Abstract
Purpose – The purpose of this paper is to investigate the implementation of initiative e-procurement in decentralized system on Indonesia’s local government system. Design/methodology/approach – The authors combine quantitative and qualitative methods. The central finding of this research is that human resources are the pivotal factors that determine the performance of local e-procurement in three cities. This research focusses on three local governments in Indonesia – Yogyakarta City, Tangerang City, and Kutaikartanegara Regency. Findings – The central finding of this research is that human resources are the pivotal factors that determine the performance of local e-procurement in three cities. However, Tangerang City is going institutionalization phase in e-procurement initiative to ensure its sound local regulation. Research limitations/implications – There are several limitations to this study including the recent nature of decentralized procurement in Indonesia, limited standardized and disaggregated data on local government procurement expenditures and performance. Practical implications – The study recommends that human resources management in procurement needs to be addressed by both local and central government. Originality/value – e-Procurement is an important instrument for preventing corruption in goods and services procurement. Indonesia has been implementing an e-procurement policy since 2008 based on a Presidential Decree. The president has issued annual orders (presidential instructions), and all central ministries and local governments have been required to comply with them to obtain their budget through the e-procurement system. However, as of 2012 fiscal year, only around 10.26 percent of the central government institution procurement budget and 10 percent of the local government procurement budget in Indonesia went through the e-procurement system, with wide variations among cities.
Highlights
Corruption is one of the most serious problems badgering public institutions of many developing countries, including Indonesia
We developed hypotheses in relation to efficiency and effectiveness of e-procurement with dependent variabels: leadership, policies and regulations, human resources, policy and planning, infrastructure and standarization, and private integration
The results demonstrate that human resources have an important influence on general e-procurement initiatives in Yogyakarta City and Kutaikartanegara Regency
Summary
Corruption is one of the most serious problems badgering public institutions of many developing countries, including Indonesia. In this regard, the use of information-communication technology (ICT), e-procurement, is considered to be one way to prevent corruption by increasing transparency and accountability of the budget process. There have been increasing numbers of e-procurement instruments: the number of system providers went up from 11 in 2008 to 491 in 2012; service providers from three in 2009 to 43 in 2012; provincial coverage from nine in 2008 to 33 in 2012; and user agencies from 11 in 2008 to 731 in 2012. This trend was followed by the increased number of tenders issued through e-procurement. INAPROC claimed that there was a savings of 10.89 percent in 2012
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