The Drivers and Barriers toEffective User Adoption ofProcurement Technologies
A collaborative research byZycus and MSU
MICHIGAN STATE UNIVERSITY
Table of Contents ................................................................................................................1
EXECUTIVE SUMMARY ................................................................................................................... 4
INTRODUCTION .............................................................................................................6
INTERVIEWS WITH PRACTICE LEADERS .................................................................................. 8
Motivation to Implement .................................................................................................................................... 8
Adoption Challenges ........................................................................................................................................... 9
Overcoming Challenges ...................................................................................................................................... 9
Challenges once EPTs are Implemented ........................................................................................................10
THE CURRENT STATE OF USER ADOPTION ............................................................................ 12
Drivers ..................................................................................................................................................................... 12
Barriers ................................................................................................................................................................... 13
Current EPTs Used ............................................................................................................................................... 14
A TECHNOLOGY ACCEPTANCE MODEL (TAM) PERSPECTIVE ............................................ 15
Perceived Usefulness ......................................................................................................................................... 15
Perceived Ease of Use ........................................................................................................................................ 16
Attitude ................................................................................................................................................................... 16
Intention to Use .................................................................................................................................................... 17
PRESSURES DRIVING EPT ADOPTION ..................................................................................... 18
Coercive Pressure ............................................................................................................................................... 18
Normative Pressure ............................................................................................................................................ 18
Mimetic Pressure ................................................................................................................................................. 19
SUPPLIER MANAGEMENT AND EPTS........................................................................................ 20
Supplier Characteristics ................................................................................................................................... 20
Social Capital ........................................................................................................................................................ 21
Cognitive Capital .................................................................................................................................................. 21
Relational Capital ..................................................................................................................................................22
Structural Capital ..................................................................................................................................................23
ENVIRONMENTAL CONDITIONS ................................................................................................ 24
Competitive Environment ................................................................................................................................. 24
1
Table of Contents
Supply Uncertainty ............................................................................................................................................. 24
Technological Uncertainty ................................................................................................................................ 25
Information Uncertainty .................................................................................................................................... 26
FIRM PERFORMANCE .................................................................................................................... 27
Cost Performance ............................................................................................................................................... 27
Quality Performance .......................................................................................................................................... 27
Delivery Performance .........................................................................................................................................28
Flexibility Performance ......................................................................................................................................28
New Product Development Performance ..................................................................................................... 29
PURCHASING PERFORMANCE ................................................................................................... 30
CONCLUSION .................................................................................................................................. 31
2
About the Author
Tobias Schoenherr holds a Ph.D. in Operations Management and
Decision Sciences from Indiana University, Bloomington, from
where he also obtained his B.Sc. and M.B. He also holds a Diplom-
Betriebswirt (FH) from the European School of Business,
Reutlingen University, Germany, and is an APICS Certified Supply
Chain Professional (CSCP). Dr. Schoenherr has taught operations
and supply chain management courses, both graduate and
undergraduate, at Indiana University, Eastern Michigan
University, the International Graduate Business School in Zagreb
(Croatia), and the Central European University, Budapest
(Hungary).
Dr. Schoenherr's research focuses on strategic supply
management, with the pillars of strategic sourcing, leveraging the
supply base, and strategic operations management. His work has
appeared in Management Science, the Journal of Operations
Management, Production and Operations Management, Decision Sciences, and Journal of Business
Logistics, among others. Dr. Schoenherr is an Associate Editor for the Journal of Operations Management,
and is on the Editorial Review Boards of the Journal of Business Logistics, IEEE Transactions on Engineering
Management, the Journal of Supply Chain Management, and the International Journal of Integrated Supply
Management. He has been active in several professional associations, including DSI, AOM, POMS, ISM and
APICS. Most recently he served as the Associate Program Chair for the 2011 DSI Annual Meeting, and as the
Proceedings Coordinator for the 2012 Conference of the Production and Operations Management Society.
He continues as POMS Proceedings Coordinator for the 2013 Conference.
Tobias Schoenherr has won several teaching and research awards and grants. For example, he received the
2003-2004 Panschar Undergraduate Teaching Award for Associate Instructors at the Kelley School of
Business, Indiana University, and the Outstanding Research in Business Award at the College of Business,
Eastern Michigan University. To support his doctoral dissertation research, he received a grant from the
Institute for Supply Management (ISM). He received ISM's Senior Research Fellowship for 2009, and MSU's
Lilly Teaching Fellowship for the 2010-2011 academic year. Most recently, he received the 2011 Richard J.
Lewis Quality of Excellence Award, the 2011 Best Paper Award at the Annual Conference of the Midwest
Decision Sciences Institute, the 2011 Best Reviewer Award for Journal of Purchasing and Supply
Management, a 2012 Award for Excellence from the Emerald Literati Network for a Highly Commended
Paper, the 2012 Michigan Campus Compact Faculty/Staff Community Service-Learning Award, the 2012
John D. and Dortha J. Withrow Endowed Emerging Scholar Award, and the 2013 MSU Teacher-Scholar
Award.
Tobias SchoenherrAssociate Professor of Supply Chain Management
Michigan State University
3
A two-phase research study was conducted in 2014 to provide insight into the drivers and barriers to
effective user adoption of enabling procurement technologies (EPTs). The first phase consisted of
interviews with seven practice leaders, which were followed by a large-scale survey study among
purchasing professionals in the second phase. A total of 144 useable responses were received.
The key highlights from phase 1 include the following:
Implementation motivations include better integration, communication and visibility; better
ensuing knowledge management; and the increasing age of legacy systems, coupled with the
availability of industry-specific software
Adoption challenges included the preference for legacy systems, change management issues, the
demand for a user-friendly environment, no time to learn the new system, perceived loss of
control, and technology being seen as an expense
Companies aimed to overcome these challenges by formal and informal training, the promotion of
success stories, and the demonstration of specific benefits
Once implemented, additional challenges emerged, which included the fact that full capabilities of
systems are often not realized, specific reporting functionality is not offered, high supplier
interface costs, and data validity issues
Validity of data is challenged
The key highlights from phase 2 include the following:
By far the most dominant driver for the adoption of EPTs was the prospect for better integration
and visibility internally
As the implementation and adoption of EPTs is oftentimes a significant corporate undertaking,
disrupting how business is being conducted, change management issues pose a considerable
barrier
Spend analysis, financial savings management, and contract management were the EPT modules
most commonly used by our respondents; modules enhancing infrastructural issues were also
frequently implemented, such as modules for the procure-to-pay (P2P) process, supplier portals,
and e-invoicing; commodity risk management was least frequently used
Perceived usefulness of EPTs was very high, with EPTs improving one’s performance, productivity
and effectiveness on the job
Perceived ease of use was notably lower, which may be attributed to the different user interfaces
offered by EPT providers, with only some having made the transition to a userfriendly and
streamlined graphical user interface
Attitude toward EPTs was very high, facilitating the implementation and adoption of such
technologies
70% or more of the respondents agreed or strongly agree with the statements assessing their
intention to use EPTs
4
EXECUTIVE SUMMARY
About half of our respondents disagreed or strongly disagreed with the existence of coercive
pressures, with an additional 20% being neutral to the statements; this suggests that only a
minority of our respondents experiences coercive pressure to implement and adopt EPTs;
however, the majority of respondents acknowledged the existence of normative pressures;
mimetic pressures were present especially in the form of competitors implementing EPTs
Suppliers enabled via EPTs tend to be long-term, important and strategic suppliers; this makes
sense, since supplier enablement can consume a significant amount of monetary resources and
time; statements assessing the relationship quality to the suppliers were also highly rated, being
indicative of respondents being greatly satisfied with the suppliers enabled via EPTs
Cognitive capital with suppliers enabled via EPTs exists in less than half of our respondents;
relational capital seems to be more prevalent in buyer-supplier relationships facilitated via EPTs;
structural capital was present for at least 40% of our respondents
Across the board, respondents described their competitive environment as very intense; the
supply environment provided to our respondents is rather stable and predictable, with good
performance of the supply base; some companies are subjected to rapid changes in terms of
technological advances; about half of our respondents were faced with significant information
uncertainty
While companies tend to view them as being on par with their competitors on the cost dimension,
the quality dimension is where they differentiate; the majority of our respondents evaluated
themselves as better than the competition on delivery performance; most respondents saw
themselves as being similar or better than the competition on flexibility and new product
development performance
Savings targets, material target costs and other procurement targets and goals were achieved by
over 60% of our respondents; most of our respondents were generally pleased with the
performance delivered from suppliers
5
Procurement technologies have evolved significantly over the last 15 years, and new applications are
constantly being developed. However, the effective adoption and use of enabling procurement
technologies (EPTs) is still a “black box” for many companies, and postulated benefits remain elusive.
Many practitioners are overwhelmed by the proliferation of EPT offerings, are faced with user adoption
resistance, and are questioning the efficacy of EPTs. Within the context of our study, we define EPTs are
applications that are intended to facilitate and support the sourcing and management of goods and
services (we use ‘procurement’, synonymously with ‘purchasing’ and ‘sourcing’).
To address these challenges and to provide insight into the current state of EPT adoption, a two-phase
industry study was conducted in 2014. The first phase consisted of interviews with procurement leaders
and practitioners to map out the current EPT landscape, identify EPT best practices and pressing
challenges, and detect any additional trends on the horizon that may shape how procurement will be
conducted in the future. Of specific interest was how EPT can be applied as a competitive weapon,
enabling procurement to become more strategic. A total of seven companies leading EPT adoption were
interviewed. Industries included manufacturing, health care, biotechnology, telecommunication, and
higher education.
The outcome of the first phase then served as the input to the second phase of the research, which
consisted of a large-scale survey among procurement leaders and practitioners, to assess the derived
notions across a larger sample and to generalize the findings. A total of 144 useable responses were
received, enabling us to derive conclusions based on a larger sample.
Most respondents were on the executive supply chain management level, and held job titles such as vice
president/director for strategic sourcing, and senior sourcing manager. Almost all respondents were
located in the U.S. (94.9%), with the remaining respondents being located in Europe. The majority of the
respondents was between 30 and 59 years of age (Table 1), and had been working an average of 15.7
years in the field (of which an average of 7.1 years was spent with the present company). This establishes
our respondents as seasoned and knowledgeable professionals. Most of our respondents started using
EPTs about four years ago.
Age Group Age Group Percentage
20-29 years 8.3
30-39 years 28.5
40-49 years 25.7
50-59 years 33.3
60-69 years 3.5
>=70 years 0.7
Table 1. Respondent age groups.
6
INTRODUCTION
Respondents primarily came from large companies, as illustrated in Table 2. Many of the firms were also
fairly established, with most of our respondents working in companies with a history of 100 years or
more. Primary industries represented in our sample included manufacturing, health care, and financial
services.
Annual Sales Percentage
Less than $50 million 2.8
$50.1 to $100 million 1.4
$100.1 to $300 million 2.1
$300.1 to $500 million 0.7
$500.1 to $1 billion 4.2
$1.1 to $5 billion 25.9
$5.1 to $10 billion 12.6
Over $10 billion 25.9
Prefer not to disclose 24.5
Table 2. Annual sales of respondents’ companies.
7
INTERVIEWS WITH PRACTICE LEADERS
In the first phase of this research we interviewed procurement leaders and practitioners to
obtain insight into (1) the motivation behind implementing EPTs, (2) adoption challenges, (3)
strategies to overcome these challenges, and (4) challenges still remaining once EPTs had
successfully been implemented. A total of seven companies leading EPT adoption were
interviewed. Industries included manufacturing, health care, biotechnology,
telecommunication, and higher education. Results from this first phase of the research are
summarized in the following.
Motivation to Implement
One of the primary motivations behind implementing EPTs was the desire for better
integration, communication and visibility. These benefits are however not only derived by the
EPTs themselves (which oftentimes offer a convenient way to synthesize, query and structure
data for better decision making), but also by the process of implementing the EPTs. Our early
research into enterprise resource planning (ERP) systems has shown that the methodical
approach that needs to be undertaken when implementing and integrating ERP systems in
companies can set the foundation for a sound enterprise structure. This structure, in turn,
can enable much more effective implementation of ensuing systems and processes. Parallels
can be seen in the EPT domain. With an integrated EPT, communication with other
departments can also be achieved, enabling cross-functional integration and collaboration. In
addition to this internal integration, external integration can be facilitated via links to
suppliers, creating benefits also for them, for example in the form of better and faster invoice
payment as part of the procure-to-pay process. Furthermore, respondents noted increased
contract compliance, due to the visibility generated into the company’s spend and associated
contracts in place.
Another primary motivation was better knowledge management. Information derived via
EPTs can be leveraged in negotiations for a more advantageous bargaining position,
supporting for example a buyer’s arguments via statistics and facts derived from the system.
Sourcing opportunities and improvements can also be identified more easily, such as whether
to rationalize the supply base (if a query reveals that for one commodity there are numerous
active suppliers) or whether to expand the supply base (if for a critical commodity there is
only one active supplier, who happens to be not very reliable). With better insight into
performance dimensionsand supplier base management, also across time, more directed
feedback can be provided to suppliers, helping them to increase their performance.
A primary driver of EPT adoption can also be the leadership of the company. As with most
initiatives, senior management support is essential for an implementation to flourish. As
discovered in our interviews, this sometimes meant a complete overhaul of the procurement
8
department, towards it becoming more strategic. As part of this movement, the
implementation of EPTs was seen as a key component.
A further motivation behind the implementation of EPTs was the lack of infrastructure
existent in the remaining legacy systems in place. For example, no tools were available to
capture spend data, and classifications into spend categories did not exist. The cost of
maintaining these legacy systems was also becoming increasingly expensive, as updates
were not released by prior vendors any more. In addition, a lot of industry-specific software
has come onto the market, which may have been a deterrent for adoption in the past:
companies just did not feel that the available solutions were able to reflect their unique
processes appropriately. However, great strides have been made since then, and unique
industry requirements can be easily accommodated. This has lowered the hurdles for the
adoption of EPTs, and at the same time, served as a motivation to take this step forward.
Adoption Challenges
While legacy systems served as a motivation to adopt new EPTs, they also served as a
challenge in this regard. Users were just more comfortable with their old systems, and did
not want to change. Several reasons can be attributed to this observation.
First, users have become so accustomed with nice and streamlined web experiences they
encounter when dealing with B2C sites such as Amazon. Unfortunately, until very recently,
many EPTs did not offer this same level of ease of use, but users expected these interfaces
also on the B2B side. This increased the hurdle for adoption. Second, users are oftentimes so
busy with their daily activities, so that they are not able to devote time to learning new
systems (or to becoming familiar with their true potential).
Third, many of our interviewees stressed the importance of culture, and how it may hinder
the adoption of EPTs. As such, individuals want to have their own control to manage vendors,
which may however be curtailed by the use of EPTs. Associated with this notion is the fear
that jobs would be cut due to the efficiencies generated by EPTs. And fourth, potential users
were offset by the expense of the new systems, and were not convinced about the long-term
return on investment these EPTs would have been able to deliver. They were of the opinion
that if the system is not broken, then why fix it?
Overcoming Challenges
Recognizing that there are significant challenges associated with the implementation and
adoption of EPTs, several strategies were suggested by our respondents on how to overcome
these. Underlying many of these strategies is the need to make users realize the value of the
9
tool, also specifically for their tasks. This can be accomplished via formal training, or more
informally, via town hall meetings or “lunch and learns”. An important element to drive
adoption is also to spend time with business unit leaders and senior staff, to get them on
board and support the initiative.
The EPTs can also be promoted internally, for example via newsletters, the intranet, or via
posters in elevators or hallways. What has also proven to be beneficial is the provision of
concrete examples of successful implementations (e.g. in another business unit or
department). Whenever possible, hard data (such as savings) should be used to demonstrate
the benefits and the bottom-line impact of EPTs. Important here is that examples are specific
and relate to the end users’ context – this was noted since oftentimes new initiatives are
perceived to be only benefitting other people, and not oneself. The immediate impact needs
to be illustrated. The hiring of qualified implementation consultants was noted as a further
strategy. Such consultancies have likely experienced and managed similar challenges before,
and have developed specific and actionable expertise on how to address the challenges.
Challenges once EPTs are Implemented
Even once successfully implemented, there may still be challenges presenting themselves.
Some of these encountered by our interviewees included that users are not using the full
capabilities of the system, especially also since new functionalities (updates) are released on
a continuous basis. Users felt a lack of direction, since once EPTs are implemented, the team
responsible for it dissolves, and leaves the operations to the individual units. This
observation stresses the importance to drive EPT adoption also after implementation. Our
research has shown that this is an often-overlooked area, and a lot of the effort that was
expended during the implementation is not paying off because of the lack of adoption
among users.
Another shortcoming (and ensuing challenge for the continued use of EPTs) is that complex
reporting is many times not supported, and more sophisticated (external) systems are
needed to complement the EPTs. This defeats the purpose of having an integrated system in
the first place, since now users have to rely again on secondary systems that are not
connected to the EPTs.
Sometimes expectations placed on the new EPTs are not met, maybe since their advantages
and efficiencies were exaggerated in the process of convincing internal users of the
approach. This stresses the importance to communicate realistic expectations in the
implementation phase. In addition, the processes associated with the new EPTs are
perceived as cumbersome and inconsistent (for example for approvals). In these instances,
criticisms need to be taken seriously and changes to the system need to be made if
10
warranted. Also, initial apprehension to new processes is not surprising, since it requires
individuals to learn the new software, potentially taking away valuable time from other tasks
that are on their to-do lists.
A further challenge encountered by our interviewees, once EPTs were implemented, consisted
of the costs to suppliers to interface with the systems and tools. This aspect is heightened due
to suppliers oftentimes being required to integrate with many of their customers, many of
which may have different EPTs requiring different setups and interfaces. This represents a
significant learning and cost for the suppliers (for some of them, it may be cost prohibitive).
Even once EPTs are in place, the validity of the data is challenged. This may be due to the fact
that users have less insight into the system infrastructure being the EPTs, in contrast to their
prior systems. Users in the firms of our interviewees also sometimes felt forced to use the
system, and rather would make their own decisions; they felt that their autonomy was
curtailed. A general challenge associated with EPTs was that of firewalls and data security.
11
The second phase of this research project, which relied on responses from 144 purchasing
managers, aimed to assess the current state of user adoption among a larger sample of
companies, specifically in terms of drivers for and barriers to the adoption of EPTs, as well as a
general assessment of which EPTs are used. This section reports on these aspects.
Drivers
Based on our understanding of EPT capabilities, complemented with the insight derived
through the preceding interviews, we developed a set of drivers that could motivate firms to
adopt EPTs. These drivers were presented to respondents, who were asked to indicate their
extent of agreement with each factor serving as a motivator / influencer for the use of EPTs.
Extent of agreement was measured on a five-point scale, anchored at “strongly agree”
(value=5) and “strongly disagree” (value=1). Figure 1 summarizes the results, ordered by the
factors that received most agreement.
By far the most dominant driver was the prospect for better integration and visibility
internally. This emphasizes the ability of EPT to accomplish such promises. With better
integration and visibility, processes can be streamlined and optimized, and decisions can be
grounded in a much better foundation. Complete insight and knowledge of processes helps
take uncertainty out of the equation, enabling more confident, more informed, and more
thorough decision making.
Associated with enhanced integration and visibility is the ability to identify opportunities for
improved sourcing performance. For instance, inefficient sourcing arrangements can be
identified, such as when a stable commodity is sourced from a multitude of vendors – the
0% 50% 100%
5 - strongly
agree
4
3 - neutral
2
1 - strongly
disagree
Better integration and visibility internally
Identification of opportunities
Achievement of savings targets
Conviction about the value of EPTs
Common information repository & dashboard
Enhanced contract compliance
Revamping of outdated legacy systems
Better integration and visibility externally
Management directive
Encouragement by senior leadership
Colleagues using EPTs for their work
Press coverage about the value of EPTs
Figure 1. Drivers to EPT adoption.
12
THE CURRENT STATE OF USER ADOPTION
0% 50% 100%
Expensiveness
5 - strongly agree
4
3 - neutral
2
1 - strongly
disagree
Company culture
No “buy in” from users
Change management issues
Lack of upper management support
Cumbersome processes
Validity of data
Time constraints
No need felt
Expectations not being met
Current systems not a good fit
Overwhelming,
difficult to
manage
Suppliers
not
willing
to
connect via
EPTs
Unclear
business case
or
value
Data
security (e.g.
firewalls)
Legacy
systems are
better
Figure 2. Barriers to EPT adoption.
opportunity for supplier reduction may be present, with the remaining suppliers receiving a
greater share of the business, likely yielding cost reductions. This can then be directly
reflected in the achievement of savings targets. Other dominant drivers, as illustrated in
Figure 1, are along similar themes.
Barriers
As the implementation and adoption of EPTs is oftentimes a significant corporate undertaking,
disrupting how business is being conducted, change management issues pose a considerable
barrier. Many of the barriers noted in Figure 2 relate to this notion (the same scale as for the
drivers was used). As such, for a successful adoption to take place, a receptive company
culture needs to be created. This can be accomplished by, for example, executive leadership
and commitment, a clear communication of the benefits and the business value of EPTs,
promotion of success stories, and the provision of formal and informal training opportunities.
Our related research has also shown that users should be involved as early as possible in the
process, ideally prior to the implementation. Users should be provided with a voice, and be
able to provide feedback to the choice of EPTs implemented. With this up-front involvement, a
sense of ownership is likely enhanced, putting EPTs on a more thorough foundation for
eventual user adoption.
13
Figure 3. Popular EPTs.
0% 20% 40% 60% 80% 100%
Commodity risk management
Supplier directory
Supply base management (SBM)
E sourcing
Supplier portals
P2P (Procure to Pay)
Supplier master data management
Category management
Contract management
Financial savings management
Spend analysis
5
4
3
2
1
0
- to a very limited extent
- not using at all
- to a great extent
Current EPTs Used
EPTs can come in many variants. Figure 3 offers an overview of which EPT capabilities were
most often utilized by our respondents. The modules presented were developed based on our
understanding of recent developments and the insight obtained in phase 1. Survey respondents
were then asked to indicate their extent to which they use these EPTs. A scale anchored at “to
a great extent” (value=5) and “to a very limited extent” (value=1) was used, with respondents
having however also the option to indicate if they do not use a particular module at all (value
=0). Spend analysis, financial savings management, and contract management were the
modules most commonly used by our respondents. This echoes the primary drivers from
above, in that EPTs are able to offer enhanced integration and visibility. These are formidable
aspects that enable the activities of spend analysis, financial savings management, and
contract management.
Modules enhancing infrastructural issues were also frequently implemented, such as modules
for the procure-to-pay (P2P) process, supplier portals, and e-invoicing. Electronic enablement
of these aspects affords purchasing managers to automate as much as possible, to then be
able to focus on more critical and strategic initiatives. Commodity risk management was least
frequently used.
14
Figure 4. Perceived usefulness.
0% 20% 40% 60% 80% 100%
Using procurement technologies enhances my effectiveness in my job
Using procurement technologiesimproves my productivity
Using procurement technologiesimproves the performance in my job
I find procurement technologies to be auseful tool in my job
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
User adoption can be explained theoretically with the technology acceptance model (TAM),
which is a frequently used framework in the information systems literature. We aimed to bring
insight from this perspective also, and presented a set of questions to our respondents that
tapped into the notions underlying TAM. The TAM consists of the dimensions of perceived
usefulness, perceived ease of use, attitude, and the intention to use the technology. Perceived
usefulness refers to an individual’s belief that EPTs will improve their job performance,
perceived ease of use to an individual’s realized effortlessness to use EPTs, attitude to one’s
positive or negative disposition relative to performing the behavior, and use intention to an 12individual’s plan to perform a specific behavior . To assess these dimensions, respondents
were provided with a set of statements to which they were asked to indicate their level of
agreement. A similar five-point scale as above was used (anchored at “strongly agree”
(value=5) and “strongly disagree” (value=1).
1 Fishbein, M., and I. Ajzen. 1975. Belief Attitude, Intention and Behavior: An Introduction to Theory and Research.
Reading. MA: Addison–Wesley.
2 Davis, F. D., R. P. Bagozzi, and P. R. Warshaw. 1989. “User Acceptance of Computer Technology: A Comparison of two Theoretical
Models.” Management Science 35(8):982–1003.
Perceived Usefulness
Perceived usefulness, which is defined as an individual’s belief that EPTs will improve their job
performance, was assessed by four statements. As can be seen in Figure 4, all four statements
received a strong agreement or agreement by around 80% of our respondents, suggesting the
widespread usefulness of EPTs. Encouraging are also the results indicating that EPTs improve
15
A TECHNOLOGY ACCEPTANCE MODEL (TAM) PERSPECTIVE
Figure 5. Perceived ease of use.
0% 20% 40% 60% 80% 100%
I find it easy to get the procurementapplications to do what I need to do
My interaction with procurementtechnologies is clear and understandable
I do not have any difficulties usingprocurement technologies for my job
Using procurement technologies for myjob is easy
5 strongly agree
4
3 neutral
2
1 strongly disagree
one’s performance, productivity and effectiveness on the job. This should serve as a further
motivator for non-adopters to venture that route and realize the significant benefits from
EPTs.
Perceived Ease of Use
Perceived ease of use describes an individual’s realized effortlessness to use EPTs. Four
statements were again used here to assess this dimension (Figure 5). While agreement was
still there with all four statements, the agreement was notably lower than with the statements
assessing perceived usefulness. A lot of respondents were neutral on these points, with also a
significant portion disagreeing with the ease of use of EPTs. This suggests that while many
users perceive EPTs as easy to use, a large portion do not find them easy to use. This may be
attributed to the different user interfaces offered by EPT providers, with only some having
made the transition to a user-friendly and streamlined graphical user interface.
Attitude
Attitude refers to one’s positive or negative disposition relative to performing the behavior,
and was assessed with three statements (Figure 6). Answers on these statements were
encouraging again, with about 90% of the respondents agreeing or strongly agreeing with all
three statements. Such a great attitude, represented among our respondents, should facilitate
the implementation and adoption of EPTs.
16
Figure 7. Intention to use.
0% 20% 40% 60% 80% 100%
I intend to use procurement technologiesto manage relationships with suppliers
To the extent possible, I would like to useprocurement technologies to manage my
supply base
I intend to use procurement technologiesmore often for my job in the future
I would like to be able to useprocurement technologies
5 strongly agree
4
3 neutral
2
1 strongly disagree
Figure 6. Attitude.
0% 20% 40% 60% 80% 100%
I have a positive perception about theuse of procurement technologies
The use of procurement technologies isbeneficial to me
Using procurement technologies for myjob is a good idea
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
Intention to Use
Use intention is defined as an individual’s plan to perform a specific behavior, and was
assessed with four statements (Figure 7). The results were also encouraging here: 70% or
more of the respondents agreed or strongly agreed with the statements assessing their
intention to use EPTs.
17
Figure 8. Coercive pressure.
0% 20% 40% 60% 80% 100%
We may not retain our importantsuppliers without the use of procurement
technologies
Our most important suppliers encourageus to use procurement technologies
Our most important customers encourageus to use procurement technologies
We may not retain our importantcustomers without the use of
procurement technologies
5 strongly agree
4
3 neutral
2
1 strongly disagree
Normative Pressure
Normative pressures are founded in the behavior of professional industry associations, which
may reflect a new way to do business. To tap into this dimension, respondents were asked to
respond to three statements (Figure 9). At least half of the respondents indicated this pressure
to exist.
18
Literature suggests that innovations may not only be adopted based on the free will of
individuals, but that also certain pressures may be at play to influence behavior. A large body
of research exists that theorizes the influence of institutional pressure, which is defined as a
stimulus that can influence an individual or a firm3. Institutional pressure can consist of the
three dimensions of coercive, normative and mimetic pressures. To assess the relevance of
these pressures in our context, we presented respondents with a set of statements tapping
into these dimensions. A similar five-point scale as above was used (anchored at “strongly
agree” (value=5) and “strongly disagree” (value=1).
Coercive Pressure
Coercive pressure can emanate from suppliers or customers a firm is dependent on, and was assessed
as such with four statements (Figure 8). About half of our respondents disagreed or strongly disagreed
with these pressures, with an additional 20% being neutral to the statements. This suggests that only a
minority of our respondents experiences coercive pressure to implement and adopt EPTs.
Dimaggio, P.J., and W.W. Powell. 1983. “The Iron Cage Revisited: Institutional Isomorphism and CollectiveRationality in Organizational Fields.” American Sociological Review 48(2):147–60.
PRESSURES DRIVING EPT ADOPTION
Figure 10. Mimetic pressure.
0% 20% 40% 60% 80% 100%
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
Best in class companies use procurementtechnologies
Competitors that have adoptedprocurement technologies for supplymanagement have benefited greatly
The competitiveness of our competitorshas increased due to their use of
procurement technologies
Figure 9. Normative pressure.
0% 20% 40% 60% 80% 100%
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
Procurement technologies are becomingpart of the norm to conduct business
Industry associations encourage the useof procurement technologies
Others in our industry have adoptedprocurement technologies to manage the
supply base
Mimetic Pressure
Mimetic pressure refers to the desire to follow suit and to keep up with best-in-class companies
and competitors. Three statements were used to assess this dimension (Figure 10). While best-
inclass companies are aimed to be emulated (by about three quarters of our respondents),
pressures from competitors exists, albeit not in as great of an extent (this is perceived to be
the case by about 40% of our respondents).
19
Figure 11. Supplier characteristics.
0% 20% 40% 60% 80% 100%
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
We have a long term relationship withthese suppliers
These suppliers are important to us
Formal contracts govern the relationship
We consider these suppliers as strategic innature
We value the relationship with thesesuppliers
We are tightly connected to the suppliers
I am familiar with how my suppliersinteract with my procurement
The suppliers were receptive to the use ofprocurement technologies
We are well integrated with the suppliers
The suppliers were convinced of the valueof procurement technologies
The suppliers were experienced in the useof procurement technologies
20
In a further set of questions we wanted to explore our respondents’ relationships with the
suppliers that are managed via EPTs. To do so, we asked questions pertaining to the
characteristics of these suppliers and the relationship quality with them, as well as to the
social capital that may exist in these relationships. A similar five-point scale as above was used
(anchored at “strongly agree” (value=5) and “strongly disagree” (value=1).
Supplier Characteristics
Figure 11 summarizes the results to statements characterizing the relationships with those
suppliers enabled via EPTs. The message is clear: these suppliers tend to be long-term,
important and strategic suppliers. This makes sense, since supplier enablement can consume a
significant amount of monetary resources and time.
Statements assessing the relationship quality to the suppliers were also highly rated, being
indicative of respondents being greatly satisfied with the suppliers enabled via EPTs (Figure
12).
SUPPLIER MANAGEMENT AND EPTS
Figure 12. Relationship quality.
0% 20% 40% 60% 80% 100%
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
The relationship we have with thesesuppliers is better than the relationship
we have with other suppliers
We are happy with the buyer‐supplier
relationship
The buyer supplier relationship can bedescribed as very good
The relationship we have with thesesuppliers serves as a model for other
relationships
21
Social Capital
Social capital refers to a more tacit dimension in buyer-supplier relationships that may be
nurtured by EPTs, primarily via the enhanced and likely closer interaction. Social capital can be
develop based on close interaction, and may thus facilitate exchange. We consider in the 4present research the three dimensions of cognitive, relational and structural capital .
Cognitive Capital
Cognitive capital refers to the compatibility of goals, objectives, philosophies and approaches between
parties. We assessed this dimension with four statements, as summarized in Figure 13. Most
respondents in our sample expressed a neutral sentiment, neither agreeing nor disagreeing,
with about 25 to 45% of the respondents falling into the two agreement category. This
suggests that social capital with suppliers enabled via EPTs is there, but only in less than half
of our respondents.
Figure 14. Relational capital.
0% 20% 40% 60% 80% 100%
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
The relationship is characterized bymutual respect
The relationship is characterized bymutual trust
The relationship is characterized byclose personal interactions
The relationship is characterized bypersonal friendship
The relationship is characterized byreciprocity
Figure 13. Cognitive capital.
0% 20% 40% 60% 80% 100%
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
We share the same vision of business inthe relationship
We share compatible goals and objectives
We share similar philosophies/approachesto business dealings
We share a similar corporateculture/values and management style
4 Nahapiet, J., and S. Ghoshal. 1998 “Social Capital, Intellectual Capital and the Organizational Advantage.”Academy of Management Review 23(2):242-266
Relational Capital
Relational capital refers to mutual trust, respect and friendship that may be in existence
between parties. Statements assessing this dimension (Figure 14) received a greater level of
agreement than cognitive capital. As such, relational capital seems to be more prevalent in
buyer-supplier relationships facilitated via EPTs.
22
Figure 15. Structural capital.
0% 20% 40% 60% 80% 100%
We promote an interaction betweenpersonnel across different levels
We promote an interaction betweenpersonnel across different functions
We promote frequent and intensiveinteraction
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
Structural Capital
Structural capital refers to the existence of frequent and close interactions between parties,
and was measured with three statements (Figure 15). For at least 40% of our respondents,
this dimension of social capital was present. This suggests the facilitating role of EPTs in
creating an infrastructure to generate such capital. EPTs can clearly enhance interactions
between buyers and suppliers.
23
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
Figure 16. Competitive environment.
0% 20% 40% 60% 80% 100%
The competitive intensity in our industry ishigh
There are many substitutes in the marketfor our products
Our customers have significant bargainingpower
Suppliers of critical inputs have significantbargaining power
Each year many new competitors enter ourindustry
Supply uncertainty assessed the unpredictability of issues related to suppliers, and was
measured with five statements (Figure 17). In general, the supply environment provided to our
respondents is rather stable and predictable, with good performance of the supply base. This
favorable performance may have been enabled via EPTs, through better supplier measurement
and management.
24
ENVIRONMENTAL CONDITIONS
Since a firm’s actions may be determined by environmental conditions, we aimed to
characterize these with a set of four questions. Specifically, we asked respondents to our
survey to characterize their competitive environment, as well as the uncertainty associated
with supply, technology, and information. A similar five-point scale as above was used
(anchored at “strongly agree” (value=5) and “strongly disagree” (value=1).
Competitive Environment
Statements assessing the competitive environment of the firm drew from Michael Porter’s Five
Forces, and tapped into the general competitive intensity of the industry, the availability of
substitutes, bargaining power of customers and suppliers, and the threat of new entrants
(Figure 16). Across the board, respondents described their competitive environment as very
intense. It is maybe this environment that pushes companies to become innovative and to
adopt new technologies, such as EPTs.
Supply Uncertainty
Figure 18. Technological uncertainty.
0% 20% 40% 60% 80% 100%
If we don’t keep up with the changes intechnology, it will be difficult for us to
remain competitive
Our industry is characterized by rapidlychanging technology
The rate of process obsolescence is high inour industry
The production technology changesfrequently and sufficiently
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
Figure 17. Supply uncertainty.
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Technological Uncertainty
Results from the four statements assessing technological uncertainty (Figure 18) are indicative
of the rapid change that some companies are subjected to in terms of technological advances.
This may create a mindset that may make the company more receptive to the implementation
of EPTs. We suggest that in those companies that are characterized by rapid technological
change, EPTs will receive less pushback.
0% 20% 40% 60% 80% 100%
Suppliers consistently meet ourrequirements
Suppliers produce materials with consistentquality
We have only limited inspection ofincoming critical materials from suppliers
We have a low rejection rate of incomingmaterial from suppliers
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
Figure 19. Information uncertainty.
0% 20% 40% 60% 80% 100%
We are constantly in search fornew information
Information obtained becomesquickly obsolete
Information is uncertain andcontinuously changing
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
26
Information Uncertainty
Information uncertainty was measured by three statements tapping into how important it is to
always have the most updated and relevant information (Figure 19). About half of our
respondents expressed agreement or strong agreement with these statements. This might yet
be another indicator for why some companies have an easier time adopting EPTs than others:
those companies for which information is constantly changing may realize the need for EPTs
even more, due to EPTs’ capability to enable efficient management of information.
Figure 20. Cost performance.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
5 - far better
4
3 - similar
2
1 - far worse
Labor Costs
Raw material costs
Total product costs
Quality Performance
In terms of quality performance, which was measured by five statements (Figure 21), most respondents
rated themselves as better or far better than the competition. This is an interesting observation against
the results for the cost performance dimension. As such, while companies tend to view them as being
on par on the cost dimension, the quality dimension is where they differentiate.
27
FIRM PERFORMANCE
We also wanted to assess the performance of their companies from our respondents, and asked them a
set of questions pertaining to cost, quality, delivery, flexibility and new product development
performance. Respondents were asked to evaluate their performance compared to their major
competitors on a five-point scale anchored at “far better” (value=5) and “far worse” (value=1).
Cost Performance
Cost performance was assessed in terms of labor, raw material and total product cost (Figure 20). The
results indicate that the wide majority of our respondents are either similar or better than the
competition.
Figure 22. Delivery performance.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
5 - far better
4
3 - similar
2
1 - far worse Response to changes in delivery due dates
Delivery speed
Delivery reliability
Figure 21. Quality performance.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
5 - far better
4
3 - similar
2
1 - far worse
Perceived overall product quality
Product conformance to customerspecifications
Product performance
Product features
Pre‐sales service and after sales service
28
Delivery Performance
Delivery was measured based on delivery reliability and speed, as well as the response to changes in
delivery due dates (Figure 22). The majority of our respondents evaluated themselves as better than the
competition on this dimension.
Flexibility Performance
Flexibility performance was assessed with three statements, results for which are summarized in Figure
23. Most respondents saw themselves as being similar or better than the competition on this dimension.
Figure 24. New product development performance.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
5 - far better
4
3 - similar
2
1 - far worse
Number of new products introduced eachyear
Lead time to introduce new products
Lead time to implement new or changeexisting processes
5 - far better
4
3 - similar
2
1 - far worse
Figure 23. Flexibility performance.
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Production volume flexibility(increase/decrease volume)
Production variety flexibility(increase/decrease product mix)
Flexibility of manufacturing operations
New Product Development Performance
New product development performance assessed a firm’s capability to develop and introduce new
products to the market. Here again, most respondents saw themselves as being similar or better than
the competition on this dimension.
29
A last performance dimension we assessed pertained to the performance of purchasing itself. For this
purpose, respondents were provided with a set of statements describing common purchasing
performance assessment dimensions, and were then asked to rate their degree of their agreement with
these statements. Similar as above, the five-point scale was anchored at “strongly agree” (value=5) and
“strongly disagree” (value=1). Savings targets, material target costs and other procurement targets and
goals were achieved by over 60% of our respondents. In addition, most of our respondents were
generally pleased with the performance delivered from suppliers. These favorable performance
evaluations may have again been enabled via EPTs, due to their integrative nature and ability to create
visibility
Figure 25. Purchasing performance.
0% 20% 40% 60% 80% 100%
5 - strongly agree
4
3 - neutral
2
1 - strongly disagree
Savings targets are achieved
We have a lot of value‐addedrelationships with suppliers
Procurement targets and goals are met
Overall procurement performance is high
Raw materials and parts are received inconformance with specifications
Procurement meets its material targetcost
Customer departments are satisfied withthe attention and dedication that
procurement shows for their problems
Raw materials and parts are received inaccordance with the requested delivery
dates
The quantity of materials purchased ininventory meets the company’s quantity
performance objectives
Suppliers contribute a lot to ourinnovation capabilities
30
PURCHASING PERFORMANCE
This research report provided insight into a recently conducted study into the drivers and barriers to
effective user adoption of enabling procurement technologies (EPTs). In the first phase, a series of
interviews were conducted with practice leaders. This was followed-up in a second phase with a large-
scale survey, yielding 144 useable responses. With these data, we were able to provide a current
assessment of the drivers and barriers of user adoption, and what types of EPTs are currently being
utilized. We further aimed to explain user adoption with the TAM framework, and explored institutional
pressures that may be at play. In addition, we described supplier characteristics that are enabled via
EPTs, and provided an overview of the environmental characteristics the responding firms were faced
with. Moreover, we provided an assessment of the company and purchasing performance on which our
respondents reported. With the insight presented in this report, we have generated a deeper
understanding of enabling procurement technologies and the adoption among users. It is our hope that
these insights will prove useful in your endeavors related to EPTs.
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CONCLUSION
Zycus is a leading global provider of complete Source-to-Pay suite of procurement performance
solutions. Our comprehensive product portfolio includes applications for both the strategic and
the operational aspects of procurement - eProcurement, eInvoicing, Spend Analysis, eSourcing,
Contract Management, Supplier Management and Financial Savings Management. Our spirit of
innovation and our passion to help procurement create greater business impact are reflected
among the hundreds of procurement solution deployments that we have undertaken over the
years. We are proud to have as our clients, some of the best-of-breed companies across verticals
like Manufacturing, Automotives, Banking and Finance, Oil and Gas, Food Processing,
Electronics, Telecommunications, Chemicals, Health and Pharma, Education and more.