EFFECTS OF ELECTRONIC DATA INTERCHANGE ON ORGANIZATION’S PROCUREMENT PERFORMANCE: A CASE OF SUPERMARKETS IN ELDORET TOWN

Abstract

The procurement unit in an organization today operates in a dynamic, complex environment and in order to operate efficiently and effectively it has to create appropriate structures and make use of suitable instruments, information technology (IT) can play an important role in this. However, the path to a successful implementation and effective application of Information Technology continue to be a challenge to many cost conscious firms. It is therefore obvious that a broader perspective of research of effects of Information Technology on organization’s procurement performance is required in order to exploit its potential benefits. The primary aim of this study therefore was to determine the effects of information technology (IT) in procurement performance of selected supermarkets in Eldoret, Kenya. The specific objectives were to establish the effects of Electronic Data Interchange (EDI) on organization’s procurement performance. The major theory that was adopted in this study was Resource Base View (RBV). The study adopted explanatory research design, with the target population being managers and operational staff of selected supermarkets within Eldoret town. The sampling technique employed was purposive sampling to select 6 supermarkets that apply fully information technology (IT) system. Census technique was used to select 153 respondents from selected supermarkets. Data was collected by administering questionnaires to the respondent, a pilot test was conduct to test validity of instrument and cronbach alpha (α) was conducted to test reliability. Data collected was coded and analyzed with the help of Statistical Package for Social Sciences (SPSS) and the findings represented in tables. The finding indicates that Electronic Data Interchange (EDI), was significant determinant of organization’s procurement performance as depicted by the results. By investing more on electronic data interchange enhance balancing supply and demand at every supply node, for these are the key determinants of successful organization’s procurement performance. Retailers need to exploit the advantages of an information intensive business environment in order to deliver superior solutions to their customers, and at the same time simplify their businesses.