Abstract

E-Procurement can be defined as using Internet (including Intranet and Extranet) technology in the purchasing process (De Boer et al., 2001). This definition excludes old applications like ordering by telephone or fax. It makes use of the latest information and networking systems and technologies, such as e-mail, Electronic Data Interchange (EDI), and e-marketplace.

Unlike adoption of other IT, adoption of e-procurement is a simultaneous adoption by two parties (buyer and supplier). E-procurement is a collective term. An organization can use one or several kinds of Internet technologies and applications to implement e-procurement. We take these characteristics into consideration and propose an Electronic Procurement Adoption (EPA) model.

The focus of this paper is mainly on direct procurement where it is easy to maintain long-term relationships between buyers and suppliers. We argue that in buyer-seller relationship, power distribution, mutual trust, and values obtained from transaction cost reduction are the key factors leading to e-procurement adoption behavior. E-procurement is adopted when at least one of these essential prerequisites (power, trust and value) is satisfied. We argue that each of these factors interacts with and enhances each other after e-procurement adoption.

Case study will be employed as the research methodology. Either single or multiple, case study, is an appropriate choice of research method when researchers have little control over the environment, when the events under investigation are contemporary, and when the context of the research is important (Yin, 1994). Case studies would enable the researchers to gain an in-depth understanding of why and how the firms under investigation are using e-procurement. Therefore, the model will be tested by case study.

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