Benefits and Barriers of Digital Procurement: Lessons from an Airport Company

Abstract

Implementing a well-integrated procurement system and applying uniform practices to achieve the strategic goals of any company is a complex phenomenon. Navigating the digital procurement systems in achieving supply-chain resilience remains a predicament. Framed within the technology acceptance model (TAM), which is a key model in understanding the predictors of human behaviour toward the potential acceptance or rejection of the technology. This study explored the benefits and barriers of digital procurement at Airports Company South Africa (ACSA). A qualitative approach in a form of a single holistic case study design was adopted. The sample involved 18 employees and individuals who were supply chain management (SCM), information technology (IT), and programme management office (PMO) professionals. Semi-structured interviews conducted focused on those with extensive experience on procurement, digital technologies, procurement automation or the implementation of transformation programmes. Digital procurement is a value-adding function at ACSA with the possibilities of providing cost reduction in the supply chain. However, the participants highlighted job losses, cyber security, lack of interoperability, lack of skills and system downtimes as obstacles affecting the adoption of digital procurement and as organizational barriers. The infusion of digital technologies into various aspects of organisational processes and outcomes remains a complex, dynamic, fluid, and volatile phenomenon. A framework highlighting critical focus areas when it comes to the adoption of digital procurement of digitalization is presented.

1. Introduction

Whilst the COVID-19 pandemic affected the global travel industry, the impact on the aviation sector was severe. The ongoing outbreak of the COVID-19 pandemic brought about significant challenges to global supply chains. This has reinvigorated the discussion about supply-chain resilience among different organisations [1]. Therefore, coping with the production delays and distribution slowdown caused by labour and material supply chain disruptions has led many organisations to leverage digital technologies to build resilience [1,2,3].

This study focused on airport companies. The purpose of an airport is to bring together people, processes, technology, government agencies, private companies, spaces, artefacts, and information in order to allow flights to depart and arrive on schedule [4]. Airport companies require goods and services to fulfil the objectives of developing and managing their business effectively, regardless of whether there is a pandemic or not. Strategic alliances are common among the airport companies to manage day-to-day services and to serve the stakeholders fully [5]; hence, there is a lot of cooperation and collaboration. Due to the complex nature of airport companies, implementing procurement practices and systems in an integrated uniform manner is critical to achieve the strategic goals of airport companies. Gartner [6] found that inefficiencies within the procurement functions could be eliminated by automation since there are more than seventy percent of companies reported. Moreover, there could be increased cost and low-quality-controlled products and services if the procurement practices, processes, and systems are undermined. This study will explore the benefits associated with digital procurement at Airport Company South Africa [ACSA].

Procurement plays a crucial role in ensuring that airport companies deliver with regard to airport infrastructure needs (Airport Council International North America [7]. Yilmaz [8] declares a need for corporate risk management strategies in aviation, particularly in procurement, where there is a great usage of external sources such as cleaning services, ground operations, technical maintenance, logistic, catering, etc. Cost of operations must be taken into consideration as a risk [8]. According to Motaung and Sifolo [9], procurement affects a company’s overall performance, contributes to its competitiveness, and has the power to leverage supplier relationships. Pereira, Christopher, and Da Silva [10] argue that one of the roles of procurement is to help create a resilient supply chain.

The research question for this study is: Which benefits and barriers of digital procurement do the employees at ACSA perceive? It is worth noting that no procurement organization is exactly ready for what comes next in the post-pandemic world; therefore, exploring the adoption of digital procurement in the developing context is critical. ACI-NA [7] estimated an annual procurement spend of USD 20 billion on U.S. airport infrastructure from the years 2017 through to 2021. However, the COVID-19 pandemic has devastated airport finances all over the world (including Airports Company South Africa (ACSA)) because the traffic is not projected to return to pre-pandemic levels until at least 2023, meaning airports face billions in lost revenue over the next several years [7]. Hence, the objective of this study was to explore the benefits and barriers of digital procurement at ACSA.

2. Literature Review

There are several definitions of procurement. A comprehensive definition adopted in this study is that procurement is about “business process of selecting a source, ordering and acquiring goods and services” [11]. Procurement “ensures identification, sourcing, access and management of external resources that an organisation needs or may need to fulfil its strategic objectives” (Chartered Institute of Procurement and Supply (CIPS)) [12]. This appears to be accurate and relevant because this study as it focuses on digitising the procurement function of an airport management company in a developing context.

2.1. Public Procurement

Public procurement fulfils an important role in the economy and public expenditure of a country, and is a critical indicator of the effectiveness of a government [13,14]. Public procurement involves purchasing of goods and services by government agencies or departments [15]; public procurement plays a strategic role in many government entities [16], including ACSA because the supply chain management (SCM) activities shall comply with a procurement system that is fair, equitable, transparent, competitive, and cost-effective. Amann, Roehrich, Eßig, and Harland [17] argue that public procurement can benefit societies if used strategically. The areas of a typical public procurement function include demand management, category management, sourcing management, contract management, supplier relationship management, and compliance and risk management [18], as shown in Figure 1.

• i.. Demand management involves the compilation and publication of costed procurement plans that are in line with the strategic plan of a procuring entity [19];

• ii.. Category and sourcing management involves the preparation, publication, evaluation, and adjudication of tender documents by category teams [19];

• iii.. Contract management involves the awarding, creation, negotiation, and administration of contracts between state entities and suppliers [19];

• iv.. Supplier relationship management involves the monitoring of supplier performance following the award of a contract [19];

• v.. Compliance and risk management involves the provision of assurance that appropriate checks and balances are in place to ensure good governance practices [19].

The main critical elements of any public procurement are “transparency and open contracting” [19]. According to Fourie and Malan [20], the annual South African public procurement spend is approximately ZAR 926 billion a year for the procurement of goods and services by all spheres of government [21]. The procurement function is critical to the country’s GDP because it acquires goods and services at a cost that enables the organization to deliver its core products [22]. The challenge is that some of the government entities are distributing a significant amount of this expenditure irregularly. The Auditor General reported in the 2017 Consolidated Auditor General Report (AGSA) [23] an irregular expenditure of ZAR 45.6 billion by government entities. The AGSA [24] cited weakness in SCM processes and deviation from the “prescribed procurement process” as the main contributors to irregular expenditure. Irregular expenditure reported in the 2019–2020 financial year in government decreased to ZAR 54.34 billion from the ZAR 66.90 billion in the previous year [25]. Despite the COVID-19 pandemic, irregular expenditure had already attributed to the disruption of business operations.

Public procurement in many countries has undergone massive transformation through modernisation of procurement processes and systems [26]. The introduction of an e-tender publication portal and a centralised supplier database (CSD) by the National Treasury in 2015 led to the first major modernisation of public procurement in South Africa from a manual paper-based system to an electronic system [27]. The National Treasury states in its SCM review update [6] that an online buy-site, also known as government commerce (g-Commerce), was launched in 2015. The g-Commerce site is primarily used for the central purchasing of transversal contracts, these being government-negotiated contracts for all government departments and agencies. These system enhancements were launched with the intention of eradicating corruption, reducing wastage of government funds, and improving efficiencies during the purchasing of goods and services by government departments [28]. Despite the National Treasury’s efforts to launch the above-mentioned systems, the fundamental issues of wastage of public funds and inefficiency are still widespread in the South African public procurement system [14]. This calls for the adoption of innovation strategies that will take public procurement to a new level [29]. Since the focus of the study is on ACSA, unpacking the procurement function is prudent.

2.2. ACSA’s Procurement Function

According to the ACSA integrated report [30], ACSA manages the nine airports it owns and provides consultancy services to other airports both locally and internationally, namely in Brazil, Ghana, and India. ACSA is a Schedule 2 state-owned enterprise (SOE), meaning it is partially owned by the government with the rest of the shares held by private investors. As a Schedule 2 SOE, the Public Finance Management Act (PFMA), the Preferential Procurement Policy Framework Act (PPPFA), National Treasury Regulations and Practice Notes (Consolidated Auditor General (AG)) Report [30] govern its procurement processes and systems.

During the financial period of 1 April 2016 to 31 March 2017, ACSA supply-chain management (SCM) faced two main challenges: irregular expenditure amounting to ZAR 446 million and non-compliance with both SCM policies and internal governance framework [30]. The report [30] further states that these challenges were related to the lack of a proper document management system and due diligence processes. In 2020, “an irregular expenditure incurred amounted to ZAR 559 million (2019: ZAR 265 million) mainly due to non-conformance with regulations on one major capital expenditure programme procurement process” [30].

A notable example is that category management and supplier relationship management (SRM) activities are performed outside the ERP system. However, ACSA strives towards adopting and leveraging appropriate digital technology to enhance operational efficiency and customer experience, while protecting their information and systems (ACSA Integrated Annual Report, 2020). The study by Huang and Handfield [31] indicates that top-performing procurement organisations are strong on using ERP in three areas, namely strategic sourcing, category management, and supplier relationship management. Meanwhile, Caraiman [29] asserts that ERP systems are beneficial in the following three areas: process execution, data capturing and storage, and performance monitoring. Evidence from the aforementioned findings suggests that the automation of category management and supplier relationship management will be a worthwhile step towards automating procurement processes at ACSA. One may argue that performing category management and SRM outside the system presents certain risks to ACSA’s procurement function. Risks associated with manual operations include poor record management and performance monitoring and management. Various systems are used within ACSA SCM. It is imperative for procurement activities to be housed in one integrated system so that buyers can have access to the full history [26]. With this in mind, ACSA procurement should take the lead in adding value to both internal and external stakeholders by adopting digital technologies.

The “Airports Company South Africa has been using electronic tendering and a supplier database to publish tenders and access information about suppliers”. However, the two electronic systems CSD and e-Tender were not successful in automating processes, shortening lead times or improving the level of compliance at ACSA. As with many other government departments, “ACSA’s procurement function is still facing serious inefficiencies and long turnaround times” [9]. “These inefficiencies include the lack of a good document management system for finalized tenders and contracts and long turnaround times of procure-to-pay processes” [9]. The ACSA responded to these challenges by developing a strategy to automate procurement processes and integrate the various systems [18].

2.3. The Evolution of E-Procurement

E-procurement is defined by many researchers as a digital platform that centralises, optimises, and streamlines the purchasing process [14]. Lindskog, Brege, and Behmer [32] opine that electronic procurement entails electronic ordering, bidding, and rendering via portals, extranets, private platforms, marketplaces, and/or electronic data interchange. Costa, Arantes, and Tavares [33] state that e-procurement involves using various end-to-end solutions, such as the electronic marketplace (e-marketplace), electronic auction (e-auction), and electronic catalogue (e-catalogue). Oh, Yang, and Kim [34] conclude by listing the following e-procurement capabilities: web-based ERP system, electronic sourcing, electronic reverse auction, and electronic informing.

The next giant step towards the evolution of procurement is the digitalisation of procurement processes using new digital technologies [35]. Gottenberg [35] asserts that the prevailing operating environment demands that companies should be digitally savvy. This is required because of the huge amount of information flow that must be captured, analysed, and interpreted to support real-time business decisions by procurement organisations [36]. Digital technologies are commonly referred to as “Industry 4.0” [37]. Burnson [36] argues, “leading companies are taking the steps to create a true digital procurement organisation”.

Digital technologies are revolutionising procurement organisations and making it easier for these organisations to access information and improve service delivery [38]. The Oliver Wyman Group [39] argues that digitising procurement processes “enables the generation of new data”, which can be used for a detailed analysis of “procurement practices, consumption models and supplier transactions”. Reddy and Reinartz [40] state that the adoption of digital technologies will result in a lasting and indeed revolutionary impact on business processes, including public procurement. Fully digitised procurement organisations are applying automated or robotically enabled processes to enhance collaboration between internal stakeholders and suppliers [39].

According to Burnson [36], the building blocks of digital procurement include “deep and rich data” and “rigorous process” which are essential in building “(artificial intelligence) AI-enabled predictive models”. Garrett [41] asserts that digital procurement involves conducting transactions on cloud solutions, AI, big data, block chain technology, and the Internet of Things. Pereira et al. [10] argue that the adoption of digital procurement solutions “involves both organisational changes and reengineering of processes”. Ashwell [42] states that there are three main elements of digital transformation capabilities, these being big data, digital technologies, and people. Ashwell further argues that these capabilities—together with relationships—will revolutionise procurement [41]. On the other hand, Dremel, Wulf, Herterich, Waizmann, and Brenner [43] singled out big data as the necessary capability when embarking on the journey to digital transformation. Digital transformation has disrupted business processes, as well as procurement processes [44]. These disruptions have affected government agencies, and there is an urgent need to reform public procurement systems [28].

In view of the aforementioned developments, it is evident that procurement technologies are evolving and will continue to do so in the future [44]. According to Brandyberry (2017), the new procurement technology will evolve to significantly improve processes, automatically analyse spend, drive incremental savings, and enable effective control and contracting of critical spend.

2.4. The Future of E-Procurement

In the research, study “Procurement Next Frontier”, Accenture predicts that in the next five to seven years, procurement organisations and their professionals will be revolutionised [45]. The study further predicts that the fourth industrial revolution will fundamentally change the way procurement interacts with both internal and external stakeholders. KPMG [44] argues that digital innovations will radically change procurement organisations to what it calls “the big procurement transformation”. This will entail the incorporation of predictive tools “as integral elements in the procurement strategy”. In the report “The Future of Procurement”, ATKearney predicts that companies will adopt “intelligent technologies” to automate their procurement functions [46]. ATKearney [46] further states that future procurement will be highly automated, resulting in automated buying through AI, AI sourcing managers, and a chatbot supplier help desk. Murray [47] predicts that digital procurement strategy will mainly be driven by the key components listed in Table 1.

The above-mentioned components of digital procurement link directly with the views of GEP [48] and the prediction that organisations transforming their procurement with digital tools such as AI, big data, robotics process automation (RPA), and three-dimensional (3D) printing will be well-positioned for the future. Accenture [45] asserts that future procurement will be enabled by digital technologies and fully integrated with a very different structure, as shown in Figure 2.

The study by Accenture [45] further argues that digital technologies will force companies to create “virtually integrated enterprises” through the establishment of relationships with strategic suppliers, that “cognitive systems” will replace manual and routine work resulting in quicker and “better decision making”, and that the Internet of Things will enhance procurement processes. Digital technologies have given rise to new opportunities [49].

2.5. Digital Technologies

Several common digital technologies in relation to e-procurement were identified from the various sources. They are described as follows:

• Artificial Intelligence (AI): AI is a “revolutionary technology that can learn on its own, by analysing and discovering patterns of massive amounts of data” [50];

• Block chain (BC): AI is a technology that enables the safe and reliable flow of data [50]. This technology allows companies to “secure sourcing and sourcing channels, contracts payments, as well as analyse market trends on a larger scale” [39]. The procurement function will be fully automated using tools such as AI to automate procure-to-pay processes and block chain to automate contract management into smart contracts [46];

• Internet of Things (IOT): The IOT involves devices that are interconnected with normal objects for automatically sending and receiving data [50]. Mertens [51] describes the IOT as the “networking of physical devices such as sensors, wearables and other electronics”;

• Cognitive Computing (CC): CC involves systems that build a big knowledge base by learning and improving through interaction with data points [51];

• Robotic Process Automation (RPA): Deloitte [52] asserts that the impact robotics automation has on supply chains and procurement is bigger than predicted. Moreover, companies can accomplish efficiencies through automating simple or repetitive tasks with robotic technologies [52];

• Big Data: Rodriguez and Da Cunha [15] argue that big data provides procurement with opportunities to analyse and manage massive volumes of data. Companies using big data will gain a competitive advantage that will enable them to create “actionable insights for sustained value” [15];

• Three-Dimensional Printing (3D Printing): Procurement functions can create complex designs through 3D printing technologies that would not be possible with traditional printing methods [52]. Deloitte further asserts that 3D printing can reduce costs across the entire procurement value chain [52].

Digital procurement comes with digital transformation for organisations due to the fundamental change within the procurement services delivered. Some of the benefits include effective ways to increase supply chain efficiencies through embedding big data analytics into procurement. According to Mishra, Devaraj, and Vaidyanathan [53], organisations that have embraced digital procurement competence could lower the procurement costs. This may have an impact when it comes to the competitive advantage of an organisation and may in turn decrease the risk to the supply chain of an organisation [54]. Table 2 presents a summary of the benefits of digital procurement from secondary data.

It is evident from the summary that digitalisation enables risk mitigation to be experienced in real time, thus minimising the exposure of procurement functions. It can be concluded from the summary that the shift from conventional to digital procurement presents many opportunities.

2.6. Theoretical Background

The theory provides a platform for explanation of an observed phenomenon. The technology acceptance model (TAM) theory was adopted in this study as a key model in understanding the predictors of human behaviour toward the potential acceptance or rejection of the technology [59]. In this study, ACSA strives towards adopting and leveraging appropriate digital technology to enhance operational efficiency and customer experience, while protecting their information and systems. TAM is relevant in exploring the benefits and barriers of digital procurement at ACSA by potential users based on their perceived usefulness and perceived ease of use. TAM is the most influential and commonly employed theory for the acceptance of the technology [60]; hence, Wentzel, Diatha, and Yadavalli [60] posit that TAM is useful in predicting the “behavioural intention and use of technology by user”. With the introduction of an e-tender publication portal in 2015, which is the first major modernisation of public procurement in South Africa, TAM is useful in the South African context to predict human behaviour. Proponents of the e-procurement systems, acknowledge the disappointing organisational adoption of technology, which has a negative impact on the performance outcomes, implementation, and adoption of it [61]. Despite the widespread technology, the failure of many organisations to translate the initial adoption decision, made at an organisational level, into the individual-level acceptance of e-procurement by an organisation’s employees still prevails [16]. This trend has been noted among organisations in developing areas. For example, Kademaunga and Phiri [61] concur that some of the challenges inhibiting the successful implementation of electronic procurement in an African context include difficulties in selling the e-procurement concept internally to organizational stakeholders, such as senior management and end-users. Although ACSA has implemented an enterprise resource planning (ERP) system, some procurement activities are still performed manually.

Let us examine the possibility of ACSA adopting digital procurement without understanding the benefits and the barriers of e-procurement prior to and post COVID-19. In this scenario, there would be a lack of confidence, a fear of making errors, and a lack of technology and innovation champions within the organizations [60]. This would inhibit the use and benefits of technology. The company would have not recovered during COVID-19. Many companies were forced to adopt new technologies during the COVID-19 pandemic [62]. TAM provides a useful analytical framework for the use and adoption of information technology through variables of perceived usefulness, perceived ease of use, and use intention [60]. Many organizations are shifting to e-procurement as an integrated supply-chain support function to achieve strategic business goals [62]. Kademaunga and Phiri [61] support this view and assert that the more favourable change towards adopting technologies was as a result of the COVID-19 pandemic. Hence, TAM was considered as relevant in examining their effects on the adoption of digital procurement technologies at airport companies.

3. Materials and Methods

To study this phenomenon, a combination of literature-based findings (secondary data) and a single holistic case study design approach were adopted to explore the benefits and barriers of digital procurement at ACSA, which is a public company that owns and manages a network of nine airports in South Africa. The study followed qualitative research methodology and a non-probability purposive sampling method. In this case, the most appropriate qualitative data collection method utilised was interviews with individuals from ACSA.

The sample involved eighteen individuals from the targeted population of one hundred and fifty seven employees (including seventy-two SCM professionals, information technology (IT), and programme management office (PMO) professionals), as shown in Table 3 below. Fourteen of these participants were selected from ACSA’s internal employees and four were external experts with extensive experience in either procurement, transformation programmes or digital technologies. Semi-structured interviews were held face to face with only 16 of the 18 identified individuals, including two external experts who work at ACSA, who have extensive experience on procurement, digital technologies, procurement automation or implementing transformation programmes, and who are knowledgeable about digital technologies. The idea was to elicit diverse types of information from the interviewee or respondent and to obtain a critical localist perspective through the interviews. The participants were asked to identify and explain the benefits and barriers that would be realised due to the implementation of digital procurement at ACSA (as people responsible for the decision-making in human behaviour toward potential acceptance or rejection of the technology based on their perceived usefulness and ease of use). The interviews ranged between 30 to 45 min each. The table below provides a list of participants who have been selected for this study.

The main reason for selecting participants with experience in any of the above areas was to provide adequate answers to the research questions. The data were collected with the consent of the respondents and with the permission of the ACSA. Before the beginning of the study, participants signed a form that declared that they would be allowed to participate. The interviews were completed during the 2018 case study, prior to the COVID-19 pandemic. Maxwell [63] suggests that case study research has been met with some criticism. The weakness of this design is that it may not be applicable to other companies. The data were collected through recorded interviews and were transcribed. Microsoft Excel software was used to help the researchers in the analysis of data. At some point during the study, especially during data retrieval, voice recording was used. For the reliability and trustworthiness of the study, the consent forms were signed by participants before the data collection started.

4. Findings and Discussion

The literature reveals that although COVID-19 presented internal and external shocks to the tourism industry as a whole, many countries on the African continent have developed and rolled out or are in the process of rolling out e-procurement across their countries for the whole procurement sector. TAM adds value in an organization like ACSA due to its useful nature in predicting the behavioural intention and use of technology by user.

4.1. Benefits of Digital Procurement at ACSA

All participants were convinced that digital procurement would bring opportunities to ACSA. Efficiency improvement in tender processes was viewed as a huge benefit of implementing digital procurement at ACSA. The results revealed the following elements:

• Process efficiency and effectiveness: Participant 2 commented, “there would be a huge improvement in efficiencies …particularly when it comes to sourcing”. Participant 4 stated, “It would definitely increase productivity and efficiencies within the procurement space especially the RFQ process”. In other words, digital procurement brings process efficiency and effectiveness to ACSA. Participant 6 noted, “efficiencies can be obtained by digitising some of the processes”. Gardenal [64] argues that positive impacts can be generated by adopting digital procurement, such as “efficiency, effectiveness, dematerialisation, competitiveness and transparency”. In other words, airport management companies can expect improvements in the quality and speed of procurement processes;

• Competitiveness benefits: Participant 9 agreed and stated that “the more you put into place your digital procurement … everything is going to be easier done and it’s going to be computerised”. Mishra, Devaraj, and Vaidyanathan [53] back this by stating that many organisations have gained a wide range of benefits from using e-procurement applications. Participant 1 indicated, “opportunities are there, for example automating your RFPs and RFQs”. Moreover, the TAM’s focus on behavioural intention and use of technology by user could have an effect on the e-procurement opportunities.

• Procurement cost reduction and improved compliance: Some of the benefits of digital procurement technologies at ACSA relate to costs. Participant 7 explained that “ACSA can benefit is the improvement in efficiencies where we can do more with less”. Mishra et al. [53] point to benefits that include, among others, “reduced cycle time, better coordination with partners and enhanced financial performance”. The enablement of procurement processes and the value chain with IT technologies result in a positive impact on the performance of the organisation [52]. Figure 3 presents the benefits of digital procurement.

The results presented are in line with Bienhaus and Haddud’s [65] findings on the benefits that can be obtained from the digitalisation of procurement processes include the following: (1) Efficiencies in daily administrative tasks; (2) Simplifying the complex process of making decisions; and (3) Assisting in making procurement focus more on strategic activities.

4.2. Barriers to Adoption of Digital Procurement

The barriers to adoption of digital procurement are discussed in detail in the following section. Procurement response times can be reduced by digitalisation. The reduction in procurement turnaround time was identified as the second benefit of digital procurement within ACSA [6]. As Participant 3 indicated, “we can reduce the cycle time. You know why I have to spend time creating a spend cube if I can actually use tools to do that for me”. Participant 4 notes that “so obviously you are shortening procurement cycle time, say from… let’s say from eight days to cut it down to four days”. Participant 6 thought, “the tender process takes very long. So, there’s turnaround time that can be reduced”. Gartner [6] stated that daily procurement activities were heavily influenced by digitalisation. The other benefits mentioned by participants included cost reduction and focusing on value-adding activities for the company.

• Costs as a barrier to adopting digital procurement: The costs involved in transforming procurement functions are a determinant factor in making digitalisation decisions. Three participants mentioned cost reduction as the other benefit of digital procurement. Participant 8 stated, “you are going to drop the cost of doing business”. Participant 4 noted “the cost of doing procurement… look there’s other drop of cost of doing business”. Participant 6 noted that there were “cost savings as well because of digitalisation”. Participant 5 stated, “I think it also allows resources to look at other value-adding things than focusing on things that can be done by the system”. Embarking on the journey from conventional to digital procurement comes at a heavy price for an organisation [66]. He further emphasises the importance of organisations understanding both the monetary and other unforeseen costs associated with digitalisation projects;

• Security as a barrier to adopting digital procurement: According to the National Association of State Procurement (NASPO) [67], security is a major concern when implementing digital technologies such as the Internet of Things. The implementation of cloud-computing brings major concerns about security and data privacy for organisations and individuals. Glas and Kleemann [68] concur, stating that the shift towards digitalisation carries risks such as data security and data transparency. It is, therefore, imperative for businesses to design flexible approaches towards mitigating security risks that are associated with the non-adoption of digital procurement.

• Talent capabilities as a barrier to adopting digital procurement: The study “Trends in Procurement Evolution” [6] indicates that sixty six percent of respondents reported, “talent capabilities are critical for future digital strategies”. The biggest barrier to digital adoption is the huge knowledge gap regarding procurement transformation. Participant 1 indicated, “your people also can be a barrier in terms of not having the necessary knowledge, the knowhow of doing things. The skill set in terms of the people, so that can be the main barrier. In my humble opinion I think it something that management need to look at”. Participant 5 felt, “I think what will stop us is probably if people are not ready for this kind of technologies and this will stop us”. Participant 9 was of the view that “we don’t have internal skills”. Participant 12 summed it up and agreed by stating, “there aren’t internal capabilities to support this”. The study by Accenture and GIBS, “Unlocking the Power of Digital Industry X.0”, shows that the demand for digital skills is increasing across all organisations [69]. Despite this increase, only twenty five percent of organisations have the required resources and competencies [41]. It is, therefore, necessary for organisations to adopt training plans that will address the digital knowledge gap [39];

• Rigid procurement operating models as a barrier to adoption of digital procurement: The proponents of digital procurement argue that the non-adoption of digital procurement comes as a result of its failure to transform procurement functions. Roman [70] suggest, “digitised procurement has not yet led to significant transformative changes”. They cite “unsuitability of software platforms”, “organisational resistance”, “lack of strategic systems integration”, and “failure to involve procurement professionals”. Setia, Venkatesh, and Joglekar [71] and Murray [47] concur, stating that many organisations still fail to achieve enhanced performance because of ineffective digital business strategies. Panda and Sahu [72] meanwhile cite the “lack of an overall accepted technology standard” as another factor affecting the adoption of e-procurement;

• Immature processes as a barrier to adoption of digital procurement: The findings from the study regarding the factors influencing the digitisation of procurement and supply chains indicated that processes are among the barriers to digitising procurement. From the 16 participants, 12 indicated that digital procurement was about automating processes. For example, Participant 2 stated that digital procurement was about “automating processes onto a system to enable the procurement function”. This is in line with what was mentioned by Participant 5, who stated that digital procurement was concerned with “moving away from manual to automated processes through tapping into digital technologies”. Participant 6 concurred that digital procurement was “automating business processes to make the company more efficient”. Participant 7, when stating that digital procurement “is automating the reports and business rules that govern decision making”, echoed this. It can, therefore, be deduced that these participants had a basic knowledge of digital procurement. The aforementioned statements from the participants correspond to the explanation that digital procurement applies automated enabled processes [49]. The process maturity determines the level to which an organisation’s processes are defined and managed because failure to map or measure processes will result in immature processes. This hinders the success of e-procurement;

• Resistance to change as a barrier to the adoption of digital procurement: The lack of change management capability limits an organisation’s adoption of digital technologies [6]. Only thirteen percent of organisations possess mature technology change management abilities [6]. A resistance to change presents a major obstacle to the adoption of digital procurement [73]. The participants were asked to identify the challenges that could be experienced during the implementation stage of digital procurement. Four participants pointed out that resistance to change was a major barrier to the digitising of procurement and recommended change management. Participant 2 stated, “…the risk is resistance to change …you may find that people are not very comfortable the system is doing things that they themselves are doing”. Participant 3 felt that “we really need to prepare the people and say: This is what is coming, and this is the impact on your jobs …and how do you plan to transition? So, we need …change management”. Participant 4 felt there was a need for “change management because the impact is big on our resources …to prepare the people to say: This is what is coming, and this is impact on your jobs”. Participant 6 agreed and stated that “change management is a big thing and especially during project implementation”. A lack of change management has been identified as a huge challenge in the implementation of many technology projects. The Oliver Wyman Group [39] advised procurement leaders to consider intensive change management with all stakeholders, and that this should be included in the digitalisation implementation roadmap. Glas and Kleemann [68] indicate that change management poses a challenge when it comes to implementing Industry 4.0 technologies. There is no consensus among researchers about the main factors affecting the adoption of digital procurement. Many argue in favour of digital procurement while some are against it. Based on the benefits and effects of non-adoption, the benefits outweigh the effects of non-adoption of digital procurement; thus, most scholars argue that it is beneficial for organisations to adopt a digital procurement system. Figure 4 presents the barriers of digital procurement as indicated by the participants.

Based on the transcripts, participants raised concerns around job security due to digital transformation and extensive use of data. Participants identified job losses, cyber security, lack of interoperability, lack of skills, and system downtimes as obstacles affecting the adoption of digital procurement and as organisational barriers. Participants thought automated processes would lead to fewer people being required within the procurement space, resulting in fewer job losses. Participants agreed that ACSA systems and data would be accessible to external players due to the exposure of the company to cybercrime. It can be deduced from these findings that participants’ views correspond with the literature regarding the barriers arising from digital procurement. Digitalisation was associated with various risks, these being data transparency, ownership, and security [68]. The other barriers identified by participants included cyber security and system downtimes due to network overload.

Although the study was completed prior to the COVID-19 pandemic, when there was no evidence of procurement digitalization at ACSA due to budget constraints, it was interesting to witness the automation of ACSA’s procurement process through the adoption of digital technologies during the COVID-19 pandemic.

5. Conclusions

COVID-19 presented more opportunities for digitalisation in tourism and had an effect on the digital procurement of many organisations, including those in the aviation space. Understanding the predictors of human behaviour toward the potential acceptance or rejection of technology such as the e-procurement systems is critical for the success of any organisation. Failure to translate the initial adoption decision, made at an organisational level, into an individual-level acceptance of e-procurement brings complexity in a work place. The analysis of the case of ACSA reflects the complex, dynamic, fluid, and volatile nature of digital procurement in a workplace. The infusion of digital technologies into various aspects of organisational processes and outcomes is not an easy task. This paper contributes towards the limited studies on digital procurement benefits and barriers among the airport companies in Africa. Given the findings of this article, it is proposed that there should be a concerted effort on ensuring that the institutional structures are resilient, adaptive, and sustainable to overcome the barriers and maximise the benefits of digital procurement. It is further proposed that in the context of South African planning a legal framework, future studies should explore the impact of digital transformation and extensive use of data among the employees and the buyers in the airports in the country. The analysis led to the diagram below depicting concepts that will be considered when implementing digital procurement at ACSA.

6. Recommendation: Concepts for Digital Transformation at ACSA

This study has the potential to make a significant contribution to the management of airport companies. Facilitating the integration between companies and the development of joint IT systems to reduce costs, such as airport co-location and joint procurement [74] is necessary. Therefore, the infusion of digital technologies into various aspects of the airport companies’ processes to ensure sustainability even in a volatile phenomenon. The diagram presented below highlights the critical focus areas when it comes to the adoption of the digital procurement of digitalization at ACSA. Tamene [75] asserts that the role of a conceptual structure in a qualitative research is to provide a guide or plan for the study. Iyawa [76] posits that a conceptual structure “consists of the map of main concepts, constructs and its related positions”. Adu [77] argues that a conceptual structure “helps to clarify, explain and justify methodological decisions” of a study. The development of a conceptual framework involves reviewing and analysing information obtained from the relevant studies [78]. The development of a conceptual structure will incorporate the concepts of digital technologies, digital procurement strategy, public procurement challenges, new government innovations, new digital procurement capabilities, and barriers to digital procurement adoption, as shown in Figure 5.

The concepts covered incorporate the key fundamentals of digital technologies, as presented by Gottenberg [35] and Ashwell [42]. Gottenberg [35] asserts that there are eight key fundamentals of digital technologies, namely digital infrastructure, mobile devices, e-Commerce/e-procurement platforms, the Internet of Things, cyber security, data and analytics, cloud-computing, and global networking and connectivity. The concepts from this structure will provide a plan from which the road map for implementing digital procurement at ACSA will be developed.

7. Limitation

The limitation of the study is that it only focused on the nine airports owned by ACSA and did not cover other airports across South Africa. Moreover, participants who had no knowledge of digital procurement were excluded from the research study. However, the analysis of an individual case study is generally subject to a number of criticisms; this study is not any different since it was conducted before the COVID-19 period. The most common criticism in this study relates to the interrelated issues of methodological rigor, investigator subjectivity, and external validity.

Author Contributions

Conceptualization, methodology, formal analysis investigation, writing—original draft preparation, writing, J.R.M.;—review, editing and supervision, P.P.S.S. All authors have read and agreed to the published version of the manuscript.

Institutional Review Board Statement

The study was conducted in accordance with the rules of conducting the study, and approved by the Milpark Business School Research Ethics Committee) under the ethical clearance number 2018/05/002.

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

Data can be availed as per the rules on the Milpark Business School, since this forms part of the MBA study conducted under ethical clearance number 2018/05/002. Similarities could be found in the original research and the Book of Abstracts International Conference on Tourism and Business ICTB Lucerne, 24–27 August 2022. Data may be availed upon request.

Acknowledgments

Airports Company South Africa (ACSA).

Conflicts of Interest

The authors declare no conflict of interest.

Footnotes

Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of MDPI and/or the editor(s). MDPI and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.

Figures and Tables

Figure 1. Procurement elements. Source: Motaung (2018) [18].

Figure 2. Future procurement framework. Source: Accenture (2015:6) [45].

Figure 3. Benefits of digital procurement. Source: emanated from the study.

Figure 4. Barriers of digital procurement. Source: emanated from the study.

Figure 5. Digital procurement concepts emanated from the study.

Table 1

Components of digital procurement.

Key Components	Description of Component
Mobile Technology	Use of the internet to connect both procurement professionals and suppliers from anywhere in the world.
Cloud Technology	“Cloud software consolidates the solutions and standalone e-procurement solutions.”
Big Data	“The use of analytics to make data-driven, intelligent procurement decisions.”
Social Media	The use of social media platforms by procurement professionals to initiate conversation with suppliers, form new supplier relationships, and maintain existing supplier relationships.
Integrated Solution	“Consolidation of functionalities from all four preceding elements.”

Table 2

Summary of the benefits of digital procurement.

	Source
Process efficiency and effectiveness benefitsEmbed big data analytics into procurement New models of procurement must be digitally enabled to deliver efficiency. Streamline the procurement processes using IT systems.	[26,41,55,56]
Cost reduction benefits Lower the procurement costs. Locate input goods of comparable or better quality at a lower price. Cut down the total cost per employee by combining artificial intelligence, block chain, digital twin, and machine learning. Adopting digital sourcing tools.	[2,26,41,52]
Competitiveness benefits Embrace digital transformation. Generate economies for both internal and external stakeholders. Generate improvements in terms of making timely, transparent, and accurate decisions. Leverage digital disruption activities. Predict demand and take faster and smarter decisions. Create value for their internal users, suppliers, and other stakeholders. Strengthen supplier relationships through knowledge-sharing using social media platforms. Win more market share and transform industries. Spend more attention on strategic activities.	[15,16,35,57]
Compliance and risk averse benefits Create a future-proof procurement. Integrate supply chain to bundle digital information. Allow for a comprehensive assessment of the value chain architecture. Digitising procurement. Apply analytics to generate supply and risk management insights for both procurement and suppliers. Adopt cloud solutions to mitigate procurement risks. Minimise operational and reputational risks through innovation. Assess risks by automating procurement processes using cognitive computing benefits such as “quality, consistency and compliance”. Draw up and negotiate own smart contracts independently via big data and contract databases.	[21,41,44,58]

Table 3

Sample of the study.

Participants Role	Designation	Sample Size	Participants
Executives	Operations, human resources, strategy and performance, information technology	4	2
Group Managers	Supply-chain management, information technology	4	4
Senior Managers	Category management, business services, system and data integration and information technology	3	3
Managers	Contract management, business enablement and demand management	3	3
Specialists and Analysts	Category specialists, buyers, data and system integration	4	4
Total participants		18	16

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