Benefits and challenges of digital procurement implementation at a bulk water utility

Abstract

Purpose: Digital supply chains (DSCs) have been shown to improve efficiency in procurement processes, to improve compliance, to enhance decision-making and greater transparency, and to improve overall performance. However, the transition to digital procurement can be daunting and poses several challenges. This research explored the benefits and challenges of implementing DSCs, specifically digital procurement, at a bulk water utility.
Design/methodology/approach: The research used a single case study approach to explore the benefits and barriers associated with the implementation of digital procurement at a bulk water utility. Data were collected through online semi-structured interviews with 12 participants from the bulk water utility.
Findings/results: Identified enablers for digital procurement include: (1) identifying and obtaining the right resources and digital capabilities and (2) addressing strategic and financial considerations. Stakeholder engagement is essential. The main challenges mentioned to implement digital procurement relate to: (1) cultural and organisational factors, (2) technological and systems issues and (3) other external factors such as legal and regulatory frameworks. The main benefits are categorised as follows: (1) increased operational efficiencies and productivity, (2) improved compliance and risk management and (3) cost savings.
Practical implications: Using the dynamic capabilities theory (DCT), the bulk water utility can benefit from digital procurement processes by sensing and seizing the opportunities for DSC implementation that were identified in the study. However, the challenges of DSC implementation also need to be overcome.
Originality/value: This study adds to the current research on the implementation of digital technologies in public procurement. The results provide useful guidance for managers seeking to implement digital procurement to navigate the benefits and overcome the challenges inherent in digital transformation.