Strat. Change 14: 273–281 (2005) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/jsc.728
Strategic Change
Public eProcurement as socio-technical change Susan P. Williams* and Catherine Hardy University of Sydney, Australia !
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ERP systems and those that support enterprise-wide business activities such as eProcurement represent complex socio-technical change. The imperative for researchers and practitioners is to identify ways of understanding and develop methods to assist in managing the complexity and messiness associated with the breadth and depth of change as the affordances of technologies and the needs of users emerge over time. In this paper theoretical concepts are presented and an empirical illustration of three cases of public eProcurement implementations is provided to make visible and make sense of the complex twists and turns of socio-technical change. These experiences reveal the nuances of socio-technical change, its fluid and emergent nature, the effect of unintended consequences, the role of influential agents and change in the representations of work practices. These theoretical concepts are analytically powerful and could provide practitioners with useful tools in understanding the envisaged and serendipitous nature of socio-technical change and the intended and unintended outcomes that may emerge in implementing enterprise-wide business information systems. Copyright © 2005 John Wiley & Sons, Ltd.
Introduction ERP systems and those that support enterprise-wide business activities such as eProcurement represent complex socio-technical change. These systems need to be integrated with a diverse range of existing technologies, infrastructures, policies and practices of multiple stakeholders both within and beyond the organization, creating major challenges for
* Correspondence to: Susan P. Williams, School of Business, University of Sydney, NSW, Australia. E-mail:
[email protected]
Copyright © 2005 John Wiley & Sons, Ltd.
ERP systems represent complex socio-technical change organizations. Whilst much interest is focused on the technologies and the business processes they support, such systems are more than a combination of technology systems and workflow systems. Their purpose and intent is not fixed, nor can they be simply derived from a combination of technological functionality and business needs. They repreStrategic Change, August 2005
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sent mutually shaping, complex and interwoven structures and practices situated in varying spatial and temporal contexts. The imperative for researchers and practitioners is to identify ways of understanding and develop methods to assist in managing the complexity and messiness associated with the breadth and depth of change as the affordances of technologies and the needs of users emerge over time. In this paper we present a theoretical perspective that allows us to make visible, and make sense of, the complex twists and turns of socio-technical change. We use Social Construction of Technology (SCOT) and Actor Network Theory (ANT) as a theoretical basis to examine the assemblages of public eProcurement in three empirical cases. In doing so we give visibility to the motives, intentions, interests, views, etc. that shape technological artefacts as they develop, how issues and problems are framed and negotiated and how designs are stabilized over time to reveal the flexibility in their interpretation. We draw attention to theoretical concepts that are useful analytical tools for making sense of, understanding and explaining the social and technical content and context of implementing public eProcurement, moving away from more traditional simple linear type models and deterministic frameworks. We posit that such concepts have analytical power as tools for practitioners tangling with the complexities of managing socio-technical change. The following sections provide the theoretical and analytical basis for the investigation and our research design; we outline and explore a framework for understanding and explaining the events in each of the cases and as a potential guide for managing such complexity over time. This is followed by the case descriptions; these illustrate emerging business designs for, and meanings of, eProcurement in each case setting. We then discuss the mechanisms by which these sitespecific translations are given visibility. Finally, we present the lessons learned and the conclusions and implications arising from this study. Copyright © 2005 John Wiley & Sons, Ltd.
Susan P. Williams and Catherine Hardy
The research setting and method In-depth case studies were developed to describe and understand emerging designs for, and meanings of, public eProcurement in three major government initiatives in Italy, Western Australia (WA) and Scotland. A sociotechnical change lens was used to shape the design and interpretation of the cases, which seeks to understand technology as both physical and social artefacts. Whilst different theoretical approaches exist (see Bijker and Law, 1992), we draw from the well-established SCOT perspective (see, for example, Pinch and Bijker, 1987) and ANT (Callon, 1986; Latour, 1987; Law and Hassard, 1999), described by Orlikowski and Iacona (2001) as ‘ensemble’ theories, which do not distinguish a priori between the technical and the social aspects of information systems change. Two data collection methods were used at each of the three case study sites. Documentary evidence was obtained from official records (e.g. policy documents, annual reports), consultancy reports, reports from international bodies (e.g. European Union) and newspapers and in-depth interviews were conducted with key people associated with each eProcurement initiative. The interviews were recorded, transcribed and reviewed. Interviewees also produced further documentation (reports, memos, proposals, etc.) to support their statements. This, along with member checking of the case study write-ups, provided triangulation of the research evidence. In our work we take a similar stance to Wolfram Cox and Hassard (2005). This takes the meaning of triangulation away from a positivist view, which emphasizes stabilization and capture in determining the reliability and validity of results, to a broader ‘appreciation of organising and ordering practices, and thus of the very situated and precarious nature’ of the research activity (Wolfram Cox and Hassard, 2005). A thematic analysis of the data was conducted at two levels. Firstly, thick descriptions presenting the development and impact of eProcurement systems were created for each Strategic Change, August 2005
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case. Our intention was not just to find evidence of the existence of particular designs, events and practices, but also to explain how these evolved. This analysis was a prelude to an interpretive analysis using the sociotechnical change perspective to gain a richer and deeper understanding of how eProcurement was shaped in each context. In the following sections the socio-technical change framework is applied to assist in understanding the problems, issues and context of change in the three case studies. First, we outline the background and business designs of eProcurement for each case. Second, some issues from the cases that illustrate the socio-technical change processes in action are outlined, in particular the importance of the local activities in shaping the design of eProcurement for each case.
Describing socio-technical change: an empirical illustration Public eProcurement in Italy Prior to 2000, the use of e-commerce and information technology (IT) more generally in Italy was considerably lower than comparable economies. Further, requirements of the Italian Anti Trust Authority relating to fairer competition and audit recommendations regarding improving cost efficiencies in the purchasing of goods and services focused attention on strengthening public procurement practices. With a view to reinforcing the ‘modernization’ process of public administration, the responsibility for ‘The Program for the Rationalisation of Public Spending’ mandated by the Financial Act was delegated to Concessionaria Servizi Informatici Pubblici (CONSIP), a private company owned by the Ministry for the Economy and Finance (MEF). CONSIP created a second division in 1999, called the Direzione Acquisti in Rete della PA (DARPA) (Division of Online Purchasing), which was assigned the task of developing master conventions for ‘frame contracts’ with suppliers and developing and assisting central and local administrations with IT platforms. Copyright © 2005 John Wiley & Sons, Ltd.
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The business design of eProcurement is comprised of electronic catalogues (eShop), online reverse auctions and the electronic marketplace. It initially began with the eShop in July 2000, which is built according to the frame contract based on a many-to-one approach. This system is suitable for large volumes of standardized goods where the volatility of price is not high and the obsolescence factor is low. The online reverse auction model was created in 2003 for DARPA to use in tendering frame contracts. However, it is increasingly being recognized as a platform for purchasing goods and services that are specialized, highly configurable, have rapid obsolescence and high price volatility, such as IT purchases. The eShop and reverse auction model are collectively referred to as the ‘frame contract system’. Orders can be placed either by fax or online. Electronic payments are not as yet possible, but part of a wider ongoing project. A total online environment is being encouraged through DARPA’s change management programmes consisting of the provision of and assistance with IT, weekly visits and feedback meetings and specially designed education programmes. However, this is considered an incremental process, as there is still mistrust in the electronic system — people want to place an order and talk with their suppliers, particularly given the limited use of IT in public administrations prior to 2000. Further, while the Oracle platform for the eProcurement portal has multi-language functionality, there is a problem for above-threshold European Union (EU) tenders as it has been customized for the Italian environment. Therefore, only a small English descriptive overview is available. The eProcurement programme slowed in the earlier parts of 2004 due to resistance from both the public administration areas as well as the supplier side, because of the pace at which procurement practices were changing and the need to use IT. DARPA invested significant resources in educating public administration bodies and suppliers about the ‘new model’. In addition, pressure was exerted from strong Strategic Change, August 2005
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supplier associations representing small and medium sized enterprises (SMEs) for equitable access to government business. As a response to such concerns, the electronic marketplace was established in 2004 for smaller purchases and supplies in different geographical locations. eProcurement has evolved as one of the main instruments for the rationalization programme. However, challenges remain with respect to cultural resistance and technological issues, such as electronic payments. Public eProcurement in Western Australia (WA) The Government Electronic Market (GEMTM) electronic procurement system is comprised of: Gem Tendering, Gem Purchasing and Gem Contracting. Gem Contracting is a more recent initiative and so is not discussed further. The Gem Tendering system evolved from the Government Contracting Information Bulletin Board, which arose from the Commission on Government Review (1998–1999). It was created to advertise tenders and give early tender advice. The online tendering idea served to trigger interest by Contract and Management Services (CAMS) into the potential for electronic marketplace, electronic purchasing and electronic procurement systems. Presently situated in the Department of Treasury and Finance (DTF), Gem Purchasing was launched in early 2000 by CAMS. The initiative was kicked off with a ‘buy local’ initiative and a budget of approximately $3 million. The limited budget later proved to be a contributing factor to problems in the production environment and data corruption because of inadequate system testing. Gem Purchasing became an instrument of state development in terms of: (1) encouraging business with government; and (2) maintaining market space following concerns expressed by the then Department of Commerce and Trade (DCT) that business could be lost to the eastern states of Australia. However, while operational and functional issues were being addressed, there was a view that Gem Copyright © 2005 John Wiley & Sons, Ltd.
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Purchasing was evolving into a phenomenon that was extending to something further than what was initially intended. Gem Purchasing was intended to serve as a vehicle in transforming CAMS’core business of managing contracts. However, CAMS endeavoured to change its procurement practices at one level whilst also trying to change contracting processes. This ‘resulted in elements of the agency practicing business as usual, while at the same time trying to change the paradigm’ and as a result the ‘execution was fragmented’ (AOT Consulting Pty Ltd, 2003). Secondly, when CAMS was later merged with the Department of Industry and Technology (DoIT) it became part of a culture where the use of technologies was intrinsic to driving change. The contract for supplying the IT platform for Gem Purchasing was awarded to a locally led SUN Microsystems consortium in August 2000. The contractor faced a steep learning curve in understanding the IT architecture, which resulted in implementation delays and dissatisfaction in agencies. The system was fully functional by July 2001, coinciding with the commencement of the Department of Justice Prisons Supply Chain Management project. This project was completed in July 2002 with all WA prisons using the system. Notwithstanding the number of agencies using Gem Purchasing, only the Department of Justice Prisons Directorate has embraced Gem Purchasing holistically and remains the only significant user of the system. The remaining users tend to be smaller agencies that do not have any purchasing system capability. The lack of uptake resulted in a review, conducted by external consultants, which concluded in August 2003. During the course of the review no work could be done on the system as it was ‘frozen’. The review revealed, in addition to the resource and implementation issues raised above, four other key issues. Firstly, increased interest from national and international government agencies was viewed as having distracted and diverted critical resources away from WA clients. Secondly, enlisting a large number of suppliers early was viewed as a key Strategic Change, August 2005
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strategic error as there were a limited number of buyers in the marketplace. Thirdly, other reform and structural issues created competing priorities. Finally, a ‘new’ procurement person was required with a mixed skill set in areas such as contract management, IT and procurement. Finding people with the requisite skills was seen as a challenge. A ‘re-badging’ project was undertaken whereby procurement staff were assigned by the DTF to liaise with each agency. These staff members are physically located in each agency but remain DTF staff. Public eProcurement in Scotland Public eProcurement in Scotland is influenced by broader UK public policies for improving government efficiency and delivering better value for money to taxpayers. In 1998/1999 recommendations were proposed for improvements in public procurement. These include: improving procurement processes, developing the skills and status of the procurement profession and exploring e-commerce and technology-enabled options for procurement (HM Treasury and Cabinet Office, 1998; Gershon, 1999). Following devolution in 1999, public procurement in Scotland became the responsibility of the new Scottish Parliament. The Procurement Supervisory Board (PSB) was established to review procurement and the Board proposed a strategy for eProcurement for the whole of the Scottish public sector including central government, local government and National Health Service Scotland. The strategy received ministerial approval in November 2000 and central government funding was allocated to the National eProcurement Scotland (NePS) programme. NePS falls within the portfolio of the Scottish Procurement Directorate (SPD) and is the key agent for implementing the Scottish eProcurement strategy. A preliminary review of eProcurement business models in both public and private settings found that no existing model was completely suitable in the context of the Scottish public sector. It was concluded that a Copyright © 2005 John Wiley & Sons, Ltd.
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more holistic approach was required, which would enable the reform of government procurement processes and practices alongside the implementation of new technologies for procurement. The NePS team took a broad interpretation and defined eProcurement as a business service as opposed to a technology solution, described locally as ‘little e, big P’. The team developed a business model that uses common methodologies for buyerenablement and supplier-adoption with private sector organizations providing the service and managing the technology platform. The resulting business design for eProcurement in Scotland is a fully hosted and managed service that brings eProcurement into the reach of all Scottish public sector organizations. The NePs team coordinates the service and provides information and expertise to buyers and suppliers. The service itself is provided by a private sector organization (Cap Gemini) and is hosted by elcom using their PECOS Internet Procurement Manager platform. The technology (the PECOS system) is a fully hosted application service supporting a range of buyer and supplier procurement functions such as catalogue management, order cycle management, approval routing and electronic tendering and auctions. The PECOS system also provides financial settlement and invoicing functions alongside a range of reporting tools. Buying organizations pay an annual management fee for the service; there are no annual management fees for suppliers. The service was launched in early 2002 and the first order was placed in March 2002. After a slow start uptake is now strong; the service is now live in all core departments of central government, in seven local authorities and NHS Scotland has signed up en-masse for the service with full rollout taking place over the next two years. In terms of impact, cost reductions and process efficiencies have been realized in a number of areas including the online auction, and the streamlining of payments and the consolidation of invoices. Broad economic goals and the provision of a whole of government Strategic Change, August 2005
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eProcurement service have been realized. NePS has promoted a holistic view of eProcurement as an end-to-end business service. Implementing this view requires a multifunctional team with a good understanding of public procurement policies and practices and skills for re-engineering and benchmarking business processes.
Understanding socio-technical change SCOT and ANT have a rich vocabulary of theoretically relevant concepts that are useful for describing and explaining how technology, actors and social arrangements are shaped and how they interact over time. In this study the concepts of actor networks, inscription, translation, enrolment, stability and irreversibility provided a powerful means of understanding the processes through which socio-technical change was shaped and stabilized in the context of public eProcurement. In presenting these elements as sequential moments, it is solely for heuristic purposes as they represent a ‘seamless web’ of history (Bijker, 1987), better represented as parallel dimensions of the social practice of organizing. Inscribing the meaning of eProcurement in the organization The concept of inscription (see, for example, Akrich, 1992) relates to how an artefact does not begin from a blank slate but embodies such things as beliefs and assumptions about what the technology is about, patterns of use, encompassing the roles that users will play, and social and economic relations. As inscription may impose a definition as to the form and functionality of the technology, actors may actively seek to inscribe their meanings and interests into the artefact (Monteiro, 2000). Therefore, by examining inscription over time, we begin to understand what actors were involved and how they affected the design and development of eProcurement. In the case of Italy and Scotland broad inscriptions were viewed in contrast to the Copyright © 2005 John Wiley & Sons, Ltd.
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initial narrower ones in WA. For example, at a policy level, whole of government reform programmes in the form of the public administration rationalization programme in Italy and the UK Gershon report in Scotland relating to efficiencies and skill development in public procurement were inscribed in eProcurement initiatives. The focus was on procurement practices themselves rather than the technology, as reflected in the ‘little e, big P’ Scottish maxim. Further, other types of inscriptions in the form of frame contracts, attributes of products and services (e.g. price volatility and obsolescence) and accounting inscriptions evolved over time. In contrast, whole of government reforms were not inscribed in the WA eProcurement initiatives until more recently, with technical functionality as the more dominant focus. Translating eProcurement and enrolling the allies: how the idea of eProcurement became important Generally, translation refers to the methods, stratagems or processes by which interests are aligned through the attempts by actors to enrol each other within a network to reach some stability or social order (Monteiro, 2000). In the case of Italy and Scotland, DARPA and the NePS group respectively played a key role in the development of eProcurement, by translating specific needs of individual government agencies and supplier groups into more unified needs, thereby enrolling them and mobilizing broad support. In doing so, agencies and suppliers translated eProcurement into the context of their specific work practices and situations. This was facilitated by the strength of literary inscription devices such as the Financial Act in Italy and strategies and methodologies used to enrol buyers and suppliers in Scotland. Further, technical artefacts such as the supplier database and document repository used in Scotland enabled the NePS group to give order to the supplier networks. For the WA case, translation was far from a smooth, continuous and uninterrupted process. It was initially defined in terms of Strategic Change, August 2005
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transforming CAMS’core business of managing contracts and ‘re-engineering itself’. This in itself created competing objectives. Further, new ways of interpreting eProcurement continued to arise despite involvement and mobilization built around solutions to previous definitions, largely due to changing agency structures and responsibilities. This is in contrast to Italy and Scotland, where DARPA and NePS acted as obligatory passage points, that is, critical points that needed to be traversed for the successful translation of eProcurement. In WA enrolling Sun Microsystems, the technology provider, became the critical point in the development of eProcurement. However, the initial translation of using technology for the automation and routinization of government purchasing across government took on various meanings, particularly with respect to those agencies that had procurement capability with their existing enterprise-wide systems. Stability and irreversibility: the aligned interests Stability (see, for example, Pinch and Bijker, 1987) and irreversibility (see, for example, Callon, 1991) generally refers to the situation whereby a ‘sufficient body of allies’ have been enrolled in a ‘successful’ network of aligned interests — so much so they are prepared to participate in particular ways of thinking and acting to maintain the network and resist competing translations (Walsham, 1997). In the case of Italy and Scotland, conceptions of eProcurement were crystallized through a convergent network. DARPA and NePS had constructed mutual understanding and common objectives with suppliers and buyers. We are not making claims that stability/ irreversibility is necessarily desirable, but more that it was considered desirable in these settings. Further, it was part of a series of change activities to this point and so may not necessarily remain this way. In contrast, in WA eProcurement did not stabilize in the form expected and different outcomes emerged. Government agencies were not successfully enrolled as there were tensions with respect Copyright © 2005 John Wiley & Sons, Ltd.
to the technical functionality of the marketplace versus the capabilities situated in existing enterprise-wide systems within agencies. Further, because of structural reform the identities and activities of agencies were continually changing.
Implications In this study we have investigated the adoption and implementation of public eProcurement initiatives using a socio-technical theoretical perspective to analyse and present three related key findings. Planned change or improvise and experiment? The implementation of eProcurement met with varying degrees of ‘success’ in each of the three cases. The breadth and depth of change revealed in our analysis shows that the adoption and implementation of eProcurement is not simply a technical matter or one necessarily of purposeful action. Technical incompatibility did in some instances destabilize the emerging network. However, this in itself took on different forms in different contexts. For example, the use of new technologies in the Italian case was in tension with cultural histories of IT usage and business practices. In WA, technical integration became a key challenge with large agencies that had existing enterprise-wide systems. A functional eProcurement system was only possible through the simultaneous achievement of social and technical arrangements influenced largely by how users became enrolled to the idea of eProcurement. If such interests are not aligned then the technology, both in terms of its meaning for different actors and its content
The implementation of eProcurement met with varying degrees of ‘success’ Strategic Change, August 2005
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relating to its specific functional capacities of hardware and software, will also be different — such as in the case of WA. These experiences serve to illustrate the nuances of sociotechnical change and its fluid and emergent nature. It also highlights the need for those involved in the implementation of enterprisewide socio-technical change to consider how it manifests in its local context, the role of influential agents and how change may not necessarily evolve in neat linear sequences requiring organizations to improvise and experiment. Importance of unintended consequences The study revealed that even in situations where there were highly resourced and carefully planned attempts to enrol actors into the network, unintended consequences may arise. For example, gaining equitable access for SMEs in government procurement in Italy destabilized the network requiring ‘deviations’ from ‘planned’ designs. In addition, eProcurement initiatives also created opportunities for restructuring and innovation in work practices. The socio-technical change revealed by the case analysis points to changes in work practices, the creation of new roles, the reorganization of existing roles and a need for a new blend of skills for the future. In Western Australia procurement staff from the client agencies were ‘re-badged’ into the DTF. In the Scotland case the image of eProcurement as an end-to-end business solution led to a call for a multi-functional team whose members have a good understanding of procurement practices and policies, skills for re-engineering and benchmarking business process and managing change and training programmes. This was seen as a potential problem as there was a perception that there is a shortage of people with the requisite skills and knowledge of public eProcurement. In Italy and Western Australia the changes in the new procurement environment resulted in an assessment of the skills required by procurement practitioners and in the case of Italy the development of a new university course. Copyright © 2005 John Wiley & Sons, Ltd.
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Representations of eProcurement Different initiatives in each case site produced different designs. However, while each site had its own history and institutional arrangements, together with variations in local conditions, such as market size and culture that influenced the interpretations of eProcurement, these differences did not ‘explain’ the different directions taken by each case site. Emphasizing the intrinsic openness of the interpretive flexibility of eProcurement in each location revealed that eProcurement was not, for example, a marketplace, tendering system or some functional capability provided by an ERP system, but rather an assemblage of different actors, actions, technical elements, business designs, procurement practices and policies of differing durations in time and space, always contestable and open to negotiation.
Conclusion and limitations This paper presented a theoretical perspective that was helpful in understanding the varied, shifting and complex character of the sociotechnical change process and the role of agency in initiating and sustaining such change. The theoretical constructs of inscription, translation, enrolment, stability and irreversibility enabled us to draw out the nuanced progress of eProcurement implementation in a public sector setting, illustrating the limitations of viewing eProcurement as a homogeneous object. Analysing how eProcurement initiatives were developed and took shape provided an understanding of its transitive and transitory nature, the collective actions and practices that constructed it and contexts in which it is located. Our findings place a strong emphasis on policy and social welfare issues, as might be expected in a government setting. Studies of eProcurement in the private sector are likely to place less emphasis on policy issues per se and focus on strategic and competitive matters. However, the theoretical concepts adopted are analytically powerful and could provide practitioners with useful tools Strategic Change, August 2005
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in understanding the envisaged and serendipitous nature of socio-technical change and the intended and unintended outcomes that may emerge in implementing enterprise-wide business information systems.
Acknowledgements The authors would like to thank the Australian Government Information Management Office and the Australian Research Council (Grant No. LP0214841).
Biographical notes Sue Williams is Associate Professor of Business Information Systems in the School of Business, University of Sydney. She co-founded and leads the Information Policy and Practice Research Group. Her research is in the areas of sociotechnical change, business information design, information management and information policy and practice. Catherine Hardy is a Lecturer in Business Information Systems in the School of Business, University of Sydney. She co-founded and is a member of the Information Policy and Practice Research Group. Her research is in the areas of information assurance, IS risk management, strategic management of IT enabled business innovations, socio-technical change and the use of multiple methodologies and methods in IS research.
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