The determinants of Procurement 4.0 technology adoption by South African manufacturing firms

Abstract

This study sought to identify the key digital procurement technologies utilised by South African manufacturing firms and the level of adoption of those technologies and examine the barriers to digitally transforming the procurement function and the suggestions to overcome them. This quantitative study utilised an online survey to collect data from a randomly selected sample of 102 participants in procurement or related functions from different sectors of the manufacturing industry in South Africa. The survey was designed to collect data related to the level of digital technology adoption and factors influencing procurement 4.0 technology adoption, measured on a five-point Likert scale. The results showed that CC, IoT and BDA were the most adopted technologies, whilst BCT was observed to have the lowest adoption level. The results highlighted three prominent barriers to adoption: lack of a clear digital strategy, poor observability and low levels of technology competence. The study unearthed that these adoption barriers differed between developed and emerging markets due to specific environmental and organisational factors, such as national or corporate policies to support the transition to procurement 4.0 adoption. The study recommended that managers focus on organisational learning of the available enabling technologies, developing concise digital procurement strategies, and hiring key talent to lead digital transformation initiatives. This research contributed to the growing body of knowledge on procurement 4.0 from an emerging market context, where most literature focused on developed markets. Future studies could focus on assessing the level of adoption in each sub-sector of manufacturing.