Simplifying procurement process through e-commerce in B2B
market of Iran

Sammanfattning: Electronic business is the process which uses Internet technology to
simplify certain company processes, improve productivity and increase
efficiency. Podlogar (2006) points some facts about process
reengineering that are strongly connected to the process simplification,
including: awareness of technology opportunities, ability to achieve
process effectiveness, readiness for e-procurement collaboration,
satisfaction and positive e-procurement experiences sharing and environment
changing response. The groups of factors discussed above explore simplicity
of business data processing with regard to processes that are necessary for
the execution of the entire procurement process. These processes may
capture (1) possible suppliers requisition request, (2) replacement of
supplier, (3) bidding, (4) access to suppliers goods or catalogs, (5)
access to suppliers inventory data, (6) suppliers access to your
inventory, (7) ordering from supplier, (8) payment to supplier, (9) order
tracking, (10) search for transporters, (11) transport ordering, (12)
receiving of delivery data announcement, (13) delivery receiving, (14)
reclamation solving and (15) inventory management. In a questionnaire,
factors based on all the above processes, were explored. For all factors,
I used a five point Likert-type scale ranging from (1) "Does not
significantly simplify" to (5) "Significantly simplifies": medium choice
(3) was "No impact", also included the choice (0) "Don't know" for
respondents who don't want to express an opinion of particular item. Only
one answer was possible in each item. The sample chosen in this study was
randomly selected from the enterprises database that is provided by
Chamber of Commerce, Ministry of Industry and Industrial Management
Institute (100 top companies selected in 2005), also all big enterprises
chosen in public stock market in Iran form many industries such as oil and
gas, automotive, energy, transportation, finance, metal and steel,
electrical, some services industries and etc. The reason for this choice is
due to the fact that unfortunately in Iran there are few or even no
enterprise that has fully implemented e-Procurement system in their
organizations. However, most of them are in the early stages of thinking
and expanding their systems into e-Procurement considering the evolution
that is happening in the business community. Prior to the survey starting,
twelve procurement, logistics and computer science managers from three
different enterprises (Automotive, Steel, Energy industries) tested the
questionnaire. Based on the test, errors and possible misunderstanding were
considered and corrected.

In Iran, about 250 big enterprises were selected and the questionnaires
were distributed directly to the procurement manager, logistic manager and
information manager of their enterprises and it was emphasized that people
who will fulfill the questionnaire are in the role of a buyer who want to
procure goods. I received 138 responses, of which 124 were valid and
completed, considering 49.6 percent response rate. More than 90% of the
respondents answered the questionnaire had experience above 10 years in the
relevant field and this point is the adequate work experience of the
respondents that will ensure the accuracy of the information they provided
in the study. The variables were subjected to principal component analysis
as the extraction method, varimax rotation with Kaiser Normalization as a
technique of rotation to examine both the individual variables and the
relationships among them. It is noticeable that possible suppliers
requisition request, bidding and order tracking are important variables
according to the both Iranian and Slovenian managers. Although payment to
suppliers is very important from Slovenian experts, but we see that from
Iranians managers point of view this variable has almost least importance.

That may come true, since in Iran electronic payment has not become so
common so far and always payments is done manually and traditionally or
through Letter of Credits for procurements through banking systems.On the
other hand, transport ordering, receiving of delivery data announcement
and reclamation solving have a high percentage of importance from Iranians
managers' point of view while, Slovenian managers don't believe so. This
fact again relates to the logistics system in Iran.The lack of information
through the transportation of good from abroad and less digital system for
track and tracing has made big problems for companies to reduce the time of
transportation of the goods. Therefore, they believe that if they have some
digital facilities to track and trace the importation, such as GIS systems,
GPS systems, digital regulations for customs clearance and customs duties
or etc, they can arrange the transportation faster and they can be
announced of delivery and shipment of the goods with more speed and more
accuracy. Also again, because of the problems in logistics, procurement
departments of companies may face inefficiencies in transportation and
their goods loss during the transportation. So, electronically they can
arrange reclaiming of loss as well and this will simplify the process and
reduce wasting time. Comparing the model of factors Iran and Slovenia by
representing each variables loadings, we notice the similarity of the both
models and it shows that the variables to be simplified in the procurement
process by e-Commerce in the world is somehow the same. Just depending on
the situation of logistics or e-Commerce infrastructure may differ in some
variables. The models indicate that the perceptions in both countries
regarding the simplifying procurement process by e-Commerce can be the same
with a bit difference from what is concluded from the results.In order to
prepare better for e-Procurement and implement it more successfully, we
understood from this research that one of the most important e-Commerce
factors for this purpose is process simplifying by reengineering them. The
developed model represents useful data and important findings at the
practitioner level and for academic researchers.

At the first stage, it is important to identify findings associated with
electronic commerce in procurement process that are important for its
development and implementation. Distinguishing the significant electronic
commerce variables in procurement process as well as the degree of their
impact and significance on the procurement process will allow new business
models to be developed. As mentioned reengineering in simplifying the
business process in e-Commerce will lead to capturing more opportunities
and benefits in e-Commerce. Based on responces, we can conclude that e-
Commerce in the procurement process simplifies the separate sub-process of
procurement. Enterprises, which endeavor to have a success in doing
business electronically, should simplify sub-processes, namely: receiving
of delivery data Announcement(shipment announcement), possible supplier's
requisition request, transport ordering, reclamation solving and bidding.