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Strategic and Operational Benefits of Electronic Integration in B2B Procurement Processes

Author

Listed:
  • Tridas Mukhopadhyay

    (Graduate School of Industrial Administration, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

  • Sunder Kekre

    (Graduate School of Industrial Administration, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

Abstract

Our goal is to assess the strategic and operational benefits of electronic integration for industrial procurement. We conduct a field study with an industrial supplier and examine the drivers of performance of the procurement process. Our research quantifies both the operational and strategic impacts of electronic integration in a B2B procurement environment for a supplier. Additionally, we show that the customer also obtains substantial benefits from efficient procurement transaction processing. We isolate the performance impact of technology choice and ordering processes on both the trading partners. A significant finding is that the supplier derives large strategic benefits when the customer initiates the system and the supplier enhances the system's capabilities. With respect to operational benefits, we find that when suppliers have advanced electronic linkages, the order-processing system significantly increases benefits to both parties.

Suggested Citation

  • Tridas Mukhopadhyay & Sunder Kekre, 2002. "Strategic and Operational Benefits of Electronic Integration in B2B Procurement Processes," Management Science, INFORMS, vol. 48(10), pages 1301-1313, October.
    • Handle: RePEc:inm:ormnsc:v:48:y:2002:i:10:p:1301-1313
    DOI: 10.1287/mnsc.48.10.1301.273
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    References listed on IDEAS

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