Value assessment of e-procurement projects: a modular methodology

Abstract

Over the last few years, an increasing number of companies have introduced or plan to adopt some kinds of e-Business solutions. They allow new forms of communication between buyers and sellers and they are expected to provide opportunities to create new marketplaces, whilst firm's productivity and efficiency should benefit. Because of the recent history of such type of projects, it hasn’t been possible yet to identify neither clear guidelines for the implementation process nor evaluation procedures for assessing the validity of a certain e-Business project. Furthermore, it has to be noted that a high number of e-Projects have failed or haven’t led to the expected results. This paper focuses on a particular aspect of this new way of doing business: the transfer of a part of purchasing activities on the net, the so called e-Procurement. The proposed methodology aims to give a structured procedure for both a quantitative and a qualitative evaluation of a certain e-Procurement investment starting from the identification of the main relationships among relevant elements influenced by the e-Procurement introduction (activities, performance indicators and company's features). The analysis also includes some considerations of a strategic nature and should lead to the reduction of a final report which has to support managers during the investment decision by highlighting expected benefits. The application of the proposed methodology to an Italian firm which has introduced the e-Procurement is described.