Effectiveness of Experience in E-Procurement: Roles of Temporal Distance and Task Routinization
42 Pages Posted: 19 Dec 2018
Date Written: November 30, 2018
E-procurement platforms facilitate transactions between suppliers and buyers from all over the world. Over time, suppliers and buyers may develop familiarity from prior experience with earlier transactions. The project team literature has established that prior experience leads to better project performance. In this study, we examine the effectiveness of prior experience that buyers have with suppliers in e-procurement platforms with a focus on the moderating role of temporal distance between the buyer and the supplier as well as that of routine tasks in the project (termed “task routinization”). Using a unique data set from a large e-procurement platform Freelancer.com (Freelancer), we first find that buyer’s prior experience with a supplier positively affects project outcomes and temporal distance negatively affects project outcomes, consistent with previous findings for the emerging e-procurement platforms. Most interestingly, we find that the effectiveness of prior experience is constrained by temporal distance, such that if a greater temporal distance separates the buyer and the supplier, their prior experience is less likely to help with the success of the current procurement project. Moreover, while task routinization does not show a direct effect, it has a positive interaction effect with prior experience, suggesting buyers’ prior experience with a supplier is more effective in enhancing project outcomes when a project comprises routine tasks. Our findings on prior experience, temporal distance, and task routinization contribute to a better understanding of the e-procurement platform for global outsourcing and procurement. Limitations are discussed and topics are identified for future research.
Keywords: e-procurement platform, procurement, outsourcing, temporal distance, prior experience, familiarity, task routinization
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