the necessary data. Therefore, this financial constraint is likely to limit the amount of data and the area to be covered in the study. The choice of case study will also mitigate the effect that this constraint might have on the research. (c) Confidentiality of information Some of the information is likely to be regarded as confidential by the officers concerned and, therefore, deny the researcher access to it. The researcher will try to persuade the officers to allow him access. (d) Uncooperative attitude by respondents

It is common for research assignment to come across potential respondent who are not willing to render cooperation to the researcher. Like in the case of confidentiality of information, the researcher will try hard to persuade the relevant unwilling respondents to cooperate. 1.8 Delimitations of the Study The research is a case study that will involve only few organizations which are based in Dar-es-Salaam region Ilala District. Moreover the study was conducted at private business organizations and the topic of the study covers e-procurement. a branch of e-commerce and the study will focus only on internal organization challenges for adoption of e-procuremnt. Moreover the respondents or organizations involved were informed that the information would be used for only academic purpose and where necessary they will be provided with a copy of study findings. The researcher is also going to use different method of data collections to facilitate the exercise of data collection.

LITERATURE REVIEW

2.0 Introduction This chapter seeks to examine the existing literature about the challenges of e-procurement adoption for SMEs in Tanzania. The main focus of the study will be to analyze the challenges faced by organization as barrier to adopting the e-procurement. 2.1 Definitions of Terms Purchasing Lyons and Gillignham (203) define purchasing as to obtain material of right quality from the source delivery at the right time and at the right place. Mahanga (2001:9) stated purchasing as the process of buying goods a process that encompasses learning of or identifying the needs sourcing and selecting a supplier negotiating price and other delivery terms and following up to ensure timely delivery. Dobber and Burt (1996:35) defined purchasing as all activities essentially associated with the acquisition of the service and equipment used in the operation of the organization. Public procurement Public procurement entails the acquisition of goods works and services by a procuring entity using public funds ( Ngwalo, 2004) E-business E-business includes e-commerce but also covers internal processes such as production, inventory management, product development, risk management, finance, knowledge management and human resources. E-business strategy is more complex, more focused on internal processes, and aimed at cost savings and improvements in efficiency, productivity and cost savings. An e-business strategy is also more difficult to execute, with four directions of integration: vertically, between Web front- and back-end systems; laterally, between a company and its customers, business partners, suppliers or intermediaries; horizontally, among e-commerce, enterprise resource planning (ERP), customer relationship management (CRM), knowledge

management and supply-chain management systems; and downward through the enterprise, for integration of new technologies with radically redesigned business processes E-commerce E-commerce covers outward-facing processes that touch customers, suppliers and external partners, including sales, marketing, order taking, delivery, customer service, purchasing of raw materials and supplies for production and procurement of indirect operating-expense items, such as office supplies. It involves new business models and the potential to gain new revenue or lose some existing revenue to new competitors. It's ambitious but relatively easy to implement because it involves only three types of integration: vertical integration of front-end Web site applications to existing transaction systems; cross-business integration of a company with Web sites of customers, suppliers or intermediaries such as Web-based marketplaces; and integration of technology with modestly redesigned processes for order handling, purchasing or customer service. E-informing e-Procurement can be used for the simple job of exchanging purchasing information between buyers and suppliers. Using Internet technologies such as e-mail the process of accumulating a database of supplier information can be made much simpler than by using traditional contact. Perhaps most importantly, these databases can be applied in the future to generating action in a reverse auction. By informing suppliers of forthcoming auctions an enterprise can allow suppliers the time to build a tender. Web-based ERP ERP software can also issue reschedule notices to suppliers. Reschedule notices are supplementary orders that can either cancel, delay, speed up and alter the size of pending orders. Its able to automatically generate purchases orders using the Bill of Materials for the finished product as a basis. Web-based ERP software can go one step further. As well as generating purchase orders it can forward them to suppliers in order to fully automate the procurement process. Based on the ideal manufacturing process laid out by the ERP

software, these orders ensure that materials will be available in time to begin production. E-auction An e-enabled opportunity to optimize the price you pay for the good or service being tendered. This is enabled in a real time open and transparent environment with clearly defined and agreed start and finish times. It is an environment where both the buyer and seller have clear visibility of the bidding process but essentially it is an open environment where current or prospective sellers can bid for your business. The process is controlled by you and is subject to the rules of the game which are developed and agreed before the launch of the auction by all participating parties. The ultimate decision is also controlled by you, whether you accept the lowest bid or whether you take the final selection offline to satisfy yourself of supplier compatibility and fit with your business. E-soucing E-sourcing is the use of the Internet for the identification of new suppliers for a category of purchasing requirements. Otherwise known as reverse auctioning, e-sourcing is a method by which enterprises can move their procurement process online in order to reach a larger number of suppliers than would be possible through usual channels. The major benefit of e-sourcing is the competitive aspect by which suppliers bid for projects. Suppliers submit bids along with various details of the service they promise to provide, and purchasers can pick and choose from the offers. E-procurement E-procurement is defined as any ICT designed to facilitate the acquisition of goods by a commercial or a governmental organization over the Internet (Davila, Gupta and Palmer, 2003). E-procurement is application of electronic commerce in procurement, it include eprocurement software, B2B auctions, B2B market exchanges and purchasing consortia that aim to automate workflows, consolidate and leverage organizational spending power and identify new sourcing opportunities online (Davila et al. 2003). Future advances would extend these ICT to create collaborative SCM tools (Cagliano et al. 2003; Folinas et al, 2004). E-procurements benefits include:

Lower administration costs, inventories and purchasing prices; shorter order-cycle time; enhanced cooperation with suppliers, performance and multi-chain operations (Croom, 2000; Sigala, 2003c). Goods Section 3 of the PPA 2004 describes goods as raw materials, product equipment and other physical objects of every kind and description whether in solid, liquid or gaseous form, electricity intangible assets and intellectual property, as well as services incidental to the supply of the goods, provided that the value of the service does not exceed the value of the themselves. Works PPA (2004) defined works as i. ii. iii. all works associated wit the construction, reconstruction demolition, repairs or renovation of building structure, roads or air fields. any other civil works, such as site preparation , excavation, creation, building installation of equipment or material decoration and finishing services which are rendered and contracted on the basis of performance of a measurable physical output such as drilling, mapping satellite photography or seismic investigation. Provided that contracts which introduce the provision Other factors also contribute to the limited support of works and services shall be regarded as works contracts if the total value of the works is greater than the value of the service covered by the contract Services PPA (2004) define services as any objects of procurement other than goods or works, which involve the furnishing of labor time or effort including the delivery of reports drawings or designs, or hire to use of vehicles machinery or equipment for the purpose of providing transport, or for carrying out work of any king with or without the provision of drives operators or technician.

Challenge: a difficult task that tests somebodys ability and skills

Procuring entity: means a public body or any other body or unit established and mandated by the government to carry out public functions. (PPA, 2004) Value in e-procurement. Value of e-procurement adoption is defined in this study simply as benefits from its implementation over costs. E-procurement adoption is justified only when the former are large enough to cover the latter. Trust in e-procurement: A great deal of activities in electronic commerce systems relies on trust. Relationship between buyer and supplier is a mix of mutual dependency and suspicion. 2.2 Analysis of Underlying Theories or models Globally Challenges to adoption, as with any other new system fielding, push-back from users, both internal users and even some vendors can create friction and resist the change other potential barriers for an effective adoption includes risk, uncertainty, inefficiencies from supplier and catalogue-content readiness, cultural change, staff resistance, need for firm wide training with likely disruption of ongoing activities. In the Australian case, cost, top management support, inadequate e-procurement solutions, business partners and lack of skilled personnel were found to be important (Hawking et al. 2004; Stein and Hawking, 2004).Moreover in the case of small businesses in Canada, security issues and the realization that once committed to automating business processes, nothing in those businesses will ever be the same again grounds the argument that big businesses, universities and governments can survive e-business failures. Smaller businesses cannot afford them at all (Bray 2004: 6) In public institutions e-procurement has been incorporated into different governments policies to ensure effectiveness in purchasing and supply of goods. Preschal (2004) explains that in United Kingdom, the employment of e-procurement in government institutions has been fruitful in cutting off costs with regard to public expenditure although about 24.6% of public institutions proved failure in practicing

of e-procurement. This information is different from the results of studies done in United States of America (USA) public institutions which about 89% proved fruitful with regard to the use of e-procurement (Hughes, 2002, Paschal, 2007).This explain the value in e-procurement implementation in organization.

The study conducted on the challenge for ICT adoption includes high costs, technical literacy, poor software quality available in the market, lack of training and experience of ICT integration and inability of the organization to relate ICT investments to business value amongst other, thus needing immediate attention. From studies above the general them has been the technological, enviromental and organizational factors that act as barrier for adoption of SMEs in e-procurement. More over the different studies pointed out the adoption challenges for any ICT implementation as follows: Organizational factors The ICT literature in general (e.g. Dewar & Dutton, 1986; Galbraith, 1977; Min & Galle, 1999) and in the hospitality industry (e.g. Sigala, 2003a; Siguaw et al, 2000) has demonstrated that larger organizations are more likely to facilitate ICT innovation and adoption due to their financial capacity, infrastructure and organizational power. By analogy, it can be claimed that e-purchasing adoption can be influenced by a large firm size and purchasing workforce. The rationale is that a buying firm with a larger purchasing unit is more likely to adopt e-purchasing, as it has greater information processing capacity, needs and organizational power than smaller firms. Moreover, a buying firm with a large purchasing unit is also more likely to possess the financial, skill resources and bargaining power to achieve the economies of scale required. Within hospitality, affiliation with a hotel chain/alliance or consortia was found to positively affect ICT adoption and use (Siguaw et al. 2000, Sigala, 2003b). Small firms also lack in ICT knowledge and technical skills. OECD (1998) and Walczuch, Van Braven & Lundgren (2000) attributed the failure of European small and medium enterprises (SMEs) to utilize e-commerce to their lack of e-commerce and Internet knowledge. Because of the obstacles in developing the necessary skills and technical knowledge, many firms postpone ICT adoption until they gain sufficient internal expertise. As ICT

knowledge of hospitality staff also positively affects ICT adoption and use (Sigala, 2003a), it is claimed that e-procurement adoption and use by foodservice firms can also be influenced by staffs knowledge on e-procurement. Innovation-related factors Research on innovation revealed that the characteristics of innovation, as perceived by the adopting firm, can crucially impact on its adoption (Rogers, 1983). Based on a meta analysis of the technological innovation literature concerning the characteristics of innovations, Tornatzky & Klein (1982) identified relative advantage, compatibility, and complexity as innovation characteristics salient to the formation of the adoption attitude. Relative advantage is the degree to which an innovation is perceived as better and more beneficial than its precursor, compatibility is the degree to which an innovation is perceived as consistent with existing values, needs, and past experiences of the adopter, while complexity refers to the degree to which an innovation is perceived as difficult to use and implement (Rogers, 1983). Thong (1999) proved that positive perceptions regarding the ICT benefits provided an incentive to adopt ICT. Drew (2003) also concluded that many managers rejected the notion that e-commerce could be useful to their businesses as they had no idea of the potential e-commerce benefits, while Walczuch et al. (2000) revealed that the main barriers to Internet adoption and use are simply managers concern and perceptions that the Internet would not lead to more efficiency or lower costs. Preliminary research on e-procurement (Min & GGalle, 2003) also revealed that perceptions regarding the benefits, costs and risks of e-procurement systems significantly affect the latters adoption. Each system of eprocurement involves different risks, costs and investments. Although implementation of B2B auctions, market exchanges, and purchasing consortia via existing networks require limited costs, e-procurement software involves larger investments. The business and ICT risks and complexities of e-procurement that can affect its adoption are analyzed below (Davila et al, 2003): Internal business risks: firms uncertainty on the availability of appropriate resources to successfully implement e-procurement such as well performing and effective systems, that

can also be integrated with existing ICT, e.g. accounting, human resources, asset, cash, inventory management and production planning. External business risks: e-procurement tools need to cooperate with external constituencies (customers, suppliers), who also need to develop internal systems for facilitating electronic communication. However, suppliers may be hesitant or even unable to meet such demands without guarantees of future revenue streams. Moreover, price reductions due to auctions and enhanced global online competition may force suppliers to reduce their quality and services. Technology risks: companies also fear the lack of a widely accepted standard and a clear understanding of which e-procurement technologies best suit the needs of each company. The lack of a widely accepted solution blocks the integration of different e-procurement software across the supply chain. This implies the need of open standards for facilitating inter-organizational e-procurement systems. E-procurement process risks: refer to the security and control of the eprocurement process itself, as security breaches endanger the function of operating systems as well as the information access, exchange, and disclosure. 3. professionalism in their markets. The concept of legitimacy is crucial in eprocurement as its systems are both new and sophisticated. Could a foodservice operator that lacks an e-procurement system, for example, be considered a legitimate player in the minds of potential suppliers/distributors? So, it is expected that greater pressures from institutional actors would relate to greater eprocurement exploitation. According to chamber of commerce briefing Kit on e-commerce for SMEs in Africa(1999) it was argued that there are two distinct kinds of constraints that SMEs face in the adoption of information and communication technology (ICT) for marketing and trading activities. The first type is particularly to SMEs in terms of information and communication Technology (ICT) diffusion and the second applies to all enterprises and concerns the policy environment in which information and communication Technol Enviromental factors.

Industry, market scope, competitive pressure and external IS support are considered to be factors that influence SMEs willingness to adopt e-procurent. Definitions of SMEs differ across countries and industry sectors, and can be based on a variety of criteria, such as number of employees, invested capital and total value of sales. However more important for policy considerations are the characteristics of these businesses, which typically include ;( Small and medium enterprises Development policy 2002). SMEs all over in the world are known to play a major role in social economy development. This is apparently the case of Tanzania, where SMEs contribute .Significantly to employment creation, income generation and stimulation of growth in both urban and rural areas.From another study conducted by (Ramdani and Kawalek 2007b) on Predicting SMEs willingness to adopt ERP, CRM, SCM & E-procurement systems they pointed out technology,enviroment and organization to be barriers. There is no universally accepted definition of SME.Different countries use various measures of size depending on their level of development. The commonly used yardsticks are total number of employees, total investment and sales turnover. In the context of Tanzania, micro enterprises are those engaging up to 4 people, in most cases family members or employing capital amounting up to Tshs 5.0 million, The majority of micro enterprises fall under the informal sector. Small enterprises are mostly formalized undertakings engaging between 5 and 49 employees or with capital investment from Tshs.5 million to Tshs.200 million. Medium enterprises employ between 50 and 99 people or use capital investment from Tsh200 million to 800million.

Category Micro Enterprises Small Enterprises Medium Enterprises Large Enterprises

Employees 1-4 5-49 50-99 100+

Capital Investment(Tsh) Up to 5mil Above 5mil to 200mil Above 200mil to 800mil Above 800mil

Source: URT (Small and medium Enterprises Policy 2002) E procurement systems consist of a number of different tools. These include automation of internal ordering processes, online catalogs from approved vendors, and an electronic Request for Proposal (e-RFP) process that leverages online auctions (e-auctions) to accumulate bids on providing goods and services for a specific project. E-Procurement is an Internet technology solution facilitating corporate buying using the Internet. Four major e-procurement Internet-based ICT tools are identified (Davila et al, 2003). First, e-procurement software refers to any internet-based software application (traditional EDI e-procurement systems have also migrated to Internet) that enables employees to purchase goods from approved electronic catalogues in accordance with company buying rules, and captures necessary purchasing data in the process. To achieve that, the software uses protocols to automatically route and move through the necessary approval processes all employees purchase selections of a good found on a supplier catalogue. Internet market exchanges are called the e-procurement systems that bring together multiple buyers and sellers in one central virtual market space and enable them to buy/sell from each other at a dynamic price. Internet B2B auctions are the third type of e-procurement systems referring to events in which multiple buyers place bids to acquire goods/services at an Internet site, Last, Internet purchasing consortia gather the purchasing power of many buyers to negotiate more aggressively discounts,

2.3 Analysis of empirical studies 2.3.1. From Abroad The challenges are globally and locally identified. Globally Challenges to implementation include, as with any other new system fielding, push-back from users, both internal users and even some vendors can create friction and resist the change other potential barriers for an effective adoption includes risk, uncertainty, inefficiencies from supplier and cataloguecontent readiness, cultural change, staff resistance, need for firm wide training with likely disruption of on-going activities. In the Australian case, cost, top management support, inadequate e-procurement solutions, business partners and lack of skilled personnel were found to be important (Hawking et al. 2004; Stein and Hawking, 2004) In the case of small businesses in Canada, security issues and the realization that once committed to automating business processes, nothing in those businesses will ever be the same again grounds the argument that big businesses, universities and governments can survive ebusiness failures. Smaller businesses cannot afford them at all (Bray 2004: 6) Most of empirical results of studies undertaken elsewhere accounts for the positive impact of the ICT on industry perfomance,by measuring intangibles. These include better responsiveness to customers or even intrinsic value in the quality of the product.(Ross 2005) in the study undertaken to survey industry in Canada established that ICT usefulness could be measured from other indicators such as the ability to:internaly attract new customers, participate in overseas markets, generate innovation, to save recourses ,get flexibility ,improve decision making, to increase productivity, gain competitive positions, gain business procedure and manage supply chain relationships. Futher, the work undertaken by Brynjolfsson et al (2005):in the study undertaken in Europe to develop an agenda regarding value creation with broadband and associated internet technology and e-business solutions among European industries, established that ICT could be redefined as a fundamental enabler in creating and maintaining a number of useful things. These includes flexible business network of inter organizational arrangements, joint ventures, alliances and partnerships long-term contact, technology

licencing,and marketing agreement,raesghaping of business models to strength the competitive performance of the industries. From the study conducted e-procurement adoption in Australia despite the great benefits of e-procurement technologies, their adoption is still at their early stages (Davila et al. 2003). A variety of factors may affect a firms decision to adopt and implement a particular ICT. In consolidating prior studies examining innovation, Kwon & Zmud (1987) classified variables that potentially influence ICT adoption into five broad categories: individual, task and innovation related, organizational and environmental characteristics. Patterson et al. (2003) also showed that the following organizational and environmental factors positively affected the adoption of ICT in SCM: organizational size; decentralized organizational structure; supply chain strategy integration; transactional climate and supply chain member pressure, and environmental uncertainty. Kwon & Zmud (1987) also suggested that these factors may be important to differing degrees depending on the context or technology. For example, individual factors such as age or education are often more relevant with individual adoption of technology rather than organizational innovation whereby decisions are made by committees. Additionally, task characteristics may be isolated and examined when individual technologies are being studied. As this study examines the organizational adoption of e-procurement systems, the focus is limited on the following key organizational, innovation-related and environmental factors Technology-Organization-Environment (TOE) framework developed by Tornatzky and Fleischer (1990) has been tested and validated by many studies (e.g. Kuan and Chau 2001, Premkumar and Roberts 1999, Iacovou et al. 1995). TOE framework has also been claimed to be a generic theory of technology adoption/diffusion (Zhu et al. 2003) that can be used to study SMEs challenges to adopt ES as illustrated in Figure 1 below (Ramdani and Kawalek 2007a). This study will use this framework to develop a statistical model that can be used to show which SMEs are more likely to become adopters of ES.

2.3.2 From Tanzania

Within east African countries,Matambalya and Wolf (2003) in the survey conducted for SMEs in Kenya Uganda and Tanzania indicated a positive correlation between industry competitiveness and use of ICT.Regard less of the fact tha the focus of the study was on how the micro level competitiveness is influenced by ICT together with other factor inputs such as labour,physical capital and production of material. Kamuzora (2005) when studying e-commerce readiness in Tanzania, underscored its importance and jointed out a number of initiatives undertaken towards the development of ecommerce friendly enviroment.These includes ,the liberalization of telecommunication and development of information society infrastructure, other includes addressing ecommerce legal frame work, overly bureaucratic trade procedures,trade restrictions and unfriendly investment climate special arrangement for companies such as Tax allowances as wel as efforts to setting up online access to and submission of tenders to enabled become are also negotiable. Trade promotion organizations are focusing on possible e-commerce opportunities in addition to the government encouraging the creation of education institution that will produce population of knowledge workers. Although there is evidence of several attempts to study linkages between ICT investments and industry perfomance, there is still no clear confirmation on the relationship between ICT and economic variables such as profitability, productivity and employment dynamics. Even when Chowdhury and Wolf (2003) use modified Cobb-Douglas production functions to investigate labor productivity and returns for an SME survey conducted in Tanzania and Kenya their main findings was that ICT investment have no significant impact on performance of SMEs.

Mrope (2005:29-30), in the speech commended, the government of Tanzania (GoT) that it has long realized the importance of procurement to the economic development and hence to the fulfillment of key objectives within the national poverty reduction strategy. The government has realized that efficient procurement system enhance effective use of public

financial resource, improves availability quality reliability and cost public service and more importantly is an integral part of government process He added that according to the country procuring Assessment report (CPAR) (2003) 70% of the government budget is utilized through public procurement processes for central and local government. The government is fully aware that procurement system is weak and need to be strengthened substantially enable it to ensure that the procurement laws and institutions become effective tools in efficient and transparent management of public funds.

2.3.1.

Gaps in knowledge

In view of the above, there exists an imperative need for study to asses the challenges for SMEs in Tanzania to adopt the e-procurement in three main contest technology, enviroment and organizational context.

2.4 Conceptual model

The conceptual framework explained above can be described in the model diagram.

ORGANISATION CONTEXT. Topmanagenet support. Organisation TECHNOLOGICAL CONTEXT. Relative advantage Compatibility Trialability Observability readness IS experience Size SMEs ADOPTION CHALLEN GES

ENVIROMENTAL CONTEXT Industry market scope Competitive pressure External IS support Source Ramdani and Kawalek( 2007)

2.4.1. Description of the model/Framework

Technological context Premkumar (2003) argues that there are very few studies that have examined the impact technological characteristics in the context of small business. Rogers (2003) innovation diffusion theory for organizations will be used as a theoretical basis for studying the impact of technological factors on SMEs challenges to adopt E-procurement. Relative Advantage is defined as the degree to which an innovation is perceived as being better than the idea it supersedes (Rogers 2003, pp. 229) studies found this variable to be positively related to the adoption of IS innovations (e.g. Grandon and Pearson 2004, Kuan and Chau 2001). When an IS innovation is perceived to offer relative advantage over the firms current practice, it is more likely to be adopted (Lee et al. 2004). This view has support in the general innovation/diffusion research (e.g.Moore and Benbasat 1991, Tornatzky and Fleischer 1990), and more specifically in the context of small business (e.g. Thong 1999, Cragg and King 1993). ES provide many benefits to adopters in terms of accommodating business growth, improving business processes and reducing business operating and administrative costs (Markus and Tanis 2000). In a highly competitive marketplace, these benefits make significant motivations for adopting these technologies.

Organizational context The characteristics in the organizational context seem to be the primary focus of many studies in the context of small business (Premkumar 2003). Top management support, organizational readiness, IS experience and size are considered to be factors that influence SMEs willingness to adopt of ES. Jeyaraj et al. (2006) found that top management support to be one of the best predictors of organizational adoption of IS innovations. Top management can stimulate change by communicating and reinforcing values through an articulated vision for the organization (Thong 1999). Many studies have found top management support to be critical for creating a supportive climate for the adoption of new technologies (e.g. Premkumar and Roberts

1999, Grover and Goslar 1993). In SMEs, the decision-maker is very likely to be in the top management team and his/her support is vital for the adoption to take place.

Environmental Context Industry, market scope, competitive pressure and external IS support are considered to be factors that influence SMEs willingness to adopt ES. It has been argued that the industry in which the firm operates influences the adoption of IS innovations (Levenburg et al. 2006, Raymond 2001). Service industries, which rely on the processing of information, depend on information systems (Goode and Stevens 2000). Retail industries, which rely on the transfer of goods, may have a greater dependence on point-of-sale systems (Premkumar and King 1994). Manufacturing industry rely more on ERP systems. Fallon and Moran (2000) showed that IS usage varies not only across sectors (i.e. across Standard Industrial Classification codes) but also within constituent subsectors. 2.4.2. Underlying Assumptions This research has assumed that the external organization adoption challenges have been overcomed. 2.4.3. Description of the variables Compatibility of an innovation with a business is defined as the degree to which an innovation is perceived as consistent with the existing values, past experiences, and needs of potential adopters Rogers 2003, pp. 240). Premkumar (2003) found compatibility to be an important determinant of IS innovations adoption. The adoption of new technologies can bring significant changes to the work practices of businesses and resistance to change is a normal organizational reaction (Premkumar and Roberts 1999). Therefore, it is important, especially for small businesses, that the changes are compatible with its infrastructure, values and beliefs. Complexity is defined as the degree to which an innovation is perceived as relatively difficult to understand and use (Rogers 2003, pp. 257). The complexity of the technology creates greater uncertainty for successful implementation and therefore increases the risk in the adoption decision (Premkumar and Roberts 1999). This factor has been found to be negatively associated with adoption of IS innovations (e.g. Grover and Goslar 1993,

Cooper and Zmud 1990). It has also been found to be an important determinant of IS innovations adoption in the context of small business (e.g. Lertwongsatien and Wongpinunwatana 2003, Thong 1999) Trailability is defined as the degree to which an innovation may be experimented with on limited basis (Rogers 2003, pp. 258). In the context of small business, Kendall et al. (2001) found trailability to be positively related to e-commerce adoption. The IS innovations under examination in this study are currently new to the SME market. Hence, trailability is expected to be exceptionally relevant. Observability is defined as the degree to which the results of an innovation are visible to others(Rogers 2003, pp. 258). In the context of small business, operability is the only attribute out of the five technological characteristics that has not been found to be positively related to IS innovations adoption. IS innovations that have been seen to make an impact in the industry in which an SME operates is more likely to be viewed in a favorable light.

Organizational readiness is defined as the availability of the needed organizational resources for adoption (Iacovou et al. 1995, pp. 467). Organizational readiness, as used in previous research on electronic data interchange (EDI) adoption, measures whether a firm has sufficient IS sophistication and financial resources (Iacovou et al. 1995,Swatman and Swatman 1992). Indeed, economic costs and lack of technical knowledge are identified as two of the most important factors that hinder IS growth in small organizations (Cragg and King 1993). IS sophistication assesses whether a firm is technologically ready to undertake the adoption of an IS innovation, while financial resources express an organizations capital available for IS investment (Chwelos et al. 2001).Firms that do not have much IS experience may be unaware of new technologies or may not want to take a risk to adopt them. Dholakia & Kshetri (2002) suggest that technologies already existing in an organization influence the future adoption of a new technology. They argue that the incremental cost and knowledge required to adopt the Internet, for example, will be much smaller if a firm already owns a computer and a

telephone. Moreover, other studies have found that prior IS experience influence the adoption of new technologies (e.g. Kuan and Chau 2001, Fink 1998). Organisational size has been identified by Jeyaraj et al. (2006) as one of the best predictors of organizational adoption of IS innovations. Goode and Stevens (2000) study shows that business size, previously the best indicator of technology adoption, was not significantly related to IS innovations adoption. However, the typical argument is that larger firms have a greater need, resources, skills and experience and the ability to survive failures than smaller firms (Levenburg et al. 2006, Yap 1990). It can be argued that larger firms are more likely to adopt ES.

Competitive pressure has been identified by Jeyaraj et al. (2006) as one of the best predictors of organisational adoption of IS innovations. Competition in the adopter's industry is generally perceived to positively influence the adoption of IS innovations (Gatignon and Robertson 1989). This is argued to be even more evident if the innovation directly affect the competition (Kuan and Chau 2001,Premkumar and Roberts 1999). Premkumar and Ramamurthy (1995) claim that it has become a strategic necessity to have these new technologies to compete in the market place.

External IS support refers to the availability of support for implementing and using IS innovations (Premkumar and Roberts 1999). External IS support has not only been found to be an important determinant of IS success (e.g. Delone 1988, Raymond 1985), but also to be positively related to IS innovations adoption (e.g. Premkumar and Roberts 1999, Fink 1998). With the popularity of outsourcing and the growth in third party support, firms are more willing to adopt new IS innovations if they feel there is adequate vendor or third party support (Premkumar and Roberts 1999).

Industrial Market scope,Zhu et al. (2003) defines market scope as the horizontal extent of a firms operations (pp. 254).they argue that the role of market scope as a predictor can be explained from two main perspectives. First, internal coordination costs increase as firms expand their market reach due to the increased administrative complexity and information processing (Gurbaxani and Whang 1991). Business digitization is claimed to help reduce these costs (Shapiro and Varian 1999). Second, external costs (search costs and inventory holding costs) would also increase with market scope (Gurbaxani and Whang 1991). When firms expand their market reach, they incur search costs which include searching for consumers, trading partners, and distributors. They may also incur inventory holding costs as a result of not controlling demand uncertainty in different market segments (Chopra and Meindl 2001).SMEs adopting E-procurements are expected to decrease external costs. Arguably, firms that serve broader markets are more likely to adopt e-procurement.

2.4.4. Relationships among the Variables. Dependent variable SMEs existence of internal challenges to adopt E-procurement Independent Variable Size,Industry,Market Scope, IS Experience,Relative Advantage,Compatibility ,Complexity,Trialability,Observability,Top Management Support,organisational readness,Competitive Pressure ,External IS Support 2.5. Statement of Hypothesis SMEs with great ability to overcome internal adoption challenges are more likely to adopt the e-procurement.

RESEARCH METHODOLOGY 3.0 Introduction Case study research methodology is a rigorous method of research. It is powerful in understanding the dynamics presented within single settings. It is therefore suitable for studies focusing on information systems in organizations when interest has shifted to organizational rather than technical issues. This study aims to provide a description of the challenges of e- procurement utilization by small firms, and explain their adoption challenges within the organization. 3.1 Research Strategy A research strategy is systematic way of dealing with a research problem. The basis behind the strategy is to look into how people view reality. Lufindi (2008) points out that the research paradigm follows anti passivism which stresses on subjectivist approach to studying social phenomenon. It attaches importance to a range of research techniques that focus on qualitative analysis. The techniques include, for example, participant observation and personal interview. Phenomenology is a social science approach which urges that business situations are complex and unique; they are the function of a particular set of circumstances and individuals raising questions about the generalisation of research that aims to capture the rich complexity of social situation. Hence, the social science approach will be used it this study. According to (Churchill et al 1984), there are two paradigms of doing research namely positivism and phenomenological approach. The researcher will use phenomenological approach for qualitative research. 3.2. Research Design According to Kothari (2004), research design is the arrangement of the conditions for collection and analysis of data in a manner that aims to combine relevance of the research purpose with the economy in procedure. According to him, research design may fall into the following categories, namely,

iv. v. vi.

exploratory research studies descriptive research studies hypothesis testing research studies

In order to achieve the general and specific objectives of the research assignment, the researcher will adopt exploratory research design due to the following reasons: i. ii. It is fairly an exhaustive method which enables the researcher to study deeply and thoroughly different aspects of the phenomenon It is flexible in respect of data collection methods. It permit the use of different data collection method like observation, questionnaire interview and documentary review iii. The researcher will be able to carry out an intensive study on the challenges in adopting e-procurement for SMEs. Ilala district compared to other district in Tanzania has more SMEs which has adopted the e-procurement. 3.2.1 SMEs in Ilala District. The researcher intends to examine the implementation of e-procurement in SMEs. He believes that few of SMEs in Ilala district are aware and uses the e-procurement in their organization. He wishes to see if the selected SMEs do really know the challenges and what are they? In essence, this is a case study. 3.2.2Description of the Study Area There are so many organizations that are implementing e-procurement. However, the researcher has chosen to study the adherence to the prescription of the two important documents in three selected organization. The choice of these particular SMEs is based on both the accessibility of information and the permission to conduct research, limited time and limited funds for doing the exercise.

3.2.2 Location or Area of the study It is located along the coast side of Indian Ocean. And it is business centre where the state house , government offices, large private organizations and ministries are Few industries are located located, in Ilala,followed by Temeke and Kinondoni, municipal, the large business are allocated in Ilala followed by Kinondoni and finally Temeke. 3.3. Nature of Data required Krishna Swami (1993) points out that data are facts, figures and other relevant material, past and present, serving as bases for study and analysis. There are two types of data primary data and secondary data. This research study will use both of these types of data. 3.3.1. Primary data According to Katundu (2005), primary data are fresh data that have not undergone some processing of any type. Thus, they are original in nature. In this exercise, the primary data will be collected from the field by the researcher himself. The sources of the primary data will be some members of staff from the accounts department, IT departments,user department, the tender board and PMU. 3.3.2 Secondary data Secondary data are those data that are obtained from literature sources? These are the the data that have already been collected and processed by some other people for some other purpose. This is second hand information that will enable the researcher to serve both time and money since they already exist. Sources of secondary data include publications, newsletter, journals, text books, official documents, records, reports and other scholars research findings.

3.3.3. Measurement of Variables According to (Kothari 2004), measurement is a process of mapping aspects of a dominion onto other aspects of a range according to some rule correspondence. Also scaling describes the produces of assigning numbers to various degrees of option attitude and other concepts. This may be nominal, ordinal, interval or rate. The researcher will use nominal and ordinal samples as way of interpreting data. The nominal scale will be used only for identification by assigning numerals to variables. The variables are normally in the form of categories such as gender race or color. The numbers do not signify order, magnitude or size. Therefore, they can be interchanged at the beginning without affecting the results of the analyis. The ordinal scale will be used for data that exhibit some order, e.g. the ascending order. Numbers are assigned to variables so that they portray the order of magnitude but not size. 3.4. Quality of Data and Measurement Ensuring reliability and validity of the data is of paramount importance in research. This will be affected through close supervision of the data collection exercise. 3.4.1. Reliability Reliability is the ability of an instrument to ensure consistency of the phenomenon it is designed to capture. Where a large number of respondents are experienced in eprocurement, the instruments used to collect data should ensure that their responses are a true view of the situation. 3.4.2. Validity Validity, according to Enon (1998) refers to the quality that procedures or an instrument to be used in the research is accurate, true and meaningful. An instrument for collecting data is said to be valid when it develops simple and straight forward questions to attract the common understanding among the respondents. The questions to be developed will be used in such as way that they measure a respondents knowledge on the challenges under the study. The researcher will supervise the distribution and collection of questionnaires and will clean the data to ensure their validity.

3.5. Data Collection Methods and Instruments Field research will be conducted at Barrick, Engine, and Total in order to get relevant information for the study. The researcher will use questionnaires, interviews, observation and documentary reviews in order to collect the required data. 3.5.1. Observation Kothari (2007) observes that ones own direct observation of activities and processes is a scientific tool because it is subjected to checks and controls as regards validity and reliability. The researcher will use observation because the subjective bias is eliminated as the information to be obtained under this method relates to what is currently happening. 3.5.2. Interviews According to Kotheri (2004), under interview method the researcher will have an opportunity of asking questions generally in face to face contact with other persons. The targeted interviewees will be those from the different department to the study due to the following reason. There will be greater flexibility and high response rate due to the fact that interviewer (i.e. the researcher) and interviewees will have direct control of the interaction and thus ensure the required results. 3.5.3 Questionnaires This method of data collection is quite popular in case of big enquires (Kothari 2004). It is free from the bias of the interviewer as the answers are in respondents own word. The respondents will have adequate time to give well thought out of answers It is for these reasons that the researcher has decided to use questionnaires as one of the tools for collecting data.

3.5.4 Documentary Review Documentary sources will be used to collect from the documents available such as files records kept within the procuring entities. Those documents will enable the researcher to get relevant information to the topic under study. 3.7. Sampling Procedures This is, according to Orotho and Kombo (2002), the process of selecting a number of individuals or objects from a population such that the selected group contains elements representative of the characteristics to be found in the entire group. The techniques can be grouped into probabilistic and non- probabilistic sampling. As pointed out above, the study will use non probabilistic sampling (i.e. purposive sampling) due to the reason that it is based on convenience judgment and quota sampling techniques also because of the roles played by the different department in the procurement work. 3.7.1. Target Population The target population of the case study is the whole staff that belongs to the PMU, user department, IT departments and the tender board. The total number of members of this staff is 100. 3.7.2. Sample Size Due to limitation in the aspects of time and resources for the research, the researcher will employ a purposive sampling method in order to get the sample that he will need for the study. The study will draw a sample size of 32 people. Sample include people from members of PMU (8) finance department (5) user department (10) tender board (4) Audit unit (2) and ICT department (3). This makes 32% of the population.

Table 3.0: Number of potential respondents

No

Department

Questionnaires

Finance department

User department

10

ICT department

PMU member

Tender board

Auditing department

Total

32

Source: researcher 2011 3.7.3. Sampling Methods to be used The sample size will be selected from different departments in the SMEs head Office and in different procurement institutions in Dar es salaam. Almost fifty five people which include management officers and heads of departments/supervisor will be selected randomly from different departments. Both probability and non-probability sampling techniques will be employed. 3.8. Field Work The reseacher has choosen a number of SME in Ilala district and the data will be collected in different departments to see the level of utilization of information systeam as well as the challenges in organisation in implimenting e-procurement.These primary data are obtained as first hand information. The primary data will be obtained from respondents by interview,

questionnaires and observation. While other dat will be requested by the resercher from the management. 3.9. Data Processing and Analysis The data to be collected from the field will be checked for accuracy and corrected where some errors are observed. The researcher will organise the data in coding form so that they can be easily processed by using computer programs. The researcher will analyze data by using graphs, pie charts tables and other data presentation tools. These tools will be used to indicate the distribution and computation of statistical values to provide association, relationship and distribution of their variables. 3.9.1. Data Processing The data to be collected from the field will be checked for accuracy and corrected where some errors are observed. The researcher will organize the data in coding form so that they can be easily processed by using computer programs. 3.9.2. Analytical Techniques Used The researcher will analyze data by using graphs, pie charts tables and other data presentation tools. These tools will be used to indicate the distribution and computation of statistical values to provide association, relationship and distribution of their variables. 3.9.3.Testing of Hypothesis The three variables organisation,technology and the enviroment will be tested since they are the primary ones that influence the adoption of E-procurement for SMEs, the researcher would look for data that would refute the hypothesis. When even a single case does not support the hypothesis the theory would be revised. 3.10. Expected Results Upon completion of this research the researcher expects that the stated objectives will be met. The findings will show that Selected SMEs impliment e-procurement and the challenges are outlined due to implementation of e-procurement.

5.0.REFERENCES

Assefa,A.,and Matambalya,F.(2002),Technical efficiency of Small and Medium scale Enterprises. Beda M and Kajiba J.(2000), connectivity and e-commerce pp.23-24 Fuller T. and Jenking.A,(2000),Public intervention in enterpreneural inovation ande opportunism:Short or Detourcuts to information super high way Jounals,(1999),report of chamber of commerce briefing-kit on e-commerce for SMEs in Africa. Kasimila 2004 .Factors limiting e-commerce adoption in Tanzaniaunpublished MBA thesis,Faculty of commerce and management,University of Dar es salaam. K.M. Eisenhardt, Building theories from case study esearch, Academy of Management Review, Vol. 14, No. 4, 1989, pp. 532-550.

I. Benbasat, D.K. Goldstein, and M. Mead, The case research strategy in studies of information systems, MIS Quarterly, Vol. 11, No. 3, 1987, pp. 369-386

Kenneth Lyons and Brian Farmington purchasing and supply chain management (7th ed) person company ltd UK. Khothari C.R (2004) Researcher methodology (2nd new sage international ltd India. Boumediene, Ramdani and Peter, Kawalek,Predicting smes willingness to adopt erp, crm, scm & e-procurement systems University of Manchester, MBS West, Manchester, M15 6PB, UK,