Abstract

Procurement performance have attracted great attention over the pass decades from practitioners, academicians and researchers due to poor performance resulting from non-adherence to proper processes and procedures. This study seeks to investigate the effect of E-procurement on the performance of SMES in Cameroon, Buea Municipality, this study adopted survey research design with a total sample size of 50 SMEs in the Buea municipality, a stratified random sampling technique was used for study.

Primary data was collected for the study using a 50 questionnaire as method of data collection. Also, data was analyze using SPSS version 21 found, data was equally presented in tables and chart. The result of the finding revealed that E-sourcing help in reducing delays in the sourcing process and has helped to increase the processing speed, e-invoicing highly enhanced data security of business of SMEs, e-payments are not secured due to high rate of internet fraud.

Also, the study concluded that E-sourcing offer cost efficient means of sourcing goods, e-invoicing prevent invoice errors and to enhance accuracy, also e-payment helped to increasing transparency in the payment process. This study went further to recommend that new procurement consultancy companies that provide procurement advisory services should be setup t

CHAPTER ONE

INTRODUCTION

hroughout the country. This is to facilitate sound procurement amongst SMEs.

1.1 Background to study

Integration of the Internet with businesses has long been a regular occurrence across the world.

However, procurement has changed to an electronic platform in various big economic organizations as one of the important tasks of an organization that is significantly likely to affect the company’s survival or even profitability. In today’s competitive and highly dynamic market places, businesses and corporate sectors have recognized the need to stay informed about new technological developments as well as manage operational costs while meeting organizational objectives and goals, resulting in increased adoption of e-procurement (Subramanian, Qualls & Shaw, 2006).

Overall, the use of e-procurement is intended to increase the productivity and efficiency of an organization’s business processes. E-procurement has emerged as a major factor in the procurement function of Small and Medium Enterprises (SMEs), allowing them to improve their procurement function. SMEs are now using a variety of e-procurement tools to improve their sourcing and ordering procedures while lowering their operating expenses.

Adoption has become an important strategy among SMEs in the United Kingdom, with around 47 percent of SMEs having previously embraced e-procurement techniques (Fernandes & Vieira, 2015). In Asia, SMEs have also embraced e-procurement in a big way. In India, for example, SMEs have realized the significant benefits of buying and are implementing various procurement strategies to enhance their procurement function.

SMEs in India are increasingly using e-procurement systems to increase flexibility in their procurement operations, promote customer satisfaction, improve delivery, and manage their inventory effectively, according to Gopinath et al, (2016). Gopinath et al (2016), suggest that adopting e-procurement solutions has not only helped the businesses to gain and sustain competitive positions but has also brought greater transparency and eliminated unethical practices in their procurement practices.

Similarly, SMEs in Malaysia have heavily embraced e-procurement to expedite their procurement processes. Tiwari et al, (2019), claim that a large number of SMEs use the e-ordering, e-sourcing, e tendering, and e-invoicing to enhance their procurement operations. The technologies have enabled the businesses to effectively communicate with customers and suppliers, to check for the prices of goods, to check the availability of goods and services, and to exchange purchase information with the internal as well as external parties.

E-procurement has proven to be one of the most effective tools used by SMEs in Africa to promote good governance and improve procurement practices. While the level of adoption of several technologies in Africa is lower than in Asia and Europe, it is worth noting that SMEs in Africa are working to improve their procurement practices and other business functions by leveraging available technologies. According to Aduwo et al (2016), in Nigeria, SMEs have integrated e-procurement to some extent in order to maximize its benefits during the purchase of goods and services, inventory management, and improving communication between businesses, suppliers, and consumers.

This has helped to enhance the performance of the businesses. In South Africa, Sithole (2017) observed that the SMEs in South Africa are increasingly utilizing e procurement technologies to enhance their operations. The common strategies adopted included e-notification, e-contract management partial e-tendering, e-contract awarding and e-invoicing. These technologies have largely revolutionized the procurement operations and to boost the performance of the businesses.

Small businesses in Cameroon are increasingly adopting and utilizing e-procurement technologies to improve their ordering and sourcing processes. The pressure they are under to deliver high-quality goods and services on time has prompted them to implement these strategies. Due to the delayed of the delivery of goods, a large number of these businesses are experiencing difficulty meeting customer demands. Goods are delayed due to the lack of efficient and effective procurement systems, which affects the consistent supply of goods to customers. Customer dissatisfaction and poor business performance result as a result of this. As a result, SMEs use e-procurement technologies like e-tendering to make tendering easier, e-sourcing to find the best suppliers, e-invoicing, and e-payment to make payments easier.

1.2 Statement of the Problem

The Adoption of e-procurement strategies is thought to be a way to empower organizations to compete in the world market, with enhanced effectiveness, bringing them nearer to their client and suppliers. It is hence pleasant that SMEs should consider Information and Communication Technology (ICT) as an important approach in business to grasp high ground from the overall markets.

Today’s business world has been significantly affected by (ICT) and the utilization of ICT among businesses is far reaching. Especially in procurement, organization is rapidly changing, overall era, work, business procedures and trade to suit this changes (Memba, Gakure & Karanja, 2012).

The recent trend of growth of SMEs in Cameroon, has led to increased competition. This is seen with SMEs expanding rapidly to cater for increased demand. The expansion is accompanied by massive movement of online services in procurement. This requires efficiency in the procurement process through which can be achieved through implementation of E-procurement. SMEs have to contend with numerous challenges such as lack of capital and stiff competition from more established firms which hinder them from being profitable, growing and staying in business (McIntire, 2012).

The inability of SMEs to market their goods and services has led to numerous negative impacts on them especially on their sales volumes, customer service, market awareness, branding, and product and service promotion. However, with the increased of E-procurement activities SMEs shall be able to address these challenges

Despite the benefits that e-procurement has brought about, e-procurement is being marred by poor quality goods and services. Failure to implement or delay the implementation of recommended performance standards has resulted in unnecessarily high operating costs, disorganized business operations, and a failure to attract and retain experienced and skilled personnel in procurement positions, all of which have harmed the function’s performance. As a result, the researcher was motivated to investigate and discover the impact of e-procurement on the performance of small and medium-sized enterprises in Buea, Cameroon.

1.3 Research questions

1.3.1 General Research Question

To what extent does e-procurement affect the performance of SMES in Cameroon, Buea municipality?

1.3.2 Specific Research Questions  

1. What is the effect of e-sourcing on the performance of SMEs in Cameroon, Buea municipality?
2. To what extent does e-invoicing influence the performance of SMEs in Cameroon, Buea municipality?
3. What is the effect of e-payment on the performance of SMEs in Cameroon, Buea municipality?

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