Original Research

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

Jacobus D. Nel, Beatrix G.T. Kekana

Received: 04 Dec. 2025; Accepted: 19 July 2026; Published: 22 Sept. 2026

Copyright: © 2026. The Authors. Licensee: AOSIS.
This work is licensed under the Creative Commons Attribution 4.0 International (CC BY 4.0) license (https://creativecommons.org/licenses/by/4.0/).

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.

Keywords: digital supply chain; digital procurement; digitalisation; digital technologies; public procurement; bulk water utility; South Africa.

Introduction

Water is essential for development and economic growth. According to Godfrey (2021), South African national water demand will exceed water supply by 17% by 2030. As a water-scarce country, South Africa must therefore ensure that it protects its water resources. The water sector is predominantly made up of water boards, also known as water utilities and other national agencies. Since enormous sums of money are spent in this sector, it is important that these entities procure goods and services in an effective and efficient manner.

Supply chain management (SCM) is one of the key strategic drivers used by the South African government to promote public service delivery through the procurement of goods, services and works. Yet, SCM within the public sector has experienced the negative effects of inefficiencies, particularly in the procurement phase (National Treasury, 2015). To account for these inefficiencies, the government needs to ensure that its SCM processes are transparent. The DSC is a growing global concept that seeks to focus on, among others, automating procurement processes to improve transparency and efficiencies.

The outbreak of COVID-19 necessitated many industries being more resilient across their supply chains (Nel, 2025). This includes governments and how they procure goods and services. This research focuses on the procurement process, which forms an integral part of SCM. Weerabahu et al. (2023) conducted a systematic literature review on DSC research trends between 1997 and 2020 to investigate the enablers and challenges to the adoption of DSCs. The study found that while digital technologies are important DSC facilitators, there are several obstacles to their adoption. The findings by Weerabahu et al. (2023) are echoed by Motaung and Sifolo (2023), who conducted a study on the benefits and barriers of digital procurement at Airports Company South Africa. The study revealed that even though there are benefits to the implementation of digital procurement, there are also barriers to its adoption.

Water boards in South Africa spent an estimated R3.8 billion in 2022/23 and R5.6 billion in 2023/24 (Parliament of the Republic of South Africa, 2025). According to the International Monetary Fund (IMF, 2023), a lack of integration and multiple information technology (IT) systems lead to fragmented procurement data. These create difficulties in monitoring the efficiency of procurement processes and also limit the ability to enforce compliance with procurement regulations. An estimated 45% of procurement activities are still carried out manually, which are time-consuming and prone to errors (IMF, 2023). This research examines the benefits and challenges of implementing a DSC at a bulk water utility for more efficient, transparent and compliant supply chain practices.

The primary objective of the study was to examine the current SCM practices of a bulk water utility and explore the benefits and challenges of implementing a DSC. Using dynamic capabilities theory (DCT), the study provides recommendations to the bulk water utility that can be used when considering adopting a DSC. The DCT explains how organisations can achieve and sustain competitive advantage in rapidly changing environments by building, integrating and reconfiguring their resources and capabilities (Shiferaw & Kero, 2024; Teece et al., 1997). The study aimed to answer the following research questions (RQs):

• RQ1: What are the barriers in the bulk water utility’s current SCM processes?
• RQ2: What enablers are necessary to implement digital procurement at the bulk water utility?
• RQ3: What are the challenges that the bulk water utility needs to manage during the implementation of digital procurement?
• RQ4: What are the benefits that digital procurement could bring to the bulk water utility?

The study contributes significantly to the academic theory on the implementation of DSCs in public procurement by specifically identifying the challenges and enablers in the context of a state-owned entity like the bulk water utility, which operates under stringent legal and regulatory frameworks. The study also aims to build on the DCT by equipping policymakers, SCM practitioners, scholars and researchers with valuable insights and tools for implementing DSCs in procurement, helping them to better understand its benefits and challenges.

The remaining sections of the article are structured as follows. Firstly, the literature review introduces the topic of DSCs and its link to public SCM. Secondly, the research methodology explains the research design, data collection and data analysis that were followed. The article concludes with the research findings, applications and direction for future research.

Literature review

Supply chain management and public procurement

Ambe and Badenhorst-Weiss (2011) state that public procurement is part of SCM. They argue that SCM entails managing all the processes and activities in supply chains, while procurement focuses more on sourcing and procuring goods within the supply chain. According to the authors, public procurement involves acquiring goods and services from suppliers in local and international markets by public-sector organisations using public funds (Ambe & Badenhorst-Weiss, 2012; Dzuke & Naude, 2015). This article focuses on procurement in the public sector. Public procurement is an important function of the South African government, as it has a major influence on the economy with regard to consumption and investment spending (Dzuke & Naude, 2015; Mojaki et al., 2024). According to the IMF, public procurement processes have an impact on how much the government pays for necessary inputs to deliver services (IMF, 2023).

Governments can increase the transparency of public procurement activities with e-procurement systems. E-procurement also helps collect timely and accurate data on procurement processes on a consistent basis (Organisation for Economic Co-Operation and Development [OECD], 2019). Mandala et al. (2024) assert that adopting e-procurement systems in public procurement is crucial for streamlining procurement processes, thus improving transparency and reducing inefficiencies. Studies reveal that there are still serious inefficiencies and challenges in the South African public procurement processes (Nzimakwe, 2023). According to Bjerke-Busch and Aspelund (2021), the public sector lacks rapid digital transformation because of factors such as legacy systems, global operations, work silos and organisational politics, which make public entities reluctant to transform their supply chains to DSCs.

Digital transformation

Industry 4.0 necessitated organisations to undergo significant changes to embrace digital technologies. Organisations explored various digital tools and solutions to fully digitalise their operations by implementing significant changes through technologies and information-sharing capabilities to achieve a competitive advantage and remain competitive (Wu et al., 2025). Perkin and Abraham (2017) argue that digital transformation is unavoidable, irrespective of a company’s readiness to adopt it, and encompasses more than just technological change, involving fundamental and widespread organisational shifts. Digital transformation is an evolving process that uses digital capabilities and technology to support operational procedures, consumer experiences and business models to generate value (Morakanyane et al., 2017; Wu et al., 2025). An open culture of collaboration and creativity needs to be encouraged among supply chain participants and is crucial for digital transformation (Ngo et al., 2023). Organisations embarking on a digitalisation journey go beyond introducing digital technologies. These organisations include a digital strategy, new organisational structures, a cultural shift and talent (Salamah et al., 2024). According to Ngo et al. (2023), organisations must be aware of advanced technologies for DSC transformation to be successful.

Digital transformation in procurement has progressed from manual tasks, such as e-procurement, to the full automation of procurement processes, where purchase orders are automatically generated within a system and sent directly to the relevant supplier without human intervention (Glas & Kleemann, 2016; Maepa et al., 2023; Makudza et al., 2023). In the past, the primary goal of the technology-enabled change was to replace manual processes with faster, more efficient ones, such as e-procurement and e-invoicing, thus reducing cost and increasing efficiency (Omare, 2022).

Digital supply chain

The concept of a DSC is still developing but is already disrupting traditional supply chain networks (Queiroz et al., 2021). For purposes of this article, a DSC can be defined as an intelligent system that consists of software, hardware and network communications that synchronises and supports the supply chain activities and interactions (e.g. procurement, production, logistics and sales) between supply chain partners (Büyüközkan & Göçer, 2018). It is evident that a DSC is a technological system where supply chain processes, including procurement, are digitalised using advanced digital technologies.

Digital technologies

The impact of digital technology on supply chains has been accelerating the transition to digitalised supply chains (Queiroz et al., 2021). With the evolution of SCM, organisations are seeking to integrate digital technologies into their activities to remain competitive in the digital era (Wang et al., 2022). By adopting digital technologies in SCM, organisations have the benefit of having supply chain practices that are more efficient, agile and lean (Dixit et al., 2024). However, the authors caution that supply chain managers need to be aware of both the challenges and opportunities that come with the adoption. Similarly, local governments are leveraging digital technologies to adapt organisational structures and improve public service delivery processes (Pittaway & Montazemi, 2020). According to the IMF (2023), public entities need to prioritise transitioning to new e-procurement systems that integrate all stages of the procurement process and connect to the relevant systems to reduce procurement transaction costs and increase competition. In an effort to make their processes more efficient and to enhance the ability to optimise supply chain and procurement strategies, organisations are considering various digital technologies such as the internet of things, cyber-physical systems, artificial intelligence, big data analytics, blockchain and cloud computing (Attaran, 2020; Bigliardi et al., 2022; Queiroz et al., 2021; Sony & Naik, 2020).

Enablers of digital transformation

Digital technologies are important enablers in the transformation of supply chains. However, other factors also need to be incorporated to enable digital transformation. Queiroz et al. (2021) proposed an integrative framework comprising three essential resources that organisations should consider for the successful implementation of a DSC, namely: (1) information and communication technologies, (2) workers’ capabilities and (3) stakeholders. Sony and Naik (2020) identified six key ingredients for assessing an organisation’s readiness for digital transformation: (1) top-management involvement and commitment, (2) employee adaptability, (3) available digital technologies, (4) current level of digitisation in the organisation, (5) current level of digitisation across the organisation’s supply chain and (6) the readiness of the organisation’s strategy to transform to a DSC. Büyüközkan and Göçer (2018) developed a framework that provides even more detail about these ingredients. The authors looked at three main categories, namely: (1) the organisation’s digitalisation strategy, (2) technology implementation and (3) SCM and integration. In the framework, there are clear overlaps with the factors mentioned by Queiroz et al. (2021) and Sony and Naik (2020). Some of these factors include: The organisational culture, available digital technologies, the relationship between humans (or employees) and technologies, and the current technology infrastructure of the organisation. By incorporating all the above-mentioned factors, the following enablers can be derived:

• There needs to be a clear DSC implementation strategy.
• Top management needs to be involved and committed to the change.
• Employees need to be adaptable and learn new skills required for DSCs. This includes DSC operations and analytics.
• Organisations need to know their current level of digitisation and how ready their organisational strategy is for the anticipated changes that will occur across numerous relationships. They need to understand what is required to move from their current (or AS-IS) procurement strategy to their envisioned (or TO-BE) digital procurement strategy.
• Organisations need to understand the extent of digitisation of all operations across the entire supply chain and integration of physical systems with the DSC.
• Organisations will have to know and understand the digital products and services that are available for DSC implementation (and the technologies necessary to implement it).

Challenges and benefits of digital supply chain implementation

Many obstacles to digital transformation remain. According to Bjerke-Busch and Aspelund (2021), there is a greater need to understand the drivers and barriers that are limiting digital transformation in public organisations. The authors distinguish between external barriers and internal barriers. External barriers include, among others, regulations, lack of system integration and finances, while internal barriers manifest at organisational and managerial levels (Bjerke-Busch & Aspelund, 2021). Dixit et al. (2024) distinguish between strategic, organisational and technological barriers. Digital transformation includes automation and augmentation. Automation happens when digital technologies replace humans (i.e. digital tools replace human labour), while augmentation entails humans using digital tools to complete tasks (i.e. employees collaborate closely with digital technologies to accomplish tasks). Digital transformation can completely change the characteristics of employees’ jobs. This may reduce job satisfaction while increasing stress and uncertainty about their future employment (Feng et al., 2025). However, there are also numerous benefits associated with DSC implementation. For example, DSC implementation allows for real-time and seamless communication and collaboration between interorganisational supply chain partners. Digital technologies allow for visibility across the supply chain and enhance efficiency and decision-making accuracy (Cheng, 2025). The literature presents several challenges and benefits of DSC implementation. Many of the benefits of DSCs are still untapped because important organisational transformations and their management are often neglected or postponed (Büyüközkan & Göçer, 2018). Some challenges and benefits of DSCs are listed in Table 1.

Dynamic capabilities theory

Dynamic capabilities refer to an organisation’s ability to sense (or identify), seize and transform opportunities and resources by integrating internal and external capabilities (Bleady et al., 2018; Shiferaw & Kero, 2024; Teece et al., 1997). The DCT is especially relevant in environments where technological changes are present. In fact, Shiferaw and Kero (2024) argue that organisations need to develop the necessary capabilities to transform their business models to adapt to these changes. These capabilities could then enable organisations to adapt to changing environments (Bleady et al., 2018). In line with the organisational capabilities highlighted by Shiferaw and Kero (2024), the dynamic capabilities may help the bulk water utility to:

• Sense (or identify) opportunities such as technological possibilities and developments and challenges of (or barriers to) DSC implementation.
• Seize opportunities by redesigning its business model and committing the necessary changes to the implementation of a DSC.
• Transform and realign its structure and organisational culture by aligning existing capabilities and investing in new capabilities.

Theoretical framework

Figure 1 illustrates the theoretical framework used in this research study. The framework shows how, in theory, the bulk water utility needs to sense (or identify) the enablers and the challenges of DSC implementation. Then, the bulk water utility needs to seize the relevant opportunities and commit the necessary resources to transform and implement its DSC strategy and reap the benefits of DSC implementation.

FIGURE 1: The theoretical underpinning of this research.

Methodology

Research design and sampling

This study adopted an exploratory qualitative approach using a holistic single case study. The unit of analysis was a South African bulk water utility. The study investigated the benefits and challenges of implementing a DSC at this utility, specifically from a procurement perspective. The units of observation were SCM officials, managers and senior buyers who were employed by the bulk water utility and who had in-depth knowledge of the utility’s SCM processes and procurement systems. Twelve participants were interviewed. Purposive sampling was used to choose participants who could provide relevant information. Table 2 summarises the profile of the individual participants.

Data collection

The researchers collected data by means of online semi-structured interviews and developed a discussion guide after reviewing relevant literature. This discussion guide was then pilot-tested and refined by topic experts who included a senior manager from the bulk water utility. All the participants received informed consent letters prior to the interviews, after which the researchers obtained the necessary approval. The interviews were conducted using MS Teams. All the participants were assured of their anonymity and the confidential nature of the study. Eleven of the 12 interviews were audio recorded with the participants’ consent. Notes were taken during the interview of one participant who did not want to be recorded. Probing questions were used to follow up on questions so that participants could explain or elaborate on their answers. The audio recordings of the interviews were transcribed verbatim using transcription software from MS Teams and were subsequently analysed. The 12 interviews (which included the initial pilot interview) were conducted between 07 August 2024 and 09 October 2024. The length of the interviews ranged between 30 min and 61 min, with an average duration of 47 min per interview.

Data analysis

Thematic analysis was used to examine the qualitative data by finding and presenting patterns in the detailed descriptive data. Creswell and Poth (2018) stipulate specific steps to analyse the data. These steps were used to ensure that the data analysis remained rigorous. Firstly, the interview transcripts were downloaded, checked for correctness and organised into folders. Secondly, the interview transcripts were read and then uploaded to ATLAS.ti. Next, codes were identified and used to create themes. Then, the information in each theme was analysed to look for connections and meanings to establish any relationship with the research questions. The codes, themes and subthemes are listed in Appendix 1 Table 1-A1, Table 2-A1 and Table 3-A1 at the end of this article. Appropriate citations from the transcripts are included with each code.

Trustworthiness

To ensure trustworthiness, the researcher adopted Lincoln and Guba’s (1985) four-criterion framework, which consists of credibility, dependability, confirmability and transferability. To establish credibility, several participants were interviewed. The research was credible because the participants were experienced and knowledgeable about the constructs included in the research instrument. In addition, similar results were identified across the participants’ interview responses. Dependability of the study was ensured by maintaining an audit trail that included detailed information on the research design, methodology, data collection and analysis. The researchers ensured that every interview was accurately transcribed and that the results were properly documented, arranged and presented using themes in a logical and methodical manner. The findings of this study were confirmed and corroborated with data from the bulk water utility. Transferability was ensured by achieving data saturation for the main findings. No new themes emerged during the last interviews.

Ethical considerations

Ethical clearance to conduct this study was obtained from the University of Pretoria Research Ethics Committee (Ref. No. u23806011/2024). Prior to conducting the interviews, all participants were informed about the study’s objectives, and they were asked to sign an informed consent form indicating their voluntary consent to participate. The participants could withdraw from the study at any time. Confidentiality and anonymity were assured by using pseudonyms for all participants.

Results

Four main themes and multiple subthemes were identified that relate to the study’s research questions. Table 3 summarises the main themes, corresponding subthemes and their relationship to the research questions. Table 4, Table 5 and Table 6 provide additional summaries of the themes, subthemes and codes with relevant citations for each.

Findings related to research question 1: Barriers in current supply chain management processes

The study’s first research question sought to understand the barriers in the bulk water utility’s current SCM and procurement processes. The theme for RQ1 was current barriers to SCM processes. A subtheme that emerged was current barriers to effective procurement process optimisation. Table 4 presents the participants’ responses and codes relating to the theme.

Theme 1: Barriers to supply chain management processes

Subtheme: Barriers to effective procurement process optimisation

Theme 1 aimed to clarify the current barriers in the bulk water utility’s SCM and procurement processes by identifying and analysing these barriers. The responses provided a better view of the company’s existing SCM landscape. All 12 participants identified manual procurement processes as a major barrier. Manual procurement processes are often not integrated across the system and are time-consuming and prone to human errors and delays. This statement was echoed by P4 in the following quotation:

‘So, it’s quite manual. It’s quite tedious and all of us are just doing what we do in silos and then we’re coming last minute to understand.’ (P4, SCM manager, female)

Compliance and audit issues emerged as another major challenge. Eleven of the 12 participants identified compliance and audit issues as one of the biggest challenges facing the bulk water utility. The following quotation describes what P2 had to say:

‘So, the biggest challenge is the challenge of non-compliance that we are having.’ (P2, senior SCM official, female)

Seven of the 12 participants identified rigid procurement operating models as another barrier that hinders the bulk water utility from being flexible and responsive with its procurement processes. The quotation below describes how P3 views the procurement operating model:

‘It’s because of processes taking long, red tapes … laws that are not enabling for supply chains to procure quickly.’ (P3, SCM manager, male)

Bid management inefficiencies were also highlighted by five of the participants as a barrier to the procurement processes. Bid management inefficiencies refer to the challenges during the process of soliciting, evaluating and awarding bids.

Findings related to research question 2: Necessary enablers for digital procurement

The second research question entailed identifying the enablers necessary to digitalise SCM, with particular emphasis on procurement at the bulk water utility. One main theme emerged from the collected data, namely successful project implementation. This theme highlights the key factors that can drive the successful transition of the bulk water utility’s procurement processes towards digitalisation. Two subthemes emerged from this theme, namely: (1) resources and capabilities and (2) strategic and financial considerations. Table 5 presents the participants’ responses to these subthemes along with the applicable codes.

Theme 2: Successful project implementation

Subtheme: Resources and capabilities

The need for (1) automation or digitalisation (n = 8), (2) the right technologies or systems (n = 8) and (3) upskilling employees and training (n = 8) were identified as key enablers. Three of the 12 participants mentioned all three of the above-mentioned topics. The findings reveal that all three factors are considered necessary for the successful implementation of digital procurement at the bulk water utility. The following citations describe some of the participants’ need for these resources and capabilities:

‘… digitalising the whole process and it will actually lessen the stress …’ (P2, senior SCM official, female)

‘… the challenge for now is how to find the best system that is able to meet the model of how [the bulk water utility] operates and also ensure compliance with the laws that are governing the entity.’ (P3, SCM manager, male)

‘So, you know we need skills, relevant skills for the implementation of the solution …’ (P9, SCM manager, female)

Subtheme: Strategic and financial considerations

Two key factors were identified for strategic and financial considerations. These factors were: (1) the need for stakeholder engagement and (2) the need for a budget. Ten of the 12 participants identified the need for stakeholder engagement, while seven of the participants identified the need for a budget as a critical enabler for successful project implementation. Examples are provided in the quotations below:

‘… to play the role you must get buy-in and co-operation from everyone.’ (P4, SCM manager, female)

‘Extensive consultation with stakeholders.’ (P6, senior buyer, male)

‘… a budget because when the documentation was given to me, I had a look at the documentation.’ (P11, senior buyer, female)

Findings related to research question 3: Challenges during digital procurement implementation

The third research question related to the challenges that the bulk water utility needs to manage when implementing digital procurement. Three subthemes emerged: (1) cultural and organisational factors, (2) technology and system issues and (3) external factors. Table 6 presents the participants’ responses to these subthemes along with the applicable codes.

Theme 3: Barriers to successful digital transformation

Subtheme: Cultural and organisational factors

Ten participants identified resistance to change as a major challenge, while eight participants identified the lack of top-management commitment and support as another challenge. The following quotations corroborate these statements:

‘… we will have to convince my colleagues that it will have to work for them …’ (P8, senior SCM official, male)

‘Top management can play a role and say yes, [they] failed in the past …’ (P1, senior research manager, female)

Four participants mentioned that a fear of repeating mistakes made in the past may lead to some hesitancy to implement digital procurement processes. Four participants also mentioned that a lack of information sharing and a lack of urgency can be barriers towards implementing digital procurement. Three participants feared that job losses and resulting unemployment could hinder the successful implementation of digital procurement processes.

Subtheme: Technology and system issues

Eleven participants identified system integration as a barrier to successful digital transformation. The following quotations describe what some of the participants had to say:

‘The process we need to follow for the migration purposes, the infrastructure, internal infrastructure, you know, obviously if we have to now procure a new system different from the infrastructure that we currently have …’ (P5, senior SCM official, female)

‘There should be a system that connects all of us.’ (P4, SCM manager, female)

Data security concerns were another possible challenge for some of the participants. Four participants raised concerns about data security.

Subtheme: External factors

The bulk water utility is regulated by several regulatory bodies that regulate the environment within which it may procure goods and services. This implies that every time regulations are amended, the bulk water utility needs to amend its procurement systems, policies and procedures to align with the regulations. Five of the 12 participants viewed legal and regulatory frameworks as a challenge to the successful digital transformation at the bulk water utility. The citation below is an example of what a participant had to say:

‘… we need a system that will speak to the regulations and the challenges, the regulations and the ever-changing requirements from a governmental point of view.’ (P8, senior SCM official, male)

Findings related to research question 4: Benefits of digital procurement

The fourth research question related to the benefits that digital procurement could bring to the bulk water utility. The main theme was thus the benefits of digital procurement transformation. Three subthemes derived from the main theme are: (1) operational efficiency and productivity, (2) compliance, security and risk management and (3) competitive advantage. Table 7 presents the participants’ responses to these subthemes along with the applicable codes.

Theme 4: Benefits of digital procurement transformation

Subtheme: Operational efficiency and productivity

The subtheme sought to identify the benefits relating to operational efficiency and productivity. Three benefits were identified. Nine participants said that improved visibility would be a benefit. Nine participants also said that process efficiencies would improve, while three participants believed that productivity would improve. The following citations describe some views regarding increased visibility and process efficiencies:

‘… I think the greatest benefit is definitely visibility and transparency.’ (P1, senior research manager, female)

‘Where we can start the process and finish it at the end, rather than using different systems …’ (P7, senior buyer, male)

Subtheme: Compliance, security and risk management

Most participants did not identify any benefits related to compliance, security and risk management, with only five participants mentioning improved reporting and three participants highlighting document safety as a potential benefit. This may be a result of SCM already being heavily audited and regulated, leading to a culture focused on document safekeeping and standardised reporting. As a result, it is not surprising that compliance, security and risk management were not mentioned as immediate benefits. The following quotations describe some of the participants’ views:

‘Reporting would be so much easier, very realistic.’ (P5, senior SCM official, female)

‘The documents will be safe.’ (P11, senior buyer, female)

Subtheme: Competitive advantage

Five participants identified cost savings as a key benefit of digital procurement. The following citation describes what a participant had to say:

‘… cost savings, that is, moving from manual procurement processes will save printing costs thus saving cost.’ (P6, senior buyer, male)

In summary, the findings in general are consistent with the various studies conducted concerning the challenges and benefits of DSC implementation (refer to Table 1).

Conclusion

The purpose of this study was to investigate the bulk water utility’s SCM processes with a specific focus on procurement and to understand the enablers, challenges and potential benefits of digitalising these processes. Figure 2, which uses the same constructs as Figure 1, presents the findings of the research.

FIGURE 2: Summary of the research findings based on the theoretical underpinning of this research.

The findings related to the first research question (RQ1) are shown to the left in Figure 2. The findings reveal that the most prominent current barrier in the bulk water utility’s procurement processes is the reliance on manual processes, which are inefficient, time-consuming and prone to human error, resulting in delays. The responses further emphasise the frustrations surrounding the lack of a DSC, as many participants mentioned that manual processes are the core issue affecting efficiency and compliance at the bulk water utility.

In addition to manual processes, compliance and audit issues are another major barrier in the bulk water utility’s procurement processes. Many participants mentioned that the current manual systems contribute to inefficiencies, increased risk of non-compliance and frequent audit findings. The participants emphasised a need for a more efficient and transparent system, with several participants pointing out that digitalisation would help mitigate these compliance issues. Rigid procurement operating models, with bureaucratic delays and the need for strict adherence to government regulations, were also mentioned as hindrances to procurement flexibility and responsiveness. Lastly, bid management inefficiencies were identified by a smaller group of participants, indicating that inefficiencies in bid solicitation, evaluation and awarding remain an issue.

The second research question (RQ2) identified several key enablers necessary to successfully digitalise procurement processes at the bulk water utility (Figure 2, top centre). The predominant theme that emerged was the need for successful project implementation, which involves a combination of resource and capability factors, as well as strategic and financial considerations. The most cited enablers were the need for automation and digitalisation, the right technology (or systems) and training staff. Automation and technological adoption were seen as critical to reducing manual errors and improving the efficiency of procurement processes. Moreover, participants emphasised the need for staff training to bridge the skills gap and ensure successful system implementation. Queiroz et al. (2021) and Wang et al. (2022) both stress the importance of skills development as a crucial enabler of digital procurement transformation. The study’s findings suggest that upskilling employees in digital tools will be essential for improving the overall procurement performance at the bulk water utility. Strategic enablers identified by participants included stakeholder engagement and securing a budget for digital procurement implementation. Most participants pointed out that gaining buy-in from key stakeholders and ensuring that there is sufficient financial backing for the transition were crucial for success. Engaging stakeholders internally and externally ensures that the digitalisation process is aligned with organisational goals and fosters greater acceptance of change (Queiroz et al., 2021).

The third research question (RQ3) focused on the theme of challenges (or barriers) that the bulk water utility would face to successfully transition to a digital procurement system (Figure 2, bottom centre). Three subthemes were identified, namely: (1) cultural and organisational factors, (2) technology and system issues and (3) external factors. Resistance to change was the most significant challenge, with most participants expressing concerns about staff reluctance to adopt new technologies. Top management’s lack of: (1) commitment to champion digital transformation and (2) urgency to implement a DSC could undermine the success of the initiative. A fear of repeating past failures and a lack of information sharing were also mentioned as barriers to successful digital transformation. The need for a seamless, integrated digital procurement system that works across different departments was seen as a critical requirement for success. However, participants also saw it as a challenge to implement and integrate the right systems. There were some concerns about data security. External factors, particularly the complex legal and regulatory frameworks governing procurement in the public sector, were also identified as a potential obstacle. The need for the digital procurement system to comply with constantly evolving government regulations was highlighted as a challenge that would require ongoing adaptation of systems and processes.

The last research question (RQ4) focused on the potential benefits of digital procurement for the bulk water utility (Figure 2, bottom right). The primary benefits identified were: (1) operational efficiency and productivity, (2) compliance, security and risk management and (3) competitive advantage. Participants emphasised that digital procurement would improve visibility and process efficiency, thus enhancing operational productivity. This would reduce manual intervention, streamline procurement processes and enable better tracking of procurement activities. The integration of procurement systems was seen as key to achieving these improvements. While fewer participants explicitly mentioned the benefits of compliance, security and risk management, those who did noted that improved reporting and document safety would be key advantages. The automation of procurement processes could also reduce errors and improve overall compliance with regulatory requirements. In terms of competitive advantage, the potential for cost savings was cited by participants. Moving away from manual processes and adopting digital procurement tools could significantly reduce costs associated with paperwork, printing and administrative overhead. Moreover, better management of contracts and procurement processes could result in more efficient use of resources, contributing to overall cost savings and improved organisational performance.

From the findings, it is evident that the DCT is applicable to the bulk water utility. The dynamic capabilities may help the bulk water utility to:

• Sense (or identify) opportunities such as technological possibilities and developments. The DCT will also assist the bulk water utility to identify and manage the challenges of (or barriers to) DSC and e-procurement implementation. Several enablers for and challenges of DSC implementation were mentioned by the participants.
• Seize opportunities by redesigning its business model and committing the necessary changes to the implementation of a DSC.
• Transform and realign its structure and organisational culture by aligning existing capabilities and investing in new capabilities to reap the benefits of a DSC.

Theoretical implications

This study provides significant theoretical insights into the application of DSCs in public-sector procurement, particularly in the context of the bulk water utility. Firstly, by exploring the barriers and benefits associated with DSC adoption, the research contributes to existing theories on digital transformation, supply chain integration and organisational change. It enhances understanding of how digital technologies impact procurement processes in the public sector, addressing gaps in literature that focus primarily on the private sector. Secondly, the study also highlights the strategic role of procurement in driving competitive advantage through digital transformation. Thirdly, it introduces the concept of barriers to digital transformation that are specific to the public sector, such as resistance to change and legacy systems, thus expanding the theoretical framework on supply chain digitisation. Finally, this research also paves the way for future studies that could explore DSC implementation across other public entities, contributing to the development of a more robust theoretical framework for digital procurement in the public sector.

Managerial recommendations

For managers at the bulk water utility, the study provides several actionable recommendations. Firstly, it is imperative to address the challenges of manual procurement processes by prioritising the digitalisation of procurement systems. Automation and the adoption of the right technology should be top priorities to eliminate inefficiencies and improve process accuracy. Moreover, a clear strategy for upskilling staff should be implemented to ensure that employees are well-equipped to operate new digital systems effectively.

Secondly, stakeholder engagement is another critical factor. Successful digital transformation at the bulk water utility will require active support from senior leadership to overcome cultural resistance and ensure buy-in from all stakeholders. In addition, ensuring sufficient financial resources are allocated to the digital transformation project is essential to its success. The challenges related to system integration and regulatory compliance should also be addressed early on. A robust digital procurement system that integrates seamlessly across departments and is adaptable to evolving regulatory requirements will be essential for overcoming these barriers.

Finally, the potential benefits of digital procurement, including improved efficiency, cost savings and enhanced compliance, should be communicated clearly to all stakeholders to build support for the transition and ensure its long-term success. The findings as illustrated in Figure 2 can be used by managers to sense, seize and transform their entities.

Limitations and directions for future research

While this study provides valuable insights into the bulk water utility’s procurement processes, it is not without its limitations. One notable limitation is the generalisability of the findings to all organs of the state or public procurement, as only the bulk water utility was studied. However, because the study was qualitative in nature, the objective was to understand the experiences of key participants. These experiences could assist the bulk water utility in deciding on DSC implementation. Future research can explore the experiences of other similar entities in South Africa to determine whether common challenges and enablers exist in their procurement processes. The second limitation of this study was the nature of the sample. Although the focus of this article was on procurement, it is acknowledged that supply chain decisions need to be made across various departments. Because of the specific focus of this research, the sample did not fully represent the diverse perspectives across all departments and levels within the organisation. Future research could include participants from other departments to incorporate their viewpoints and experiences. Furthermore, longitudinal studies that track the progress of digital procurement implementation over time could provide deeper insights into the long-term benefits and challenges of digital transformation in the public sector. Lastly, the study focused mainly on e-procurement, which does not encompass the entire supply chain. Further research is required to assess DSC implementation across other supply chain processes.

Acknowledgements

Competing interests

The authors reported that they received funding from the University of Pretoria, which may be affected by the research reported in the enclosed publication. The authors have disclosed those interests fully and have implemented an approved plan for managing any potential conflicts arising from their involvement. The terms of these funding arrangements have been reviewed and approved by the affiliated university in accordance with its policy on objectivity in research.

CRediT authorship contribution

Jacobus D. Nel: Conceptualisation, Formal analysis, Investigation, Methodology, Project administration, Supervision, Writing - review & editing. Beatrix G.T. Kekana: Conceptualisation, Formal analysis, Investigation, Methodology, Project administration, Resources, Writing – review & editing. All authors reviewed the article, contributed to the discussion of results, approved the final version for submission and publication, and take responsibility for the integrity of its findings.

Funding information

The research conducted in this article was supported by an internal research grant (Grant Number: 202000605) from the University of Pretoria.

Data availability

Upon reasonable request, the data that support the findings in this research are available from Jacobus D. Nel, the corresponding author.

Disclaimer

The views and opinions expressed in this article are those of the authors and are the product of professional research. They do not necessarily reflect the official policy or position of any affiliated institution, funder, agency or that of the publisher. The authors are responsible for this article’s results, findings, and content.

References

Appendix 1