2.

0 LITERATURE REVIEW
Introduction
The chapter entails the literature of other scholars on factors affecting use of e-Procurement in
firms. The bottom line of the study is to enrich the already existing work on e-Procurement
attainable through critical consideration of other scholars work. The researcher will attempt to
critic the findings and establish knowledge gap with a view to enhancing the factors affecting use
of e-Procurement in the public sector.

Public procurement

Public Procurement is an important function of government (Thai, 2001). It has to satisfy

requirement for goods, works system and services in a timely manner. Furthermore, it has to
meet the basic principles of goods governance transparency, accountability and integrity (Wittig,
200; callender &schapper, 2003). Another main principle of government is to achieve value for
money in procurement (Dof,2001) However, Public Procurement has been a neglected area of
academic education and research, although governmental entities, policy makers and public
procurement professionals have paid a great deal of attention to procurement improvements and
reform (Thai,2011)
The reason why most public institution have been faced with challenges in procurement
management is that the procurement process has been misconstrued as a simple arrangement for
purchase instead of being understood as amulti-step process (i.e. selection of the service provider
,financing, purchasing and measuring)
Researchers whose work covers areas of Public Procurement ; policy implementation and
evaluation ; challenges in procurement ; procurement procedures; Current Trends in
Governmental Procurement Practices; etc., have reviewed a considerable literature to generate
brilliant ideas and solutions to some of the numerous factor affecting the implementation of eprocurement practice
Public Procurement is defined by the Global Trade Committee as the procurement of goods and
services on behalf of a public authority, such as a government agency (Global Trend Negotiation
Committee,2006). Public Procurement, in Ghanaian context, is seen as an initiative to solicit
offers from potential suppliers of the goods and services in question. These offers can also be
referred to as tenders (Regulations Public Procurement Act, 2003

The implication is that Public Procurement initiates a process that public authorities or agencies
must go through to procure goods and services. In an ideal situation, the procurement unit of
each establishment is required to start the process by collating individual user department
requirements plan and then reviewed and approved by the entity tender committee of the
procurement entity for onward submission to the ministry of finance & economic planning with
copies to the public procurement authority (Appiah,2010) .
In 1996, the World Bank reported that the legal framework for public procurement in Ghana was
minimal. At the time, insufficient qualified procurement personal ,lack of planning for the
required goods, and lack of proper database, untimely acquisition of funds,etc.,were cited as
some of the challenges that hindered the public procurement process (Verhage et al, 2002).public
procurement can play a role in both development and diffusi9on of new technologies (Edquist
and hommen , 2000). According to Edquist and hommen , ( 2000), the approach is therefore
adoption and implementation of new reforms in the public procurement laws, processes to
eliminate waste and corrupt practices, save time and improve procurement standard across public
institution.
The only conculsion that can be drawn from the works of Edquist and hommen ,( 2000),
McDonald (2008), and Tikkanen and Kalkeva (2011): is that the institution framework for
ensuring transparency, provbity and accountability in public procurement is compromised by
government agencies, private firms, and procurement professionals in public institutions.
2.1 Theoretical framework
The concept of e-procurement
E-Procurement is strongly related to concepts such as logistics, supply chain management (SCM)
as well as e-commerce. Although some definitions are suggested to distinguish between these
concepts, the problems faced are similar .They all require financial, transportation, legal, and
communication infrastructure (Ohmae, 2000).If a country is weak in one or some of these
infrastructures, then e-Procurement activities are destined to fail. In addition to these four factors,
education of the e-Procurement personnel, security issues, societal readiness to use information
and communication technologies (ICT), and the impact of the wireless technologies should also
be considered. In the past, the purchasing function was seen as a way to execute a transaction
between a buyer and a seller. Today, purchasing function needs to be executed on broader level.

This means connecting different partners and helping them come up to the mark (Shah, 2002). EProcurement has a multi-layered body and is connected to auxiliary industries and distribution
channels. For example, vehicle routing problems are part of general purchasing system (Emel,
Taskin, &Deniz, 2004). These problems are also part of e-Procurement. Stanton and Stanton,
(2002) have created a model of Internet purchasing to show the link between personality,
predisposition towards innovativeness, and adoption.
2.2 Value of e-Procurement
Hawking and Stein (2004) view e-procurement not only as a strategic player in the value chain
but as a major driver in the extended supply chain. The use of e-equipment and systems improves
quality, which in turn improves the level of output (Mukhopadhyay, 2007). This type of impact is
mainly on the operational level and results in cost reduction, higher productivity and improved
quality (Mukhopadhyay, 2008). Electronic commerce (e-commerce) tools provide the
opportunity to enhance two elements of procurement process; communication and transaction
aspects (Oslomebekor et al. 2002)
Varieties of benefits of B2B e-procurement have been reported as achieved or expected in the
academic literature. Among different benefits the most common ones are transactional costs and
buying price reduction, process shortening improvement of information exchange and control.
Such benefits are grouped into taxonomies that include operational and strategic (Croom 2006).
E-procurement has a far greater potential for cost savings and business improvements than online
retailing or enterprise resource planning systems, and will permanently and fundamentally
reform the way we do business in the future (Neef 2010). It has been confirmed that e-commerce
tools and IT solutions have an influence on procurement-related processes. Companies have
reported: Cost reduction (Croom and Johnston 2003, Davila et al. 2003, Lin and Hsieh,

Sarcar (2009) provides a five level approach on how firms integrate e-procurement implementation: Level 1 Website with just broad information about the company, level 2- Website with relevant information on products
and services, level 3 - Website with support for selection and purchase decisions, level 4 - Website with online
facility for placing orders and level 5 - Websites that allow actual financial transactions. The success of in the eprocurement implementation in any of the indicated levels is a factor of several variables. The study on the impact
of these variables is guided by the below conceptual variables based on the Sarkar (2009) model.
Figure1: Conceptual Relationship between Variables Theoretical Review
Sarkar (2009) provided a framework for the successful implementation of e-procurement.
revealed that there is value in e- interaction with customers and suppliers in the form of prompt feedback
provided through web technology.
Web-Based Procurement Framework
The use of Web-based e-procurement system is thought to have implications for enhancing the capability in
conducting the task of completing the procurement, and in particular for reducing information asymmetries and
changing inter-organizational relationships (Chin-Fu, Yi-Ming,Wen-Hsiung & Jau-Jeng, 2008). Operational
benefits and strategic benefits are two major advantages of implementing Web-based e- procurement system
(Chin-Fu
et al,
2008). According to Chin-Fu