The Benefits of E-Procurement and Barriers to Adopt E-Procurement in Malaysian Construction Industry

Tham, Chun Meng (2020) The Benefits of E-Procurement and Barriers to Adopt E-Procurement in Malaysian Construction Industry. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

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Abstract

A construction project always requires good flow to make sure the projects are in good quality, on time and within the budget especially the procurement process has playing an important role to enhance the project performance. As Malaysia is a developing country, the number of construction project will be carried out is slowly increase. Therefore, the internet technology is slowly applying in construction industry to increase the overall performance for a construction project including the procurement process of material. In this research study, the term of e-procurement process defined as the uses of electronic media and internet in the purchasing process of material. The aim for this research is to study the benefits of e-procurement and barriers to adopt of e-procurement in the construction industry of Malaysia. There are three objectives are achieved in order to accomplish the aim which is identifying the benefits of e-procurement in construction industry, to identify the barriers to adopt e-procurement in construction industry and to determine which benefits and barriers are most important by adopting e-procurement in construction industry. Online questionnaire and printed questionnaire are distributed to the respondent to collect information and data. The data collected from both type of questionnaire was analyzed in table. There is a total of 30 respondents involved in this research study. There are eight benefits of e-procurement identified, which are (1) reduction purchasing cost in procurement proces(2) reduction in time spent on procurement process, (3)simple procurement process, (4) eliminating paperwork in procurement process, (5) increase the bond of communication, (6) reduction of procurement staff, (7) better control for control procurement process and (8) Reduction in errors associated with paper based. There also have ten barriers identified, which are (1) company culture, (2) lack of upper management support, (3) lack of infrastructure, (4) IT system too costly, (5) lack of technical expertise, (6) lack of e-procurement knowledge or skill, (7) lack of business relationship via electronic media, (8) security of transactions, (9) data transmission reassembly and (10) resistance to change. The results show that the most important benefits and barriers to adopt e-procurement in construction industry of Malaysia are reduction in time spent on procurement process and lack of upper management support respectively. The outcome from this study is to help the contractor firm in Malaysia to understand the benefits and barriers of e-procurement and provide as guideline to construction industry to increase the adoption rate of e-procurement in Malaysia.