From tough negotiation to complex integration: Implications of adversarial and collaborative relationships on electronic procurement systems

For many organisations e-Procurement has become a necessity. Nevertheless, while e-procurement has generated considerable hype the phenomenon is generally under-researched despite the fundamental impact that e-Procurement has on the nature of inter-organisational relationships This paper explores the effects that business-to-business relationships have on e-Procurement systems using a field study of 6 companies. The study classifies business-to-business (B2B) relationships as being adversarial and collaborative, where adversarial relationships include attributes such as tough negotiation, short-term contracts and multiple sourcing, while collaborative relationships include cooperation, mutual benefit and trust, strategies such as cross-functional team decision-making, supply base rationalisation, and long-term contracts. The effects of both relationships on the electronically supported transaction phases of the procurement lifecycle are examined. The research findings indicate that adversarial relationships have most effect on the sourcing phases whereas collaborative relationships most affect the, fulfilment, and consumption phases of the procurement cycle. This further highlights the need for practitioners to manage and understand the interorganisational relationships within their business.