The impact of E-procurement on performance of Indian Railways

Abstract

This study measures the impact of e-Procurement on the purchasing and organisational process of Indian Railways which is a Public Service. It aims at proposing and validating a model pinpointing and quantifying performance benefits. A review of existing literature about e-Procurement and its impact on inter and intra organisation aspects have been taken into account. The critical factors of measurement are examined, and main impact dimensions of electronic procurement are precisely set out. The key contribution of this paper is a model, consisting of a specific measurement framework for each impact dimension. Specifically, the study examines the following research question: Whether e-procurement has any impact on performance of Indian Railways . Thus the concept to be tested is that the e-procurement have impact on suppliers, purchaser and through them on organization performance. For this, research question has been broken into parts leading to formation of hypothesis for each research question. Adoption of e-procurement leads to certain key capabilities. The purpose of research model was to find whether e-procurement capabilities lead towards improved purchaser performance and supplier collaboration and performance. Research model was further assessed whether supplier collaboration, supplier performance and purchaser performance is resulting in improved organisational performance. There were seven research questions and thus seven hypotheses to be tested. One unit of Indian Railway was selected for research study. As this study examines various factors associated with the e-procurement, the tool used is survey questionnaire and secondary available data. The questionnaire was administered to collect data from companies and users being stakeholders of e-procurement. Using statistical tools of SPSS and AMOS, the analysis was done to find whether e-procurement influences are positive and significant. Based on analysis three hypotheses were accepted and four were rejected. The research shows that E Procurement has a positive impact on Performance of Purchasing organisation. Similarly it has a positive impact on suppliers performance. The purchaser performance is getting translated into organisational performance whereas supplier performance is not getting translated into organisational performance. The research also showed that E Procurement has not resulted in any impact on Supplier Collaboration. The key finding of research is that e-procurement of Indian Railways has significant impact on intra organizational process, however at the same time it has no or incomplete impact on inter organisational process. Study concludes that it would be prudent to analyse the entire process of e-procurement from inter organizational point of view as this link is presently ineffective. Further studies are needed to answer why e-procurement is not resulting in supplier collaboration and why supplier performance is not translating into organizational performance. There is a need isolate the barriers towards supplier collaboration and performance which lead towards organization performance. The present study was conducted in one unit of Indian Railways. As several new items were adopted to reflect the constructs in a government environment, a controlled study was needed being exploratory in nature. The questionnaire designed was checked for reliability and validated to a large extant. However a bigger multi-unit study is needed to further draw upon the results, which is a future research area.