E-Procurement Practices and Procurement Performance of Insurance Firms in Kenya
DOI:
https://doi.org/10.47941/ijscl.3306Keywords:
Electronic Tendering, Electronic Ordering, Electronic Sourcing, Electronic Invoicing and Procurement PerformanceAbstract
Purpose: This study sought to examine the influence of e-procurement practices specifically electronic tendering, electronic ordering, electronic sourcing, and electronic invoicing on procurement performance among insurance firms in Kenya. Grounded in Transaction Cost Theory, Resource-Based View Theory, Diffusion of Innovations Theory, and the Technology Acceptance Model, the study was guided by the premise that the integration of technology-driven procurement systems can significantly improve operational efficiency and accountability in procurement processes.
Methodology: A descriptive survey design was employed, targeting 63 insurance firms registered with the Insurance Regulatory Authority. Data were collected through structured questionnaires administered to procurement managers, and both descriptive and inferential statistics were used to analyze the findings.
Findings: The study revealed that e-procurement practices collectively enhance procurement performance by improving efficiency, reducing transaction costs, and promoting transparency in procurement operations. Specifically, electronic tendering, electronic ordering, and electronic sourcing were found to have a positive and significant influence on procurement performance, indicating their critical role in improving procurement speed, supplier relations, and cost control. While electronic invoicing also demonstrated a positive influence, its impact was relatively modest, suggesting a need for improved integration and user adoption. The study concludes that the adoption and effective utilization of e-procurement practices significantly contribute to enhanced procurement performance in the insurance sector.
Unique Contribution to Theory, Practice and Policy: By embracing comprehensive e-procurement systems, insurance firms can strengthen operational efficiency, ensure compliance, and improve service delivery. The study recommends that insurance firms invest in robust digital infrastructure, staff training, and continuous system upgrades to fully leverage the benefits of e-procurement in achieving strategic procurement excellence.
Downloads
References
Abolhasani, S., & Azar, A. (2021). The role of electronic tendering in procurement performance in Malaysia's public and private sectors. Journal of Public Procurement and Governance, 12(2), 45-61.
Awuor, D., Kibuine, M., & Akwalu, E. (2024). Effect Of Electronic Sourcing On Procurement Performance In Siaya County, Kenya. International Journal of Economics, Commerce and Management, 12(10), 189–200.
Barney, J. B., & Hesterly, W. S. (2019). Strategic management and competitive advantage: Concepts and cases (6th ed.). Pearson.
Basheka, B. C., & Mutebi, A. (2017). Public procurement reforms and performance in developing countries: A case of Uganda. International Journal of Procurement Management, 10(2), 178–196.
Boateng, S. (2016). The role of e-procurement in improving procurement performance in the Ghanaian public sector. Journal of Public Procurement and Contract Management, 3(1), 45–60.
Byiringiro, K. D., & Madichie, N. (2022). E-procurement practices and performance of public institutions in Rwanda: A case of Kicukiro District. The Strategic Journal of Business & Change Management, 9 (4), 744 – 760.
Chakladar, R. (2021). How Do Insurers Reduce Cost and Become Efficient. Journal of Scientific and Engineering Research, 8(11), 190–194.
Croom, S., & Brandon-Jones, A. (2017). Key issues in e-procurement: Procurement performance and relationship management. Journal of Supply Chain Management, 53(4), 67–83.
Davis, F. D., & Granić, A. (2024). The Technology Acceptance Model. Springer International Publishing.
Greenhalgh, T., Robert, G., Macfarlane, F., Bate, P., & Kyriakidou, O. (2005). Diffusion of innovations in service organizations: Systematic review and recommendations. The Milbank Quarterly, 82(4), 581–629.
IRA. (2019). National Survey On Enterprises Perception Of Insurance In Kenya. Welcome - Insurance Regulatory Authority. https://ira.go.ke/assets/file/National%20perception%20survey%20on%20enterprises%20perception%20of%20insurance%20in%20Kenya1.pdf
IRA. (2023). About IRA Kenya. Insurance Regulatory Authority. https://ira.go.ke/about-ira-kenya/
IRA. (2024). Registered Insurers 2024. Insurance Regulatory Authority. https://ira.go.ke/resource/registered-insurers-2024/
Isango, E. (2024). An Assessment of the Impact of E-Procurement Practices on Organizational Performance in Tanzania. NG Journal of Social Development, 14(2), 237–241.
James, L. L., & Osoro, A. (2023). E-procurement practices and procurement performance in Turkana County, Kenya. The Strategic Journal of Business & Change Management, 10 (2), 882–900.
Kajwang, B. (2021). Challenges Facing Insurance Brokers In Kenya. European Journal of Business and Strategic Management, 1(1), 1–7.
Karimi, J., & Namusonge, G. (2014). Influence of e-procurement practices on performance of procurement functions in public universities in Kenya. European Journal of Business Management, 6(17), 223–230
King, W. R., & He, J. (2006). A meta-analysis of the Technology Acceptance Model. Information & Management, 43(6), 740–755.
Lavrakas, P. (2018). Encyclopedia of Survey Research Methods, Los Angeles. Sage Publications
Makudza, F., Jaravaza, D. C., Govha, T., Mukucha, P., & Saruchera, F. (2023). Enhancing supply chain agility through e-procurement in a volatile frontier market. Journal of Transport and Supply Chain Management, 17
Mebrate, Y., & Shumet, K. (2024). Assessing the impact of procurement practice on organizational performance. Cogent Business & Management, 11(1).
Morioka, R., Yamamoto, T., & Ueda, K. (2016). The impact of electronic ordering on procurement performance in Japanese manufacturing firms. International Journal of Production Economics, 181, 1-12.
Mutunga, J. M., & Makhamara, D. F. H. (2020). E-Invoicing And The Performance Of Small And Medium Enterprises In Nairobi City County Kenya. Strategic Journal of Business & Change Management, 7(3).
Nawi, M., & Roslan, S. (2016). The Benefits and Challenges of E-procurement Implementation: A Case Study of Malaysian Insurance Companies. International Journal of Economics and Financial Issues, 6(7), 329–332.
Obicci, A. P. (2015). E-Procurement and Performance of Service Organizations in Uganda. [Unpublished master's thesis]. Bugando University - CUHAS.
Olusola, O. A., & Adebayo, O. T. (2019). Impact of electronic tendering on procurement performance in the public sector: Evidence from Nigeria. International Journal of Public Administration, 42(9), 787-798.
Osei-Tutu, E., Agyekum, K., & Adjei-Kumi, T. (2018). Electronic procurement implementation challenges in developing countries. Journal of Construction Project Management and Innovation, 8(2), 1923–1942.
Parboteeah, P., & Zakaria, R. (2023). Resource-Based Theory. SAGE Publications, Inc.
Paul, P., Ogugua, J., & Eyo-Udo, N. (2024). Advancing strategic procurement: Enhancing efficiency and cost management in high-stakes environments. International Journal of Management & Entrepreneurship Research, 6(7), 2100–2111.
Rindfleisch, A. (2019). Transaction cost theory: past, present and future. AMS Review, 10(1-2), 85–97.
Rogers, E. M. (1962). Diffusion of innovations. Collier-Macmillan.
Rotich, G. K., & Okello, B. (2015). Analysis of the influence of e-procurement practices on organizational performance among large-scale manufacturing firms in Nairobi, Kenya. International Journal of Business and Commerce, 4(9), 45–58
Schutte, C. S., & Coetzee, S. A. (2018). The influence of electronic procurement on procurement performance in South African listed firms. South African Journal of Business Management, 49(1), 35-46.
Shukla, A. (2016). Literature Review of Adoption of E Procurement Practices by Construction Industries. [Unpublished research paper].
Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the Technology Acceptance Model: Four longitudinal field studies. Management Science, 46(2), 186–204.
Wernerfelt, B. (2016). Adaptation, Specialization, and the Theory of the Firm: Foundations of the Resource-Based View. Cambridge University Press.
Williamson, O. E. (2007). Transaction Cost Economics: An Introduction. SSRN Electronic Journal. 3(4), 56-64
Williamson, O. E., & Masten, S. (Eds.). (2016). Transaction Cost Economics. Edward Elgar Publishing.
Zulkarnain, Z., Muda, I., & Kesuma, S. A. (2023). Factors Determining The Adoption of E-Procurement in Developing Countries: A Systematic Literature Review. International Journal of Social Service and Research, 3(2), 585–594.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Faith Whitney Murugi Ndwiga, Dr. Rebecca Mutia
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
