What are the main challenges and barriers to adopting e-procurement in developing countries?

Least Developing countries face several challenges in adopting e-procurement, including: 1. Limited access to technology 2. Lack of technical expertise 3. Resistance to change 4. Insufficient legal and regulatory frameworks 5. Financial constraints 6. Supplier readiness 7. Data security and privacy concerns

There is no universal agreement on the ‘developing’ categorisation. The World Bank classifies economies differently. As far as solutions go, there are several examples of notable successes and proper utilisation in some of the ‘so-called developing’ countries and on the other side of the spectrum instances of low uptake in some of the ‘so-called developed’ countries & vice versa. So, I don't believe this is defining factor. Many factors may negatively affect optimal adoption and will vary between companies and between industries, e.g. poor or inconsistent internet infrastructure, expensive or insufficient IT and solutions infrastructure, IT vulnerabilities, lack of implementation capacity, and power outages.

Developing countries often face challenges related to inadequate infrastructure, including limited internet connectivity, unreliable power supply, and outdated technology infrastructure. The lack of robust digital infrastructure hinders the effective implementation and utilization of e-procurement systems, making it difficult for organizations to access and leverage online procurement platforms.

In my experience, even if the municipality or organization has adequate internet access, reliable electricity, and the proper hardware, some request a printed proposal. This procedure does not promote access to diverse suppliers, as it restricts the offers to those with physical locations in the city. Also, the time frame to handle a hard copy of the entire tender document is so brief that suppliers from other cities do not have enough time to react. Then, a printed proposal in an E-procurement process is not aligned with cost reduction, efficiency improvement, and transparency increase objectives. Therefore, remote or rural areas in developing countries must address this issue using electronic systems and platforms from beginning to end.

n developing countries, e-procurement adoption is hindered by poor infrastructure, including limited internet connectivity and access to computers and mobile devices. This makes it difficult to sustain e-procurement systems and hinders procurement professionals' ability to use electronic platforms effectively. Insufficient training and technical skills among staff add to the challenges. Overcoming these hurdles requires significant investment in infrastructure and comprehensive training programs. Without addressing these fundamental challenges, widespread e-procurement adoption in developing countries remains challenging.

Legal and regulatory frameworks in developing countries may not be conducive to e-procurement adoption. Complex and outdated procurement laws, regulations, and bureaucratic procedures can pose significant barriers to the implementation of e-procurement systems. Ensuring compliance with existing regulations and overcoming legal barriers requires coordinated efforts from government agencies, policymakers, and stakeholders.

Although we discuss developing countries here, so-called developed countries have their own respective legal and regulatory frameworks as well, which can pose challenges in adopting e-procurement solutions, especially where your organisation does business across borders, and you need to consider various multi-national legislation, maturity, and practices. Therefore, this is not a unique consideration to the so-called developing countries.

Legal and regulatory issues pose significant challenges to adopting e-procurement in developing countries. Complex frameworks and environments can hinder effective implementation of electronic systems. Ensuring compliance with procurement laws while transitioning to digital platforms is difficult. Inadequate legal infrastructure may impede enforcing electronic contracts, raising security and accountability concerns. Overcoming these hurdles necessitates legal reforms and clear guidelines for e-procurement practices. Without addressing these issues, widespread e-procurement adoption in developing countries remains limited.

In any case, the adoption of electronic procurement in any country will come as an obligation from the legislation. In these cases, we should not confuse the mandatory nature of the horizontal application of e-procurement with the success of the initiative. It may work less efficiently for practitioners compared to conventional procurement, with no choice The same may be the case with businesses. Imagine the example of an SME that should use a digital signature. In addition to the cost of acquiring it, ιτshould also ensure the staff who will be able to digitally sign the documents.

One essential thing to do about organizational behavior is to develop a sense of proprietorship in E-procurement's stakeholders. To be specific, it is usual to find public officials in developing countries hired as temporary contractors. Hence, due to the uncertainty about continuity in their job positions, it is easy for some to prioritize personal interest instead of society's welfare. In addition to training and educational campaigns, one of the alternatives to overcome this challenge is providing full-time positions within the organization. The public sector could reduce public officials' uncertainty about incomes by changing public officials’ contracts.

Proper success assumes infrastructure maturity at suppliers and prospective suppliers, which is not a constant. It could be difficult to get the entire suppliers base to engage electronically. You may also find that a comprehensive suite of solutions is not available in a specific market, thus limiting competitive options and functionality. There are multiple standards that can give rise to ambiguities about spend categories. Another difficulty is the organisation’s current infrastructure, for example it may have a legacy financial system that may make integration difficult, impossible or expensive.

Organizational and cultural factors, such as resistance to change, lack of digital literacy, and bureaucratic inertia, can impede the adoption of e-procurement in developing countries. Traditional procurement practices and entrenched organizational cultures may resist the shift towards digital procurement methods, requiring effective change management strategies and capacity-building initiatives to overcome resistance and foster a culture of innovation.

Adopting e-procurement in developing countries faces significant challenges, with organizational and cultural factors being key. Resistance to change and entrenched traditional procurement practices hinder electronic system adoption. Hierarchical structures and bureaucratic processes also slow down agile e-procurement implementation. Cultural skepticism towards new technologies and a preference for face-to-face interactions add further obstacles. Overcoming these challenges needs both technological advancement and a cultural shift towards innovation and digital transformation. Effective change management and training programs are crucial for addressing these barriers and promoting successful e-procurement adoption in developing countries.

A question to be asked- what are the actual requirements for and how integrated are various activities and functionalities, incl. eInforming, eTendering, eOrdering, EInvoicing & EContract management?

Developing countries may encounter technical and operational challenges in implementing e-procurement systems, including limited IT capabilities, inadequate system integration, and data security concerns. Building and maintaining e-procurement platforms require technical expertise, financial resources, and ongoing support and maintenance efforts. Addressing technical challenges and ensuring system reliability, scalability, and security are essential for successful e-procurement adoption.

Adopting e-procurement in developing countries faces significant technical and operational challenges. Limited internet access and digital infrastructure make implementing electronic procurement systems difficult. Also, insufficient technical expertise among procurement professionals and IT staff can impede system deployment and maintenance. Ensuring compatibility with existing systems adds complexity, along with concerns about data security, system reliability, and user support. Overcoming these hurdles requires investing in technical infrastructure, improving digital literacy, and implementing robust support mechanisms.

There are many challenges like infrastructure (limited internet), low digital literacy among stakeholders and resistance to change the traditional procurement method, concerns about data security & financial constraints for implementing technology.