E-Procurement and SMEs, a marriage still uncertain

April 6, 2017

During 2016, we collaborated with the Tor Vergata University of Rome to carry out market research that showed that in Italy platforms for managing online supplier lists are still little-known and used tools by Italian SMEs, which still do not seem to grasp the advantages that electronic purchasing process management can bring.

The market research was developed within the “Master in Procurement Management – Procurement and Procurement” at Tor Vergata University of Rome and had precisely the objective of understanding how much e-Procurement tools are known and used in Italian SMEs; we share below the results that emerged, which highlight important information about the Procurement culture in Italy.

The survey, developed by Dr. Ruggero di Mauro, contacted 6,237 Italian SMEs, culminating in the survey being submitted to a fairly small sample (81 companies-about 1.3 percent of those contacted).

Despite this low participation in the survey, the companies surveyed that had adopted e-Procurement solutions in the past were very satisfied and stated that they particularly gained the following benefits from electronic purchasing management:

  1. Speeding up purchasing processes (saving time, money and manpower);
  2. Greater transparency of inbound and outbound transactions;
  3. Computerized supplier register that can be updated in real time;
  4. evaluation of suppliers based on supply performance, related risks, and other factors such as-for example-business ethics;
  5. Lowering operating costs, especially for companies that use many suppliers;
  6. Ability to track savings (monetary, time or labor).

Our experience in electronic purchasing management tells us that the main advantages of e-Procurement systems are their adaptability to the specific needs of different companies and the possibility of purchasing individual functional units that can be integrated with the management systems already in use within the company. Market research conducted shows that in Italian SMEs, there are, however, two main objective factors that constitute obstacles to the adoption of these platforms:

  • the company’s tendency to maintain traditional procedures;
  • the overall cost of e-Procurement solutions (both in terms of monetary investment and in terms of time and human resources).

Among the interviewed companies, those who mentioned having only heard about modern e-Procurement systems showed a favorable inclination towards their usage and expressed interest in the proposed innovation. However, the majority, despite acknowledging their curiosity and interest in e-Procurement platforms, stated that they did not perceive the need for their company because they were “confident in knowing how to do our job” (as mentioned earlier, there is a company tendency to maintain traditional procedures).

The market research conducted by Dr. Di Mauro within the Master’s in Procurement Management at the University of Tor Vergata in Rome has highlighted that so far, only SMEs that are not constrained by the weight of deeply rooted habits in the field of procurement management are ready to adopt e-Procurement systems. Currently, in Italy, e-Procurement solutions are only adopted by those SMEs that are more receptive to innovation and wish to keep up with new technologies.

At present, it can be affirmed that Italian SMEs view e-Procurement solutions in contrast to the approach of large private companies in Italy and abroad, which, instead, show great attention to new procurement technologies.