User Satisfaction of E-Government Procurement
Service in Developing Country : Indonesian
Government
Gumala Warman
University of Groningen, The Netherlands
Faculty of Economics & Business, Department of Business & ICT
November 2010
Supervisor:
Dr. D. Seo
Co- assessor:
Prof. Dr. E.W. Berghout
Faculty of Economics & Business
Department of Business & ICT
Abstract
1. Introduction
The transformation of the government towards electronic goverment in delivering service has been gradually increasing worldwide. The advancement of business and e-commerce technologies is the source of this transformation (Wimmer et al, 2001). Unfortunately, the wide gap prevails between developing and developed countries. Around 95 % of e-commerce took place in developed countries while the developing countries accounted for the rest (E-commerce and Development Report, 2003). In recent outlook of UNCTAD (Information economy report, 2009), the proportion of businesses using internet is still highly available for most developed countries in which Europe and North america, Asia, Latin America and Africa accounted for around 60% , 25%, 18 % and 8% respectively.
In e-business, online procurement is the most widely used application for companies (Davila et al, 2003). An e-procurement system enables companies to automate transaction with multiple suppliers in sourcing goods or services such as information catalogue, order placement and payment. Business sectors have recognized that this system providing business-to-business transaction reduces cycle times and increase productivity (Gunasekaran and Ngai, 2008). E-procurement system also can be applied in the public sector to reduce administrative matters (Moon, 2005). This application serves government to arrange public tender online. The government agencies interact with businesses in acquiring goods and services. Eventhough there are inadequacy of statistical data on the e-procurement market worldwide, there is general statement that government consumption plays a major role in a national economy (E-commerce and Development Report, 2004).
Furthermore, service online allows time flexibility, cost saving and reduced physical effort (Donthu & Garcia, 1999). In term of e-government procurement, users (government agencies as well as vendors) don’t need to go to government offices to initiate, conduct and conclude transaction. Vendors are easier to choose the kind of public tender they need to participate and to provide information of product or service they want to offer, or just to see the announcement. If those benefits can be acquired properly, it results in satisfaction. Further, satisfaction will be increased once users feel more convenient in using and experiencing service online (Szymanski & Hise, 2000).
and disparity of technological capabilities between vendors. These constraints lead to low competition in e-government procurement. If vendors are not interested to use e-government procurement service, both most government agencies and vendors will keep implementing procurement in conventional way. Therefore, vendors perception and satisfaction is very important to attract and maintain them to participate in e-government procurement. We took the case of Indonesian public sector to explore e-procurement development in developing country. There are several reasons why e-government procurement is urgent to be implemented in this country. First, procurement activities in Indonesian government have been the source of corruption, bid collusion and abuse of public resources. Second, geographical boundaries make vendors difficult to participate in highly competitive environment.
In fact, there is a little attention to the role of vendor perception and their experience on service convenience and performance failures of e-government procurement service. Therefore, we address two research questions:
1. How important does service convenience determine the satisfaction of e-procurement users (vendors) ?
2. How important does performance failure make vendors dissatisfied in e-government procurement service ?
To answer the above questions, we assess the dimension of those factors that influence vendors satisfaction on e-procurement service experience. Our findings contributed to have deeper understanding of designing and maintaining e-government procurement service. The result suggest that e-government procurement service should be focused on the information quality, benefit convenience and transaction convenience. Service developer should take the biggest effort in reducing informational failure and enhancing the benefit, decision and transaction convenience.
who are responsible for e-procurement in public administration instead of vendors as users from business perspective. This paper improves our knowledge to understand the importance of demand-side approach in e-government procurement study. The findings suggest that the theoretical elements such as service convenience and performance failure are the key factors in evaluating the quality of e-government procurement service. User experience on service convenience and performance failure plays a critical role to measure user satisfaction in e-government research.
In the next section, we will first explain literature review in e-government and service marketing. Second, we develop our therotical model and research hypotheses. Third, we present research methodology including data collection, measurement setting and data analysis. Finally, we end up with the discussion of the result and findings, implication, limitation, suggestion and conclusion.
2. Literature Review
2.1 Introduction
To study user satisfaction on the quality of e-government procurement service, we need to review the relevant literature regarding e-government and service marketing. In this section, we will discuss the theory regarding e-government adoption and service convenience. First, we will review two types of e-government relationship (government to citizen and government to business) that are mostly salient in e-government literature. Second, we will review the theory of service convenience in the marketing literature.
2.2 Government-to-Citizen (G2C)
In early literature, most researchers study e-government adoption in government perspective. Seifert & Petersen (2002) believed that G2C initiative would increase efficiency, new service, citizen participation and national information infrastructure. Those benefits serve as factors that influence government to adopt and implement the initiative.
information and service through internet. In addition, Olphert and Damodaran (2007) suggest that government should involve users in designing electronic service delivery to citizen. They believed that citizen participation and its engagement with government in decision making process that fulfill citizen’s needs would improve the successful development of e-government. In the subsequent literature, e-government adoption in citizen’s perspective has been studied in various aspects. Laskowski (2000) stated that the government efforts to provide information on electronic document has changed the way of citizen in accessing government information. He found empirically that most citizens acknowledged the benefit of government information online. They preferred to access government information online due to ease of use and accuracy. Moreover, Hung et al (2006) examined the determinant of citizen acceptance towards e-government services. The perceived usefulness, ease of use, trust, compatibility, perceived risk, social influence, individual knowledge and access availability have significant effect on user intention towards adoption. On the other hand, Dijk et al (2006) investigated that socio-demographic factors (age, education, gender), social influence and user attitude have not strong effect on actual use while the access availability, the knowledge of this availability, channel use preference, user ability and experience are the most important determinants.
In the existing literature, most researchers paid little attention to specifically study the development of e-government quality in developing countries. Mirchandani et al (2008) studied the citizens’ perception in Thailand and Indonesia to assess the importance of e-government services. Altough they examined empirically the influence of the success features of e-government services (e.g., quality, convenience) on the importance of adoption, they didn’t validate the individual dimensions. Alshawi & Alalwany (2009) evaluate e-government services in developing countries from citizen’s perspective by using criteria such as technical issues (performance and accessibility), economic issues (cost and time) and social issues (trust, openness, perceived usefulness and perceived ease of use). However, they didn’t assess comprehensive validation on citizen’s satisfaction. Most studies only evaluate the usage rates and citizen’s attitude towards e-government in developing countries (Essers & Ettedgui, 2003; Heeks,2006) but don’t fully explain the citizen’s perception on e-government service quality.
2.3 Government-to-Business (G2B)
A number of studies discussing Government-to-Business (G2B) relationship in e-government studies have been conducted within the last decade. Most studies particularly paid attention to the perceived benefit of G2B initiative (Seifert & Petersen, 2002; Tung & Rieck, 2005; Panayiotou et al, 2003). They defined that government is potential to reap the advantage in which there will be cost reduction, time savings and increased efficiency. Useful information in easier access, obvious report, the efficient forms, easy transactions; and clear rules and procedures are several efforts to achieve those benefits (Awan, 2007). Those expected benefits are the most important factors influencing government to adopt G2B e-services (Tung & Rieck, 2005, Obeidat & Abu-Shanab, 2010).
Among various services offered in G2B initiative, e-procurement is the most widely used application in many countries (Alsaghier et al, 2009). In the government sector, it is very likely that procurement lead to corruption, collusion, abuse of public resource (Liao et al, 2003). Because of those critical issues, most researchers then specifically focused on e-procurement studies (Liao et al, 2002; Panayiotou et al, 2004; Karjalainen & Kemppainen, 2008; Gunasekaran, 2008; Aboelmaged, 2009). Panayiotou et al (2004) identifies cost reduction, time and resource savings, process improvement and transparency in the procurement process as the perceived benefit of the e-procurement initiative.
The success factor in implementing electronic procurement are the strategic solution in managing relationship between government agencies and suppliers including how to maintain suppliers’ motivation (Kumar & Peng, 2006). Electronic public procurement should provide the simplified process, the electronic support of the activities, continous improvement and technical knowledge of employees (Panayiotou et al, 2004). Gunasekaran (2008) identified several key factors to implement e-procurement successfully such as financial support, management commitment, appropriate security systems, interoperability with current communication systems, recognition of suppliers’ preference and sufficient training and education to encourage the application. On the other hand, the role of internal service in delivering e-procurement system is the most critical success factor in the adoption (Croom & Jones, 2007). Gunasekaran (2008) identifies lack of suppliers’ preference, lack of financial support, lack of interoperability and standards, lack of management support, and lack of data security as the main barriers to adopt the successful e-procurement.
There are several studies evaluating and assessing the quality of G2B service in term of demand side (Zhao et al, 2007; Gotoh, 2008; Awan, 2007). Awan (2007) evaluates the quality of G2B e-services by assessing usability, service offered, communication, security and content of G2B websites. He argued that most businesses only accessed service but didn’t conduct transaction due to security concern. He also suggests the relationship management in business community is the most important thing to improve the quality of G2B e-services. Zhao et al (2007) measure the quality by using instruments such as information content, web navigation, interactive service, transaction service, and intelligent service. They found that users had satisfactory experience in evaluating the type of services that achieve those capacity measures. Gotoh (2008) also found that user experience and service quality affect significantly user satisfaction.
In term of business perspective, there are only a few empirical studies in literature addressing e-public procurement. Researchers have surveyed business sectors in evaluating various types of G2B e-services in which e-procurement application is one of them (for example, see Wauters et al, 2007; Essers & Ettedgui 2003). Essers & Ettedgui (2003) conducted survey in which IT managers at companies of 7 countries (Finland, France, Germany, Greece, Italy, Spain and the UK) were asked about their usage, preference and perception of government services online based on types of service they used. This study selected several types of service for business : payment of social contribution for employees, corporate tax, VAT, registration of a new company, submission of statistical data, customs declaration, environmental permits and public procurement. However, they didn’t specifically conduct single study on e-procurement service.
examining the demand side of e-public procurement services, particularly in developing countries.
2. 4 Service Convenience
Convenience is an important aspect to satisfy and maintain either consumers or users in purchasing and using the service. In marketing literature, researchers began to study the concept of convenience in term of consumer products (Copeland, 1923; Brown, 1989; Murphy and Enis 1986). Copeland (1923) defines that convenience goods are the distributed products requiring minimal time and effort to purchase. Then, subsequent literature identified the convenience as attribute of a product (Etgar 1978). Brown (1989) argued that convenience should be seen as a multidimensional construct and then proposed the dimension of convenience – time, place, acquisition, use and execution- for marketing consumer products.
Brown (1990) applied the dimension of product convenience into service marketing. According to him, the concept of convenience he had proposed can be used to examine the convenience of services. In time dimension, service is provided at a time that is more convenient for the consumer. In place dimension, service is provided in a place that is more convenient for the consumer. In acquisition dimension, service provider should make the consumer easier to purchase the service. In use dimension, service should be made more convenient for the consumer to use. In execution dimension, service provider should have someone to provide the service conveniently.
Later on, the importance of convenience in service marketing is salient in the literature. In service industry, convenience is one of the dimensions to evaluate the service quality besides perceived fairness, empathy, responsiveness and reliability (Andaleeb & Basu, 1994). Convenience perceived by customers when they experience the service, will affect their reaction, perception and satisfaction. Customer response over waiting time is considered as indicator to measure convenience (Hui, Thakor, & Gill, 1998), while Taylor (1994) believed that the control of service provider in managing waiting time can influence the customer reaction.
and repurchase behavior (Szymanski & Hise, 2000; Berry et al, 2002; Seiders et al, 2005; Seiders et al, 2007). Keaveney (1995) argued that inconvenience would lead consumers to switch, whereas Rust et al (2004) found that convenience have direct impact on customer perception and indirect impact on marketing investment. The transactional convenience in shopping time also determined the consumers’ store choice (Messinger & Narasimhan, 1997).
Berry, Seiders, and Grewal (2002) developed a conceptual model of service convenience based on how consumers’ time and effort perceptions in buying or using a service. They identified decision, access, transaction, benefit and post-benefit as stage of service experience in convenience evaluation. In later research, Seiders, Voss, Grewal, & Godfrey (2007) examine empirically the relationship between each dimension of service convenience and its antecedents. Each constructs of convenience are related to such antecedents as shopping enjoyment, competitive intensity, product category, number of interaction and return experience.
There are a few studies focusing on the importance of convenience in online service. Donthu & Garcia (1999) found that the consumers tend to shop online due to convenience. They argued that online consumers perceive reduction of time spent shopping, flexibility in the timing for shopping, saving physical efforts of visiting stores and avoiding complicated things. Besides the site design and financial security, Szymanski & Hise (2000) identified convenience as the factor that influence online costumers to purchase. They found that browsing and obtaining product or service online without travelling and visiting the stores manifested more positive perception of convenience and increased the satisfaction of online shopping. Although
Szymanski & Hise (2000) has examined consumer perceptions and satisfaction in online convenience, but they didn’t propose and validate the individual dimensions of service convenience constructs. Seiders et al (2007) has conducted the validation of the five distinct service convenience dimensions. However, they didn’t apply those instruments in the context of online services. Therefore, to fully understand the user satisfaction in online service, we need to measure each dimension of service convenience constructs conceptualized and being salient in the past literature.
consumers were dissatisfied with recovery efforts of service failure. This failing exerted negative impact on consumer behaviors.
2. 5 Conclusion
In G2C literature, most researchers have discussed various aspect of e-government in term of supply side as well as demand side. However, there is a lack of research addressing more deeply the quality of government services in developing countries. In G2B literature, e-government studies from e-government perspective (decision maker) are much more dominant than e-government studies from business perspective (users). Although there are several studies assessing the quality of G2B e-services from users’ perspective (Zhao et al, 2007; Gotoh, 2008; Awan, 2007, Wauters et al, 2007; Essers & Ettedgui 2003), but those literature didn’t address specifically on the quality of e-public procurement service. Specific studies on e-government procurement have been merely conducted in the view of government of advanced countries (Wirtz et al, 2010; Croom & Jones, 2007). In addition, e-government success tend to just look at generally the quality of performance instead of focusing on performance failure. In marketing literature, convenience is one of the instruments in assessing service quality (Andaleeb & Basu, 1994). Several researchs took into account that the convenience and its dimension strongly influence the users’s perception and satisfaction (Szymanski & Hise, 2000; Seiders et al, 2005; Seiders et al, 2007). The failure of online service and its recovery have also been investigated in influencing consumer behaviors and satisfaction (Holloway & Beatty, 2003). However, no study examines the relationship between the dimensions of service convenience, failure and user satisfaction in e-government procurement service, especially in developing countries. To fill a lack of studies in the literature that we have reviewed, it is imperative to investigate the relationship between each dimension of convenience, failure and user satisfaction in e-public procurement service of Indonesian government.
3.
The Research Model and Hypotheses
quality of e-government service assessed by user experience affect user satisfaction (Gotoh, 2008; Zhao et al, 2007). To assess user satisfaction, Gotoh (2008) proposed quality construct (system, process and service) while Zhao et al (2007) measured the capacity in term of content information, web navigation, interactive service, transactional service and integration service. In marketing literature, it shows the distinctive relationship between each dimension of convenience in service experience and costumer satisfaction (Seider et al, 2007). Szymanski & Hise (2000) also presented the positive relationship between convenience and the satisfaction of online consumers.
In this paper, we apply a multidimensional construct of service convenience, having evidenced as an empirically validated framework (Seider et al, 2007), to assess e-procurement users satisfaction. Service convenience construct consists of five dimension - decision, access, transaction, benefit and post benefit. Our study investigates e-government procurement user experience on each dimension of service convenience. We propose that e-government procurement users perceive time and effort costs associated with deciding to use the service (decision convenience), initiating service delivery (access convenience), experiencing the core benefit of the offering (benefit convenience), conducting the transaction (transaction convenience), and reestablishing subsequent contact with the service provider (post-benefit convenience).
We examines the relationship between each dimension of convenience and user satisfaction through expectancy-disconfirmation theory approach. The theory of disconfirmation has been used to explain consumer satisfaction (Oliver, 1980). Based on this theory, consumer satisfaction on service quality results from how well the user experience in the actual service performance match their expectations. If the actual performance perceived by user experience exceeds their expectations, positive disconfirmation will occur and then consumer satisfactions will increase. On the contrary, negative disconfirmation occurs when the actual performance perceived by user experience is below their expectations.
service (Seiders et al, 2007; Tan & Benbasat, 2009). The more obvious the information direction or instruction that is available on the portal of e-procurement, the higher convenience threshold of users in the decision process.
Decision convenience has been examined theoretically as well as empirically in the marketing literature (Berry et al, 2002; Seiders et al, 2007) showing that there is positive relationship between decision convenience and consumer satisfaction. They also found that decision convenience influence positively consumer behavior such as repurchase behavior and intention. Using positive disconfirmation theory, consumer satisfaction will increase if the actual performance in their experience exceeds their expectation. The higher the user convenience in decision process, the actual performance perceived by users in their experience will be greater in matching their initial expectations. Therefore, we hypotesize that
H1: Users’ experience of e-procurement on decision convenience is positively related to positive disconfirmation.
In access convenience, consumers perceive time and effort cost when they require actions to initiate service delivery (Berry et al, 2002). Service delivery capacity such as physical location, online availability and operating hours determine the convenience at the time the users access the service. In online perspective, access associates with the availability of device (e.g., computer and laptop) and internet connection (e.g., LAN, wireless network, fiber optic). Users must have those availibility to initiate using online service. In the context of e-procurement, users expend the time and effort to gain access to the online service provided on the portal. The accessibility is the importance of service delivery. Since this service is available online, the service provider (SePP as provider of e-government procurement service) should take into account how well the portal can be accessed by users. The availability of information infrastructure and the capability of information technology lead to higher accessibility and user participation (Seifert & Petersen, 2002). Infrastucture (skills, hardware, network and software) and availability in term of time and place determine the user satisfaction in e-government service (Verdegem and Verleye, 2009). Ease of access and speed delivery will reduce the time and effort that users spend in accessing the service.
in accessing the service. Thus, the higher the user convenience in accessibility, the actual performance of e-procurement service comparing to user expectations will be greater. So, access convenience can determine the positive disconfirmation of e-procurement users. Hence, we hypothesize that
H2: Users’ experience of e-procurement on access convenience is positively related to positive disconfirmation.
In transaction convenience, consumers expend the time and effort at the time they conduct and finalize transaction (Berry et al, 2002). Transaction convenience is determined by the action of consumers that they have to do in keeping their right to use the service. Conducting transaction online deals with the payment in which they need to do some procedure (e.g., filling online form) and fulfill the requirement (e.g., bank account, credit card ) and security mechanism (e.g., authentication). In the context of e-government, transaction is a stage where there are two-way communication through website between government and either citizens or business (Layne and Lee, 2001). Either citizen or business interact with government online (e.g., filling out form, downloading form, uploading form) and government responds citizen or business (e.g., providing confirmations, receipts, approving request, uploading announcement)
In e-procurement service, users take time and effort to complete the transaction. For example, vendors have to conduct the transaction phase in providing their goods or services to government agencies. Government give announcement for procedure and requirement (e.g, e-announcement). Vendors need to follow the procedure (e.g, downloading form, filling electronic form). Long waiting time and much effort that vendors must take lead to transaction inconvenience. So, the simplified process in transaction is very important. The lower the effort and the faster the waiting time, the higher the transaction convenience will be. In addition, the availability of multiple options or alternatives in service provider can also enhance users convenience in concluding their transactions.
experience on transaction convenience. The higher the convenience on transaction process, the greater the positive disconfirmation will be. Therefore, we hypothesize that
H3: Users’ experience of e-procurement on transaction convenience is positively related to positive disconfirmation.
In benefit convenience, consumers perceive the time and effort cost to experience the core benefit of service. For instance, home shoppers tend to purchase books online because of the benefit of online shopping. The benefit is they can search, order, pay and obtain the book easily in online store so that they don’t need to leave their home. When they take long time and much effort to acquire the benefit (e.g., they take a lot of time and effort in searching, paying, ordering or obtaining the book), it causes the inconvenience to them in experiencing the benefit. In term of e-government procurement service, the vendors tend to use the service in order to participate in government procurement. Both government and vendors has recognized the benefit of e-procurement service (Panayiotou et al, 2004; Tung and Rieck, 2005; Badri & Alshare, 2008). However, service provider should make sure that users can acquire and experience the benefit which they really desire in appropriate time and effort. The benefit of e-procurement service such as efficiency and transparency must be properly realized by users.
In service marketing literature, there is positive relationship between benefit convenience and consumers satisfaction (Seiders et al, 2007). In e-procurement service, users satisfaction can be achieved once the user experience meets their expectations. Thus, positive disconfirmation can be determined by benefit convenience. The greater the benefit convenience that users realize in their experience, the higher the positive disconfirmation will be. Therefore, we hypothesize that
H4: Users’ experience of e-procurement on benefit convenience is positively related to positive disconfirmation.
problems or complaining the failure that they encountered. Post-benefit convenience is determined by convenience that users have experienced in the previous stages of service delivery. It can result from the convenience in the process of decision, access, transaction or benefit. Users inconvenience in experiencing the service is identified as service failure. The types of service failure are recognized in term of delivery, website design, helpdesk service, payment and security (Holloway & Beatty, 2003). Service failure causes consumer reactions to complain in the post-benefit phase. In this phase, recovery efforts need to be taken by service provider in order to handle consumer reactions over service failure. The ability of service provider in managing service recovery is the important way to prevent post-benefit inconvenience. If users can perceive minimal time and effort in recovery, post-benefit convenience will be increased (Berry et al, 2002). The availibility of service feature allowing users to track or retrieve every recorded transaction or any recorded process they conducted can reduce the complain over service failure (Tan et al, 2010). Thus, tracking also can increase post-benefit convenience.
Post-benefit convenience also has positive influence on customer satisfaction (Seiders et al, 2007). User convenience in post-benefit stage determine positive disconfirmation. While e-procurement users realize that their experience in post-benefit convenience fulfill their intial expectation, it will result in positive disconfirmation. Therefore, we hypothesize that
H5: Users’ experience of e-procurement on post-benefit convenience is positively related to positive disconfirmation
DeLone and McLean (2003) proposed a framework for measuring e-commerce system success. The framework presents how quality constructs (system quality, information quality and service quality) influence use, user satisfaction and net benefit. System quality relates to the desired characteristics of an e-commerce system such as usability, reliability, adaptability and response time (e.g., download time). Information quality relates to the e-commerce content issue such as completeness, ease of understanding, personalization, relevance and security. Service quality relates to the overall support delivered by the service provider such as assurance, emphaty and responsiveness
quality, system quality and service quality is used to measure the success of e-government service. On the basis of the preceeding theory, we develop and conceptualize the failure constructs in measuring user dissatisfaction of e-government procurement. We adapted two dimension of quality construct (information and system) from DeLone and McLean's IS success model and changed them into the dimension of failure construct. We add functional failure as one additional dimension. Thus, we identify informational failure, system failure and functional failure as formative construct that leads to negative disconfirmation. We argue that the failure in the actual performance can unmatch users’ initial expectation.
Informational failure occurs when e-procurement users encounter inaccurate information and inappropriate content provided in experiencing the service. They are unable to find the information they desire in the service. Unclear direction and inadequate information fail users to acquire the benefit of service.
Informational failure will cause negative disconfirmation from users. The greater the informational failure, the higher the negative disconfirmation will be. Therefore, we propose that
H6: Informational failure is positively related to negative disconfirmation
Functional failure occurs when the function of service can’t support the core benefit of the service (e.g., time saving, cost reduction, transparency). One of the modul or features in e-government procurement website is unable to provide the function it offers. For example, the function in the modul of e-catalog doesn’t work properly in ordering product or services offered.
Functional failure leads to dissatisfied users in which their expectations are not fulfilled. The more the functional failure, the higher the negative disconfirmation occurs. Therefore, we hypothesize that
H7: Functional failure is positively related to negative disconfirmation
System failure experience leads to dissatisfied users who unmatch their expectation. The greater the system failure, the higher the negative disconfirmation occurs. Therefore, we hypothesize that
H8: System failure is positively related to negative disconfirmation
According to disconfirmation theory explained before, if the actual service performance outperforms their expectations (positive disconfirmation), e-procurement users will be satisfied. The greater the positive disconfirmation, the higher the users satisfaction will be. Thus, we propose that
H9: Positive disconfirmation is positively related to e-procurement users’ satisfaction
If the actual service performance based on experience doesn’t fulfill their initial expectations (negative disconfirmation), e-procurement users will be dissatisfied. The greater the negative disconfirmation, the lower the users satisfaction will be.
4. Research
Methodology
To test our hypotheses, we conducted a quantitative study using survey methodology. We will explain how data was collected and what instrument we used.
4.1 Data
Collection
The data used to test the hypotheses were obtained from experienced users of e-procurement service in Indonesian government. This e-e-procurement service called SePP (System of Electronic Government Procurement) is developed, provided and managed by Ministry of Communication and Information Technology. SePP is a system featuring module application of procurement activities in government agencies (e.g, announcement, e-tendering, e-purchasing, e-selection). All vendors and government institution across Indonesia, central as well as local government, can utilize this service once they are registered in the system. Database management system for government agencies and vendors are integrated in single service.
In our research addressing business perspective, we only surveyed data from vendors. In the field survey, we distributed the questionnaires to respondents by both delivering paper based form and emailing electronic form. First, we distributed 100 paper based questionnaire forms to vendors in helpdesk office of SePP. However, it only resulted in a sample of 40 responses. Second, we also emailed directly online form to 40 vendors. We only obtained 11 responses. Then, we skipped 2 respondents because of unsatisfactory responses. Comprehensively, we took 49 samples to be analyzed in Structural Equation Modelling (SEM) techniques. Detailed descriptive statistics relating to the respondents' characteristics are shown in Table 1.
4.2 Instrument
Assessment
Before measuring instrument, respondents were first asked about vendor information such as annual income, age, location, the number of employee and usage of SePP service. Then, the respondents were instructed to assess the instrument in a five-point likert scale with 1 = strongly disagree, 2 = disagree, 3 =neutral, 4 = agree, 5 = strongly agree. To assess
disconfirmation and satisfaction. Each dimension of those constructs generates three measurement items. The measurement items are mostly selected from prior studies for ensuring the content validity. First, we measured the items for each dimension of service convenience and user satisfaction which were adapted from prior study in marketing literature (Seider et al, 2007). Second, we developed failure construct in which two of dimensions (information and system failure) are adapted and modified from DeLone & McLean (2003). Besides DeLone & McLean (2003), the measurement items for these dimensions were also developed from Wang (2008). We added one dimension (functional failure) and its measurement items. Third, we developed the measurement items for disconfirmation constructs (positive and negative) from Oliver (1980). For all measurement items, we fit the wording in term of e-procurement service. The list of measurement items for the whole constructs is displayed in Appendix A.
Table 1 : Descriptive statistics of respondents (vendors as e-procurement users) Total (Sample N = 49) Number of employees Less than 20 24 48.98% 20-50 13 26.53% 51-100 7 14.29% More than 100 5 10.20% Age of Vendor < 1 years 2 4.08% 1-5 years 9 18.37% 6-10 years 15 30.61% > 10 years 23 46.94% Location DKI Jakarta 33 67.35% Jawa Barat 13 26.53% Surabaya 2 4.08% Lampung 1 2.04% Product/Service Office supplies 3 6.12%
IT, Computer & Electronics 19 38.77%
Media & Advertisement 5 10.20%
6-10 times 9 18.37% > 10 times 2 4.08% Not Mentioned 8 16.33% Annual Income 10 - 50 Million 3 6.12% 50 - 100 Million 2 4.08% 100 - 500 million 12 24.49% 500 million -1 billion 14 28.57% > 1 Billion 15 30.61% Not Mentioned 3 6.12% Role/Position Manager 27 55.10% Employee 19 38.78% Not Mentioned 3 6.12%
4.3 Data
Analysis
To test and validate both the measurement and structural properties of our research model, we ran the software of SmartPLS 2.0 which is freely downloadable and installed from the website (http://www.smartpls.de) once we have registered. The software provide Partial Least Squares (PLS) analysis to facilitate the modeling of formative constructs (Chin, 1995).
In the test of measurement model, we present internal consistency, inter-construct correlation and item reliability for determining convergent and discriminant validity (Fornell & Larcker, 1981). First, we calculated composite reliability to measure the internal consistency. Composite reliability is the amount of scale score variance that is accounted for by all underlying factors (Brunner and Sub, 2005). Second, the Average Variance Extracted (AVE) for each latent construct were computed for demonstrating convergent validity. Average Variance Extracted was proposed by Fornell and Larker (1981) as a measure (percentage) of the variance of the construct which is explained by an individual item. As recommended by Fornell and Larcker (1981), each latent construct has composite reliability higher than the 0.70 thresholds and an AVE higher than the 0.50 threshold (Table 2).
that convergent and discriminant validity hold for each latent construct in which its square root of AVE load above 0.50. Lastly, the measurement of item reliability is shown in Appendix A demonstrating means, standar deviation and factor loading in individual items. To strengthen the result, these measures dropped some low loading items .
Table 2: Internal Consistency of Latent Constructs (Sample N = 49)
Construct AVE (>0.50) Composite Reliability (>0.70)
Experienced Decision Convenience 0,577913 0,725047
Experienced Acessed Convenience 0,745432 0,853539
Experienced Transaction Convenience 0,606579 0,738319
Experienced Benefit Convenience 0,710423 0,829348
Experienced Post-Benefit Convenience 0,611131 0,752685
Experienced Informational Failure 0,531353 0,771806
Experienced System Failure 0,569456 0,711136
Experienced Functional Failure 0,582225 0,802635
Positive Disconfirmation 0,699139 0,822168
Negative Disconfirmation 0,619132 0,764385
Figure 2 : Results of Structural Model Analysis (Users, N= 49)
*** Correlation is significant at the 0.001 level; ** Correlation is significant at the 0.01 level; Correlation is significant at the 0.05 level.
As presented in figure 2, there are nine hypotheses which are supported while we find one hypothesis which has no support. The results show positive and significant relationship
between four dimensions of e-procurement service convenience and positive disconfirmation. In support of hypothesis 1, users experience on decision convenience are significantly positive in relation to positive disconfirmation ( β = 0.130, ρ < 0.001). In support of hypothesis 3, users experience on transaction convenience has both significant and positive impact on positive disconfirmation ( β = 0.127, ρ < 0.001). The relationship between users experience on benefit convenience and positive disconfirmation is significantly positive ( β = 0.196, ρ < 0.001), in support of hypothesis 4. The relationship between users experience on post-benefit convenience is also significantly positive ( β = 0.087, ρ < 0.01) , in support of hypothesis 5. However, the relationship between users experience on access convenience and positive disconfirmation doesn’t support hypothesis 2 in which there is insignificant effect ( β = 0.017, ρ > 0.05).
Meanwhile, there are both positive and significant relationship between user experience on each dimension of failure constructs and negative disconfirmation. Informational failure influences negative disconfirmation positively and significantly ( β = 0.389, ρ < 0.001), supporting hypotheses 6. Functional failure affects negative disconfirmation positively and significantly ( β = 0.083, ρ < 0.05) , supporting hypothesis 7. System failure also puts both positive and significant effect on negative disconfirmation ( β = 0.270, ρ < 0.001) , supporting hypothesis 8. The relationship between positive disconfirmation and e-procurement user satisfaction is significantly positive ( β = 0.656, ρ < 0.001), supporting hypothesis 9 while the opposite result shows negative and significant relationship between negative disconfirmation and e-procurement users satisfaction ( β = - 0.128, ρ < 0.001), supporting hypothesis 10.
All dimensions of service convenience, except access convenience, show similar effect on positive disconfirmation in which benefit convenience has the most significant impact and post-benefit convenience is the lowest. In failure construct, the influence of informational failure on negative disconfirmation is stronger than system failure and functional failure. In relation to e-procurement users satisfaction, the result shows that positive disconfirmation renders much greater influence than negative disconfirmation.
has major portion as the factor affecting negative disconfirmation while service convenience construct has small portion as the factor affecting positive disconfirmation. Finally, positive and negative disconfirmation exhibited almost half portion of factors affecting e-procurement users satisfaction.
4.4 Post-Hoc
Analysis
Overall, there are no hypotheses showing opposite results. Although one of the hypothesized positive relationship yielded no significant effect in which the relationship between access convenience and positive disconfirmation had very low influence on positive disconfirmation but it remained to be found in positive relationship. This hypothesis was very low because users didn’t consider access convenience as the important factor in experiencing SePP service conveniently. Most users who didn’t encounter inconvenience and difficulty in accessing the service could be the reason. This may be because most users (vendors) acquired ease of access while they utilized the service. Thus, they didn’t realize that access convenience influences indirectly their satisfaction.
Although positive disconfirmation has stronger effect than negative disconfirmation on e-procurement user satisfaction, the predictors of positive disconfirmation proposed in the model (decision, access, transaction, benefit and post-benefit convenience) represented much less portion (R2 = 0.197) than the predictors of negative disconfirmation consisting of
informational, system and functional failure (R2= 0.412).
In other hyphoteses, we found strong support in different level of significance ( 0.001, 0.01 and 0.05) as displayed in figure 2. Seven hypotheses (H1, H3, H4, H6, H8, H9, H10) were found to be very significant in highest level (ρ < 0.001) while H5 and H7 were found to be significant in lower level (ρ < 0.01 and ρ < 0.05 respectively). We summarize our findings in Table 3 listing the hypotheses and the support.
Table 3 : List of Hypotheses and Support
Hypothesis Support
H1: Users’ experience of e-procurement on decision convenience is positively related to positive disconfirmation
Supported
H2: Users’ experience of e-procurement on access convenience is positively related to positive disconfirmation
H3: Users’ experience of e-procurement on transaction convenience is positively related to positive disconfirmation
Supported
H4: Users’ experience of e-procurement on benefit convenience is positively related to positive disconfirmation
Supported
H5: Users’ experience of e-procurement on post-benefit convenience is positively related to positive disconfirmation
Supported
H6: Informational failure is positively related to negative disconfirmation
Supported
H7: Functional failure is positively related to negative disconfirmation
Supported
H8: System failure is positively related to negative disconfirmation Supported H9: Positive disconfirmation is positively related to e-procurement
users’ satisfaction
Supported
H10: Negative disconfirmation is negatively related to e- procurement users’ satisfaction
Supported
5. Discussion
and
Conclusion
5.1 Discussion
important. This finding may suggest that vendors have pleasant accessibility and capability of IT infrastructure so that they encounter no problem to reach and access the service. The capability and maintenance of technology infrastructure of SePP provider could also play a role in matters of access .
Second, informational failure proposes the strongest predictive power in exerting negative disconfirmation. However, all dimensions of failure interact with negative disconfirmation to attenuate SePP users’ satisfaction. This finding suggests that SePP users really consider the quality of information in using the service.
Lastly, the result revealed that positive disconfirmation really strongly formed SePP users’ satisfaction as previously demonstrated by Oliver (1980). As displayed in the difference of path coefficient (see Figure 2), the power of positive disconfirmation is much stronger than negative disconfirmation in affecting SePP users’ satisfaction. However, it doesn’t mean that SePP users’ experience on service convenience plays greater role than performance failure in their satisfaction. Service convenience dimensions don’t represent major factors in explaining positive disconfirmation while failure dimensions serve as dominant factors in explaining negative disconfirmation. Overall, the model provides a strong gauge in predicting e-procurement user satisfaction.
5.2 Implication
for
Research
The result implies that unpleasant experience on performance failure in the model has been the important aspect in explaining negative disconfirmation instead of service convenience explaining positive disconfirmation. This study adds failure construct as negative factor in evaluating the quality of e-government service. This research presents e-government procurement users’ experience on failure of service performance attenuating their satisfaction. Finding suggests that performance failure, particularly informational failure, is very critical to evaluate e-government service in future research .
Since there are a higher number of G2B studies addressing supply side instead of demand side, this research tried to fill the gap. It also reduces a lack of studies studying e-government procurement in developing countries in term of business perspective.
5.3 Implication
for
Practice
In developing countries, government is still dealing with early implementation of e-procurement in which encounter low quality and doesn’t provide an fully electronic marketplace yet for all business opportunities (E-commerce and Development Report, 2004). E-procurement service may encounter inconvenience and failure in its performance. Our study adds in-depth understanding of critical aspects in evaluating and redesigning e-government procurement service. It helps practicioners keep and maintain the relationship between goverment agencies and vendors. By recognizing the demand of vendors, decision maker and service developer can design convenient service and recover the failure.
and informational failure are the strongest motivator, service provider should keep enhancing those dimensions over the time.
Finally, access convenience has been revealed as insignificant factor to determine user satisfaction. This finding may suggest that service provider should prioritize other dimensions rather than access convenience. However, skipping access convenience is not necessarily the solution for service provider that could encounter potential risk in the future. Access convenience has been the lowest dimension because vendors may have adequate access to use the service. The matters of access don’t only come from vendors but the problems can occur from website when there is network access problem such as conectivity, server failure, etc. Thus, service provider should always monitor the maintanance of system.
5.4
Limitations and Suggestion for Further Research
This study has several limitations causing a few inaccurate findings. First, the number of sample obtained is only 49. The sample size is quite limited when the population reach over thousands of vendors. Second, the vendors who responded are centered in Jakarta where SePP office takes place. Although small number of data and maldistribution of questionnaires may lead to weak result which couldn’t represent general perception of vendors entirely. Finally, the ignorance of respondents and time consuming may also have influenced their answers in representing perception.
influencing user satisfaction is an important finding. Access convenience was found to be significant dimension in exerting a positive influence on satisfactory output (Seider et al, 2007). Therefore, the examination should be explored in further research to obtain longitudinal evidence.
5.6 Conclusion
In this study, we argue that user satisfaction is the important aspect in evaluating the quality of e-government procurement service. Therefore, we investigated what may influence users satisfaction in using e-government procurement service (SePP). Under the empirical study of user satisfaction on e-government procurement service, we developed a theoretical model adapting, integrating and modifying salient and relevant framework from previous literature. First, we proposed a validated framework of service convenience (Seider et al, 2007). Second, we developed failure construct adapted from DeLone and McLean's IS success model (2003). Third, we presented expectancy-disconfirmation theory (Oliver, 1980). Comprehensively, we developed, adopted and modified those models in term of e-government procurement service. Thus, the model examined the relationship between five dimensions of service convenience (decision, access, transaction, benefit and post-benefit) and positive disconfirmation; three dimensions of failure (information, system and functional) and negative disconfirmation; disconfirmation (positive and negative) and e-procurement users’ satisfaction.
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APPENDIX A
Table of Measurement Items used
Construct Question Mean (Std)
Standardized Factor Loading
User All Items
After Dropping
Items
e-Procurement Decision Convenience (DEC)
DEC-1
Company did not have to spend much too much time in making decisions on transactional matters when utilizing services provided on
the e-government (SePP) 3,98(0,72) 0,562284 Dropped
DEC-2
Company could quickly make up my mind on transcational matters when utilizing services provided on SePP
3,71 (0,74) 0,893045 0,972077
DEC-3 (R)
Company did not find it difficult to decide on transactional matters when utilizing services provided on SePP
3,86 (0,84) 0,50323 0,517903
e-Procurement Access Convenience (ACC)
ACC-1
Company could easily access services provided on SePP
4,31(0,51) 0,566243 0,599729
ACC-2
Company did not have to spend too much time to access services
provided on SePP 3,69 (0,85) 0,891903 0,892273
ACC-3 (R)
Company encountered little difficulty in aceessing services provided on the e-government
3,31 (1,04) -0,52026 Dropped
e-Procurement Transaction Convenience (TRA)
TRA-1 (R)
Company did not have to exert too much effort to utilize services
provided on SePP to complete my governmental transactions 3,8(0,8) 0,268174 Dropped
TRA-2
Company find it easy to utilize services on the e-govt website to
TRA-3
Company was able to accomplish my governmental transactions
quicklyby utilizing services provided on SePP 3,94 (0,72) 0,828626 0,822379
e-Procurement Benefit Convenience (BEN)
BEN-1 (R)
Company was able to obtain the benefits of services provided on SePP
with minimal effort 3,88 (0,66) 0,515491 Dropped
BEN-2
Company could easily extract the benefits from services provided on
SePP 3,9 (0,66) 0,785393 0,800822
BEN-3
Company viewed the time taken to receive the benefits of services on
SePP to be appropriate 3,8 (0,82) 0,843278 0,921709
e-Procurement Post-Benefit Convenience (POS)
POS-1
Company could resolve transactional problems quickly by utilizing
services provided SePP 3,9 (0,72) 0,843054 0,92671 POS-2
Company could easily monitor my governmental transactions via
services provided on SePP 3,84 (0,77) 0,460452 0,529265 POS-3 (R)
Company find it easy to solve transactional problems by utilizing
services provided on SePP 3,83 (0,66) 0,390227 Dropped
e-Procurement's Informational Failure (INF)
INF-1 (R)
Information provided on SePP is unable to help company in obtaining
desired outcomes from governmental transactions 2,65 (0,88) 0,61798 Dropped
INF-2
Information provided on SePP does not improve the outcomes company
can attain from governmental transactions 2,98 (1,01) 0,634922 0,630023 INF-3
Information provided on SePP is not useful to company in getting
preferred outcomes from governmental transactions 2,53 (1,04) 0,870178 0,908479
FUNF-1
Functions provided on SePP do not support company in conducting
governmental transactions 2,33 (0,93) 0,767704 0,75655 FUNF-2 (R)
Functions provided on SePP make it difficult for company to conduct
governmental transactions 2,6 (0,96) 0,582256 Dropped
FUNF-3
Functions provided on SePP are incapable of assisting company in
conducting governmental transaction 2,65 (1,1) 0,838651 0,921129
e-Procurement's System Failure (SYSF)
SYSF-1 (R)
Service content on SePP was not readily accessible to company when
conducting governmental transactions 2,44 (1,05) 0,470581 Dropped
SYSF-2
Service content on SePP did not load properly when conducting
governmental transactions 2,8 (1,1) 0,860222 0,894421 SYSF-3
Service content on SePP was difficult to acess when conducting
governmental transactions 2,56 (0,94) 0,796801 0,773491
Users' Positive Disconfirmation (PDIS)
PDIS-1 (R) SePP is better than what company expected 3,78 (0,84) 0,629544 0,641813
PDIS-2 Company's expectations about SePP are fulfilled 3,53 (0,96) 0,6985 0,686902
PDIS-3 The performance of SePP matches my expectation 3,9 (0,72) 0,92935 0,928933
Users' Negative Disconfirmation (NDIS)
NDIS-1 (R) SePP is worse than what company expected 2,31 (0,93) 0,67204 0,652659
NDIS-3 The performance of SePP is below company's expectations 2,89 (0,92) 0,754057 0,744976
Users' Satisfaction (SAT)
SAT-1 (R) Overall, company is satisfied with SePP 3,94 (0,75) 0,532664 Dropped
SAT-2 Overall, company is pleased with SePP 4,04 (0,84) 0,892005 0,906646
APPENDIX B
Inter-Construct Correlation Matrix
ACC BEN DEC FUNF INF NDIS POS PDIS SYSF TRA SAT
ACC 0,76* BEN 0,29789 0,86* DEC 0,50379 0,61727 0,78* FUNF 0,02525 0,062004 0,2525 0,84* INF 0,20587 0,124213 0,117 0,555133 0,78* NDIS 0,14244 -0,13247 -0,026 0,460634 0,587351 0,73* POS 0,15341 0,170347 0,34 -0,035458 0,109575 -0,133 0,75* PDIS 0,18914 0,391634 0,3729 -0,204841 0,001859 -0,262589 0,209906 0,76* SYSF -0,1495 -0,1945 -0,173 0,598485 0,563893 0,538939 -0,28035 -0,2914 0,84* TRA 0,27064 0,748023 0,6537 0,093042 0,109803 -0,17397 0,334186 0,39292 -0,16776 0,79* SAT 0,11386 0,498932 0,4406 -0,145573 0,008568 -0,300041 0,287919 0,68952 -0,12702 0,5419 0,87*
