Electronic Procurement and Procurement Performance of Private Hospitals in Nairobi, Kenya

Abstract

Technology has emerged as the driving force for businesses. Every transaction is powered by technology so is procurement is currently embraced by businesses corporate firms as well as health facilities. The health sector in Kenya has been on the growing trajectory and the facilities have been developing their movement systems overtime. The adoption of E-Procurement practices contributes up to 30% costs of operations. The study aimed at determining a link between e-procurement and supply chain performance. Specifically, the focus of the study was on extent of implementation of e-procurement, a link between e-procurement and procurement performance and key issues faced in e-procurement implementation. The design adopted was descriptive. The study findings established that the E-Tendering was implemented at a very large extent among private hospitals in Nairobi County. Other respondents established that E-Catalogue was implemented at a large extent. The findings are consistent with the existing literature. Competent firms are adopting electronic tendering as a mechanism to increase their efficiency, reduce lead-time and reduce operational costs as well as satisfying their customers. More importantly, firms generate more wealth through proper implementation of electronic tendering systems. With regard to the relationship between E-Procurement and procurement performance, (R) was 0.782 which was a positive strong relationship. R2 was 0.615 indicated that the model explained 62% of the variations or changes in procurement performance among private hospitals in Nairobi County. The study also established different challenges experienced in the implementation of E-Procurement among private hospitals in Nairobi County. Resistance to change by staff experienced at a very large extent while high cost of implementation and lack of supplier interest were challenges experienced at a large extent. The study findings also revealed that lack of performance measurement system and lack of top management support were challenges experienced at a small extent. The study findings were consistent with the existing literature. Cost implications are a reasonably considered as a challenge on E-Procurement implementation. The implementation through purchasing, installation and maintenance of various E-Procurement software applications are expensive to manage for many firms and therefore an impediment to their full uptake for improved systems on supply chains. The study recommends that private hospitals management in Nairobi County should consider implementing E-Procurement system in their respective organizations for the smooth running of the supply chain. This would be significant in promoting the efficiency in service delivery to clients. The study further recommended that management should focus on specialization of staff by empowering the employees on how to use E-Procurement in their day to day running of the organization. The resistant employees/staff should be trained enough to see the importance of E-Procurement in the promotion of procurement performance in the hospitals. The study also recommended that suppliers should adopt E-Procurement systems in their Business Models so as to remain competitive in their activities.