Investigating the Impact of Procurement Alignment on Supply Chain Management Performance

Abstract

The increasing emphasis that organizations are placing on purchasing and supply chain management over the past decade, has set the spotlight on the potential of procurement systems. However, the majority of studies still examine IT adoption enablers despite the fact that procurement systems are perceived as a commodity in modern enterprises. Studies that examine the post-adoption conditions that facilitate performance gains in the supply chain management domains still remain scarce. In this paper we investigate the effect of business/IT-alignment within the procurement domain in order to determine if it affects procurement performance. Additionally, we examine the impact that supply chain management governance centralization has in attaining procurement alignment. In order to answer these questions, a sample of 172 European companies was analyzed by means of Partial Least Squares (PLS) modeling. Our results empirical support our hypotheses that procurement alignment leads to increased performance over time and in relation with competitors, with the effect of the former being greater than the latter. Additionally, we find that contrary to empirical evidence supporting the statement that a decentralized structure enables e-procurement adoption, governance centralization of supply chain management decisions fosters procurement alignment.

The Effect of Strategic Alignment of Complementary IT and Organizational Capabilities on Competitive Firm Performance

“…This study has some interesting findings that can be applied in practice as outcomes suggest that, to some extent, strengthening imperative pillars and firm investment cycles (or efforts) in isolation is not sufficient in order to enhance a firm's competitive edge. Rather, the complementarities, synergies and ongoing interactions among different capabilities are a key enabler of performance, which is consistent with the extant literature [5,6], determining factors that facilitate a state of alignment [54], and capabilities and their ability to launch competitive actions [10,23]. This is an important insight for business, IT managers and executives because they can look at strategic alignment, with the underlying pillars, i.e., IT flexibility, dynamic capabilities, and a firm's absorptive capacity, as a mean (and key toolbox) to drive firm performance and systematically enhance the evolutionary fitness of the firm.…”

Purchasing alignment under multiple contingencies: a configuration theory approach

“…Accordingly, we define purchasing alignment as the degree of balance between the six dimensions within the purchasing and supply management domain. Although alignment under these dimensions has been empirically put to test in a number of contexts, the underlying contingencies that shape purchasing alignment still remain under-researched (Mikalef et al, 2013).…”

Strategic Alignment Between IT Flexibility and Dynamic Capabilities

“…This definition is in accordance with studies evaluating IS/IT performance from a rich and diverse understanding of outcomes, i.e., a multi-factorial perspective (Hitt & Brynjolfsson, 1996;Van de Wetering & Batenburg, 2014). In the context of alignment, competitive advantage in comparison with competitors should not solely be translated into hard to quantify economic values (Patrick Mikalef, Pateli, Batenburg, & Van de Wetering, 2013). As such, the performance construct we employ in this study enables a more diverse understanding of outcomes from various perspectives.…”