Suppliers' E-Maturity for Public E-Procurement

Abstract

Business transactions require involvement from both customers and suppliers. This is the case whether the transaction takes place on-line or off-line or whether the transaction is businesses to business (B2B), businesses to consumers (B2C), or businesses to administration (B2A). At the beginning of the e-commerce era attention focused mainly on business to business and business to consumer relations. Today attention has shifted and the possible commercial benefits resulting from e-commerce with the public sector are now also on the agenda (Andersen, 2004; Coulthard & Castleman, 2001). Regardless of whether e-commerce is performed in a private or a public context, it is commonly assumed that e-commerce can lead to shortening of transaction time, lowering of costs, increased transparency, improved sharing and maintenance of enterprise information, and an increased internal and external efficiency of the organization (Zwass, 2003). In this article we will focus on and use the term e-procurement to refer to the use of electronic means in purchasing processes. These processes include seeking information about goods and services and ordering and paying of goods (Andersen, 2004). A number of issues concerning e-procurement have been studied recently. Among these issues is the required architecture of e-procurement systems (Liao et al. 2003), the tendering process in e-procurement (Liao et al., 2002), and the possible economic gains achieved from public procurement portals (Henriksen & Mahnke, 2005. Common assumptions for these studies suggest a pool of suppliers willing to offer goods and services through e-procurement channels as well as a concurrent demand for goods and services in e-procurement channels among public sector institutions. In the Danish context there has been some reluctance to adopt e-procurement among the public sector institutions (Henriksen & Mahnke, 2005). Whether this reluctance to adopt e-procurement is caused by the classic problem of who is to embark the marketplace first: buyers or suppliers (Bakos, 1991) is still to be decided. In this article the focus is on the challenges that suppliers to public sector institutions face. In recognition of the broad scope of issues that suppliers have to consider when including e-procurement in their business activities, a model has been developed for assessing e-maturity. The model is designed to embrace two aspects of e-maturity: the technological aspect and the organizational aspect. Whereas this article is conceptual in nature, the proposed assessment model is empirical, estimated in earlier work by Henriksen, Kerstens and Andersen (2004b).