Effect of Procurement Processes Digitalization on the Organizational Performance

Abstract

This study aimed to assess the effect of digitalization of procurement processes on the organizational performance of Tanzania Electric Supply Company Limited (TANESCO) in Dar es Salaam. The specific objectives included analyzing the relevance of procurement processes digitalization, evaluating associated challenges, and establishing strategies for improvement. Technology Acceptance Model and Resource-Based Theory were utilized in this study. This research utilized a mixed research approach, combining quantitative and qualitative methods, targeting all 408 employees across various TANESCO departments. Sampling techniques included simple random and purposive sampling, with data collected through questionnaires, interviews, and documentary review. Descriptive statistics, facilitated by SPSS version 26, were employed for quantitative data analysis, while content analysis was utilized to analyze the qualitative data obtained from interviews. The study revealed digitalization positively influenced organizational performance, with an emphasis on improved efficiency and cost savings. However, challenges were identified, including concerns about limited vendor relationship improvements and the need for enhanced transparency. Internal stakeholder satisfaction demonstrated only modest gains. While digitalization moderately improved decision-making and strategic planning, its effect on product and service quality was limited. Based on the findings, it is recommended that TANESCO continues to embrace digitalization in its procurement processes but focuses on addressing challenges to maximize its benefits. Strategies to enhance vendor relationship management, ensure transparency, and monitor internal stakeholder satisfaction should be developed and implemented. Future research should examine employee attitudes and the effectiveness of change management strategies in the context of digital procurement could contribute to a comprehensive understanding of the human dimension in the digitalization journey.