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In today’s advanced construction industry, e-procurement with many different forms (e.g. e-sourcing, e-tendering, e-reverse auctioning, e-catalog, e-payment, and e-informing) has become the normal method to procure construction materials, equipment, services and works (Vitkauskaite and Gatautis, 2008, Laryea and Ibem, 2014, Rai et al., 2006). Although there are different levels of uptake of e-procurement in construction supply chain, the final goal of the strategic e-procurement is to achieve a full integration and collaboration of procurement activities, participants and the different business technologies into a unified information management system (Laryea and Ibem, 2014). The literature demonstrates that the positive relationship between the sophistication level of e-procurement implementation with the level of construction business performance (Stewart and Mohamed, 2003, Eadie et al., 2011, Búrca et al., 2006, Salleh et al., 2010).
However, the level of collaborative and integrative e-procurement adoption is still very low within the construction industry in developing countries (Quangdung et al., 2014). There are various reasons for this fact. First, the construction industry is characterized by fragmentation (in geography, business relationships and information), the one-off nature of its product, and the complexity of supply chains (Hardie and Newell, 2011, Grilo and Jardim-Goncalves, 2011). Second, there exists many unique environmental factors that can be obstacles to the development of e-procurement, such as fast changing laws and regulations, strong governmental control, lower experience with ICT, low maturity ICT infrastructures, lack of ICT resources, low level of trust in relationships and especially a focus on short-term operational improvements rather than long-term strategic considerations (Soja and da Cunha, 2015, AlGhamdi et al., 2011, Tran et al., 2013). Additionally, construction practitioners in the developing economies are criticized as less active and much dependent on external supports to uptake of information communication technologies (Soja and da Cunha, 2015).
Costa and Tavares (2014) stated that an atmosphere of co-operation between firms, where they may have mutual expectation of long-term commercial interaction, is very important to the emergence and sophistication of innovative systems. Furthermore, the frequency and volume of business exchanges and social contacts also largely influence the adoption of e-procurement instruments (Costa and Tavares, 2014). Additionally, London and Bavinton (2006) also confirmed that the behavior and attitudes of firms toward technological innovations can have a significant influence on the acceptance and ultimately the dispersion of e-business by other firms within the construction supply chain. In Vietnam, there was empirical evidence demonstrates network activity characteristics in number and diversity have a positive and statistically significant effect on a firm’s level of innovation (UNU-WIDER, 2012). However, to the best of our knowledge, empirical studies on the role of external trading partners to e-procurement success of an individual company is limited in the transition economies (Roztocki and Weistroffer, 2015). These motivated us to conduct an investigation of relationships between supply chain characteristics and the level of e-procurement institutionalization in construction firms.
The study’s results will be helpful to policy-makers in formulating supportive policies and actions to effectively improve the presently low level of e-procurement institutionalization as well as accelerate the diffusion of the technology.