An empirical investigation of factors that hinder the adoption of electronic procurement by SMEs in India

With the increasing competition among the key players of a supply chain has resulted in a need for an advanced supply chain management system for the survival of the firms. For most of the industrial enterprises the procurement of goods and service is the first step of manufacturing. Therefore, an effective and efficient procurement management system is very important for reducing the total cost, improving product quality and to enhance the competitive advantage of the firm. E-procurement has emerged as a tool in reducing procurement cost and increases the competitiveness of small and medium scaled enterprises (SMEs). This paper reports an empirical investigation conducted to identify the major factors that hinder the adoption of e-procurement in SMEs in India. The results indicate that scarce use of electronic business by suppliers is the major cause that hinders the adoption of e-procurement by SMEs and the majority of the firms do not want to commit major resources in adopting e-procurement.