Business alignment in the procurement domain: a study of antecedents and determinants of supply chain performance

Abstract

With organizations now placing an increasing amount on attention on the management of their supply chain activities, the role of Information Technology (IT) in supporting these operations has been put in the spotlight. In spite of extensive research examining how IT can be employed in various activities of supply chain management, the majority of studies are limited in identifying enablers and inhibitors of adoption. Empirical studies examining post-adoption conditions that facilitate performance improvement still remain scarce. In this study we focus on procurement as part of the supply chain management activities. We apply the business-IT alignment perspective to the domain of procurement, and examine how certain organizational factors impact the attainment of this state. Additionally, we research the effect that procurement alignment has on supply chain management performance. In order to do so, we apply Partial Least Squares (PLS) analysis on a sample of 172 European companies. We find that firms that opt for a centralized governance structure, as well as larger firms, are more likely to attain a state of procurement alignment. Furthermore, our results empirically support the statement that procurement alignment is positively correlated with operational efficiency and competitive performance of the supply chain.