Methodology for Developing a Model for the Analysis of E-Procurement Capability Maturity of Construction Organisations

Uptake of e-procurement by construction organisations worldwide has been inadequately researched. E-business successes achieved in other industries indicate the potential for the construction industry to achieve the same or better. There have been many government backed programmes and initiatives to encourage eprocurement within the UK. Since inception in April 1995, the Construction Industry Trading Electronically (CITE) standard has been proclaimed as the way forward for construction e-procurement in the UK. However, the poor usage (less than 2.9%) is indicative of the poor state of e-procurement in the UK construction industry (Martin 2003). There are many drivers and barriers to e-procurement. Previous studies in the US (Davila et.al. 2003, Minahan & Degan 2001) and Australia (Hawking et.al. 2004) have ranked these for the general procurement of goods and services industry. There is no such analysis provided for the construction industry. This paper presents details of a wider research project aimed at developing a model to analyse the e-procurement capability of construction organisations. This termed as e-readiness of organisations will indicate the current state of a construction organisation in terms of its readiness to carry out e-procurement. The paper describes in detail the research methodology being employed for the development of this model. It also provides details of preliminary findings (based on a pilot study of the Northern Ireland construction industry) of a research project which ranks drivers and barriers to construction e-procurement. It also evaluates the use of CITE prescribed data exchange format for the construction industry. The results of the pilot study indicate that 71% of construction organisations receive less than 10% of contact documentation in an electronic form. 80% of organisations have never used CITE approved software for bills of quantities preparation or pricing while 84% of organisations use and prefer spreadsheets over CITE approved format for data exchange. It also identifies ‘improving communication’ and ‘reduced administration costs’ as the two most important drivers with ‘security of transactions’ and ‘being unsure as to the legal position of e-procurement’ as the two most important barriers to construction e-procurement.