Adoption of E-Procurement Strategy and Procurement Performance in State Corporations in Kenya (A Case of Kenya Revenue Authority)

Abstract

E-procurement is the use of information technology in managing the procurement process in the organization with an aim of improving the procurement process. The study is aimed at determine Role of E-procurement strategies in enhancing procurement performance in state corporations in Kenya with reference to Kenya Revenue Authority.  The study focused on the management and activities of the staff of Kenya Revenue Authority, Times Towers, Haile Sellasie Avenue Nairobi and will include the staff from relevant Departments in the Organization. The researcher adapted a descriptive research design as there are variables which cannot be quantified but can only be described in descriptive statistics. Through random stratified sampling method the researcher selected 45 respondents out of total of the 90 population of the staff from relevant Departments and will stratified into procurement management staff, Stores management staff, Operations and management Department staff in the organization. In addition, 20 suppliers were purposively selected to participate in the study. Primary was collected through administering of questionnaires to the respondents. Quantitative and qualitative techniques of data analysis was used to analyze Data and included the use of SPSS version 21 data analysis methods and the findings presented through charts, tables and graphs for simple understanding of the findings. From the findings the study, conclusions were drawn and recommendations made on the implementation of Electronic procurement at Kenya revenue authority. Findings of the study indicate that electronic communication positively influenced procurement performance in Kenya Revenue Authority as it leads to instant responses and real-time information. The purpose of e-procurement is to allow the purchasing function to focus on more value adding activities such as serving customers rather than on operational issues. The potential of e-procurement is so great that it has turned the formerly looked down upon traditional function into a competitive weapon. The findings also show that electronic order processing positively influenced procurement performance in Kenya Revenue Authority. Studies have shown that companies have found a lot of benefits from their e-procurement projects which include, but are not limited to: process efficiencies amounting to annual savings, ability to link directly into existing systems, such as ERP, reductions seen in lead times within the procure-to-pay cycle. The findings also indicate that self-invoicing on behalf of clients can add to the bottom line, month-end reconciliation can end the problem of the wrong items being ordered or the wrong price being offered as business processes have been streamlined and all are working off the same catalog. The internet, via e-procurement, has made procurement more effective and efficient in the sense that purchasing of goods and services by organizations is made easier, faster and cheaper. Level of customer service influenced procurement performance in Kenya Revenue Authority. An organization to be truly effective, every single part of it, each department, each activity and each person and each level must work properly together, because every person and every activity affects and in turn is affected by others. Cost of E-Procurement positively influenced procurement performance in Kenya Revenue Authority. The amount of money that the organization saves when it adapts e-procurement cannot be over looked by any organization that is out to reduce its operation overheads. Proper use of information technology in an organization coupled with training of staff in systems operations can highly reduce the cost of operation in an organization.

Keywords: E-procurement strategy, Procurement performance, State corporations, Electronic communication, Electronic order processing, Customer service level, Cost of E-procurement