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IMPACT OF E-PROCUREMENT ON PROCUREMENT PRACTICES

AND PERFORMANCE EFFICIENCY-A STRUCTURAL EQUATION
MODELING APPROACH

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Journal of ISOSS
2022 Vol. 8(3), 235-250

IMPACT OF E-PROCUREMENT ON PROCUREMENT PRACTICES

AND PERFORMANCE EFFICIENCY-A STRUCTURAL EQUATION
MODELING APPROACH

Muhammad Abdullah Idrees1§, Mehdi Abbas2,

Sehrish Qasim Ali2 and Ayesha Khan2
1
Denning Business School, Karachi, Pakistan
Email: §abdullah.idrees@denning.edu.pk
2
Bahria University, Karachi, Pakistan
Email: mehdiabbas.bukc@bahria.edu.pk
sehrishqasim.bukc@bahria.edu.pk
ayesha.khan.bukc@bahria.edu.pk

ABSTRACT
This research investigates the effects of e-procurement on procurement practices and
performance efficiency. In addition to making procurement more competitive,
e-procurement also enhances the connection flanked by the purchaser and the retailer. E-
procurement implementation can only be effective if the company's management is
committed to providing financial and technical assistance. The success of e-procurement
is aided by several variables. A personal survey and an online survey were both employed
in the research. In this study, we contacted individuals using a convenience sample method.
A total of 239 persons were included in this study Regression analysis was used to test
hypotheses. By using partial least square and structural equation modeling (PLS-SEM),
four e-procurement strategies have been shown to improve the performance of the supply
chain in Pakistan's industrial industry, according to this report. The findings of this study
show that digital design and assessment have a beneficial effect on supply chain
performance, while electronic negotiating & electronic sourcing have no meaningful
impact.

KEYWORDS
E-Design, E-Sourcing, E-Negotiation, E-Evaluation, Supply Chain Management.

INTRODUCTION
Procurement is the acquisition of supplies and services for a company. As part of the
company's operational operation, such as buying, shipping, inspection, receipt, and storage,
the purpose is to procure the company's products and services. E-procurement and
traditional procurement are the two methods used to acquire products. Procurement
operations such as ordering, buying, negotiating, and looking for raw resources in the
procurement procedure may all be carried out via an integrated communication system
(web-based) (Croom & Brandon-Jones, 2007). Transparency, efficiency, and fairness are
all possible outcomes of using e-procurement. As Teo, Lin, and Lai (2009), e-procurement

© 2022 Journal of ISOSS 235

236 Impact of E-Procurement on Procurement Practices and Performance Efficiency …

has two advantages. It is possible to raise the operational efficiency and effectiveness, as
well as data correctness and usefulness of the application process, via direct advantages.
According to Croom and Brandon Jones (2007), challenges with organizational
relationships and IT infrastructure might impede the acceptance of e-procurement in the
provide series. Government organizations’ deployment of e-procurement shows that
internal management support and stakeholder participation throughout the supply chain is
crucial. Managers should support technological experimentation with creative methods of
managing and participating in organizational operations. This would aid in the creation of
management innovation procedures to enhance the company's performance. For newly
industrializing and emerging nations, IT innovation inside an enterprise is a key
determinant of ineffective technology adoption. Innovative information technology is more
than just a tool for enhancing corporate efficiency and streamlining cross-company
interactions and transactions. Effective asset and product description management are
made possible by innovative IT solutions (Ibem & Laryea 2014). E-procurement entails
the gaining of products and services via the use of cutting-edge technological
breakthroughs in information systems.
E-efficiency procurements are directly related to the platforms used by the company.
Web-based control on supply chain act is the basis for e-procurement. OLAP was utilized
by Priya et al., (2012) for e-procurement competitiveness has all been used to make e-
procurement technology platform selection decisions. E-procurement adoption is more
successful when high-quality information technology is employed, according to this study.
It's become critical for management and information technology infrastructure in
developing nations to incorporate new technologies into procurement processes.
Technology transportation is one of three major problems recognized in underdeveloped
countries when implementing e-government.
African governments are only beginning to embrace e-procurement, particularly in the
community sector. Mainly African governments have turned to legislative changes and the
espousal of procurement in arranges to address the lack of responsibility and lucidity in
public sector procurement operations. On the other side, e-procurement has the potential
to boost productivity. When the Jubilee administration took office in Kenya, it immediately
began promoting the use of electronic procurement. A lot of pressure and changes have
taken place since then to guarantee that all government procurement tasks are handled
online. The Kenyan government has mandated that all public commodities, works, and
services be bought through an internet portal. All procurement and financial processes must
be done online, and this is particularly true for county governments. For example, the
government has mandated the use of the accounting information system (IFMIS) by all 47
counties. By delivering real-time financial data and allowing for more efficient program
development and budget formulation, IFMIS was designed to enhance governance. It also
improves accountability and transparency and serves as a disincentive to fraud and
corruption (Chebet & Kihara 2022).
Negotiating better contract conditions and saving money is made possible by procuring
entities. Several selected markets without the need for extra marketing efforts are made
possible for suppliers by receiving electronic orders. This allows for quicker and more
efficient quotations, as well as better order accuracy. This approach of embracing e-
Muhammad Abdullah Idrees et al 237

procurement has been used by certain governmental entities in Rwanda, including the
Rwanda Revenue Authority (RRA), profitable banks, and assurance firms. The purpose of
this research is to learn from the Ministry of Economy and Finance Planning in Rwanda
about their experiences with e-procurement implementation and the results that have been
achieved. To improve their overall performance, public organizations must guarantee that
public choices are transparent and that public monies are being used efficiently. It's
important to remember that public sector performance necessitates a connection between
the nationwide idea, methods, and outcomes and that the outcomes be supposed to be the
concurrent application of correct budget, competence, and efficiency. Community
institutions that fail to achieve their stated goals pose a danger to both the state and those
who are directly affected by the institution (Masudin et al., 2021). When it comes to the
functioning of public institutions, inefficient and improper use of public funds during
procurement procedures is the most common cause. To eliminate situations of speculative
performance and achieve long-term performance, now is a good moment to recognize the
requirement of providing value for money and implementing performance efficiently at all
levels of the community division throughout the procurement procedure. The government
may utilize this information as a way to evaluate their progress, and the public's desire to
know is met by this information (Public Account Committee, 2014). According to reports
from MINECOFIN, the ministry's performance was mostly blamed on inefficient and
improper use of public funds during procurement procedures. Between 2013 and 2015, the
ministry spent $20.4 million, $23.2 million, and $24.4 million. In adding e-procurement
has lately been a hot subject for debate on several platforms, but its potential in Rwanda
has only just been realized. This needs more investigation.
As of the end of the 1990s, the electronic procurement system was widely available,
transforming the whole supply chain and procurement process. The standard procurement
and supply chain procedures are increasingly being replaced and substituted by the
innovative system. As a result of this approach, procurement and supply chain costs have
been reduced dramatically while keeping the quality requirements of the firm. Manual
procurement requires more labor, time, and money, but online tendering saves all of those
things (Waithaka & Kimani, 2021). Small and medium-sized businesses in emerging
nations are also quickly transitioning from a conventional procurement method to an
advanced computerized one.

Problem Statement
The performance of a company and its supply chain may be significantly impacted by
a single fleabag in the procurement process. Due to a lack of awareness and a lack of
information about market demand, procurement errors are common (Chepng’etich, et al.,
2020). Procurement processes have become more complex due to the growing use of e-
procurement. As a result, procurement process interruptions have increased in frequency
and severity during the last several years. Organizations and their supply chains may suffer
greatly from these interruptions, which also limit their ability to achieve responsiveness in
partnership with their supply chain and procurement strategy. For example, if the loss of
Compaq was due to their inability to respond swiftly because of poor procurement and
supply chain processes, the PC manufacturing business example will be more appropriate
(Chepng’etich, et al., 2020). In light of the recent economic turmoil, it is imperative that
every second is counted and that every action be productive and beneficial to the company.
238 Impact of E-Procurement on Procurement Practices and Performance Efficiency …

Today's enterprises can no longer tolerate any waste associated with internal or external
processes since each step costs a significant sum in terms of money, time, and effort.
However, by improving procurement and supply chain management efficiency and
responsiveness, firms may save these expenses.

Research Objective
The goal of this reading was to locate out how e-procurement procedures affect
companies' and banks' supply chain performance. It has been shown that e-procurement, e-
procurement techniques, and supply chain performance are all successful methods for
obtaining goods and services. Only e-procurement techniques and their influence on supply
series performance were examined in this study. It is the focus of this study to examine
how these four procurement strategies influence supply chain performance in a specific
Pakistani industrial market. This argument is based on a long-standing study that found
that these four activities are vital to e-procurement (José & Camilo, 2020).

Research Questions
● E-procurement systems are driven by what factors?
● What do you mean by e-procurement?
● How might e-procurement methods improve the supply chain's performance?
● Are our supply chain management and e-procurement still relevant?

LITERATURE REVIEW
Performance in the supply chain, However, in the literature on supply chain
management, the SC performance is sometimes referred to as the assessment of supply
chain operations and the exploitation of supply chain capacity as intangible factors (Mafini
et al., 2020). Procurement is the systematic use of electronic methods to obtain supplies,
materials, and other acquisitions by an organization. Electronic procurement has a broader
use in e-business (electronic business). E-business, on the other hand, makes use of digital
technology like desktop computers, laptops, tablets, and cell phones to perform corporate
activities and procedures across an extranet or the internet. E-procurement, e-logistics, e-
transaction, and e-collaboration are just a few examples of the many uses for e-business
(Albinkhalil & Razzaque, 2021). Procurement is among the most significant business
applications among others, and the current study is concentrating on this specific
application. We've discovered in the accessible literature that the reason why e-
procurement is so important needs a thorough examination. Because e-procurement
improves operational efficiency and supply chain transparency, it is the first argument
(Madzimure, 2020). An indirect conclusion may be made that e-procurement systems are
more vital than other e-business applications when it comes to assessing supply chain
management success. Secondly, given the present business and economic climate, the act
of creating and providing value-added services is critical to improving supply chain
performance (Faheem & Siddiqui, 2019). Expectations may be made that the functional
and operational elements of electronic procurement can contribute to the improvement of
the procedures for creating and delivering value-added services.
Muhammad Abdullah Idrees et al 239

Electronic procurement is referred to as e-procurement in the present research, and it is

comprised of four key functions. Consider the four essential functions of e-procurement
that have been identified by several examiners, which are: e-evaluation, negotiation,
sourcing, and design. These four fundamental activities have been identified by numerous
examiners as being the most important (Ibrahim, 2021). Supply chain managers utilize an
electronic procurement system to plan out all of the organization's purchases as part of the
first job, known as e-design. A process through which supply chain authorities construct a
list of possible suppliers, acquire information about those providers, and then utilize that
information to choose the best source from that list is known as e-sourcing. Electronic
procurement systems (EPRs) are used by supply chain managers to negotiate contracts with
the suppliers of their choosing. Finally, as part of the e-evaluation process, the supply chain
authorities collect information on promised suppliers and their progress to assess and plan
for future transactions. The strategic features offered by electronic procurement can benefit
supply chain management through these capabilities. Some studies provide further
different perspectives on how supply chain performance can be linked to electronic
procurement, such as supply chain collaboration, information sharing, or alliance
association creating a bridge between the functions of electronic inventory and supply
chain performance. Because of their importance to Supply chain performance is expected
to improve as a result of the incorporation of the following business strategies into e-
procurement plans: joint learning strategy, social exchange theory, and information-rich
theory, among others (Ayoub & Abdallah, 2019). According to the literature, e-
procurement practices may improve supply chain performance via the use of collaborative
learning strategies, relational exchange theories, and information-rich theories.
Furthermore, these techniques include e-procurement practices such as e-negotiation, e-
sourcing, and electronic design (Ayoub & Abdallah, 2019). For information interchange
and enrichment, many alternative techniques may be used. For example, the information
exchange and enrichment approach focus on maintaining a continuous connection with
parties and the flow of information, such as information acquisition, information
dissemination, and knowledge exploitation, among other activities.

E-Procurement Practices
Literature offers a variety of e-procurement procedures that come together to produce
a unique procurement system that includes both high- and low-level operational tasks.
Organization and supply chain performance may be improved using this technique, which
is well-known for identifying opportunities for improvement (Ayoub & Abdallah, 2019).
But the most typical models in the literature are built on four stages of commercial
transactions and/or processes that have been computed as information collecting,
negotiation process, agreement settlement, and assessment after-sale.

Information Collection
Search for essential things and suppliers who can provide those specific items are
included, as is the selection of the finest products and providers from a variety of options.
A vendor's catalog has traditionally been used as a starting point for purchases. Catalogs
identify which provider is best for strategic buying in the market. However, today buyers
may access a wealth of information about things and providers through websites,
240 Impact of E-Procurement on Procurement Practices and Performance Efficiency …

smartphone apps, and other electronic advertising mediums. The buyer then compiles a list
of vendors who can provide the requested goods.

Requisition
It has been described as the request and approval of a purchase order using electronic
means. When purchasing from a supplier through email or intranet, both words are used to
describe the process of acquiring that supplier's products using any ERP system (ERP).
The request may be placed by remote personnel in an electronic procurement procedure.
Digital assistance (PDA), as well as other wireless devices, may be used to let workers
place orders and specify delivery locations more easily, hence promoting remote ordering.
As a result of using technology and submitting orders online, the business saves time and
money, which helps to enhance supply chain efficiency and the overall performance of the
organization (Mutangili, 2019). Additionally, when business transactions are conducted
electronically, the approval of requisitions is also included in the sourcing process.
Occasionally, suppliers must seek clearance from higher authorities before fulfilling orders
if the required item or even the amount provided in the order isn't specified in the pre-
contract catalog. Requisition permission is contingent on the consumer's desire or
budgetary constraints. Automated approval of requisitions for standard quantities and
specifications is provided by the supplier sometimes. Users and purchasers are profiled,
together with the requirements of the goods/services to be purchased, the profiles of
providers, and other important variables. This automated system affects the number of
people assigned to review and approve requisitions, and this number decreases as a result.
Source selection and automated acceptance of purchase orders have a significant impact
on supply chain management efficiency (Wijaya, 2022).

Negotiations
There are three main areas of negotiation: the arrangement of terms, the negotiations
with suppliers, and confirmation of the contract or its settlement. Requisitions that are
standardized are immediately approved and proceed to purchase, but those that are not
standardized are subject to negotiation (buyer and seller). The literature, on the other hand,
provides some guidelines for negotiating a fair price. There are three worldwide standard
procedures for e-procurement: customer group purchasing (also known as aggregate
customer demand or power buying) and power buying (also known as aggregate demand
buying), both of which allow customers to exert negotiating leverage over suppliers.
Procurement negotiations may also benefit from a two-way conversation between the buyer
and supplier through a private messaging system or email. A mutual auction, bid-and-ask,
and two-way auctions are all good negotiating tools for e-procurement, as are reverse
auctions like competitive bidding and Dutch auctions known as open bidding. Supply chain
performance is greatly influenced by these processes since they save time and resources
for the companies (Shafiee & Rejali. 2022).

E-Evaluation
For the study's premise on e-evaluation, the research identified a large amount of
material. A transaction's data and records are saved in the back office or procurement
management system for future reference, evaluation of supplier performance, analysis of
purchasing patterns, provision of a foundation for linking industrial purchases, improved
Muhammad Abdullah Idrees et al 241

price control with the best supplier, and improved bargaining position in upcoming
transactions. Creating these records may cause delays in delivery, poor supplier
management, and communication problems, according to the research. As a result, data
collection, storage, and organization are critical tasks for this role if the firm hopes to
improve performance (Shafiee & Rejali. 2022)

The Role of E-Procurement

EDI, or Electronic Data Interchange, is a technology that makes it easier to implement
products and services over an electronic network. E-procurement, or electronic
procurement, is defined in presidential order number 54 of 2010 as the purchase of goods
and services via the use of information and communications technology and electronic
transactions that are legal in Indonesia. Procurement processes, such as resource search,
negotiation, order placement, and purchase, may now be completed via the use of e-
procurement technologies. According to Gunasekaran et al, another definition of e-
procurement is the process of making an online purchase. Several online services allow
businesses to make in-house purchases. When it comes to major corporations, electronic
procurement (e-procurement), according to Davila and coworkers, is the most crucial factor
in electronic commerce operational excellence. When it comes to e-procurement, as
according to Oliveira and Amorim, procuring products and services over the internet or an
e-network constitutes it. There are several goals for e-procurement, including boosting
openness and accountability, promoting access to markets and business competitiveness,
facilitating the surveillance and audit of procedures, and ensuring access to the most recent
information. From the standpoint of procurement firms, e-procurement has been
considered. E-tendering for products and materials, for example, was made possible by the
use of block chain technology by Mali et al. To ensure a transparent and fair tendering
process, block chain is used in the study by the researchers. Previous studies have examined
the use of electronic media in bidding procedures, such as the internet, intranet, and
electronic data exchange, such as Rolas et al. (EDI). In addition, e-catalog may be used to
supply electronic information systems with listings, kinds of technical specs, and pricing
for particular items and services from numerous suppliers. An efficient method for
procuring commodities and resources might be found using this method. Electronic buying
has a beneficial and considerable influence on procurement efficiency at the end of the
transaction process.

Top Management Support

The company's senior executives should be in charge of overseeing the company's day-
to-day operations. The direction of a company's growth will be determined by the actions,
directives, and efforts of its senior management. The primary objective of top-level
management assistance is to elevate a project's chances of success to an all-important level.
For procurement to become more efficient and transparent, top management support for e-
procurement is needed. Concerning firm resources, senior management is in charge of
allocating them. Human resources may also be allocated by management to support
organizational activities. According to Kumar et al, a company's capacity to affect other
human-resource-related aspects is what makes top management support important. To
ensure the successful implementation of thee for a wide range of resources, including
human resources, senior management is the primary allocator. System failure may be
242 Impact of E-Procurement on Procurement Practices and Performance Efficiency …

caused by faulty data transmission. E-procurement systems should be developed in an open

environment, enabling them to interface to other systems, so that system changes may be
simplified. To successfully adopt e-procurement, organizational changes are required. In
light of stakeholder demands, the need for effective change management seems to be
growing. For processes to change, the user must put in more time and effort, according to
Vaidya, K, E-procurement change management requires greater attention, and three
methods are recommended for success: consultation, communication, and problem-
solving. To guarantee that procurement changes are fully understood, top management
should devote appropriate time and effort. The senior management team sets the company's
goals and vision. In addition, they need to pull together their efforts to execute e-
procurement rules and strategies, as well as to reform procedures and organizational
structure.

Information Quality
E-information procurement's technology platforms have a key impact on the quality of
information. According to Ronchi et al, more businesses are using e-procurement owing to
the growth of IT platforms. This prediction was made in research by Alvarez-Rodrguez et
al. It is possible that an online-accessible semantic technology protocol, following standard
and common data models, formal query languages, and semantic data models, can satisfy
the demands of intelligent electronic procurement. Electronic data exchange (EDI), file
transfer (FTP), teleconferencing, and online auctions have been approved by Masudin and
Kamara, as well as Quesada et al. To help with efficient e-procurement, blockchain
technology is now being applied in the creation of information systems. Blockchain-based
e-procurement solutions, according to Akaba and coworkers, may be implemented by the
public field in the recent future. Because of the use of blockchain expertise, the e-
procurement system established by Thio-ac was secure, robust, and private.

E-Procurement Implementation and Company Performance Links

As a consequence of the firm's prepared events in employing its income, the
performance of the company is a comprehensive depiction of the company's position over
a convinced time epoch. Competence, sale accomplishment, purchaser pleasure, and
affiliation construction all play a role in company performance. The reimbursement of e-
procurement embraces increased productivity, sales, and client pleasure as well as
enhanced relationships with suppliers and customers. When it comes to business success,
consumer happiness is the most important factor. Marketers, consumers, buyers, and
customer behavior researchers are all intimately involved in customer
satisfaction/dissatisfaction. Customers benefit from lower prices because of the increased
bargaining power they have as a result of more choices among providers of similar goods
and services.
HYPOTHESES
● H1: E-design has a favorable effect on the supply chain management.
● H2: E-Sourcing has a favorable effect on supply chain management.
● H3: E-negotiation has a favorable effect on supply chain management.
● H4: E-Evaluation has a favorable effect on supply chain management.
Muhammad Abdullah Idrees et al 243

Figure 1: Conceptual Framework

Using past studies as a guide, we created the conceptual research model shown in
Figure 1. Electronic design, sourcing, negotiation, and assessment are shown on the left-
hand side, while supply chain performance is shown on the right.

RESEARCH METHODOLOGY
Some aspects of the population studied in this study restricted the scope of the study,
such as the age range of the participants, who were all supply chain management-dependent
Pakistani firms. A personal survey and an online survey were both employed in the
research. To begin, the questionnaire was distributed in paper form, and participants filled
them out. It has been prepared and sent through email and text messages to the supply chain
professionals. Regression analysis was used to test hypotheses. In this study, we contacted
individuals using a convenience sample method. A total of 239 persons were included in
this study, all of whom were drawn from various companies and all of them had prior
experience working in the supply chain. Larger samples minimize the amount of error that
may be incorporated in the statistical analysis. The hypotheses are analyzed using Smart-
PLS, which has been incorporated. Both CFA and SEM, which stand for confirmatory
factor and structural equation modeling, have been implemented into Smart-PLS.

FINDINGS AND RESULTS

Demographic Analysis
The demographic analysis of the current study is presented in a tabular manner and
includes many tables that contain frequency data, gender, age, education, and job-related
stats and percentages. Let's take a look at the current study's demographics in the table
below. According to frequent statistics (the first table), the study included all 239 of the
study's valid participants. These percentages may also be found in a table beneath each
table that lists each member's demographic information (gender / age / education /
occupation).
244 Impact of E-Procurement on Procurement Practices and Performance Efficiency …

Table 1
Demographics
Valid Cumulative
Frequency Percent
Percent Percent
Female 125 52.3 52.3 52.3
Gender Male 114 47.7 47.7 100.0
Total 239 100.0 100.0
21 to 30 180 75.3 75.3 75.3
31 to 40 41 17.2 17.2 92.5
41 to 50 11 4.6 4.6 97.1
Age
Above 50 2 .8 .8 97.9
Less than 21 5 2.1 2.1 100.0
Total 239 100.0 100.0
Doctorate 24 10.0 10.0 10.0
Graduate 171 71.5 71.5 81.6
Intermediate/
Education 4 1.7 1.7 83.3
A Level
Undergraduate 40 16.7 16.7 100.0
Total 239 100.0 100.0
Employee 119 49.8 49.8 49.8
Self employed 29 12.1 12.1 61.9
Occupation
Student 91 38.1 38.1 100.0
Total 239 100.0 100.0

Composite Reliability
The stability of questionnaire results is a sign of reliability. The results will be the same
for the same target population; regardless of how many times the questioner uses the
questionnaire. This shows that the survey has a high level of internal consistency and
repeatability. The most important way to ensure consistency in research is to keep an eye
out for bias. In this way, it may be enhanced by experimenting with new study and
assessment methods or by employing other researchers. This includes the validity and
reliability of the investigation. The dependability of the measuring devices was assessed
using composite dependability. All of the readings were higher than the usually accepted
cutoff point of 0.70. This is a generally recognized variety of values for dependability.
The degree of consistency of quite a few variables may be used to estimate dependability
(Hair, 2010). You'll find a breakdown of composite dependability in the table that follows.

Table 2
Reliability
Variable No. of items Reliability
Supply Chain Performance 12 0.678
Electronic Design 5 0.543
Electronic Sourcing 4 0.348
Electronic Negotiation 3 0.448
Electronic Evaluation 3 0.491
Muhammad Abdullah Idrees et al 245

There is only a 0.4 dependability level necessary for electronic sourcing; all other
elements have reliability levels that are equal to or greater than that. It was found that the
questionnaire's reliability was 0.752, which is within the acceptable range and indicates
that it may be used.
Significant factor loadings Confirmatory factor analysis (CFA) loadings are shown in
the table below. Assemble using as your loading parameter. The constructions with loading
below are considered weak loading variables, while 5 is considered a strong loading
variable. There are only 5 items on the table that should be discarded.

Convergent Validity
Consensus on at least two metrics is an indicator of converging validity (Carmines &
Zeller, 1979). Each factor's convergent validity was examined using variance mining
(Fornell & Larcker, 1981). Convergent strength is demonstrated and the conclusion is
derived that the loadings are excellent if the variance extracted value exceeds 0.5, whereas
loadings less than 0.5 are deemed less useful for the research. The results are in the
following table.

Table 3
Convergent Validity
Cronbach’s Composite Average Variance
Variables
Alpha Reliability Extracted (AVE)
E-Design 0.539 0.725 0.354
E-Evaluation 0.491 0.743 0.494
E-Negotiation 0.447 0.703 0.455
E-Sourcing 0.346 0.664 0.335
Supply Chain Performance 0.677 0.767 0.223

Discriminate Validity
Discernible validity may be defined as any single construct that varies from the other
constructs in the model (Carmines & Zeller, 1979). When constructs have an AVE loading
of more than 0.5, discriminate validity findings are good, indicating that at least half of
variance was taken up by construct (Chin, 1998). If the values in diagonal rows & columns
are much greater than the values in off-diagonal rows and columns, then discriminate
validity has been demonstrated. A Discriminant Validity test is being carried out to
determine whether or not two unrelated concepts or measures are unconnected. It is
possible to evaluate the discriminant validity of thought by demonstrating that it is not
unusually related to various tests aimed to measure presumably varied notions. Below is a
table of Discriminant Validity.
246 Impact of E-Procurement on Procurement Practices and Performance Efficiency …

Table 4
Discriminant Validity
E- E- E- E- Supply Chain
Design Evaluation Negotiation Sourcing Performance
E-Design 0.595

E-Evaluation 0.248 0.703

E-Negotiation 0.185 0.279 0.674

E-Sourcing 0.246 0.278 0.172 0.579

Supply Chain
0.279 0.354 0.254 0.242 0.472
Performance

Model Fit Measures

Standardized root-mean-square residual (SRMR), the precise model fits such as d ULS
and d G, Normed Fit Index (NFI), and 2 all serve to establish the model's fitness in SEM-
PLS (Chi-square). Saturated models and estimated models are both included in this table,
as well as their respective fit metrics. In the saturated model, all constructs are evaluated
for their relationship to one another. The model structure is taken into consideration in the
calculated model, which is based on the total effect scheme.

Table 5
Model Fit
Fit Summary
Saturated Model Estimated Model
SRMR 0.084 0.084
d_ULS 2.637 2.637
d_G 0.557 0.557
Chi-Square 726.280 726.280
NFI 0.258 0.258

Hypothesis Testing
In PLS-SEM, bootstrap is an important step that provides data on the stability of factor
guesstimates. Throughout this procedure, sub-tests are derived from the initial example,
including replacement (Hair, Matthews, Matthews, & Sarstedt, 2017). Bootstrapping tells
us about the reliability of coefficient estimates, which is useful information. In this method,
the original sample is used to generate a huge number of replacement sub-samples (Hair,
Matthews, Matthews, & Sarstedt, 2017). Suggested t-values from the bootstrapping
technique are shown by SmartPLS upon the completion of the operation. The factor
loadings for all the hypotheses are provided in the table below. As long as the 95 percent
confidence threshold is met (=0.05), the association is statistically significant (t-value
larger than 1.96).
Muhammad Abdullah Idrees et al 247

● Supply chain performance is improved by using e-design.

● E-evaluation has a good effect on the performance of the supply chain.
● When it comes to e-negotiation, supply chain management is boosted.
● Electronic procurement has a favorable influence on supply chain management.

Table 6
Hypotheses Testing
Standard
T-values P-values Decision
Deviation
0.069 2.392 0.017 Accepted
0.071 3.447 0.001 Accepted
0.075 1.828 0.068 Rejected
0.069 1.605 0.109 Rejected

It can be seen from Table 3 that the first alternative hypothesis (relating to digital design
and digital sourcing) was acknowledged in the PLS-SEM analysis, while the last two
hypotheses (relating to digital negotiation and digital evaluation) were not. This means that
the PLS-SEM analysis rejected both the first two hypotheses (relating to digital design and
digital sourcing). Similarly, the P-values for each of the four hypotheses are listed in the
following row. P-values for electronic design and electronics sourcing are below 0.05,
hence the PLS-SEM analysis accepts these two hypotheses. Electronic negotiating and
electronic assessment both have P-values larger than 0.05, hence the PLS-SEM analysis
has ruled them out. Electronic negotiating and electronic assessment were found to be
248 Impact of E-Procurement on Procurement Practices and Performance Efficiency …

rejected in the PLS-SEM analysis in this reference, whereas two other factors were
allowed. Electronic design and sourcing have a substantial impact on supply chain
performance, but electronic negotiation and assessment haven't.

DISCUSSION AND CONCLUSION

Discussion
They were tested using some of the previously listed structures to investigate the four
hypotheses. When it came to supplying chain performance, we discovered that digital
design and electronic assessment had a considerable influence, whereas electronic
negotiating and electronic sourcing had little to no impact. It is theoretically possible to
improve supply chain performance by using electronic negotiation and sourcing, but they
failed. Electronic negotiation and sourcing yielded results that was at odds with previous
research (Presutti, 2003; Kim & Shunk, 2004). Methodological flaws might be the cause
of this outcome. Electronic procurement has a considerable and beneficial effect on supply
chain performance in addition to the other two dimensions. However, the relative influence
of these two aspects differed. The electronic assessment had the greatest influence on
supply chain performance, whereas electronic design had the least impact. Although these
findings are consistent with previous research on supply chain management, they are not
unique (Park, 2005). Electronic procurement has been shown to subsidize the performance
of the supply chain, according to the findings of this study. A management function based
on certain technology, known as electronic procurement or e-procurement, is used to
acquire materials a business requires. According to Croom (2000), Kim & Shunk (2004);
Presutti (2003; Chang, Tsai & Hsu, 2013), this technology procurement function has four
main dimensions: electronic design (sourcing), electronic negotiation (negotiating), an
electronic assessment. According to the information gathered, all four aspects are necessary
for effective e-procurement and their role in the supply chain. Furthermore, empirical
research has shown that these e-procurement aspects are important when it comes to supply
chain management and has shown that they help improve supply chain performance. This
finding is in line with previous research (Walters, 2008).

CONCLUSION
Procurement & supply chain management strategies have been examined in previous
research studies, but previous research studies do not provide empirical and theoretical
insights into how procurement practices are useful in deploying supply chain and supply
chain strategies successfully and how to increase their influence on performance (supply
chain responsiveness). In Pakistani manufacturing, we've looked at how four different
types of electronic buying procedures affect the efficiency of the supply chain. When it
came to e-procurement, the four techniques were electronic design (source), negotiation,
and assessment (Chang, Tsai, & Hsu, 2013). As a result, a theoretical framework for
comparing the performance of the supply chain with four different electronic buying
procedures was developed. Thus, this study has filled in a need in the academic literature
by examining the relationship between supply chain management & electronic
procurement procedures. By using partial least square and structural equation modeling
(PLS-SEM), Four e-procurement strategies have been shown to improve the performance
of the supply chain in Pakistan's industrial industry, according to this report. The findings
of this study show that digital design and assessment have a beneficial effect on supply
Muhammad Abdullah Idrees et al 249

chain performance, while electronic negotiating & electronic sourcing have no meaningful
impact. The conclusions of the prior study were somewhat in agreement and partially in
disagreement with these results (Chang, Tsai, & Hsu, 2013). The four aspects of e-
procurement are critical to reducing supply chain uncertainty, increasing supply chain
responsiveness, increasing order fulfillment rates, and improving supply chain
management, according to the findings of the above study (Lin, Huang, & Lin, 2002). From
raw material procurement to final customer fulfillment, the supply chain is considered a
whole. Collaboration, SC association, and competency all benefit from the integration of
these tasks. Because e-procurement is digitally empowered in a supply chain that boosts
efficiency across the board, managers must have a firm grasp of the technology and the
forces that drive it. Managers should consider the administration's e-procurement
implementation system since they may optimize the implemented process' efficacy and
reduce its cost. Finally, it was emphasized that the predicted advantages of electronic
procurement depend on the company's size.

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