The performance impact of digital technology adoption in procurement: A case study of the manufacturing industry in the Eastern Economic Corridor, Thailand

Abstract

The procurement process is part of Purchase to pay (P2P) that consumes huge company costs. There are many procedures that need to be performed related to data. Without digital technology it might cause human error which will lead to issues in higher cost and will create a lot of delay in the procurement process. To improve procurement performance, selecting the right technologies that will create performance impact is quite a challenging task for the company. This study aims to examine the impact of digital technology adoption on procurement performance and to examine the mechanism through which digital technologies impact procurement performance. Target groups are medium and large manufacturing companies in the Eastern economic corridor, Thailand. In research findings, there is data supporting our hypotheses that digital technology adoption in procurement has a positive impact on procurement performance in cost and cycle time reduction. As a result of the moderation effect, reducing human errors, data availability and responsiveness moderated the positive impact between technology adoption and procurement cost reduction. The effect between technology adoption and procurement cycle time reduction has positively been mediated by reducing human errors and data availability. However, responsiveness rejected the hypothesis that mediates the relationship between technology adoption and procurement cycle time reduction.