Factors influencing Malaysian small and medium enterprises adoption of electronic government procurement

Publication Date02 January 2020
Date02 January 2020
AuthorKai-Kit Soong,Elsadig Musa Ahmed,Khong Sin Tan
SubjectPublic policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public finance/economics,Taxation/public revenue
Factors inuencing Malaysian
small and medium enterprises
adoption of electronic
government procurement
Kai-Kit Soong,Elsadig Musa Ahmed and Khong Sin Tan
Faculty of Business, Multimedia University, Melaka, Malaysia
Purpose This study aims to examine Malaysiansmall and medium-sized enterprises (SMEs) Adoption of
electronic government procurement(EGP) in the post-introduction phase as the portal was introduced in the
early year2000.
Design/methodology/approach This study integrated electronicpublic services into two acceptance
theories (the technology acceptance model [TAM] and unied theory of acceptance and use of technology
[UTAUT] framework) and having a direct measurement of the criterion. Both TAM and UTAUT models
measure the behaviour intention to use and indirectly measure the criterion of actual usage along with
behavioural intention.Besides, this study conducted a systematic sampling surveyin SMEs located in Klang
Valley (thebusiness hub in Malaysia).
Findings The results conrm thateffort expectancy, performance expectancyand social inuences had a
direct effect on the adoption of EGP in the private sector. Rather than the original UTAUT setup, the
behaviouralintention would inuence user behaviour.
Social implications The implications and policy recommendations of these ndings will be used by
both SMEs and the governmentto improve the EGP delivery.
Originality/value The gap with this study is at the time the Malaysian Government introduced e-
procurement. The SMEs were quite new and had limited knowledge in the e-procurement during the
introduction phase.Both SMEs and the government will use the implications and policy recommendations of
these ndingsto improve the EGP delivery in the current post introduction phase.
Keywords Malaysia, UTAUT, Small and medium-sized enterprises,
Electronic government procurement, Government ICT, Government-to-business
Paper type Research paper
1. Introduction
The introduction ofelectronic government portal (EGP) will help to enhancelocal market for
local suppliers to support long-term growth, as it helps to generate job for local private
company such as small and medium-sized enterprises (SMEs), the value of the public fund
will drive the nation by reducing foreigndependency Ribeiro et al. (2018). This virtual online
service allowed the non-governmental business to conduct government-to-business (G2B)
e-commerce over the internet with the public sector. There are several types of online G2B
for a range of business models. Online EGP is considering as something convenience to the
government agencies.It automated the traditional paper-based procuring method into online
acquisition. Nevertheless, it induced collaboration between private and public sectors. The
EGP legislation tied closely between the private and public sectors out of the eight
e-government applications.Moreover, two recent studies in Malaysia electronicgovernment
application and services reported the EGP stays low compared to traditional procurement
Received29 September 2019
Revised21 November 2019
Accepted28 November 2019
Journalof Public Procurement
Vol.20 No. 1, 2020
pp. 38-61
© Emerald Publishing Limited
DOI 10.1108/JOPP-09-2019-0066
The current issue and full text archive of this journal is available on Emerald Insight at:
mode (Shuib et al.,2019and Osman et al., 2019). Henceforth, Kassim and Hussin (2013)
attested that even though the Malaysia Ministryof Finance had successfully built up public
electronic procurement to accommodate government agency and business organizations,
but acceptance and usage of the system remain poor. As a result, there is a need to study
what holding back the automation of the traditionalprocurement mode to EGP; in the paper
it can improve the coordination and all buying exercises. However, the acceptance of this
innovation stays stagnant in the early stage of using e-government services by the
stakeholders (Shuibet al., 2019).
Another benet that EGP brings to the public sector as it improves transparencies and
reduces corruption (Gasco et al., 2018). The EGP has turned the traditional paper-mode
catalogue to a repository of electronic catalogues. This will ease the government agency to
view and compare prices. For each transaction, it will be easier for them to keep the
government agency updated with the latest productinformation. The electronic portal is an
end-to-end procurement system that uses a secure online environment that allows
government agencies and SMEs to trade efciently and condently. Moreover, this online
acquisition model doesnot incur much cost to the SMEs.
The EGP is an internet application that allows Malaysias SMEs to take part in the
emergence of Web 2.0 application in Malaysia that promote transparent government (Yap
et al., 2019). The EGP is a G2B where the federal government agencies will act as buyer
whilst the SMEs will act as a seller. The only difference between a G2B versus B2B is the
buyer communities are usually from the public sector and seller communities is from the
private sector. For the B2B, both are belonging to the private sector. Moreover, digital
government is the most imperative approach to connect the digital divide in developing
countries in the digitaleconomy (MDEC, 2019).
Indeed, the use of online procurementmethod improves the supply chain efciency.
The adoption of EGP merged into an interesting topic to explore as the study of e-
government in developing countryis slower as majority of the past studies in e-government
were concentrated in developed country such as Ganapati and Reddick (2012) in the USA,
Shareef et al. (2011) for Canada, Croom and Brandon-Jones (2007) in the UK, Kim (2010)
analyzed government performance in South Korea and Japan, Horst et al. (2007) in The
Netherlands and Chan et al. (2010) in Hong Kong. Moreover, Carter and Weerakkody (2008)
did a comparison cultural comparison in both developed countries between the US and the
UK in spite Jacob and Darmawan (2019) revealed that e-governmentadoption in developing
countries is still not satisfactory.
In this regard, the impact of low EGP usage need to be carry out to ll the gap of
successful government service (Osman et al., 2019) In the same vein, the Malaysias SMEs
that having doubt in the EGP system will not devote any fund until the best e-procurement
model is recognized by the rest of the business partner. The discussion leads to the
argument of peer recognition is important to the development of using the online
procurement system. To sum things up, they are a need to consider peer pressure (social
inuences) when implementing EGP innovation and the individual seeing the usage
recognized from peer and thinks that it will bring bigger benet in their businesses. The
objective of this paper is to examine the factor determining EGP adoption by Malaysian
SMEs. The current study involved in the post introduction phase of e-government portal in
Malaysia as earlier studies conrm that e-procurement in Malaysia was never accepted by
the SMEs Eei et al. (2012);Aman and Kasimin (2011),Kaliannanand Awang (2008);Colesca
(2009); Kaliannan et al.(2009); Lee et al. (2008);Croom and Brandon-Jones (2007);George
(2007);Salleh etal. (2006);Chu et al. (2004).
Adoption of

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