1064 Copyright © 2009, IGI Global, distributing in print or electronic forms without written permission of IGI Global is prohibited. Chapter 4.7 Application of Web Services in the Context of E-Procurement: An SME Foci Stanley Oliver University of Bolton, UK Kiran Maringanti University of Bolton, UK ABSTRACT This chapter highlights the importance of e-pro- curement and the barriers affecting its widespread adoption in the context of small and medium enterprises. The chapter takes a technical per- spective and critically analyzes the importance of information systems in the procurement domain and the integration challenges faced by SMEs in today’s digitally networked economy. Next, the role of XML-based Web services in solving the integration challenges faced by SMEs is discussed. Subsequently, a procurement transformation framework enabled by Web services which pro- vides a clear methodology of the way in which information systems should be introduced in the procurement domain is discussed. The chapter concludes by a discussion of the measures that must be undertaken by various stakeholders like the government and universities in increasing the awareness levels of SMEs to the latest e-business mechanisms. INTRODUCTION Micro, small and medium-sized enterprises (SMEs) play a central role in the world economy. They are a major source of entrepreneurial skills, innovation, and employment. There are an estimated 75 million SMEs worldwide, which represent about 99 percent of all companies (IBM, 1998). Zheng, Caldwell, Harland, Powell, :RHUQGODQG;X¿QGWKDWWKH³,QWHUQHW presents many opportunities for SMEs to harness WKHEHQH¿WVRI,QIRUPDWLRQDQG&RPPXQLFDWLRQV Technologies (ICT)” (p. 27-39). E-procurement, which is the utilization of the Internet in enabling 1065 Application of Web Services in the Context of E-Procurement and streamlining the entire procurement cycle, KDV EHHQ LGHQWL¿HG DV D YHU\ LPSRUWDQW DUHD of concentration for SMEs (ABI, 2003; OGC, ³(OHFWURQLFSURFXUHPHQWVSHFL¿FDOO\DQG eCommerce generally will knit supplier and buyer business processes together to deliver seamless transactions” (Cavinato & Kauffman, 2000). Large enterprises have already invested huge amounts of resources in e-procurement and DUHUHDSLQJWKHEHQH¿WVRILW(SURFXUHPHQWLV being championed by larger enterprises, mainly to save transaction costs and reduce prices. But potentially they also offer opportunities for SMEs WR¿QGQHZEXVLQHVVSDUWQHUVDQGWREHQH¿WIURP closer integration into the value chains of large companies (ABI, 2003). It is pertinent to study the impact of e-procure- ment on SMEs owing to many factors: 1. Many large organizations’ supplier base consists of small and medium enterprises (SMEs), and without the full participation of these SMEs, the initiatives of large cor- porations will not be successful. 2. The application of emerging information technologies (IT) has often proven to be a complex job for SMEs. 3. SMEs are often at a disadvantage in terms of ¿QDQFHWHFKQRORJ\KXPDQUHVRXUFHGHYHO- opment, and networking (UN-ECE, 1997); in the case of information technologies, the task seems even more daunting, owing to the highly complex evolving process and also the challenge in successfully deciphering D EXVLQHVVFDVHIRU WKH MXVWL¿FDWLRQ RILWV investment. In this chapter, we will look at the evolution of procurement and look at the importance of e- procurement for SMEs. We will also look at the barriers to the widespread adoption of e-procure- ment and how the deployment of Web services will help overcome those barriers. BACKGROUND This section offers primary insight into procure- ment, e-procurement, inter-organizational infor- mation systems, and supply chain management. We believe these areas are closely knitted and usually overlapping. Procurement Every business, irrespective of its size and sector, are involved in some form of buying and selling. Procurement is an unavoidable and important busi- QHVVIXQFWLRQ$W\SLFDO¿UPVSHQGVDWOHDVWKDOI of its revenues on external purchases of goods and services (Markham, Morales, & Slaight, 2000). 3URFXUHPHQWLVGH¿QHGE\*HEDXHU%HDPDQG 6HJHYDV³LQFOXGLQJDOODFWLYLWLHVLQYROYHG in obtaining, transporting and moving material towards the production process.” Though procure- ment has long been overlooked as a backwater, repetitive function, nevertheless it is indispens- able, it forms the bedrock of the company, and it is a core business function. A study made by AT Kearney on European and North American manufacturers found that in 1985, 30% of the total manufacturing cost stemmed from purchased PDWHULDO DQG VHUYLFHV ,Q WKH ¿JXUH URVH to 55%, and for 2005, it was estimated to rise to 85%, which makes procurement a very important function (Knusden, 2003). Since the procurement process is located at the beginning of the value chain, any ripples created here will be echoed right across the supply chain. But traditional procure- PHQWSURFHVVHVDUHPXGGOHGZLWKLQHI¿FLHQFLHV and leave scope for non-compliance with existing procurement policies. Procurement, purchasing, and supply manage- ment are simply different terms used in the litera- ture to describe the same activity. But we prefer the X V D J H RI W K H W H U P ³ S U R F X U H P H Q W ´ . Q X V G H Q MXVWL¿HVWKHXVDJHRIWKHWHUP³SURFXUHPHQW´E\ DVVHUWLQJWKDW³LWQHLWKHUUXOHVRIWKHRSHUDWLRQDO nor the strategic aspect of acquiring external 1066 Application of Web Services in the Context of E-Procurement resources.” Procurement is the name given to a very broad purchasing function which includes basic steps like making a requisition for goods, to much more complex aspects like sourcing and logistics. Thus, the scope of procurement is very wide, making it a very important component of supply chain management. Typically, a company’s procurement function is subdivided into strategic and operational processes, since activities and priorities in these two areas are entirely different (Kaufmann, 1999; Lamming, 1995), as depicted in Figure 1. However, traditionally procurement was often neglected as a back room function. A glance at the organization chart of many organizations reveals that purchasing departments are located in many areas of the organization. Separate purchasing departments for manufacturing and sales made it GLI¿FXOWWRKDYHDFHQWUDOL]HGSXUFKDVLQJSROLF\ Heywood, Barton, and Heywood (2002, p. 8) QRWH WKDW ³WUDGLWLRQDO EX\HUV KDYHORQJDUJXHG that their work does not lend itself to automation because much of the information that appears on a purchase order or contract is unstructured text, DQGPRVWSXUFKDVLQJV\VWHPV¿QGWKLVGLI¿FXOWWR accommodate. A blank purchase order with terms and conditions written in the very small lettering on the back is the way they like to work. Because there was never a big push from the buyers to au- tomate, traditional purchasing departments were usually left to their own devices and persisted ZLWKPDQXDOSDSHUV\VWHPVWKDWVDWLV¿HGRQO\WKH needs of the buyers.” This is one of the reasons why procurement IXQFWLRQVZHUHQHYHUDXWRPDWHGDVLQVXI¿FLHQW emphasis was placed on this important corpo- UDWHIXQFWLRQ1HHIQRWHV³WUDGLWLRQDOO\ the external resources that were acquired by the company have been broken down into two major categories, that is, Direct and Indirect goods.” 1. Direct goods: Typically, direct goods are 80% by value and 20% by volume of many organizations expenditure on procurement. Direct goods include goods which are used in the production of core products and services of the company. Direct goods are central to the running of the business, and are very crucial because any disruption in this area of purchasing can cause havoc and ultimately challenge the survival of the company. Procurement strategies for direct JRRGVDVVXPHWKHKLJKHVWVLJQL¿FDQFHIRU any company and have to be planned with XWPRVWFDUH 7KH\LPSURYHWKH HI¿FLHQF\ of the company, which in turn will help it in gaining competitive advantage in the market. 2. Indirect goods: Ty p i ca l l y, i n d i r e c t g o o d s a r e 20% by value and 80% by volume. Indirect )LJXUH3URFXUHPHQWFODVVL¿FDWLRQPRGHO6RXUFH$XWKRUV 1067 Application of Web Services in the Context of E-Procurement JRRGVFDQEHFODVVL¿HGDVJRRGVZKLFKDLGLQ the running of the business. Indirect goods DUHFODVVL¿HGDJDLQDVEHORZ • Maintenance, retail, and operation (MRO): MRO goods are very crucial to the business as these include obtain- ing parts for the various machinery and other high-end instruments which perform the actual production. • 2I¿FHVXSSOLHV2I¿FHVXSSOLHVLQFOXGH all other expenditure which is helpful in performing routine jobs. These in- clude stationery, lighting, and so forth. These are not mission-critical goods and can be bought at any period with off-contract suppliers as they can be substituted easily. Complexity is an inherent attribute of pro- curement. Companies have always been trying to simplify this extremely crucial aspect of their business, in extracting optimal quality and ac- curate transactions at a lowest possible cost. For example, Figure 2 demonstrates the routine tasks involved on the operational side of a traditional procurement life cycle. As garnered, the process was very labor-intensive, which was a source of LQHI¿FLHQF\LQPRVWRUJDQL]DWLRQV7KHVROXWLRQ WRFXWGRZQGUDVWLFDOO\RQWKHLQHI¿FLHQF\ZDV through the introduction of information systems. Thus, the concept of inter-organizational informa- tion systems (IOIS) came to the fore. Inter-Organizational Information System (IOIS) Generally, the need for sharing procurement-re- lated information is found to be on a higher scale between participant organizations. The emergence of IOIS attempted to solve that problem. An IOIS LVGH¿QHGDVDFRPSXWHUDQGFRPPXQLFDWLRQLQ- frastructure, crossing company boundaries and enabling information sharing (Cash & Konsynski, Figure 2. Traditional procurement process (Heywood et al., 2002) 1068 Application of Web Services in the Context of E-Procurement 1985). IOIS facilitate technology-based coopera- tion across organizations (Bakos, 1991). Basically, IOIS enables two companies to exchange business- related documents in some pre-agreed proprietary format. As processes evolved, we saw the rise of electronic data interchange (EDI), a variant of IOIS during the period of the 1980s. Electronic Data Interchange (EDI) Electronic Data Interchange has been around for a long time and has been widely used for the ex- FKDQJHRIEXVLQHVVGRFXPHQWVE\ODUJH¿UPV(', L V RI W H Q F R Q ¿ Q H G W R G D W D H [F K D Q J H X V L Q J ( ' , 9$ 1 (value added network) or EDI standard protocols such as UN/EDIFACT (United Nations/EDI for Administration, Commerce and Transport) and ANSI (American National Standards Institute) ASC (Accredited Standards Committee) x12 6KLPDGD 0DQ\ ODUJH ¿UPV KDYH EHHQ applying technology to the purchasing process for several decades through electronic data inter- change (EDI). It was still expensive to implement, often running into millions of dollars (Presutti, 2002). However, the high costs associated with EDI can be afforded only by the large companies (Khazanchi, 1999). Competing standards, high- entry barriers and lack of suitability for real-time transactions meant that EDI was not an option for SMEs. But with the anvil of e-business, the concept of doing business electronically with a multitude of partners has become affordable for even the SME community. E-Business Human race has been involved in buying and sell- ing of products and services to each other for as long as recorded history. McMillan (2002) notes WKDWWKH³WUDGLQJRIJRRGVDQGVHUYLFHVIRURWKHU goods or for money is central to the concept of human socialization.” While the basic philosophy has remained the same, means of achieving the ends have changed profoundly. The success of the PC-based model of computing, coupled with the emergence of the World Wide Web, has opened up new and exciting opportunities for businesses. The Internet in general, and in particular, e-business has changed the centuries-old practices/methods dramatically at an unprecedented pace. Businesses DOO RYHU WKH JOREH ZDQWHG WR JDLQ WKH EHQH¿WV offered by this new channel of communication. While the most visible manifestation of the In- ternet has been in the emergence of electronic commerce as a new retail channel, it is likely that the Internet will have a profound impact on business-to-business interaction, especially in the area of supply chain integration. The consumer-centric business-to-commerce (B2C) model dominated the embryonic stages of the Internet. But it will be their B2B successors who will leverage the full potential of this new- found electronic economy. Gartner Group, an IT UHVHDUFK¿UPSUHGLFWHGWKDWWKHZRUOGZLGH%% market would be $ 7.2 trillion by 2003. True to predictions, B2B/e-business is already the fast- est growth area in the superheated new Internet economy and carries potential almost beyond measure. ,QWKH¿HOGRIHEXVLQHVVHSURFXUHPHQW is regarded as having far greater potential for cost savings and business improvements than online retailing or enterprise resource planning systems (Aberdeen, 2000; Neef, 2001). Many studies have clearly indicated that the biggest savings from e-business initiatives will occur in the area of e-procurement (Knusden, 2003). Supply Chain Management (SCM) Supply chain management can be described as the chain linking each element of the manufacturing and supply process from raw materials to the end user, encompassing several organizational bound- aries (New & Payne, 1995; Scott & Westbrook, 1991). Increasingly, organizations are looking to squeeze costs out of the supply chain to gain FRPSHWLWLYHDGYDQWDJHRYHURWKHU¿UPV&KULV- topher (1998) also notes that the goal of supply 1069 Application of Web Services in the Context of E-Procurement chain management is to link the marketplace, the distribution network, the manufacturing process, and the procurement activity in such a way that customers are serviced at higher levels but at ORZHUWRWDOFRVW6HYHQW\SHUFHQWRID¿UP¶VVDOHV revenues are, on average, spent on supply chain- related activities from material purchases to the GLVWULEXWLRQDQGVHUYLFHRI¿QLVKHGSURGXFWVWRWKH ¿QDOFXVWRPHU3UHVXWWL6XSSO\FKDLQPDQ- agement has thus evolved into a very important area of study for many researchers and companies attributable to the symbiotic relationship between supply chain and organizational performance. Supply chain management is seen as paramount to delivering high customer satisfaction with reduced lead times and costs (Bhattacharya, Coleman, & Brace, 1996). The emergence of e-business has provided a fresh impetus for re-invigorating the supply chain. Today, there is an increased use of geographi- FDOO\GLVSHUVHGVXSSOLHUVE\¿UPVWRUHWDLQWKHLU competitive advantages. This act requires a high degree of orchestration between the geographical- ly-dispersed partners. The role played by informa- tion technology in synchronizing these partners is profound. Cagliano, Caniato, and Spina (2003) QRWHWKDW³HEXVLQHVVLVSDUWLFXODUO\LPSRUWDQW for the supply chain literature as a consequence of the increasing need to integrate activities and LQIRUPDWLRQÀRZVDQGWRRSWLPL]HWKHSURFHVVHV not only at the single company level, but also at the level of inter-company processes.” Chen and Meixell (2003) point towards the symbiotic relationship between supply chain management and information technology. Due to the dynamic nature of supply chain management, new breed LQIRUPDWLRQWHFKQRORJLHVFDQRIIHUVLJQL¿FDQWFRQ- tributions in optimizing supply chains for better performance. This makes SCM more responsive to the dynamics of the marketplace. E-procurement is a subset of supply chain management. E-PROCUREMENT AND SMES E-procurement is a collective term for a range of e-business software solutions which utilize the lat- est information and communication technologies (especially the Internet), that can be employed to automate the internal and external processes as- sociated with strategic sourcing and purchasing, which includes catalogue search, item requisi- tion request, approval, purchase order, delivery, UHFHLYLQJ SD\PHQW LGHQWL¿FDWLRQ RI VRXUFLQJ opportunities, supplier evaluation, negotiation, and contract. Examples of the e-business software solutions include e-procurement software, busi- ness-to-business (B2B) auctions, B2B market exchanges, purchasing consortia, e-tendering, e-auctions, e-marketplaces, and e-sourcing. The e-business software solutions that aid the procurement process automation utilize the latest information and communication technologies, such as electronic data interchange, Internet, e- mail, software and hardware, but excludes other means of communication such as telephone, fax, and so forth. E-procurement technologies IXQGDPHQWDOO\ DLP WR KDPPHU RXW LQHI¿FLHQ- cies associated with manual-based procurement systems. From the above discussion, we can deduce that e-procurement is mainly the effective utilization of the modern Internet standards for streamlining the entire corporate procurement activities. The emergence of e-procurement, which leverages the potential of the Internet to improve the procure- ment process, has gathered considerable interest amongst academia and business practitioners. %HQH¿WVRI(3URFXUHPHQWWR60(V We spoke about how e-procurement can help organizations in improving over traditional pro- curement processes. Especially for an SME, if they adopt electronic procurement, a small per- centage of savings in procurement expenses can help them reduce operation costs and improve the 1070 Application of Web Services in the Context of E-Procurement SUR¿WPDUJLQFRQVLGHUDEO\DVSURFXUHPHQWLVDQ expensive business activity. This improves their competitiveness as well, which would ultimately EHQH¿WWKHHFRQRP\&KDQ/HH 7 K L V V H F W L R Q O L V W V W K H E H Q H ¿W V RI H S U R F X U H P H Q W which are exclusive to SMEs, as highlighted by PDQ\DXWKRUV$%,1(332I¿FHRI Government Commerce, 2002): • Competition with any other supplier, regard - less of their size; any supplier with access to the Internet is now on a par with even the largest suppliers • Being strategically valuable, as it helps them to win other business elsewhere • Receiving payment more quickly as there is less of a paper chase at the buyer end • Business does not need to be limited to one geographical area • Removal of some of the process costs as - sociated with supplying to government (I¿FLHQF\GRLQJWKLQJVEHWWHUWKURXJKSXUH cost reduction in current procurement and selling business processes) • Effectiveness (doing better things, through supply chain integration driving costs out of the supply chain, and strategic sourcing to establish new competitive supply sources) • Evolution (doing things differently promoted through transparency and intelligence) • B2B re-engineering (promoting business in - telligence and transparency in the customer and supply chain partners and encouraging innovation through collaboration) But on a precautionary note, it must be un- derstood that e-procurement does not replace procurement. E-procurement is only a strategic tool that enhances the entire procurement op- eration. The aim that an e-procurement system attempts to achieve could be divided into two categories, that is, internal and external, as de- picted in Figure 3. The functionality that is set forth to be achieved on the internal side of e-procurement could be achieved through either: • An ERP system • Specialized e-procurement software The functionality that is set forth to be achieved on the external side of e-procurement could be achieved through: • B2B marketplaces •E-auctions •e-tendering There is no particular variant of e-procurement that will dominate the entire industry. Different models are suitable for different industries, and the kind of solution to be embraced is also dictated by the size of the company. Davila, Gupta, and 3DOPHUQRWHWKDW³HSURFXUHPHQWVRIWZDUH and B2B auctions are better suited to the needs of large corporations, while market exchanges and purchasing consortia better serve the needs RIVPDOOHUFRPSDQLHVDQGQRQSUR¿WV´7KXV HOHFWURQLFPDUNHWSODFHVKDYHEHHQLGHQWL¿HGDV Figure 3. Essentials of a good e-procurement system 1071 Application of Web Services in the Context of E-Procurement the preferred way for SMEs to conduct electronic procurement. New, Meakin, and Southworth (2002) note WKDW³RQHRIWKHPRVWPLVOHDGLQJDVSHFWVRIPXFK that has been written about the Internet and its effects on organizations is the lumping together of different types of organizations operating in different types of markets. Firms differ in many VLJQL¿FDQWZD\V´ (FKRLQJWKHDERYHWKRXJKWV ¿UPVHVSHFLDOO\60(VYDU\VLJQL¿FDQWO\LQWKHLU SURFXUHPHQWSDWWHUQVDQGLWLVRIWHQGLI¿FXOWWR SUHVFULEHDSDUWLFXODUPRGHOIRUDJURXSRI¿UPV Instead, SMEs have to mix and match solutions that best serve their purpose from the wide gamut of e-procurement solutions available. B2B Marketplaces B2B marketplaces are the umbrella term which embraces all variants of external e-procurement models. There are many names by which B2B marketplaces are addressed. In this chapter, they would be addressed as B2B marketplaces as they focus on business-to-business transactions and engage in product, service, or information H[FKDQJHEHWZHHQEX\HUVDQGVHOOHUV³7KHH[LV- tence of Marketplaces in human society has a long history from before the agora of Ancient Greece to the online trading places of the 21 st century” (Stockdale & Standing, 2004). The concept of an Electronic Marketplace dates back to the mid- V ZKHQWKH¿UVWGRFXPHQWHG(0 V\VWHP known as Selevision, was used to remote-market Florida citrus (Henderson, 1984). B2B marketplaces basically provide the infra- structure for the transfer of information, service, or product between the concerned partners. The ability of the marketplaces to interoperate extends the idea of liquidity and network effect by joining more buyers with more suppliers, but does not VDFUL¿FHWKHDELOLW\RIHDFKPDUNHWSODFHWREH KLJKO\VSHFL¿FWRWKHVXSSO\FKDLQQRGHRUWDUJHW buyer group it serves. B2B marketplaces have emerged as the best mechanism to unlock that value, which aligns buyers and sellers in product or industry-focused Internet marketplaces for the exchange of goods and services (Aberdeen Group, 2001). Schmid (1993) and Bakos (1991) consider B2B marketplaces as manifestations of the neo- classical market ideal, reducing transaction costs to a negligible minimum. Malone, Yates, and Benjamin (1987) conclude that markets are the preferred coordination mechanism for products ZLWKORZDVVHWVSHFL¿FLW\DQGORZSURGXFWGHVFULS- tion complexity. B2B marketplaces offer compel- ling features like price discovery, aggregation of buyers and sellers, automation of processes, and expanding markets to buyers and sellers (Bakos, 1998; Kaplan & Sawhney, 2000). However, there have been various viewpoints on the position- ing of B2B marketplaces: • Is a B2B/e-marketplace an inter-orga - nizational information system? (Bakos, 1991) • Is a B2B/e-marketplace an e-procurement solution? (Segev & Gebauer , 1999) • Is a B2B/e-marketplace a medium? (Schmid & Lindemann, 1998) • Is a B2B/e-marketplace a meeting point? (Kaplan & Sawhney, 2000) • Is a B2B/e-marketplace an intermediary? (Dai & Kauffman, 2000) • Is a B2B/e-marketplace just a listing? (Bradley & Peters, 1997) We consider that B2B marketplaces fall under the ambit of e-procurement, which is consistent with Segev and Gebauer (1999) who note that ³FRPSDUHGWRPDQ\RWKHUHOHFWURQLFSURFXUHPHQW solutions, electronic marketplaces represent a rela- tively neutral position between buyer and seller, providing services to both sides of a transaction. An electronic marketplace represents a virtual place where buyers and sellers meet to exchange goods and services.” The electronic markets hypothesis (EMH) by 1072 Application of Web Services in the Context of E-Procurement Malone, Yates, and Benjamin (1987) predicted that electronic marketplaces will be the favored mechanisms for coordinating material and infor- PDWLRQÀRZVDPRQJRUJDQL]DWLRQVLQWKHSUHVHQFH of electronic communication technologies. True to their hypothesis, the rise of the B2B marketplaces has been stupendous. Technically, e-marketplaces DUHPRUHVWUDWHJLFE\HQDEOLQJ¿UPVWRLQWHUDFW Z L W K R W K H U ¿ U P V L Q D P D U N H W V H W W L Q J W K D Q H O H F W U R Q L F data interchange (EDI) systems in a relational setting (Grewal, Comer, & Mehta, 2001). %%0DUNHWSODFHV&ODVVL¿FDWLRQ *HQHUDOO\%%PDUNHWSODFHVFDQEHFODVVL¿HG into public, private, and industrial/consortia marketplace. • Public marketplace: A public marketplace could also be termed as a third-party or a neutral marketplace. They provide content, value-added services, and transaction capa- bilities. • Private marketplace: Private marketplaces are exclusively the networks built by large enterprises to deal with their group of sup- pliers. In these kinds of marketplaces, the establisher of the network provides the in- frastructure, and thus it is tightly integrated with the enterprises and its suppliers. Typical examples of such kind of marketplaces are Click2Procure (Siemens), Wal-Mart, and UPS. • Industrial or consortia marketplace: Industrial marketplaces are generally es- tablished by a group of large enterprises to leverage their buying power. In these kinds of environments, the marketplaces are in- tegrated with the establishing enterprises. Examples of such marketplaces are Covisint, E2Open, and so forth. Barriers to Electronic Procurement for SMEs Numerous studies highlight the fact that the adop- tion of e-business among SMEs is not in tune with the expectations, and the reasons cited are numerous. Many studies have been conducted to investigate the inhibitors to the adoption of e- business among SMEs. MacGregor and Vrazalic (2005) summarize the inhibitors to the adoption of e-business among SMEs. A study conducted by Davila et al., (2003) has pointed out that user’s of e-procurement technolo- gies report that they can acquire goods over the Internet from only 15% of the supply base. A majority of suppliers in the supply base are SMEs because of their common role as suppliers for dominating manufacturers (Hauser, 2000). This indicates that the uptake of e-procure- ment is low among small and medium enterprises. Ex: Click2Procure (Siemens), Wal-Mart, UPS Ex: Covisint, E2Open Ex: Free markets Private Marketplace Industrial Public Marketplace )LJXUH%%PDUNHWSODFHVFODVVL¿FDWLRQ 1073 Application of Web Services in the Context of E-Procurement However, the barriers related to the adoption of e-procurement among SMEs and the solutions to overcome those barriers is an under-researched area, and there exists very little rigorous academic and empirical research in these areas. Since there is a wealth of information available on the bar- riers to the adoption of e-procurement among large corporations, a summary of the barriers is presented in Table 2. These barriers were sum- marized by Hawking and Stein (2004) from their VWXG\RIPDMRU$XVWUDOLDQ¿UPV¶HSURFXUHPHQW adoption. +DZNLQJDQG6WHLQQRWHWKDW³WKHPDLQ barriers to the uptake of e-procurement are infra- structure, technology, and integration-based. This seems to indicate that the complex technological issues—both within and between organisations in the procurement process—are crucial.” A study was commissioned by IMPAQ (which specializes in developing e-procurement technologies to enable SMEs to trade with blue-chip customers) on top FTSE 350 compa- nies to identify the extent to which e-procurement Table 1. Summary of the inhibitors to e-business adoption amongst SMEs (MacGregor & Vrazalic, 2005) . network) or EDI standard protocols such as UN/EDIFACT (United Nations/EDI for Administration, Commerce and Transport) and ANSI (American National Standards Institute) ASC (Accredited Standards Committee). rise of electronic data interchange (EDI), a variant of IOIS during the period of the 1980s. Electronic Data Interchange (EDI) Electronic Data Interchange has been around for a long time and has. promoted through transparency and intelligence) • B2B re-engineering (promoting business in - telligence and transparency in the customer and supply chain partners and encouraging innovation