E-procurement, Internal Customer Service And External Customers – A Study of Effects And Interdependencies

Abstract: Rapid technological advancements have completely revolutionalised the way things are done in the business world today. Proliferation of the internet and related technologies in the 1990s made it possible for companies to do business over the internet and it became easier and faster to do business both with suppliers and customers. With the ushering in of electronic business (e-business), many organisations including the public sector have since implemented various forms of its applications such as e-procurement, e-service, e-government and many others. As a matter of necessity organisations that want to sustain their businesses in such an environment must adapt their business strategies to meet the demands of the day and also be able to take advantage of the benefits of doing business electronically. Many such benefits have been cited which include reduction in costs, better communication among supply chain players and increased levels of productivity. It is also important to understand how such applications as e-procurement are impacting on intra organisational systems as this is just as important as inter organisational systems such as external supply chains. Internal processes are a vital part of the supply chain and the effect of e-procurement on internal processes is vital as it has a bearing on the level of customer service within the organisation which could also have a bearing on the level of external customer service. According to Michael Porter’s value chain, procurement is clearly a support function and it must add value to primary activities such as production. E-procurement therefore must create value that will be appreciated by primary activities within the organisation otherwise it is not worth undertaking. It is important for organisations to see where value can be added along the supply chain and find ways of improving on current processes in order to increase profits and decrease costs. Improvements in delivery times for example, as a result of e-procurement can add significant value to the external customer. This thesis therefore has sought to find out the effects of e-procurement on internal customer service and also to find out if internal customer service has any effects on external customers. The results of this research are that e-procurement affects internal customer service positively and that internal customer service affects external customers. The qualitative method has been used in this research work and the works of many different authors have been drawn upon.