E-procurement System and Transparency in the Procurement Process
Many organisations admit that with the adoption of E-procurement system, their procurement process has greatly improved. E-procurement has many benefits ranging from increased transparency in the procurement system and saving organisations money and time by simplifying transactions. Many organisations and individuals believe that with the adoption of E-procurement into their systems, corruption will end and the procurement process will be transparent and will result in the acquisition of quality, fairly priced goods and services. This is not necessarily the case. What many do not know is that E-procurement only addresses a few areas in the procurement process. The procurement procedure includes the selection of bidders, the bidding process, technical evaluation, commercial evaluation, negotiations, contracting and implementation and continuous improvement. E-procurement system only best applies in the selection of bidders and in the bidding stages.
It is true that with the adoption of E-procurement, corruption cases have reduced and transparency has increased. But this does not mean that corruption has completely ended. There have been cases whereby corrupt individuals in purchasing organisations have manipulated the process in order to favour certain suppliers. Corrupt buyers simply use the other stages in procurement in order to favour certain suppliers. Many procurement procedures require buyers to visit the seller’s premises to evaluate their capability to supply. A buyer who has the intention of disqualifying a certain supplier might rate the supplier poorly after the site visit over small technical irregularities like employees not wearing adequate safety equipment just because one employee did not wear an ear muff. Such irregularities seem small but can lead to a supplier being disqualified on technical grounds.
Other corrupt buyers leak sensitive information about a supplier to their competitor which might compromise the supplying company. Corrupt individuals in organisations do not like the E-procurement process and try as much as possible to make the system fail. There have been cases in many organisations whereby employees have been slow in adopting the system and each time efforts are made to implement the process, it has failed because of lack of corporation from certain individuals in the firm.
The final stage in the procurement process is the evaluation of the performance of the supplier. At this stage, a buyer can sabotage a supplier that refuses to offer a bribe or who the buyer does not like. The buyer can look for any small mistake of the buyer and cancel their contract. For example, the buyer might accuse the supplier of delays in supply simply by a small delay. If the supplier were to give a bribe, then the buyer would treat the supplier much better and be more lenient with them.
Different firms have different procurement policies. Some firms aim at promoting poor communities or wish to promote certain ages, genders, races and sexes. As a result, the procuring entities will purchase products from the minority groups. Sometimes, big firms pose as the minority groups and tender alongside other minority groups. Because the big firms have a lot of resources, they provide better goods and services than the true disadvantages groups and end up being awarded tenders.
E-procurement system is harder to implement in smaller firms because the small firms do not have adequate time and resources to fully administer the system. Many E-procurement systems only allow the attachment of documents by suppliers in the PDF format. This makes it difficult for purchasers to authenticate the information provided by the supplier. The information provided might not be accurate. Small firms usually work towards minimising costs and maximising profits. As a result, technical procurement procedures are ignored because the company might see it too costly to hire technical personnel to test the goods and services offered by the suppliers. This will, in turn, compromise on the quality of the goods and services provided.
In conclusion, firms should not assume that just because they have bought an expensive procurement software that all their procurement problems have ended. Firms need to, first of all, ensure that everyone in the organisation, from top management to junior staff, are on board. In order to do this, change management seminars need to be undertaken to ensure that everyone understands the need to incorporate the new system. Secondly, firms need to understand that E-procurement system only applies to very few stages in the procurement process. The firm, therefore, needs to address the issue of corruption and transparency as a whole and address other areas in the procurement system that might be weak and that might compromise effective procurement practices. Failure to address procurement challenges in all the stages of procurement is the reason behind the failure of E-procurement processes. Most people blame E-procurement for failure in their procurement processes while in actual sense the failure is as a result of poor implementation and understanding of E-procurement system.