Investigating the Impact of Procurement Alignment on Supply Chain Management Performance

The increasing emphasis that organizations are placing on purchasing and supply chain management over the past decade, has set the spotlight on the potential of procurement systems. However, the majority of studies still examine IT adoption enablers despite the fact that procurement systems are perceived as a commodity in modern enterprises. Studies that examine the post-adoption conditions that facilitate performance gains in the supply chain management domains still remain scarce. In this paper we investigate the effect of business/IT-alignment within the procurement domain in order to determine if it affects procurement performance. Additionally, we examine the impact that supply chain management governance centralization has in attaining procurement alignment. In order to answer these questions, a sample of 172 European companies was analyzed by means of Partial Least Squares (PLS) modeling. Our results empirical support our hypotheses that procurement alignment leads to increased performance over time and in relation with competitors, with the effect of the former being greater than the latter. Additionally, we find that contrary to empirical evidence supporting the statement that a decentralized structure enables e-procurement adoption, governance centralization of supply chain management decisions fosters procurement alignment.