DRAFT-----PROPOSAL FOR MSc PROCUREMENT AND SUPPLY CHAIN MANAGEMENT

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AN ASSESSMENT OF E-PROCUREMENT INTERNAL ADOPTION CHALLENGES

FOR SMEs IN TANZANIA



CHAPTER ONE

BACKGROUND INFORMATION

1.0 Introduction

E-procurement is and element of e-commerce which began around 1965 in America when

consumers were able to withdraw money from Automatic Teller Machine (ATM) and make

purchases with a credit card where vender electronically verified payment and big

corporate managed procurement and controlled inventory (USCIB 1998) since 1995 the

development has been overwhelming. It is estimated to be growing at a rate of 10% per

month reaching 40 million people in 160 countries around the globe.

Information technology came to Tanzania as early as 1956 where the public works

departments under the British administration introduced the hand-punch input device for

computer cards (Sawel 1999).It was used to capture data everywhere .In 1965, the country

first full scale computer processing facility was installed at the ministry of Finance.

In his study Rein et al (1993) revels that there is no ground and concrete measures of the

adoption of e-commerce technology and there is little understanding among SMEs in

developing countries like Tanzania. Although ICT came early in Tanzania but still e-

commerce took place later as it has been stated above by United State Information Bureau(USCIB)

The study conducted by Fuller and Jenkins (2000) in e-commerce benefits in SMEs

realized the six benefits: Time based competitive advantage, productivity improvement,

business re-engineering, and empowerment of individual employees, creating &

maintaining business relationship, and reaching new market.

E-procurement is the technology-enabled acquisition of goods and services required by an

organization at the best value obtainable. The goal is the right product or service, at the

right place, at the right time, at the right price in the most efficient manner possible. The e-

commerce relates to commercial transaction of goods and services conducted electronically

between parties mainly through the open international networks system. That is parties



interact electronically rather than by physical exchange or physical contact ( Beda and

Kajiba 2000 )

Supply chain management (SCM) has exploded as a management’s major concern over the

last years, since with the exploitation of new Information and Communication

Technologies (ICT) and in particular of Internet the potential to revolutionize, streamline

and enhance supply chain operations has flourished (Patterson, Grimm and Corsi, 2003;

Cagliano, Caniato and Spina, 2003). Specifically, e-procurement has been identified as an

important element of e-business operational excellence for large firms (Barua, Konana,

Whinston and Yin, 2001).

In Tanzania many ICT initiatives are simply not viable at present due to a number of

factors: outdated institutional frameworks, poor infrastructures, inefective payment system,

and technological skills.

In Tanzania private institutions, the practice of e-procurement has been

incorporated into the individual company policy for the past five years there

have been arguments for effectiveness among those, which use e-procurement.

In the year 2005, 46% of the private institutions that employed e-procurement

managed to cut costs and the percentage increased up to 52% in the year 2007(Daily News, 2009).

Then, by reviewing the literature on ICT adoption challenges as well as the few studies in

e-commerce and e-procurement adoption challenges, potential factors determining the

adoption challenges of e-procurement in the SMEs adoption behavior from a buyer-seller

relationship perspective were identified. The significance of these factors on the adoption

challenges of e-procurement were tested by gathering data from SMEs in Dar es salaam

Ilala municipality. Data provide useful information about the challenges affecting e-

procurement adoption in SMEs challenges from a buyer-seller relationship perspective

SMEs stand for small and medium enterprise and sometimes is used synonymous with

Micro, small and medium enterprises (MSMEs).There is no universally accepted definition

of SMEs.Different countries use various measures of size depending on their level of



development to categorize enterprises .The commonly used criteria are number of

employees, total investment and sales turnover.Mininstry of industry and trade

( MIT,2003 )

In Tanzania the vast majorities of businesses are Small and Medium Enterprises (SMEs)

rather than large enterprises (LE’s) and account for major economic growth, jobs and

assets. In the past decades the SMEs has witnessed exponential growth, resulting in

increased competition on such global scale.It is estimated that they generated more than

50% of Gross Domestic Product (GDP) (Admassie and Matambalya ibid 2002)

According to Lyatuu and Sawere ( 2007 ) it is revealed that SMEs play a pivot role in the

national effort to eradicate poverty.

This study intends to identify the internal challenges in organizational adoption of e-

procurement in SMEs in Tanzania, where Dar es salaam-Ilala municipality was chosen as a

case study. This is because Dar es salaam is among the region in Tanzania where most

users of information communication technology are found, since internet technology is

more concentrated in Dar essalaam and Arusha compared to other region (Nelienger ibid

2003)

1.1 Context of the Study

Mlinga (2007) defines procurement as the activity of assessing, buying of works, goods

and service. Procurement includes some activities that start with the identification of need

and ends with the delivery of the material, works or service required is public wherever this

process is performed by any one public organization or wherever it is performed on their

behalf or funded by public organization. As such, it is carried out in both public and private

sectors. It is, according to Mlinga (2007), the acquisition of goods or service at the best

possible total cost of ownership in the right quantity, at the right time, of the right quality,

from the right source and to the right place.

The process is referred to as e-procurement, when the exercise is done with the assistance

or use of the ICT, tools and it is referred as electronics procurement (e-procurement).The

processes of carrying out the procurement function have been undergoing various reforms



over the years in different parts of Africa. In all parts where reforms have been undertaken,

the central objectives of such have been to increase transparency and efficiency in the

process of procurement. The reforms have also aimed at combating corruption in the public

procurement system as corroborated by Kenya, Uganda and Nigeria where experience has

shown that it is a major hindrance in the attainment of value for money in the use of public

funds. From one press release “ I f there is a one-stop solution to eradicating corruption in

Asia's public procurement systems, E-procurement is it”. That's what regulators from India,

Indonesia and South Korea said in recent interviews with Supply Chain IQ.

Growth in business-to-business e-commerce remains strong as information and

communications technologies (ICTs) continue to transform organizations’ interactions

with their suppliers and customers .Supply-side activities such as electronic procurement

(e procurement) have been identified as a key area where information systems (IS)-enabled

innovations are likely to yield significant benefits for organizations (European

Commission 2005b 2006, Laub, 2001).

It’s a collaborative procurement of goods, works and services using electronic methods in

every stage which will bring in efficiency and transparency by monitoring and control in

procurement process, bring in economies of scale through aggregation of demand, reducecost of doing business for both government and suppliers and establish level playing field

and “fair” competitive platform for the suppliers, of which this can be achieved only

through effectively use of e-procurement. Thus in this study the researcher was assessing

the internal organization challenges for adoption of e-procurement.

1.2 Emerging Challenges

Sheya (1992),when referring to information technology evolution in Tanzania, cautions

about ICT policy and strategies in the country. He mentioned that there was an imbalance

in ICT series due to the fact that Tanzania being one of the developing countries had not

reached a high stage in ICT application. Poor infrastructure, lack of funds, inadequate

service facilities, lack of training, poor ICT knowledge/skills, and lack of commitment



towards ICT are among the problems that affect effective use and application of ICT,e-

procurement being one of the element.

ICT use and application in most government institutions in Tanzania in the 1980s and

1990s was generally low. Most of the computers were neither used effectively nor to full

capacity. This condition has been attributed by factors such of lack of adequate skills,

knowledge, experience, pace of technology change and resistance to change. To date, the

situation is still the same in some institutions ( Ngomuo 1999)

Moreover SMEs are often the main driver for a country’s economic growth. However, as

the number of SMEs increases, competition increases, which then results in a decrease in

prices, customer base, or both. This in turn will erode existing profits, creating less

incentive for people to start SMEs.

This dynamic is captured by balancing feedback loops where the greater the number of

SMEs, the greater the competition, resulting in a slower rate of growth for SME.

ICT can thus play a very important role because it can help SMEs both create business

opportunities and combat pressures from competition. Appropriate ICT can help SMEs cut

costs by improving their internal processes, improving their product through faster

communication with their customers, and better promoting and distributing their products

through online presence.

Given the benefits that ICT can bring to SMEs, SMEs in most developing countries

including Tanzania still have been slow to adopt it.SMEs still use basic communication

technology such as fixed phone line and fax, and only few use CRM softwa,meanwhile,

their counterparts in developed countries are using advanced ITs.

One cause of limited adoption is the lack of dynamism between ICT firms and SMEs

outside of the ICT sector. ICT firms have not provided goods and services tailored to SMEs

in the past because demand from SMEs has been low. However, their demand is low in part

because ICT products available in the market are too complex and expensive. Thus more

studies need to be conducted on this area and its application in our SMEs for the

development.



1.3 Statement of the Research problems

SMEs have a critical role to play in national economy. Despite the advances in information

and Communication Technology which lead to innovation of electronics commerce and

acceptance by large organization of such technologies the same level of adoption is not

evident among SMEs ( Bonde and Burn 2002 ).

In keeping abreast with the technological development in the world, in general, and

Tanzania, in particular, few, large enterprises (LEs) private organizations in Tanzania have

introduced the use of e-procurement. The introduction of this procurement has lead to

significant change in terms of efficiently and cost.

According to Lovelock (1996), in today’s increasingly competitive environment, the

quality and quantity (in terms of the length of time and the numbers of places) of service

that an organization renders are critical to its success.

Indeed, the procurement department and organization mission is to provide quality and

competitive products that reflect the value for money. The mission of the procurements

department,role of SMEs in national economy,importance of implimenting e-procurement

in an organisation and all else which has been said above made the researcher develop

some keen interest in this study in general, and Tanzania, in particular. This lack of abundant research and findings has resulted in the failure by people to properly understand,

what are the internal organisation adoption challenges, how are the challenges affect the e-

procurement adoptin in an organizations especially SMEs which contributes much to

national economy , therefore the study will be on assessing the internal organizational

challenges facing the SMEs in adapting e-procurement.

1.4. Research Question.

The researcher wanted to answer a number of questions.



1.4.1. The Main Research Question

The main research question is “What are the internal challenges facing SMEs in adopting

e-procurement in Tanzania?”

1.4.2. Specific Research Questions

i. What are the organizational internal challenges of e-procurement adoption for

SMEs?

ii. What are internal technological challenges of e-procurement adoption for

SMEs?

iii. What are internal environmental challenges of e-procurement adoption for

SMEs?

1.5 Research objectives

The study is designed to achieve the following general and specific objectives.

1.5.1. The Main Research Objectives

The general objective of the study is to address the internal challenges faced by

organizations in implementing the e-Procurement .Secondly assess the internal challenge

organization in adopting the e-procurement and finally, measures that could be applied to

solve the problem.

1.5.2. Specific Research Objectives

i. To determine the internal organizational factors that limit e-procuremnt.



ii. To determine the internal technological factors that limit e-procurement.

iii. To identify environmental factors encountered by organizations related to use of e-

procurement.

1.6. Significance of the Study

The researcher hope the study will be of benefit to the following:

Business entities.

The findings from this study are expected to provide better understanding of the factors

which hinders e-procurement adoptions in SMEs and other business entities.

Academicians.

The findings of the study are also likely to help procurement academicians to discover issues which need research and actually carry out research on them. This will also add

value to the body of knowledge in bridging the gap between theories and practices of the

application of e-procurement in SMEs.

Regulators and the government

The finding will provide useful understanding to SMEs and policy makers of the factors

that are setback, supportive, influencing and accelerating the adoption of e-procuremnt

Also they can be useful in developing countries context to increase conducive environment

for adoption of e-procurement by SMEs

The results of the study are likely to encourage the government and responsible authorities

to take necessary action to address challenges facing the procurement practitioners so as to

bring about an easily implement able legal framework in this area of the study. Research of

this form is required before government policies can be formulated that seek to increase the

adoption rate among SMEs and other organizations.

1.7 Scope of the Study



The research is a case study that will involve only few organizations which are based in

Dar-es-Salaam. And the topic of the study covers e-procurement and internal organization

challenges for SMEs.

1.8 Limitations of the study

The limitations that hinder the researcher to conduct his study efficiently are:

(a)Time limit

The time provided for study is not enough to collect all the necessary information. The

situation is worse because the researcher is a part time student who carries out his normal

duties with his employer. In order to mitigate the effect of time constraint, the researcher

has settled for a case study that will limit him to one organization within Dar-es-Salaam.

(b) Insufficient funds

The study will require a lot of money in order to obtain all the necessary data. Therefore,

this financial constraint is likely to limit the amount of data and the area to be covered inthe study. The choice of case study will also mitigate the effect that this constraint might

have on the research.

(c) Confidentiality of information

Some of the information is likely to be regarded as confidential by the officers concerned

and, therefore, deny the researcher access to it. The researcher will try to persuade the

officers to allow him access.

(d) Uncooperative attitude by respondents



It is common for research assignment to come across potential respondent who are not

willing to render cooperation to the researcher. Like in the case of confidentiality of

information, the researcher will try hard to persuade the relevant unwilling respondents to

cooperate.

1.8 Delimitations of the Study

The research is a case study that will involve only few organizations which are based in

Dar-es-Salaam region Ilala District. Moreover the study was conducted at private business

organizations and the topic of the study covers e-procurement. a branch of e-commerce and

the study will focus only on internal organization challenges for adoption of e-procuremnt.

Moreover the respondents or organizations involved were informed that the information

would be used for only academic purpose and where necessary they will be provided with a

copy of study findings.

The researcher is also going to use different method of data collections to facilitate the

exercise of data collection.

LITERATURE REVIEW



2.0 Introduction

This chapter seeks to examine the existing literature about the challenges of e-procurement

adoption for SMEs in Tanzania. The main focus of the study will be to analyze the

challenges faced by organization as barrier to adopting the e-procurement.

2.1 Definitions of Terms

Purchasing

Lyons and Gillignham (203) define purchasing as” to obtain material of right quality from

the source delivery at the right time and at the right place.

Mahanga (2001:9) stated purchasing as the process of buying goods a process that

encompasses learning of or identifying the needs sourcing and selecting a supplier

negotiating price and other delivery terms and following up to ensure timely delivery.

Dobber and Burt (1996:35) defined purchasing as all activities essentially associated with

the acquisition of the service and equipment used in the operation of the organization.

Public procurement

Public procurement entails the acquisition of goods works and services by a procuring

entity using public funds ( Ngwalo, 2004)

E-business

E-business includes e-commerce but also covers internal processes such as production,

inventory management, product development, risk management, finance, knowledge

management and human resources. E-business strategy is more complex, more focused on

internal processes, and aimed at cost savings and improvements in efficiency, productivity

and cost savings.

An e-business strategy is also more difficult to execute, with four directions of integration:

vertically, between Web front- and back-end systems; laterally, between a company and its

customers, business partners, suppliers or intermediaries; horizontally, among e-commerce,

enterprise resource planning (ERP), customer relationship management (CRM), knowledge



management and supply-chain management systems; and downward through the enterprise,

for integration of new technologies with radically redesigned business processes

E-commerce

E-commerce covers outward-facing processes that touch customers, suppliers and external

partners, including sales, marketing, order taking, delivery, customer service, purchasing of

raw materials and supplies for production and procurement of indirect operating-expense

items, such as office supplies. It involves new business models and the potential to gain

new revenue or lose some existing revenue to new competitors.

It's ambitious but relatively easy to implement because it involves only three types of

integration: vertical integration of front-end Web site applications to existing transaction

systems; cross-business integration of a company with Web sites of customers, suppliers or

intermediaries such as Web-based marketplaces; and integration of technology with

modestly redesigned processes for order handling, purchasing or customer service.

E-informing

e-Procurement can be used for the simple job of exchanging purchasing information

between buyers and suppliers. Using Internet technologies such as e-mail the process of

accumulating a database of supplier information can be made much simpler than by usingtraditional contact.

Perhaps most importantly, these databases can be applied in the future to generating action

in a reverse auction. By informing suppliers of forthcoming auctions an enterprise can

allow suppliers the time to build a tender.

Web-based ERP

ERP software can also issue reschedule notices to suppliers. Reschedule notices are

supplementary orders that can either cancel, delay, speed up and alter the size of pending

orders. It’s able to automatically generate purchases orders using the Bill of Materials for

the finished product as a basis. Web-based ERP software can go one step further. As well

as generating purchase orders it can forward them to suppliers in order to fully automate

the procurement process. Based on the ideal manufacturing process laid out by the ERP



software, these orders ensure that materials will be available in time to begin production.

E-auction

An e-enabled opportunity to optimize the price you pay for the good or service being

tendered. This is enabled in a real time open and transparent environment with clearly

defined and agreed start and finish times. I t is an environment where both the

buyer and seller have clear visibility of the bidding process but essentially it is an open

environment where current or prospective sellers can bid for your business. The process is

controlled by you and is subject to the rules of the game which are developed and agreed

before the launch of the auction by all participating parties. The ultimate decision is also

controlled by you, whether you accept the lowest bid or whether you take the final

selection offline to satisfy yourself of supplier compatibility and fit with your business.

E-soucing

E-sourcing is the use of the Internet for the identification of new suppliers for a category of

purchasing requirements. Otherwise known as reverse auctioning, e-sourcing is a method

by which enterprises can move their procurement process online in order to reach a larger

number of suppliers than would be possible through usual channels.

The major benefit of e-sourcing is the competitive aspect by which suppliers bid for projects. Suppliers submit bids along with various details of the service they promise to

provide, and purchasers can pick and choose from the offers.

E-procurement

E-procurement is defined as any ICT designed to facilitate the acquisition of goods by a

commercial or a governmental organization over the Internet (Davila, Gupta and Palmer,

2003). E-procurement is application of electronic commerce in procurement, it include e-

procurement software, B2B auctions, B2B market exchanges and purchasing consortia that

aim to automate workflows, consolidate and leverage organizational spending power and

identify new sourcing opportunities online (Davila et al. 2003). Future advances would

extend these ICT to create collaborative SCM tools (Cagliano et al. 2003; Folinas et al,

2004). E-procurement’s benefits include:



Lower administration costs, inventories and purchasing prices; shorter order-cycle time;

enhanced cooperation with suppliers, performance and multi-chain operations (Croom,

2000; Sigala, 2003c).

Goods

Section 3 of the PPA 2004 describes goods as raw materials, product equipment and other

physical objects of every kind and description whether in solid, liquid or gaseous form,

electricity intangible assets and intellectual property, as well as services incidental to the

supply of the goods, provided that the value of the service does not exceed the value of the

themselves.

Works

PPA (2004) defined works as

i. all works associated wit the construction, reconstruction demolition, repairs or

renovation of building structure, roads or air fields.

ii. any other civil works, such as site preparation , excavation, creation, building

installation of equipment or material decoration and finishing

iii. services which are rendered and contracted on the basis of performance of a

measurable physical output such as drilling, mapping satellite photography or

seismic investigation. Provided that contracts which introduce the provisionOther factors also contribute to the limited support of works and services shall be regarded

as works contracts if the total value of the works is greater than the value of the service

covered by the contract

Services

PPA (2004) define services as any objects of procurement other than goods or works,

which involve the furnishing of labor time or effort including the delivery of reports

drawings or designs, or hire to use of vehicles machinery or equipment for the purpose of

providing transport, or for carrying out work of any king with or without the provision of

drives operators or technician.

Challenge: a difficult task that tests somebody’s ability and skills



Procuring entity: means a public body or any other body or unit established and mandated

by the government to carry out public functions. (PPA, 2004)

Value in e-procurement.

Value of e-procurement adoption is defined in this study simply as benefits from its

implementation over costs. E-procurement adoption is justified only when the former are

large enough to cover the latter.

Trust in e-procurement:

A great deal of activities in electronic commerce systems relies on trust. Relationship

between buyer and supplier is a mix of mutual dependency and suspicion.

2.2 Analysis of Underlying Theories or modelsGlobally Challenges to adoption, as with any other new system fielding, push-back

from users, both internal users and even some vendors can create friction and resist

the change other potential barriers for an effective adoption includes risk,

uncertainty, inefficiencies from supplier and catalogue-content readiness, cultural

change, staff resistance, need for firm wide training with likely disruption of on-

going activities.

In the Australian case, cost, top management support, inadequate e-procurement

solutions, business partners and lack of skilled personnel were found to be important

(Hawking et al. 2004; Stein and Hawking, 2004).Moreover in the case of small

businesses in Canada, security issues and the realization that ‘once committed to

automating business processes, nothing in those businesses will ever be the same

again’ grounds the argument that ‘big businesses, universities and governments can

survive e-business failures. Smaller businesses cannot afford them at all” (Bray 2004:

6)

In public institutions e-procurement has been incorporated into different

governments’ policies to ensure effectiveness in purchasing and supply of goods.

Preschal (2004) explains that in United Kingdom, the employment of e-procurement

in government institutions has been fruitful in cutting off costs with regard to public

expenditure although about 24.6% of public institutions proved failure in practicing



of e-procurement. This information is different from the results of studies done in

United States of America (USA) public institutions which about 89% proved fruitful

with regard to the use of e-procurement (Hughes, 2002, Paschal, 2007).This explain

the value in e-procurement implementation in organization.

The study conducted on the challenge for ICT adoption includes high costs, technical

literacy, poor software quality available in the market, lack of training and experience of

ICT integration and inability of the organization to relate ICT investments to business

value amongst other, thus needing immediate attention. From studies above the general

them has been the technological, enviromental and organizational factors that act as barrier

for adoption of SMEs in e-procurement.

More over the different studies pointed out the adoption challenges for any ICT

implementation as follows:

Organizational factors

The ICT literature in general (e.g. Dewar & Dutton, 1986; Galbraith, 1977; Min & Galle,

1999) and in the hospitality industry (e.g. Sigala, 2003a; Siguaw et al, 2000) has

demonstrated that larger organizations are more likely to facilitate ICT innovation and

adoption due to their financial capacity, infrastructure and organizational power.

By analogy, it can be claimed that e-purchasing adoption can be influenced by a large firm

size and purchasing workforce. The rationale is that a buying firm with a larger purchasing

unit is more likely to adopt e-purchasing, as it has greater information processing capacity,

needs and organizational power than smaller firms. Moreover, a buying firm with a large

purchasing unit is also more likely to possess the financial, skill resources and bargaining

power to achieve the economies of scale required.

Within hospitality, affiliation with a hotel chain/alliance or consortia was found to

positively affect ICT adoption and use (Siguaw et al. 2000, Sigala, 2003b). Small firms

also lack in ICT knowledge and technical skills. OECD (1998) and Walczuch, Van Braven

& Lundgren (2000) attributed the failure of European small and medium enterprises

(SMEs) to utilize e-commerce to their lack of e-commerce and Internet knowledge.

Because of the obstacles in developing the necessary skills and technical knowledge, many

firms postpone ICT adoption until they gain sufficient internal expertise. As ICT



knowledge of hospitality staff also positively affects ICT adoption and use (Sigala, 2003a),

it is claimed that e-procurement adoption and use by foodservice firms can also be

influenced by staff’s knowledge on e-procurement.

Innovation-related factors

Research on innovation revealed that the characteristics of innovation, as perceived by the

adopting firm, can crucially impact on its adoption (Rogers, 1983). Based on a meta

analysis of the technological innovation literature concerning the characteristics of

innovations, Tornatzky & Klein (1982) identified relative advantage, compatibility, and

complexity as innovation characteristics salient to the formation of the adoption attitude.

Relative advantage is the degree to which an innovation is perceived as better and more

beneficial than its precursor, compatibility is the degree to which an innovation is

perceived as consistent with existing values, needs, and past experiences of the adopter,

while complexity refers to the degree to which an innovation is perceived as difficult to use

and implement (Rogers, 1983).

Thong (1999) proved that positive perceptions regarding the ICT benefits provided an

incentive to adopt ICT. Drew (2003) also concluded that many managers rejected the

notion that e-commerce could be useful to their businesses as they had no idea of the

potential e-commerce benefits, while Walczuch et al. (2000) revealed that the main barriers

to Internet adoption and use are simply managers’ concern and perceptions that the Internetwould not lead to more efficiency or lower costs. Preliminary research on e-procurement

(Min & GGalle, 2003) also revealed that perceptions regarding the benefits, costs and risks

of e-procurement systems significantly affect the latter’s adoption. Each system of e-

procurement involves different risks, costs and investments. Although implementation of

B2B auctions, market exchanges, and purchasing consortia via existing networks require

limited costs, e-procurement software involves larger investments. The business and ICT

risks and complexities of e-procurement that can affect its adoption are analyzed below

(Davila et al, 2003):

• Internal business risks: firms’ uncertainty on the availability of appropriate resources to

successfully implement e-procurement such as well performing and effective systems, that



can also be integrated with existing ICT, e.g. accounting, human resources, asset, cash,

inventory management and production planning.

• External business risks: e-procurement tools need to cooperate with external

constituencies (customers, suppliers), who also need to develop internal systems for

facilitating electronic communication. However, suppliers may be hesitant or even unable

to meet such demands without guarantees of future revenue streams.

Moreover, price reductions due to auctions and enhanced global online competition may

force suppliers to reduce their quality and services.

• Technology risks: companies also fear the lack of a widely accepted standard and a clear

understanding of which e-procurement technologies best suit the needs of each company.

The lack of a widely accepted solution blocks the integration of different e-procurement

software across the supply chain. This implies the need of open standards for facilitating

inter-organizational e-procurement systems.

• E-procurement process risks: refer to the security and control of the eprocurement process

itself, as security breaches endanger the function of operating systems as well as the

information access, exchange, and disclosure. 3. professionalism in their markets. The

concept of legitimacy is crucial in eprocurement as its systems are both new andsophisticated. Could a foodservice operator that lacks an e-procurement system, for

example, be considered a legitimate player in the minds of potential suppliers/distributors?

So, it is expected that greater pressures from institutional actors would relate to greater e-

procurement exploitation.

According to chamber of commerce briefing Kit on e-commerce for SMEs in Africa(1999)

it was argued that there are two distinct kinds of constraints that SMEs face in the adoption

of information and communication technology (ICT) for marketing and trading activities.

The first type is particularly to SMEs in terms of information and communication

Technology (ICT) diffusion and the second applies to all enterprises and concerns the

policy environment in which information and communication Technol

Enviromental factors.



Industry, market scope, competitive pressure and external IS support are considered to be

factors that influence SMEs’ willingness to adopt e-procurent.

Definitions of SMEs differ across countries and industry sectors, and can be based on a

variety of criteria, such as number of employees, invested capital and total value of sales.

However more important for policy considerations are the characteristics of these

businesses, which typically include ;( Small and medium enterprises Development policy

2002).

SMEs all over in the world are known to play a major role in social economy development.

This is apparently the case of Tanzania, where SMEs contribute .Significantly to

employment creation, income generation and stimulation of growth in both urban and rural

areas.From another study conducted by (Ramdani and Kawalek 2007b) on “Predicting

SMEs willingness to adopt ERP, CRM, SCM & E-procurement systems” they pointed out

technology,enviroment and organization to be barriers.

There is no universally accepted definition of SME.Different countries use various

measures of size depending on their level of development. The commonly used yardsticks

are total number of employees, total investment and sales turnover. In the context of

Tanzania, micro enterprises are those engaging up to 4 people, in most cases familymembers or employing capital amounting up to Tshs 5.0 million, The majority of micro

enterprises fall under the informal sector. Small enterprises are mostly formalized

undertakings engaging between 5 and 49 employees or with capital investment from Tshs.5

million to Tshs.200 million. Medium enterprises employ between 50 and 99 people or use

capital investment from Tsh200 million to 800million.



Category Employees CapitalInvestment(Tsh)

Micro Enterprises 1-4 Up to 5milSmall Enterprises 5-49 Above 5mil to

200milMediumEnterprises

50-99 Above 200mil to800mil

Large Enterprises 100+ Above 800mil Source: URT (Small and medium Enterprises Policy 2002)

E procurement systems consist of a number of different tools. These include automation of

internal ordering processes, online catalogs from approved vendors, and an electronic

Request for Proposal (e-RFP) process that leverages online auctions (e-auctions) to

accumulate bids on providing goods and services for a specific project.

E-Procurement is an Internet technology solution facilitating corporate buying using the

Internet. Four major e-procurement Internet-based ICT tools are identified (Davila et al,

2003). First, e-procurement software refers to any internet-based software application

(traditional EDI e-procurement systems have also migrated to Internet) that enables

employees to purchase goods from approved electronic catalogues in accordance with

company buying rules, and captures necessary purchasing data in the process. To achieve

that, the software uses protocols to automatically route and move through the necessary

approval processes all employees’ purchase selections of a good found on a supplier

catalogue. Internet market exchanges are called the e-procurement systems that bring

together multiple buyers and sellers in one central virtual market space and enable them to

buy/sell from each other at a dynamic price.

Internet B2B auctions are the third type of e-procurement systems referring to events in

which multiple buyers place bids to acquire goods/services at an Internet site,

Last, Internet purchasing consortia gather the purchasing power of many buyers to

negotiate more aggressively discounts,



2.3 Analysis of empirical studies

2.3.1. From Abroad

The challenges are globally and locally identified. Globally Challenges to implementationinclude, as with any other new system fielding, push-back from users, both internal users

and even some vendors can create friction and resist the change other potential barriers for

an effective adoption includes risk, uncertainty, inefficiencies from supplier and catalogue-

content readiness, cultural change, staff resistance, need for firm wide training with likely

disruption of on-going activities. In the Australian case, cost, top management support,

inadequate e-procurement solutions, business partners and lack of skilled personnel were

found to be important (Hawking et al. 2004; Stein and Hawking, 2004) In the case of small

businesses in Canada, security issues and the realization that ‘once committed to

automating business processes, nothing in those businesses will ever be the same again’

grounds the argument that ‘big businesses, universities and governments can survive e-

business failures. Smaller businesses cannot afford them at all” (Bray 2004: 6)

Most of empirical results of studies undertaken elsewhere accounts for the positive impact

of the ICT on industry perfomance,by measuring intangibles. These include better

responsiveness to customers or even intrinsic value in the quality of the product.(Ross

2005) in the study undertaken to survey industry in Canada established that ICT usefulness

could be measured from other indicators such as the ability to:internaly attract new

customers, participate in overseas markets, generate innovation, to save recourses ,get

flexibility ,improve decision making, to increase productivity, gain competitive positions,

gain business procedure and manage supply chain relationships.

Futher, the work undertaken by Brynjolfsson et al (2005):in the study undertaken in Europe

to develop an agenda regarding value creation with broadband and associated internet

technology and e-business solutions among European industries, established that

ICT could be redefined as a fundamental enabler in creating and maintaining a number of

useful things. These includes flexible business network of inter organizational

arrangements, joint ventures, alliances and partnerships long-term contact, technology



licencing,and marketing agreement,raesghaping of business models to strength the

competitive performance of the industries.

From the study conducted e-procurement adoption in Australia despite the great benefits of

e-procurement technologies, their adoption is still at their early stages (Davila et al. 2003).

A variety of factors may affect a firm’s decision to adopt and implement a particular ICT.

In consolidating prior studies examining innovation, Kwon & Zmud (1987) classified

variables that potentially influence ICT adoption into five broad categories: individual, task

and innovation related, organizational and environmental characteristics. Patterson et al.

(2003) also showed that the following organizational and environmental factors positively

affected the adoption of ICT in SCM: organizational size; decentralized organizational

structure; supply chain strategy integration; transactional climate and supply chain member

pressure, and environmental uncertainty. Kwon & Zmud (1987) also suggested that these

factors may be important to differing degrees depending on the context or technology. For

example, individual factors such as age or education are often more relevant with

individual adoption of technology rather than organizational innovation whereby decisions

are made by committees. Additionally, task characteristics may be isolated and examined

when individual technologies are being studied. As this study examines the organizational

adoption of e-procurement systems, the focus is limited on the following key

organizational, innovation-related and environmental factorsTechnology-Organization-Environment (TOE) framework developed by Tornatzky and

Fleischer (1990) has been tested and validated by many studies (e.g. Kuan and Chau 2001,

Premkumar and Roberts 1999, Iacovou et al. 1995). TOE framework has also been claimed

to be a generic theory of technology adoption/diffusion (Zhu et al. 2003) that can be used

to study SMEs’ challenges to adopt ES as illustrated in Figure 1 below (Ramdani and

Kawalek 2007a). This study will use this framework to develop a statistical model that can

be used to show which SMEs are more likely to become adopters of ES.

2.3.2 From Tanzania



Within east African countries,Matambalya and Wolf (2003) in the survey conducted for

SMEs in Kenya Uganda and Tanzania indicated a positive correlation between industry

competitiveness and use of ICT.Regard less of the fact tha the focus of the study was on

how the micro level competitiveness is influenced by ICT together with other factor inputs

such as labour,physical capital and production of material.

Kamuzora (2005) when studying e-commerce readiness in Tanzania, underscored its

importance and jointed out a number of initiatives undertaken towards the development of

ecommerce friendly enviroment.These includes ,the liberalization of telecommunication

and development of information society infrastructure, other includes addressing e-

commerce legal frame work, overly bureaucratic trade procedures,trade restrictions and

unfriendly investment climate special arrangement for companies such as Tax allowances

as wel as efforts to setting up online access to and submission of tenders to enabled become

are also negotiable. Trade promotion organizations are focusing on possible e-commerce

opportunities in addition to the government encouraging the creation of education

institution that will produce population of knowledge workers.

Although there is evidence of several attempts to study linkages between ICT investments

and industry perfomance, there is still no clear confirmation on the relationship betweenICT and economic variables such as profitability, productivity and employment dynamics.

Even when Chowdhury and Wolf (2003) use modified Cobb-Douglas production functions

to investigate labor productivity and returns for an SME survey conducted in Tanzania and

Kenya their main findings was that ICT investment have no significant impact on

performance of SMEs.

Mrope (2005:29-30), in the speech commended, the government of Tanzania (GoT) that it

has long realized the importance of procurement to the economic development and hence

to the fulfillment of key objectives within the national poverty reduction strategy. The

government has realized that efficient procurement system enhance effective use of public



financial resource, improves availability quality reliability and cost public service and more

importantly is an integral part of government process

He added that according to the country procuring Assessment report (CPAR) (2003) 70%

of the government budget is utilized through public procurement processes for central and

local government.

The government is fully aware that procurement system is weak and need to be

strengthened substantially enable it to ensure that the procurement laws and institutions

become effective tools in efficient and transparent management of public funds.

2.3.1. Gaps in knowledge

In view of the above, there exists an imperative need for study to asses the challenges for

SMEs in Tanzania to adopt the e-procurement in three main contest technology,

enviroment and organizational context.

2.4 Conceptual model



The conceptual framework explained above can be described in the model diagram.

Source Ramdani and Kawalek( 2007)

2.4.1. Description of the model/Framework

TECHNOLOGICAL

CONTEXT.

Relative

advantage Compatibility

Trialability

Observability

SMEsADOPTION

CHALLEN

GES

ENVIROMENTAL

CONTEXT

Industry

market scope

Competitive

pressure

External IS support

ORGANISATION

CONTEXT.

Topmanagenet

support.

Organisation

readness

IS experience

Size



Technological context

Premkumar (2003) argues that there are very few studies that have examined the impact

technological characteristics in the context of small business. Rogers’ (2003) innovation

diffusion theory for organizations will be used as a theoretical basis for studying the impact

of technological factors on SMEs’ challenges to adopt E-procurement.

Relative Advantage is defined as “the degree to which an innovation is perceived as being

better than the idea it supersedes” (Rogers 2003, pp. 229) studies found this variable to be

positively related to the adoption of IS innovations (e.g. Grandon and Pearson 2004, Kuan

and Chau 2001). When an IS innovation is perceived to offer relative advantage over the

firm’s current practice, it is more likely to be adopted (Lee et al. 2004). This view has

support in the general innovation/diffusion research (e.g.Moore and Benbasat 1991,Tornatzky and Fleischer 1990), and more specifically in the context of

small business (e.g. Thong 1999, Cragg and King 1993). ES provide many benefits to

adopters in terms of accommodating business growth, improving business processes and

reducing business operating and administrative costs (Markus and Tanis 2000). In a highly

competitive marketplace, these benefits make significant motivations for adopting these

technologies.

Organizational context

The characteristics in the organizational context seem to be the primary focus of many

studies in the context of small business (Premkumar 2003). Top management support,

organizational readiness, IS experience and size are considered to be factors that influence

SMEs’ willingness to adopt of ES.

Jeyaraj et al. (2006) found that top management support to be one of the best predictors of

organizational adoption of IS innovations. Top management can stimulate change by

communicating and reinforcing values through an articulated vision for the organization

(Thong 1999). Many studies have found top management support to be critical for creating

a supportive climate for the adoption of new technologies (e.g. Premkumar and Roberts



1999, Grover and Goslar 1993). In SMEs, the decision-maker is very likely to be in the top

management team and his/her support is vital for the adoption to take place.

Environmental ContextIndustry, market scope, competitive pressure and external IS support are considered to be

factors that influence SMEs’ willingness to adopt ES.

It has been argued that the industry in which the firm operates influences the adoption of IS

innovations (Levenburg et al. 2006, Raymond 2001). Service industries, which rely on the

processing of information, depend on information systems (Goode and Stevens 2000).

Retail industries, which rely on the transfer of goods, may have a greater dependence on

point-of-sale systems (Premkumar and King 1994). Manufacturing industry rely more on

ERP systems. Fallon and Moran (2000) showed that IS usage varies not only across sectors

(i.e. across Standard Industrial Classification codes) but also within constituent sub-

sectors.

2.4.2. Underlying Assumptions

This research has assumed that the external organization adoption challenges have been

overcomed.

2.4.3. Description of the variables

Compatibility of an innovation with a business is defined as “the degree to which an

innovation is perceived as consistent with the existing values, past experiences, and needsof potential adopters” Rogers 2003, pp. 240). Premkumar (2003) found compatibility to be

an important determinant of IS innovations’ adoption. The adoption of new technologies

can bring significant changes to the work practices of businesses and resistance to change

is a normal organizational reaction (Premkumar and Roberts 1999). Therefore, it is

important, especially for small businesses, that the changes are compatible with its

infrastructure, values and beliefs.

Complexity is defined as “the degree to which an innovation is perceived as relatively

difficult to understand and use” (Rogers 2003, pp. 257). The complexity of the technology

creates greater uncertainty for successful implementation and therefore increases the risk in

the adoption decision (Premkumar and Roberts 1999). This factor has been found to be

negatively associated with adoption of IS innovations (e.g. Grover and Goslar 1993,



Cooper and Zmud 1990). It has also been found to be an important determinant of IS

innovations’ adoption in the context of small business (e.g. Lertwongsatien and

Wongpinunwatana 2003, Thong 1999)

Trailability is defined as “the degree to which an innovation may be experimented with on

limited basis” (Rogers 2003, pp. 258). In the context of small business, Kendall et al.

(2001) found trailability to be positively related to e-commerce adoption. The IS

innovations under examination in this study are currently new to the SME market. Hence,

trailability is expected to be exceptionally relevant.

Observability is defined as “the degree to which the results of an innovation are visible to

others”(Rogers 2003, pp. 258). In the context of small business, operability is the only

attribute out of the five technological characteristics that has not been found to be

positively related to IS innovations’ adoption. IS innovations that have been seen to make

an impact in the industry in which an SME operates is more likely to be viewed in a

favorable light.

Organizational readiness is defined as “the availability of the needed organizational

resources for adoption” (Iacovou et al. 1995, pp. 467). Organizational readiness, as used in previous research on electronic data interchange (EDI) adoption, measures whether a firm

has sufficient IS sophistication and financial resources (Iacovou et al. 1995,Swatman and

Swatman 1992). Indeed, economic costs and lack of technical knowledge are identified

as two of the most important factors that hinder IS growth in small organizations (Cragg

and King 1993). IS sophistication assesses whether a firm is

technologically ready to undertake the adoption of an IS innovation, while financial

resources express an organization’s capital available for IS investment (Chwelos et al.

2001).Firms that do not have much IS experience may be unaware of new technologies or

may not want to take a risk to adopt them. Dholakia & Kshetri (2002) suggest that

technologies already existing in an organization influence the future adoption of a new

technology. They argue that the incremental cost and knowledge required to adopt the

Internet, for example, will be much smaller if a firm already owns a computer and a



telephone. Moreover, other studies have found that prior IS experience influence the

adoption of new technologies (e.g. Kuan and Chau 2001, Fink 1998).

Organisational size has been identified by Jeyaraj et al. (2006) as one of the best

predictors of organizational adoption of IS innovations. Goode and Stevens (2000) study

shows that business size, previously the best indicator of technology adoption, was not

significantly related to IS innovations’ adoption. However, the typical argument is that

larger firms have a greater need, resources, skills and experience and the ability to survive

failures than smaller firms (Levenburg et al. 2006, Yap 1990). It can be argued that larger

firms are more likely to adopt ES.

Competitive pressure has been identified by Jeyaraj et al. (2006) as one of the best

predictors of organisational adoption of IS innovations. Competition in the adopter's

industry is generally perceived to positively influence the adoption of IS innovations

(Gatignon and Robertson 1989). This is argued to be even more evident if the innovation

directly affect the competition (Kuan and Chau 2001,Premkumar and Roberts 1999).

Premkumar and Ramamurthy (1995) claim that it has become a strategic necessity to have

these new technologies to compete in the market place.

External IS support refers to the availability of support for implementing and using IS

innovations (Premkumar and Roberts 1999). External IS support has not only been found to

be an important determinant of IS success (e.g. Delone 1988, Raymond 1985), but also to

be positively related to IS innovations’ adoption (e.g. Premkumar and Roberts 1999, Fink

1998). With the popularity of outsourcing and the growth in third party support, firms are

more willing to adopt new IS innovations if they feel there is adequate vendor or third party

support (Premkumar and Roberts 1999).



Industrial Market scope,Zhu et al. (2003) defines market scope as “the horizontal extent

of a firm’s operations” (pp. 254).they argue that the role of market scope as a predictor can

be explained from two main perspectives. First, internal coordination costs increase as

firms expand their market reach due to the increased administrative complexity and

information processing (Gurbaxani and Whang 1991). Business digitization is claimed to

help reduce these costs (Shapiro and Varian 1999). Second, external costs (search costs and

inventory holding costs) would also increase with market scope (Gurbaxani and

Whang 1991). When firms expand their market reach, they incur search costs which

include searching for consumers, trading partners, and distributors. They may also incur

inventory holding costs as a result of not controlling demand uncertainty in different

market segments (Chopra and Meindl 2001).SMEs adopting E-procurement’s are expected

to decrease external costs. Arguably, firms that serve broader markets are more likely to

adopt e-procurement.

2.4.4. Relationships among the Variables.

Dependent variable

SME’s existence of internal challenges to adopt E-procurement

Independent Variable

Size,Industry,Market Scope, IS Experience,Relative Advantage,Compatibility

,Complexity,Trialability,Observability,Top Management Support,organisationalreadness,Competitive Pressure ,External IS Support

2.5. Statement of Hypothesis

“SMEs with great ability to overcome internal adoption challenges are more likely to adoptthe e-procurement”.



RESEARCH METHODOLOGY

3.0 Introduction

Case study research methodology is a rigorous method of research. It is powerful in

understanding “the dynamics presented within single settings”. It is therefore suitable for

studies focusing on information systems in organizations when interest has shifted to

organizational rather than technical issues. This study aims to provide a description of the

challenges of e- procurement utilization by small firms, and explain their adoption

challenges within the organization.

3.1 Research Strategy

A research strategy is systematic way of dealing with a research problem. The basis behind

the strategy is to look into how people view reality. Lufindi (2008)” points out that the

research paradigm follows anti passivism which stresses on subjectivist approach to

studying social phenomenon. It attaches importance to a range of research techniques that

focus on qualitative analysis. The techniques include, for example, participant observation

and personal interview.

Phenomenology is a social science approach which urges that business situations arecomplex and unique; they are the function of a particular set of circumstances and

individuals raising questions about the generalisation of research that aims to capture the

rich complexity of social situation. Hence, the social science approach will be used it this

study. According to (Churchill et al 1984), there are two paradigms of doing research

namely positivism and phenomenological approach. The researcher will use

phenomenological approach for qualitative research.

3.2. Research Design

According to Kothari (2004), research design is the arrangement of the conditions for

collection and analysis of data in a manner that aims to combine relevance of the research

purpose with the economy in procedure. According to him, research design may fall into

the following categories, namely,



iv. exploratory research studies

v. descriptive research studies

vi. hypothesis testing research studies

In order to achieve the general and specific objectives of the research assignment, the

researcher will adopt exploratory research design due to the following reasons:

i. It is fairly an exhaustive method which enables the researcher to study deeply

and thoroughly different aspects of the phenomenon

ii. It is flexible in respect of data collection methods. It permit the use of different

data collection method like observation, questionnaire interview and

documentary review

iii. The researcher will be able to carry out an intensive study on the challenges in

adopting e-procurement for SMEs.

Ilala district compared to other district in Tanzania has more SMEs which has adopted the

e-procurement.

3.2.1 SMEs in Ilala District.

The researcher intends to examine the implementation of e-procurement in SMEs. He

believes that few of SMEs in Ilala district are aware and uses the e-procurement in their organization. He wishes to see if the selected SMEs do really know the challenges and

what are they? In essence, this is a case study.

3.2.2Description of the Study Area

There are so many organizations that are implementing e-procurement. However, the

researcher has chosen to study the adherence to the prescription of the two important

documents in three selected organization. The choice of these particular SMEs is based on

both the accessibility of information and the permission to conduct research, limited time

and limited funds for doing the exercise.



3.2.2 Location or Area of the study

It is located along the coast side of Indian Ocean. And it is business centre where the state house ,

government offices, large private organizations and ministries are located,Few industries are located

in Ilala,followed by Temeke and Kinondoni, municipal, the large business are allocated in Ilala

followed by Kinondoni and finally Temeke.

3.3. Nature of Data required

Krishna Swami (1993) points out that data are facts, figures and other relevant material,

past and present, serving as bases for study and analysis. There are two types of data

primary data and secondary data. This research study will use both of these types of data.

3.3.1. Primary data

According to Katundu (2005), primary data are fresh data that have not undergone some

processing of any type. Thus, they are original in nature. In this exercise, the primary data

will be collected from the field by the researcher himself. The sources of the primary data

will be some members of staff from the accounts department, IT departments,user

department, the tender board and PMU.

3.3.2 Secondary data

Secondary data are those data that are obtained from literature sources? These are the the

data that have already been collected and processed by some other people for some other

purpose. This is second hand information that will enable the researcher to serve both time

and money since they already exist. Sources of secondary data include publications,

newsletter, journals, text books, official documents, records, reports and other scholars’

research findings.



3.3.3. Measurement of Variables

According to (Kothari 2004), measurement is a process of mapping aspects of a dominion

onto other aspects of a range according to some rule correspondence. Also scaling

describes the produces of assigning numbers to various degrees of option attitude and other

concepts. This may be nominal, ordinal, interval or rate. The researcher will use nominal

and ordinal samples as way of interpreting data. The nominal scale will be used only for

identification by assigning numerals to variables. The variables are normally in the form of

categories such as gender race or color. The numbers do not signify order, magnitude or

size. Therefore, they can be interchanged at the beginning without affecting the results of

the analyis. The ordinal scale will be used for data that exhibit some order, e.g. the

ascending order. Numbers are assigned to variables so that they portray the order of

magnitude but not size.

3.4. Quality of Data and Measurement

Ensuring reliability and validity of the data is of paramount importance in research. This

will be affected through close supervision of the data collection exercise.

3.4.1. Reliability

Reliability is the ability of an instrument to ensure consistency of the phenomenon it is

designed to capture. Where a large number of respondents are experienced in e-

procurement, the instruments used to collect data should ensure that their responses are a

true view of the situation.

3.4.2. Validity

Validity, according to Enon (1998) refers to the quality that procedures or an instrument to

be used in the research is accurate, true and meaningful. An instrument for collecting data

is said to be valid when it develops simple and straight forward questions to attract the

common understanding among the respondents. The questions to be developed will be used

in such as way that they measure a respondent’s knowledge on the challenges under the

study. The researcher will supervise the distribution and collection of questionnaires and

will clean the data to ensure their validity.



3.5. Data Collection Methods and Instruments

Field research will be conducted at Barrick, Engine, and Total in order to get relevant

information for the study. The researcher will use questionnaires, interviews, observation

and documentary reviews in order to collect the required data.

3.5.1. Observation

Kothari (2007) observes that one’s own direct observation of activities and processes is a

scientific tool because it is subjected to checks and controls as regards validity and

reliability. The researcher will use observation because the subjective bias is eliminated as

the information to be obtained under this method relates to what is currently happening.

3.5.2. Interviews

According to Kotheri (2004), under interview method the researcher will have an

opportunity of asking questions generally in face to face contact with other persons. The

targeted interviewees will be those from the different department to the study due to thefollowing reason. There will be greater flexibility and high response rate due to the fact that

interviewer (i.e. the researcher) and interviewees will have direct control of the interaction

and thus ensure the required results.

3.5.3 Questionnaires

This method of data collection is quite popular in case of big enquires (Kothari 2004).

It is free from the bias of the interviewer as the answers are in respondent’s own word. The

respondents will have adequate time to give well thought out of answers It is for these

reasons that the researcher has decided to use questionnaires as one of the tools for

collecting data.



3.5.4 Documentary Review

Documentary sources will be used to collect from the documents available such as files

records kept within the procuring entities. Those documents will enable the researcher to

get relevant information to the topic under study.

3.7. Sampling Procedures

This is, according to Orotho and Kombo (2002), the process of selecting a number of

individuals or objects from a population such that the selected group contains elements

representative of the characteristics to be found in the entire group. The techniques can be

grouped into probabilistic and non- probabilistic sampling. As pointed out above, the study

will use non probabilistic sampling (i.e. purposive sampling) due to the reason that it is

based on convenience judgment and quota sampling techniques also because of the roles

played by the different department in the procurement work.

3.7.1. Target Population

The target population of the case study is the whole staff that belongs to the PMU, user

department, IT departments and the tender board. The total number of members of this staff

is 100.

3.7.2. Sample Size

Due to limitation in the aspects of time and resources for the research, the researcher willemploy a purposive sampling method in order to get the sample that he will need for the

study. The study will draw a sample size of 32 people. Sample include people from

members of PMU (8) finance department (5) user department (10) tender board (4) Audit

unit (2) and ICT department (3). This makes 32% of the population.

Table 3.0: Number of potential respondents



No Department Questionnaires

1 Finance department 5

2 User department 10

3 ICT department 3

4 PMU member 8

5 Tender board 4

6 Auditing department 2

Total 32

Source: researcher 2011

3.7.3. Sampling Methods to be used

The sample size will be selected from different departments in the SMEs head Office and

in different procurement institutions in Dar es salaam. Almost fifty five people which

include management officers and heads of departments/supervisor will be selected

randomly from different departments. Both probability and non-probability sampling

techniques will be employed.

3.8. Field Work

The reseacher has choosen a number of SME in Ilala district and the data will be collectedin different departments to see the level of utilization of information systeam as well as the

challenges in organisation in implimenting e-procurement.These primary data are obtained

as first hand information. The primary data will be obtained from respondents by interview,



questionnaires and observation. While other dat will be requested by the resercher from the

management.

3.9. Data Processing and Analysis

The data to be collected from the field will be checked for accuracy and corrected where

some errors are observed. The researcher will organise the data in coding form so that they

can be easily processed by using computer programs.

The researcher will analyze data by using graphs, pie charts tables and other data

presentation tools. These tools will be used to indicate the distribution and computation of

statistical values to provide association, relationship and distribution of their variables.

3.9.1. Data Processing

The data to be collected from the field will be checked for accuracy and corrected where

some errors are observed. The researcher will organize the data in coding form so that they

can be easily processed by using computer programs.

3.9.2. Analytical Techniques Used

The researcher will analyze data by using graphs, pie charts tables and other data

presentation tools. These tools will be used to indicate the distribution and computation of

statistical values to provide association, relationship and distribution of their variables.

3.9.3.Testing of HypothesisThe three variables organisation,technology and the enviroment will be tested since theyare the primary ones that influence the adoption of E-procurement for SMEs, the researcher

would look for data that would refute the hypothesis. When even a single case does not

support the hypothesis the theory would be revised.

3.10. Expected Results

Upon completion of this research the researcher expects that the stated objectives will be

met. The findings will show that Selected SMEs impliment e-procurement and the

challenges are outlined due to implementation of e-procurement.

5.0.REFERENCES



Assefa,A.,and Matambalya,F.(2002),Technical efficiency of Small and Medium scale

Enterprises.

Beda M and Kajiba J.(2000), connectivity and e-commerce” pp.23-24

Fuller T. and Jenking.A,(2000),Public intervention in enterpreneural inovation ande

opportunism:Short or Detourcuts to information super high way”

Jounals,(1999),report of chamber of commerce briefing-kit on e-commerce for SMEs in

Africa.

Kasimila 2004 .”Factors limiting e-commerce adoption in Tanzania”unpublished MBA

thesis,Faculty of commerce and management,University of Dar es salaam.

K.M. Eisenhardt, “Building theories from case study esearch”, Academy of Management

Review, Vol. 14, No. 4, 1989, pp. 532-550.

I. Benbasat, D.K. Goldstein, and M. Mead, “The case research strategy in studies of

information systems”, MIS Quarterly, Vol. 11, No. 3, 1987, pp. 369-386

Kenneth Lyons and Brian Farmington purchasing and supply chain management (7 th ed)

person company ltd UK.

Khothari C.R (2004) Researcher methodology (2nd new sage international ltd India.

Boumediene, Ramdani and Peter, Kawalek,”Predicting smes willingness to adopt erp, crm,

scm & e-procurement systems ”University of Manchester, MBS West, Manchester, M15

6PB, UK,

Documents

DRAFT-----PROPOSAL FOR MSc PROCUREMENT AND SUPPLY CHAIN MANAGEMENT