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Analyzing Factors that Influence eBidding Utilization in

Malaysian Public Sector

By
Megat Shariffudin B. Hj. Zulkifli
(GM03958)

Scope of Presentation

Introduction
Overview of the eBidding System
Problem Statement
Research Objectives
Research Framework
Hypotheses
Methodology
Data Analysis
Findings
Summary
Policy and Practical Implications
Theoretical Implications
Limitations of the Study
Recommendations for Future Research

Introduction

Malaysian Govt. Aspire for Public Sector Reform to


achieve World-Class Government

e-Government to increase Efficiency, Inter-Agency


Cooperation's and Enhanced Service Delivery

Leverage on ePerolehan - Interconnects Suppliers and


Buyer via Complete End-to-End Integration Services

eBidding as new innovative G2B procurement auctions


(MAMPU, 2005)

eBidding Overview

Source: (home.eperolehan.gov.my,2009)

Reverse Auctions

An online procurement auctions performed between multiple


suppliers in real-time via the Internet produces dynamic,
competitive process and downward price pressure (Jap, 2007)
S1

1. Buyer
Posting a Product
Request

Supplier
1

Supplier
2

S3

Supplier
3
Buyer
(Government)

5. Buyer Buys at
Lowest Cost

4.Seller
Lower
Profit but
Fast Sale

S
2

S3

2.Suppliers
Bidding Against
Each Other
Pushing down
Price

3.Buyer Compares
the Price Offers and
reach Decision

eBidding Overview
Introduced in 2006 as ePerolehan module
Electronic bidding mode where the Buyer (Government) get the
Suppliers to compete interactively online to reach lowest price
offer to the Buyer
Criteria:
o Involve multiple MoF-registered Suppliers with single
procuring agency (Buyer)
o Session is online and real-time
o Bidding session is set within a period of time (2 weeks)
o Final price is derived from competitive lowest price
o Maximum of 6 sessions can be held at one time
Comparisons:Conventional/Manual
1. Acquisition time
2. Price Offers
3. Procurement decision
-making

- 1 to 3 months
- Fixed by Suppliers
- Time consuming

eBidding
- 1 to 14 days
- Multiple bids lower prices
- Immediately (up to 7 days) ;
shorter cycle time for suppliers
6
Source : http://www.casb.com.my, 2012

Problem Statements
Current eBidding adoption is Low, but planned adoption by
Government is high since Launched in 2006
For example, in 2012, out of 888,866 procurement
transactions, only 606 transacting units via eBidding.

Practitioners and Users agree that eBidding is a great idea


for cost savings, transparency and shorter cycle time for
suppliers, but actual adoption continues to lag.

eBidding Status

Source : http://home.eperolehan.gov.my/v2/index.php/bm/mengenai-ep/statistik-sistem-ep

Problem Statements

Low Usage
Low eBidding utilization detrimental to Governments
aspiration for e-Government procurement reverse
auctions implementation
Losses in terms of development costs, cost and time
savings, service delivery efficiency and transparency

Validation issue
Gaps in the body of knowledge in terms of public
sector reverse auctions adoption empirical studies
Not many empirical studies conducted to ascertain
the causes of low utilization of G2B procurement
auctions among the government users.
9

Research Objective
To examine the User Factors and System
Factors that Influence eBidding Utilization
among Government Sourcing Officials in
Malaysian Public Sector

11

Specific Objectives

To identify the variables that may influence the adoption of


eBidding by government users

To examine the effects of the variables on the adoption of


eBidding by government users

To examine if some of the variables have moderating or


mediating effects on the relationships established as
stated in objective 2

To propose a framework to analyze the adoption of


eBidding by government users

11

Proposed Research Model


Personal Innovativeness
In IT

Performance
Expectancy

Experience

H1a

H2a
H1

H2b

H4a
H3a

Effort Expectancy
H2

Social Influence
Facilitating Conditions

Information
Quality
System Quality

H3

H4

eBidding
Adoption

H5

H6

H7

Service Quality
H7a
H6a
H5a

Satisfaction

12

Hypotheses
H1: Performance expectancy is significantly related to officials adoption
of eBidding
H2: Effort expectancy is significantly related to officials adoption of
eBidding
H3: Social influence is significantly related to officials adoption of
eBidding
H4: Facilitating conditions is significantly related to officials adoption of
eBidding

H5: Information quality is significantly related to eBidding adoption


H6: System quality is significantly related to eBidding adoption
H7 : Service quality is significantly related to eBidding adoption
H5a : Satisfaction significantly mediates relationship between information
quality and eBidding Adoption

13

Continue..
H6a: Satisfaction significantly mediates relationship between system quality and
eBidding Adoption
H7a: Satisfaction significantly mediates relationship between service quality and
eBidding Adoption
H1a: PIIT positively moderates the relationship between performance expectancy
and eBidding adoption
H2a: PIIT positively moderates the relationships between effort expectancy and
eBidding adoption
H2b: Experience negatively moderates the relationship between effort expectancy
and eBidding adoption
H3a: Experience negatively moderates the relationship between social
influences and eBidding adoption
H4a: Experience positively moderates the relationship between facilitating
conditions and eBidding adoption

14

The Research Method


Quantitative Approach : Survey ; Cross Sectional Study

Population : 2,558 Pusat Tanggung Jawab (PTJs) ;


2,047 ePerolehan-enabled in Peninsular Malaysia
Sampling frame : 1,507 procuring officials
604 PTJs in Klang Valley and Putrajaya.
Unit of Analysis : Individual (Officials as Individual users)
Sampling Procedure : Simple Random Sampling
Research Instruments : Self-administered Questionnaires

15

Study Instruments
Section

Variables

No. of
Items

Source

Performance
expectancy (PE)

Venkatesh et al., (2003)

Effort expectancy
(EE)

Venkatesh et al., (2003)

Social influence (SI)

Venkatesh et al., (2003)

Facilitating
conditions (FC)

Venkatesh et al., (2003)

System quality (SQ)

Delone and Mclean, (2003)

Information quality
(IQ)

Delone and Mclean, (2003)

16

Study Instruments
Section

Variables

No. of
Items

Source

Service quality
(SVQ)

Delone and Mclean, (2003)

Satisfaction

Delone and Mclean, (2003)

Experience

Venkatesh et al., (2003)

Personal
Innovativeness in
Domain of IT (PIIT)

Agarwal and Karahanna, (2000)

Adoption/Use

Delone and McLean, (2003)

Respondents profile

Researcher
17

Data Analysis Process

Data
Analysis
Interpretation of
Results
Data
Collection

Answer for
research
questions

Discussion

Feel for data


Normality

Goodness of
data
Reliability
Validity

Hypothesis
testing
Appropriate
statistical
(SEM,
Hierarchical,
Regression)

Testing model fit

RMSEA,
TLC, NFI, Chisquare, etc

Source: Sekaran, (2003)

18

DATA ANALYSIS :
STRUCTURAL MEASUREMENT MODELING

SEM - test relationships among variables in the model


Multivariate analysis show causal dependencies between
endogenous and exogenous variables (Hair et al, 2006)
Confirmatory Factor Analysis (CFA) measure data
consistency with research model ; Factor Analysis and Path
Analysis (Sekaran, 2003)
Pre-Test : Normality ; Reliability and Validity tests
Test Steps :
o Developing a Model
o Path Diagram Relationship
o Structural and Measurement Models
o Proposed Model Estimation
o Assessing the model Identification
o Evaluate the Goodness of Fit Criteria TLI, RMSEA,
Chi-square, NFI, CFI
o Modifying the Model re-specification by trimming and
adding paths to achieve model fit
19

DATA ANALYSIS:NORMALITY
Normality test examine data from normal distribution examine the central tendency and dispersion
Tests for Mean, Standard Deviation, Skewness and
Kurtosis.

Data must be multivariate normality to avoid biased result


(Sekaran, 2003)
Data Normality if value of skewness and kurtosis = +-1
(Hisham, 2008)
From the results (Table 10), all data from constructs
falls within +-1, hence normally distributed
20

DATA ANALYSIS: RELIABILITY


To examine the consistency of respondents in answering
the questionnaire items.
Construct reliability measure the degree to which the
items were free from random error to produce consistent
results (Sekaran, 2003).
Cronbachs alpha - used in testing consistency reliability
between items that is used for multipoint-scaled items
Likert scale. .
Cronbach alpha value of 0.5 and higher is considered
sufficient in determining reliability of the item (Sekaran,
2003).
21

DATA ANALYSIS: RELIABILITY

The results indicates all factor loadings for the study


constructs are found significant and surpassed the 0.5
guideline recommended by Hair et al., (2006).

All constructs variance extracted estimate surpassed the


50 per cent. The composite reliability values are higher
than 0.6 ranging from 0.82 to 0.94.

From the results (Table 11) , the constructs have


adequate reliability

22

DATA ANALYSIS: VALIDITY


Each constructs tested for discriminant validity

Discriminant validity measures whether one variable is


internally correlated, unique and distinct from other
variables (Tong, 2007).
A correlation value of 0.5 shows distinct, whereas a
correlation value of 0.8 and higher shows a lower
distinct.
The results (Table 12) all constructs are less than
0.8 indicating the presence of discriminant validity

23

SUMMARY OF HYPOTHESES TESTING


Hypot
heses

Results

H1

Supported

H2

Supported

H3

Supported

H4

Supported

H5

Supported

H6

H7

Past
Empirical Studies

Venkatesh et al., (2003) ; Louho et al., (2006) ; Al-Qeisi


(2009)
Helaiel, (2009); Rosen, (2004); Venkatesh et al., (2003) ;
Park et al., (2007) ; Carlsson et al., (2006) ; Gefen and
Straud, (2000)
Karahanna and Straub, (1999); Rosen, (2004); Venkatesh
et al., (2003) ; Wolin and Korgaonkar, (2003) ; Singh et al.,
(2010) ; Amin et al., (2008)
Hung et al., (2006) ; Venkatesh et al., (2003) ; Wu et al.,
(2007) ; Joshua and Koshy, (2011)
Delone and Mclean, (2003); Nelson et al., (2005) ; Wang
(2008) ; Lee et al., (2007) ; Lin, (2006)
None.

Not
supported
Not
Halonen and Martikainen (2011) found service quality of
supported the system is not significant in the use of an IS system

24

SUMMARY OF HYPOTHESES TESTING (cont.)


Hypot
heses

Results

Supported
H5a
Supported
H6a
Supported
H7a

H1a

H2a

Not
Supported
Not
Supported

Past
Empirical Studies

Wixom and Todd (2005) ; Cronin et al., (1992); Cheung


and Lee, (2005) ; Kim et al., (2009) ; Liu et al., (2000) ;
Cora K.L. (2009)
Wixom and Todd (2005) ; Cronin et al., (1992); Cheung
and Lee, (2005) ; Kim et al., (2009) ; Liu et al., (2000) ;
Cora K.L. (2009)
Wixom and Todd (2005) ; Cronin et al., (1992); Cheung
and Lee, (2005) ; Kim et al., (2009) ; Liu et al., (2000) ;
Cora K.L. (2009)
Rosen A., (2004) - found PIIT did not have a moderator
role between PE and behaviour intentions
Rosen A., (2004) - found PIIT did not have a moderator
role between EE and behaviour intentions

25

SUMMARY OF HYPOTHESES TESTING (cont.)


Hypoth
eses

H2b

H3a

H4a

Results

Past
Empirical Studies

Not
None.
Supported One possible explanation is that users prior
experience with similar e-auctions e.g. Lelong
and eBay not affected the perception of the IS
ease of use
Not
None.
Supported Possible explanation is that users past
experience not affected the effects of peer
pressure of using IS
None.
Users prior experience not affected the
Not
perception of availability of infrastructure/facilities
Supported supporting the system.

26

SUMMARY
The user behavior factors (performance expectancy ;
effort expectancy; social influence & facilitating
conditions) significantly related to eBidding adoption,
including IQ.
System quality and service quality are proven to be not
significantly associated with eBidding adoption
Experience and personal innovativeness in IT (PIIT)
are confirmed not to exhibit moderating effects on
relationships between user factors and eBidding adoption
Satisfaction is found to have a full mediating effect on
system quality and adoption and partial mediating effect
on information quality with adoption and service quality
with adoption of eBidding
27

POLICY AND PRACTICAL IMPLICATIONS


Improving e-procurement auctions policy with better
understanding user behaviour to incorporate PE, EE, SI, FC
and users satisfaction factors in policy planning.
Program managers and the early adopters of the eBidding
should communicate the usefulness to peers about the
benefits of using the eBidding
Support eBidding use through review of policy and circulars
relevant to the eBidding system e.g. mandatory use
eBidding is reliable and productive system, can be improved
by considering other attributes, such as,
product
specifiability, value and price.
28

IMPLICATIONS FOR THEORY


Combination of determinants from various disciplines
Validation of UTAUT theory in G2B reverse auctions
setting
Provide empirical support that the eBidding adoption is
influenced by system factors mediated by user
satisfactions.
In terms of methodological implications,
recommended for model testings.

SEM

is

There are various benefits of SEM over other multivariate


techniques. SEM can provide estimates of error variance
parameters, while multivariate techniques are not able to
correct measurement error.
29

LIMITATIONS OF THE STUDY


Research done only in the Putrajaya, Klang Valley and
Seremban
Sample size as most common SEM estimation
procedure is MLE with minimum sample size of 150 200 cases (Hair et al, 2006)
A cross sectional study but not a longitudinal study

30

RECOMMENDATIONS
FOR FUTURE RESEARCH

Studies in other areas in the Peninsular and Sabah


Sarawak.

Further study with the inclusion of the suppliers

Future studies in a longitudinal context

Incorporate determinants from reverse auctions


attributes (i.e. value, product specifications,
competitiveness)

31

THANK YOU

32

Notes

33

Literature Review

Literature
Global eG
Developmen
t
Malaysias
eGovernme
nt
ePerolehan
Online
Reverse
Auctions
Overview of
eBidding
Overview of
Established
theories of
User
Acceptance
TAM1,
Diffusion of
Innovation
UTAUT

Theoretical and
Empirical
Studies

User
Factors->
Behavioral
Intention
System
Quality
Factors>
Behavioral
Intention
Personal
Innovativene
ss on IT>
Behavioral
Intention
Models
Compariso
ns

Theoretical and
Empirical
Studies

User &
System
Quality
Factors>
Adoption
Behavior
Mediator role
of User
Satisfaction
Moderator
Factors on
the User
Factors ->
Adoption
Behavior

Problems
Statement
& Study
Objectives

The Relevant Theories


The study and the model proposed will be based on:

Unified Theory of Acceptance and Use of Technology


(UTAUT) (Venkatesh et al., 2003)
An Information System (IS) framework for assessing an
individuals intention to use an IS technology
Information System Success Model (Delone and Mclean,
2003)
A system success can be evaluated in terms of information,
system, and service quality; these characteristics affect the
subsequent use or intention to use and user satisfaction
Personal Innovativeness in Information Technology
(Agarwal and Prasad, 1998)
Domain-specific individual trait which reflects the willingness of a
person to try out a new information technology

Theoretical Models
Unified Theory of Acceptance and
Use of Technology (UTAUT)
(Venkatesh et al., 2003)

IS Updated Success Model


(Delone and Mclean, 2003)

Moderator Model of Personal


Innovativeness in Information
Technology (PIIT)
(Agarwal & Prasad, 1998)

Construct

No

1.

2.

Performance Expectancy
(PE)
PE1
PE2
PE3
PE4

4.

Composite
Reliability

Cronbach's
Alpha

.75

.92

.929

.79

.94

.932

.7

.9

.908

.888
.949
.831
.798

Effort Expectancy (EE)


EE4
EE5
EE6
EE7

3.

Factor
loading

Average
Variance
Extracted
(AVE)

.948
.974
.897
.703

Social Influence (SI)


SI 1
SI 3
SI 5
SI 7
Facilitating Conditions
(FC)
FC2
FC 4
FC 5
FC 7

.873
.879
.686
.888

.886
.787
.763
.733
.95

.66

.88

3
7

Construct

No
5.

8.

9.

.822
.803
.735
.957

.7

.9

.72

.91

.891

.568
.906
.899
.969
.878

Service Quality (SVQ)


SVQ1
SVQ3
SVQ5
SVQ6
Actual Use (USE)
USE1
USE2
USE3
USE 4
Satisfaction
Satisfaction1
Satisfaction2
Satisfaction3
Satisfaction4

Cronbach's
Alpha
.891

System Quality (SYQ)


SYQ3
SYQ5
SYQ6
SYQ7

7.

Composite
Reliability

Information Quality (IQ)

IQ2
IQ4
IQ5
IQ6
6.

Factor
loading

Average
Variance
Extracted
(AVE)

.65

.88

.67

.89

.892

.53

.82

.818

.803
.883
.78
.754
.756
.934
.911
.638
.76
.66
.69
.80

3
8

DATA ANALYSIS: VALIDITY


Variable
PE (X1)

X1

X2

X3

X4

X5

X6

X7

X8

X9

Adoption/Use (X2)

.660**

EE (X3)

.643**

.771**

SI (X4)

.462**

.809** .605**

FC (X5)

.129

.406** .242** .622**

SQ (X6)

.683**

.542** .425** .379**

.039

IQ (X7)

.423**

.698** .513** .798** .785** .328**

SVQ (X8)

.437**

.721** .543** .723** .561** .358** .675**

Satisfaction (X9)

.710**

.815** .696** .570** .191* .557** .482**

.522**

1
1

1
1

**. Correlation is significant at the 0.01 level (2-tailed).


*. Correlation is significant at the 0.05 level (2-tailed).

3
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