JOURNAL OF PUBLIC PROCUREMENT, VOLUME 12, ISSUE 2, SUMMER E-PROCUREMENT: MYTH OR REALITY? Clifford McCue and Alexandru V.

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1 JOURNAL OF PUBLIC PROCUREMENT, VOLUME 12, ISSUE 2, SUMMER 2012 E-PROCUREMENT: MYTH OR REALITY? Clifford McCue and Alexandru V. Roman* ABSTRACT. Governments across the globe appear to identify and tout technology as a way to transform how they govern. Public procurement is at the forefront of most reform efforts given that it plays a significant role in promoting accountability and transparency. This study relies on survey data of procurement professionals to delineate the current status of e- procurement implementation in United States and Canada. Findings suggest that digitalized public procurement has not yet led to significant transformative changes. Unsuitability of software platforms, organizational resistance, lack of strategic systems integration and failure to involve public procurement professionals in the design of e-procurement systems were identified as the primary obstacles of effectively implementing digital procurement. These findings suggest that in order to capitalize on the potentially transformative nature of ICT in procurement, policymakers, system designers, and procurement professionals must take an active role in both the design of the software and its adoption across political, institutional and behavioral domains. INTRODUCTION With the accession of New Public Management (NPM) during the 1980s the role of government in society was challenged. Fundamentally, proponents of NPM focused on disaggregation, competition, and incentivization (Dunleavy, Margetts, Bastow & Tinkelr, 2006; Nobuo, Akai, & Osano, 2010; Dubnick & Frederickson, * Clifford McCue, Ph.D., is an Associate Professor and Director of the Public Procurement Research Center, School of Public Administration, Florida Atlantic University. Dr. McCue s research interests are in public financial management and public procurement. Alexandru V. Roman is a Ph.D. candidate in the School of Public Administration, Florida Atlantic University. His research interests are in public management, e-government and public procurement. Copyright 2012 by PrAcademics Press

2 222 MCCUE & ROMAN 2010). Although some scholars believe that NPM is still maturing in nations that are attempting to manifest NPM tenents in their policies and practices (Pollitt, Thiel, & Homburg, 2007; Hood & Peters, 2004), others contend that current reform efforts are now focused on the relationship between information technology and governance (Osborne, 2006). Dunleavy et al. (2006) suggested that effective reform through e-governance must take in to account reintegration, needs-based holism, and digitization. These three themes, they posited, will generate opportunities to reform governments by connecting technology to organizational, cultural, and social reform. Although the debate about whether NPM is dead or alive is still apparent in the extant literature, the link between NPM and the digital-era governance is only now beginning to receive scholarly attention. What may be driving this link is the fact that governments across the globe have spent significant amount of resources (both human and monetary) attempting to digitalize governance (egovernance). In fact, according to the World Bank (2004) a significant number of nations have spent more on information communication technology (ICT) over the last decade than on traditional capital investments such as roadways, airports, water purification plants and the like. Those governments investing heavily in e-governance initiatives anticipate that these efforts will transform governance. Eventually how governments operate, how citizens interact with their governments, as well as what role government plays in society will change (Christensen & Laereid, 2007). The end result is that government is expected to be more responsive, democratic, accountable and transparent (Dunleavy et al., 2006). One area within government that has seen significant reform efforts, as well as notable investments in ICT, is procurement. Those attempting to reform the procurement process argue that the current system is broken, and unsuitable for the demands of modern governance (Thai, 2001). As a result of various efforts to limit the opportunity for corruption, increase accountability, and promote transparency, procurement has witnessed tremendous pressures to change current processes. In fact, investing in ICT, primarily through e-procurement, has been an attempt to change how government procurement operates. Eventually by adopting digital platforms, procurement would be better suited to achieve the advances of modern government.

3 E-PROCUREMENT: MYTH OR REALITY? 223 In this article, a survey of public procurement professionals was conducted to identify the current state of e-procurement implementation across the U.S. and Canada. Although many in the popular media suggest that ICT and specifically e-procurement will transform governance, findings of this study suggest that digitalized public procurement has not yet led to significant transformative changes. In fact, for the majority of agencies in this study, the current state of e-procurement is primarily focused on automating existing internal processes and procedures. Unsuitability of software platforms that were originally designed for private sector applications, organizational resistance to change, lack of strategic systems integration and failure to involve public procurement professionals in the design of an e-procurement system were identified as the primary obstacles of effectively implementing e-procurement. These findings suggest that in order to capitalize on the potentially transformative nature of ICT in procurement, policymakers, system designers, and procurement professionals must take an active role in the design of the software, but more importantly they must be actively engaged in the process changes that must take place to successfully implement the system. DIGITAL GOVERNMENT: MYTH OR REALITY? The dynamics associated with the transformation of governance (Kettl 2002, 2005) have emphasized several major themes. First, the notions of what constitutes the domain of governmental activity and what represents appropriate administrative actions have become blurred. Within the context of increased pressures on the administrative state, the private and not-for-profit sectors have assumed roles, manifested in webs of contractual and network relationships, as key players in delivering government services (Clarke & Stewart, 1997; Agranoff & McGuire, 1998; Milward & Provan, 2000; Savas, 2000; Sclar, 2000; Kettl, 2002; Cooper, 2003). Secondly, technological advancements and the use of information communication technology (ICT) supposedly would make government more effective, responsive, accountable and eventually more democratic (Johnson, 1998; Hanberger, 2003; Lee, Tan, & Trimi, 2005; Dunleavy et al., 2006; Bekkers & Homburg, 2007; United Nations, 2010). Finally, a number of scholars in the field (Hardy & Williams, 2008; McGuire & Agranoff, 2011), contended that

4 224 MCCUE & ROMAN management and governance within evolving network type structures is challenging and emphasizes different skill sets that were not necessarily fundamental in traditional public administration. In the milieu of the drive to reconstruct governments, typically couched under the rubric of doing more with less, public procurement was delineated as one the main areas that can benefit from reinvention (Lee, Tan & Trimi, 2005; Moe, 2004; Hardy & Williams, 2008; Mota & Filho, 2011). In fact, over the past two decades, governments at all levels have dedicated sizable financial investments toward digitalizing public procurement (Coulthard & Castleman, 2001; Carayannis & Popescu, 2005; Hardy & Williams, 2008; Varney 2011). Although the reported benefits and costs of digitizing procurement have been well discussed in the literature, whether proposed transformative goals have been achieved is still being evaluated (Hardy & Williams, 2008). The lack of evaluation research is a common occurrence for most e-government initiatives (Fountain, 2001) and this should be far less surprising when looking specifically at e-procurement initiatives in government. Previous research suggested that simply adopting an e- procurement platform may not achieve its intended purposes. This study adds to this growing body of literature by expressly looking at the implementation of e-procurement technology from the perspective of the practicing public procurement professional. Through the lens of these individuals, we can specifically look at the institutional and behavioral aspects of adoption success or failure. This study did not attempt to examine the political determinants of implementation success. Research presented here relies on survey data of procurement professionals to delineate the current status of e-procurement implementation in the United States and Canada, and to discuss the impacts and limitations of current e-procurement initiatives. There are three main parts to the paper beyond this introduction. Benefits and challenges associated with digitalization of e-procurement will be addressed in the first part. That will be followed by the presentation of the survey instrument and the methods used to collect the data. The third part of the paper will discuss the implications and possible concerns associated with the findings, as well as suggest some of the

5 E-PROCUREMENT: MYTH OR REALITY? 225 possible policy challenges governments must address before embarking on an e-procurement strategy. DIGITALIZATION AND PUBLIC PROCUREMENT E-procurement is commonly defined as the use of ICT to automate and make more responsive and dynamic the purchasing process (Coulthard & Castleman, 2001; Bof & Previtali, 2007; Andersen et al., 2009). Within the context of governance, the use of ICT for purchasing purposes is expected to increase the levels of transparency, accountability and compliance within legal frameworks (Henriksen & Mahnke, 2005; Varney, 2011). For the purposes of this discussion the perspective suggested by Mota and Filho (2011) relying on Orlikowski (1992, 2000) is used. Mota and Filho (2011) posited that e-procurement should be interpreted both as a product and as a construct for human action, which interacts with institutional and rule structures to generate or enforce existing constraints on the everyday behavior and choices made by users. Within this framework, e-procurement is both a course for delivering goods and services to the consumers more efficiently, while at the same time transforming the process, including the individuals involved, by making them more effective in the discharge of their responsibilities. There are a number of reported benefits that are regularly associated with the implementation of e-procurement practices. Operational and cost efficiency are perceived as the primary advantage of e-procurement. Scholars assert that employing tools such as e-notice, e-auction, e-catalogue, e-dossier, e-submission and e-signatures will reduce costs and improve buyer-vendor relationships (Croom, 2000; Zsidisin & Ellram, 2001; deboer et al., 2002; Croom & Johnston, 2003; Mishra et al., 2007; Lösch & Siân 2007; Brandon- Jones & Carey, 2010). Web-based purchasing is also believed to offer the capability to develop effective long-term strategic approaches, improve process and budgetary controls, and reduce transaction costs, hence leading to more efficient supply markets (Croom, 2000; Croom & Johnston, 2003). Further it is reported that e-procurement will facilitate the documentation of the bidding process which would enhance transparency and accountability of government operations (Croom, 2000). The mechanistic formula-based e-decisionmaking processes used during auctions and bid solicitations is posited to limit

6 226 MCCUE & ROMAN discretionary and biased selection, while also increasing transparency and accountability (Croom & Johnston, 2003; Varney, 2011). A fully articulated e-procurement system would expand the bidding pool which, in turn, would eventually enhance the quality of goods or services offered to the government, and most importantly at a lower cost. Increased internal customer satisfaction is also a benefit reportedly associated with e-procurement (Croom & Johnston, 2003). Along the same lines, Brandon-Jones and Carey (2009) found a strong relationship between the perceived quality and professionalism of an implemented e-procurement system and contract and process compliance. Increased use of information communication technologies in the procurement process is expected to lead to more competitive structures and generate competitive markets (expand the vendor pool) that might not have been possible within current structures (Croom, 2000; Varney, 2011). Finally, scholars assert that implementation of e-procurement initiatives and structures could improve the professionalism and outside perceptions of procurement specialists (Croom, 2000; Croom & Johnston, 2003). The latter would provide the context for procurement professionals to become more involved in shaping public policy. As a result, the procurement process of governments would not only be more responsive, but eventually governance could be better situated at a policy level to take advantage of innovations in the market place. Implementation of E-procurement Initiatives Worldwide e-procurement initiatives have been undertaken in the public sector on a large scale (Henriksen & Mahnke, 2005; Somasundaram & Damsgaard, 2005; Mota & Filho, 2011). These efforts, however, have been associated with varying levels of success (Bof & Previtali, 2007). In some cases the implementation of e- procurement has lead to the expected outcomes, while in other cases badly designed adoption processes caused high failure levels and financial waste (Somasundaram & Damsgaard, 2005)., Varney (2011) argued that there has been significant progress in the implementation along certain e-procurement dimensions in the European Union. All union members use e-notices for at least 85% of their contracts with many states employing e-notification more than

7 E-PROCUREMENT: MYTH OR REALITY? % of the time. E-catalogues and e-procurement based solutions, however, enjoy much less emphasis (Varney, 2011). Mota and Filho (2011) argued that e-procurement implementation in Brazil is in its early stages with limited transformative impacts and digitalized purchasing has lead to some benefits, but it did not resolve any of the major issue it was anticipated to address. Bof and Previtali (2007) and Henriksen and Mahnke (2005) reached similar conclusions in their studies of e-procurement implementation in Italy and Denmark, respectively. The implementation of technology in the public sector is seldom simple and has to be framed within the ambiguous and continuously transforming constrains of administrative and political prerogatives (Fountain, 2001). In the case of public procurement, given that the process already exhibits high levels of complexity (Leukel & Maniatopoulos, 2005) substantive policy choices become even more challenging (Henriksen & Mahnke, 2005). Certain adoption and barriers might be common to most environments; studies in Italy (Bof & Previtali, 2007), Brazil (Mota & Filho, 2011), Australia, New Zealand and Scotland (Hardy & Williams, 2008) have all suggested similar issues in achieving coordinated public procurement transformation. E-procurement: Concerns and Challenges Curiously, implementation of e-procurement initiatives has turned out to be much more problematic and challenging than expected (Arbin, 2003; Croom & Johnston, 2003). In fact research has shown that implementing e-procurement will not automatically lead to higher levels of efficiency or contract and system compliance (Brandon- Jones & Carey, 2010). Moreover, given the relative short history of e- procurement initiatives in the public sector, reliable performance and outcome measurements have yet to be developed thus, practitioners have to learn on the fly. In an attempt to address some of these concerns Varney (2011) noted that a common procurement vocabulary is vital to the ultimate success of e- procurement in achieving increased structural effectiveness through integrating procurement systems across jurisdictions. For instance, in the case of the European procurement system, there is limited integration or interoperability among the procurement frames (Varney, 2011).

8 228 MCCUE & ROMAN The implementation of e-procurement can often be costly (Croom & Johnston, 2003), especially in cases when systems based on incompatible platforms are attempted to be incorporated at a later date. The more diverse the technical platforms the more prohibitive it becomes. Fulfilling the legislative requirements for transparency and timely provision of information increases by notable margins the operational cost of e-procurement (Varney, 2011). The management and monitoring of e-procurement systems will emphasize different skill sets and relationship constructs that have not been witnessed in traditional public procurement practices. It could be argued that e-procurement might stymie the development of trust within the relationships between procurement specialists and vendors. While information communication technology can limit human-induced biases it can also strip the public sector of the benefit of reduced administrative costs that result from trust-based working relationships among members of networks. According to the literature in the field, security (Croom, 2000) and authentication (Varney, 2011) are two other major challenges present in e-procurement. The impacts of technological errors, system constraints and technological failures, which are seldom discussed or acknowledged, are also a major concern for e-procurement (Coulthard & Castleman, 2001; Mota & Filho, 2011; Sun et al., 2012). While tools such as e-signature, e-notice or e-bids do significantly reduce processing time these constructs might raise security issues, cause costly errors and authenticating bidders problematic. In this sense, much of the responsibility of ethical behavior is placed on the vendors which, given their motives, may place additional pressure on procurement to validate the integrity of the process; again driving up implementation costs. The public agency is limited in its ability to insure that the internal structures of suppliers fits within the broader context of the rigorous ethical expectations of the public sector. Lastly, digital procurement platforms do not exist in a vacuum. They need supportive administrative constructs and technological systems. The benefits of any of the e-procurement tools will be forgone in case they are not provided with compatible support structures. It is not uncommon for agencies to report underwhelming results of e-procurement functionality due to low levels of harmonization among systems and low compliance rates (Cox et al.,

9 E-PROCUREMENT: MYTH OR REALITY? ; Aberdeen, 2006; Varney, 2011). Low satisfaction among internal customers may also significantly reduce the benefits of digitalized procurement (Croom & Johnston, 2003). METHODOLOGICAL APPROACH To gauge the level of satisfaction with current e-procurement systems, as well as to identify the potential for increasing the benefits associated with implementing a fully articulated e-procurement system, a survey of state and local government procurement professionals was administered. The list of potential participants was gathered from the National Institute of Governmental Procurement (NIGP), a member driven professional association with more than 16,000 members across the U.S. and Canada. Although there are a number of challenges to using a sample pool based on organizational affiliation, given the diverse representation of NIGP s members, and noting the potential limitations to the generalizability of the findings, Table 1 indicates that there is sufficient variation across levels of government, location of the respondents, and the job titles to warrant some level of confidence in the survey frame. However, findings should be interpreted with all the cautions typically associated with national surveys. The heads of procurement departments at all levels of government were invited to complete a 30-item survey. The public procurement specialists and the individual perceptions represented the units of analysis of the study. An was sent to the NIGP members on May 28 th and again on June 1 st informing them of the survey issuance. The survey was administered online on June 2, 2011 using surveymonkey.com. On June 9, a reminder was sent out, where June 27, 2011, was the last date when responses were accepted. A total of 2,269 procurement specialists were invited to participate in the survey. Out of those contacted, 499 (22%) completed the survey by the closing date. In the initial stage, a pilot survey was reviewed by several procurement professionals and scholars with experience in public procurement. The instrument was designed to address five major areas: (1) status of e-procurement implementation, (2) integration of e-procurement software with existing platforms, (3) levels of usage, (4) degree of satisfaction and (5) strategic impacts. For a number of

10 230 MCCUE & ROMAN TABLE 1 Summary of Respondents by Position and State States Chief Procurement Officer/Procurement Director Purchasing Agent Purchasing Manager Buyer/Contract Specialist Alabama Alaska Arizona Arkansas California Canada Colorado Delaware D. of C Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey Clerical Staff Other/Not Specified Total

11 E-PROCUREMENT: MYTH OR REALITY? 231 TABLE 1 (Continued) States Chief Procurement Officer/Procurement Director Purchasing Agent Purchasing Manager Buyer/Contract Specialist New Mexico New York North Carolina Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Other/Not Specified Total Clerical Staff Other/Not Specified Total questions, respondents were provided space for open-ended responses in order to qualify and provide more detailed answers if needed. This allowed for a more thorough understanding of the respondent s frame of reference, and enabled the potential location of areas for more detailed analysis. Appendix A provides the questionnaire. Within the final sample, 37% of the respondents were employed by cities/municipalities, 18% by county/regional governments, 15% by state/provincial governments, 11% by public colleges/universities

12 232 MCCUE & ROMAN and 19% by special districts, public school districts, federal agencies or township/town/village governments. Position wise, 41% of respondents indicated that they acted as chief procurement officers/purchasing directors, 32% were employed as managers while 27% served as agents, buyer/contract specialists or in other administrative positions. RESULTS A total of 45% of respondents indicated that they are not using any state furnished systems for e-catalogue, e-sourcing or e-notice. While, 37% of those who responded indicated that their agencies do not use any other software other than their state-provided platforms. Table 2 provides a detailed breakdown of the responses. It is important to note here that only 20% of the agencies that have implemented e-procurement software have done so within the last 5 years. The majority of the agencies (55%) implemented e- procurement software in the early 1990s. This might suggest that there has been little progress beyond the first major wave of digitalization of governance that came about during the dot.com movement. TABLE 2 Summary of Usage of E-procurement Platforms Are you using a state furnished system for ecatolog, esourcing and notification? (N = 499) Does you entity/agency use any other procurement software? (N = 322) Please estimate the approximate number of years your entity has been using procurement software of any type? (N = 186) Response Types % of Responses No 45% esourcing 16% Notification 11% ecatalog 6% Yes 63% No 37% Less than 1.0 year 2% 1.0 to 3.0 years 10% 3.01 to 5.0 years 8% 5.01 to 10 years 24% to 15 years 22% More than 15 years 34%

13 E-PROCUREMENT: MYTH OR REALITY? 233 Seventy-four percent of 107 respondents indicated that their agency is not planning to implement procurement software, while 65% of 177 respondents suggested that their agency was not planning to implement any new or additional procurement software to the one that was currently in place. For those who expected to implement additional software, system upgrades for underperforming platforms constituted a dominant theme within the responses. One procurement officer s comment was found to be particularly representative Additional module to the horrible system we currently use. In the case of those who indicated that their agency is not currently planning to implement e-procurement initiatives, four dominant themes were identified: (1) a sufficient interests or perceived need on the part of legislative and administrative decision makers to implement e-procurement was lacking, (2) implementation was perceived as too costly or complex, (3) organizational conditions stymied or made change difficult, and (4) inability to identify a technically suitable platform that would meet the agency s needs. On average the majority (57%) of those responding reported that they were not using features that otherwise are considered core e- procurement dimensions. Of those who did use the features those who were satisfied or very satisfied outnumbered those who were dissatisfied by 3 to 1. Table 3 provides a detailed breakdown. TABLE 3 Satisfaction Ratings by Features How would you rate your satisfaction with the capabilities of your software? Features Dissatisfied and Very dissatisfied Satisfied and Very satisfied Feature not Used # of Responses Requisitioning (incl. catalog services / shopping cart) 18% 69% 13% 174 Online supplier registration 13% 51% 36% 166 esourcing 10% 28% 61% 163

14 234 MCCUE & ROMAN TABLE 3 (Continued) Features Dissatisfied and Very dissatisfied Satisfied and Very satisfied Feature not Used # of Responses Forward auctions 6% 18% 76% 160 Reverse auctions 8% 14% 79% 155 Notifications 12% 45% 43% 166 Central contract repository 14% 46% 40% 168 Procurement marketplace (including catalog services) 10% 26% 64% 164 e-invoicing 7% 19% 74% 162 Supplier performance and risk management tools 10% 17% 73% 165 Spend analytics 15% 31% 54% 163 Contract life-cycle management suite 10% 23% 67% 164 Collaboration tools 10% 17% 74% 159 Averages 11% 32% 57% 164 Based on the pattern of responses it can be deduced that even in instances when e-procurement software was used, its application was limited to basic administrative purposes. More complex features were either not used or not made available. The responses to the questions that examined the levels of integration among digital procurement and financial platforms uncovered expected patterns. With the exception of requisitioning, procurement specialists indicated low levels of system integration or were not able to qualify the level of integration since the feature was not used. Table 4 provides the complete results. The limited integration of e-auction (5-6%) and contract/ collaboration tools (<20%) constitutes a critical dimension of the findings. Also, the agency s experience with e-procurement was not found to be statistically significant (p >.05) for reported integration levels along any of the dimensions. The agencies that experienced no

15 E-PROCUREMENT: MYTH OR REALITY? 235 TABLE 4 Integration Levels by Feature Features Full or Partial Integration Not Integrated N/A # of responses Requisitioning (incl. catalog services / shopping cart) 77% 12% 11% 181 Online supplier registration 28% 42% 30% 173 esourcing 19% 31% 51% 170 Forward auctions 6% 28% 66% 169 Reverse auctions 5% 25% 70% 171 Notifications 25% 38% 37% 173 Central contract repository 37% 30% 34% 170 Procurement marketplace (including catalog services) 23% 25% 53% 171 e-invoicing 20% 20% 59% 167 Supplier performance and risk management tools 13% 27% 60% 172 Spend analytics 33% 24% 43% 171 Contract life-cycle management suite 17% 23% 60% 170 Collaboration tools 10% 25% 66% 167 Averages 24% 27% 49% 171 integration for procurement features and financial platforms on average have used digitalized procurement as long as the organizations that have reported partial or full integration. The latter might suggest that platform integration is not a function of time, at least not directly. FINDINGS Results of this study should be interpreted with consideration of two possible weaknesses. First, given that many of the respondents indicated that their agencies were not using e-procurement, the valid number of responses to e-procurement- related questions was much

16 236 MCCUE & ROMAN lower than 499. Secondly, federal employees constituted less than 1% of the total number of respondents, while Canadian procurement professionals made up less than 4% of the sample. Nevertheless, even within the constraints set by the above weaknesses, several sample-specific suggestions about the current status of e- procurement are offered. Low Implementation Rates The patterns in the responses suggest that the e-procurement implementation is nowhere close to what could have been expected a decade ago. Forty-seven percent of the respondents indicated that their agencies are not using any e-procurement software. In the case when e-procurement software was employed, many of its features were not used. Furthermore, only 20% of the respondents indicated digitalization of the procurement process within the last five years. While the latter could be attributed to factors such as budgetary constraints and low levels of diffusion, it is somewhat concerning that the sample is heavily skewed towards technology that was adopted over a decade ago. Further research should address the motivation for the significant gap between on the ground implementation and e- procurement policy rhetoric. Problematic and Spotty System Integration Based on the itemized responses and the open-ended questions it can be concluded that system integration is problematic, especially with older platforms. With, the exception of requisitions (77%) respondents indicated low rates of e-procurement integration. The fact that on average 49% percent of the respondents were not able to qualify their answers could indicate integration is not a strategic focus during implementation. Moreover, examining the average time of use of procurement software does not support the possibility that the longer an agency uses such application the more probable platform integration becomes. No statistically significant difference in means was identified among the agencies that reported full or partial integration among e-procurement and finance platforms and those that claimed no integration. This latter finding falls along the lines of conclusions reached by the extant body of literature on e-government

17 E-PROCUREMENT: MYTH OR REALITY? 237 that suggests that system integration is one of the most daunting challenges in e-governance (West, 2005). High Levels of Dissatisfaction Within agencies that did implement procurement platforms, respondents exhibited relatively high levels of dissatisfactions. On average only 32% of the respondents indicated that they were satisfied or very satisfied with a specific function, while general dissatisfaction levels were approximately 11%. The majority of respondents (57% on average) indicated that they were not using the features, thus not being able to qualify their satisfaction levels across platforms. This lends support to extant findings that e-procurement acceptance is often an overlooked issue in the adoption decision (Bouwman et al., 2005; Aboelmaged, 2010) It has been shown that procurement specialists who are dissatisfied with the technical capabilities of e-procurement systems will develop means to go around the framework so called maverick purchasing (Croom, 2000; Croom & Johnston, 2003). The fill-in responses also suggest that public procurement specialists believe that the software is not responsive or representative of their particular needs. The specialists do not participate in the design of e- procurement software and become passive users (Mota & Filho, 2011), which in turn could lead to their being dissatisfied and resisting using the system. E-procurement initiatives that are not supported by organizational structures and are opposed by users will eventually fail (Bof & Previtali, 2007) or become ineffective. Scholars have previously identified trust as a critical aspect of whether a certain inter-organizational system is adopted and used (Soliman & Janz, 2004; Pavlou & Gefen, 2004; Chang & Wong, 2010). E-procurement Not (yet?) Strategic In the case when agencies indicated that they used procurement software - only 20% employed collaboration tools, 23% e-auctions; only 32% indicated that they implemented software for contract lifecycle management, while 32% used a digitalized approach to monitor supplier performance and risk management. These rates would suggest that the primary transformative expectations associated with e-procurement implementation, making public procurement a

18 238 MCCUE & ROMAN dynamic and strategic aspect of public policy have not yet been achieved. Chang and Wang (2010) argued that when the use of e- procurement has not been legitimized as an expected institutional characteristic, there will be low diffusion and integration levels. One could argue that at this point in the evolution of e-procurement, the areas where significant benefits could be obtained are underutilized or not utilized at all. It appears that the digitalization of the procurement process simply automates the processes rather than generates strategic capabilities. The limited integration level across the organizational spectrum of procurement severely limits the impact of e-procurement and reduces it to just another tool in the procurement professional s toolbox. The limited strategic and policy impact of e-procurement initiatives are consistent with concerns present in extant literature (Barnes et al., 2002; Croom & Johnston, 2003; Bof & Previtali, 2007; Mota & Filho, 2011; Varney 2011). E-procurement Is Local Survey responses suggest that there does not exist a universal understanding of e-procurement or its benefits. Agencies perceive e- procurement from their need-based perspective. Implementation of e- procurement is typically undertaken in a manner that suits local needs. Hardy and Williams (2008) argued that that e-government and e-procurement initiatives, while starting from a common denominator, have evolved into heterogeneous sets of systems. At the moment, coordination and compatibility at national levels seems unrealistic, let alone integration across organizational boundaries. Varney (2011) reported improvement in large scale integrations of procurement platforms across EU, but even in such cases the initiatives were found to be less successful than expected. The direct and transformative benefits of digitalizing public procurement are highly dependent on scale-driven effects from compatible and interconnected platforms. Given that e-procurement s largest financial gains might be associated with decreasing internal administrative costs (Kothari et al., 2005; Turban et al., 2006), scholars have suggested the need for multi-organizational implementation in order to maximize possible benefits (Chang & Wong, 2010). Agency-constrained software adoption might simply

19 E-PROCUREMENT: MYTH OR REALITY? 239 lead to the cooptation of the systems by extant organizational structures and cultures. Pricey and Technically Inadequate Survey respondents indicated that the major reasons for dissatisfaction, low implementation rates and low probability of future e-procurement initiatives rests on the cost of implementing such software (relative to risk) and their inability to locate a suitable system that addresses their primary needs. Private developers simply are not (yet) providing software that would be appropriate for the heterogeneous demands in the public sector. It might be the case that at present the procurement process has to adapt to the software rather than that the software fit within the boundaries of the procurement process. Scholars have long pointed out that public e-procurement dynamics are more complex than those found in the private sector (Leukel & Maniatopoulos, 2005), hence the underlying criteria for designing public procurement software need to be notably different from the constructs intended for private sector use. The findings are consistent with recent academic accounts asserting that the current software market provides few options for technically adequate or reasonably priced public e-procurement software (Bof & Previtali, 2007). CONCLUSION This study is different from some of the most recent research efforts in that it deals specifically with e-procurement implementation and usage and it examines the issue from the perspective of a professional organization. NIGP is one of the leading procurement associations in the world and its membership provides a reliable barometer for evaluating the current status of e-procurement implementation. Holistically, the results presented in this paper make several important additions to practical and theoretical understanding of e-procurement within the context of public administration and policy. First, in the last two decades e- procurement implementation has generated limited transformative changes at the organizational or network levels. It was identified that the local and fragmented, strategy-free character of e-procurement

20 240 MCCUE & ROMAN implementation juxtaposed with limited software options is a major factor behind the underwhelming current status of e-procurement. Secondly, defining e-procurement as a tool that can transform the procurement process without consideration for the organizational impacts and social constructs will most likely limit the benefits from its implementation (Kling, 2000; Mota & Filho, 2011). The digital platform will most likely automate existing processes, thus enforcing extant constructs and limiting the probability of achieving more accountable, responsive or democratic systems. It is regularly the case that administrative and democratic hopes placed within the realm of innovative use of technology in public procurement remain unfulfilled as users incorporate technology within established structures, hence reaffirming the status quo (Mota & Filho, 2011). This study confirms this to be true in terms of the current status of e- procurement implementation. Finally, and probably most consequential, the findings presented here support the fact that employing ICT is not enough in achieving harmonious operation and integration. E-procurement, like most ICT dimensions, is not deterministic in character. The lack of statistical difference in historic experience with e-procurement among groups with integrated and non-integrated platforms suggests that if the integration of digital procurement is not undertaken during e- procurement s initial adoption, it is likely that it will not happen down the road. The latter supports the idea that hastily adopting technology without understanding the benefits of properly planned integration will result in flawed outcomes. It is important to note that this study should only be interpreted within the context of providing one evaluative dimension of the present status of e-procurement initiatives. Future research should attempt to address in more detail any of the specific areas identified in this paper. For instance, exploring the dynamics and the possible benefits of involving procurement specialists in the design of e- procurement platforms appears to be an area of research that can assist practice in important ways. One area that is ripe for future study is why e-procurement vendors have not developed sufficient platforms to achieve many of the stated objectives of digital transformation. Does profit play an important role in how software vendors develop systems? Are governments willing to take risks in investing heavily in e-procurement when the benefits associated with

21 E-PROCUREMENT: MYTH OR REALITY? 241 transformation may be hard to monetize? Lastly, are procurement professionals willing to change processes to advance their strategic position in their organization? From a policy perspective, it becomes readily apparent that the success of any attempt to transform government, whether in terms of governance or administration, must not only account for the idiosyncratic nature of individual environments, but must also account for all existing processes within systems and how best to transform them collectively. Technology on most occasions is simply a tool that must have a defined set of circumstances to properly achieve its potential, like a set of agreed upon criteria to implement any policy process change. In addition to recognizing the limitations of structurally unsupported technology, there is a significant amount of research in the policy implementation literature which finds that in order to avoid potential problems during implementation, political, institutional and behavioral issues must be fully assessed prior to adopting new initiatives. These findings are consistent with what we find herein. ACKNOWLEDGMENTS Research support for this study was provided by the National Institute of Governmental Procurement, Input Inc., and SciQuest, Inc. REFERENCES Aboelmaged, M. G. (2010). Predicting E-procurement Adoption in a Developing Country: An Empirical Integration of Technology Acceptance Model and Theory of Planned Behaviour. Industiral Managemetn & Data Systems, 110 (3): Agranoff, R., & McGuire, M. (1998). Multinetwork Management: Collaboration and the Hollow State in Local Economic Policy. Journal of Public Administration Research and Theory, 8 (1): Andersen, K. V., Juul, N. C., Korzen-Bohr, S., & and Pedersen, J.K. (2003). Fractional Institutional Endeavors and E-procurement in Local Government. Working Papers , Copenhagen Business School, Department of Informatics.

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