*4.2.3 Integrated E-procurement system KONEPS in Korea*

The digitalisation of procurement processes reinforces internal anti-corruption controls and detection of integrity breaches, and it provides audit services trails that may facilitate investigation activities. In Korea, the implementation of a national e-procurement system has resulted in a significant improvement in the transparency and integrity of the public procurement. In 2002, the central procurement agency of Korea, the Public Procurement Service (PPS), introduced a fully integrated, "end-to-end e-procurement system" called KONEPS, which provides for all aspects of the procurement cycle such as one-time registration, tendering, contracts, inspections, payments, as well as electronic exchange of documents. KONEPS links a multitude of external systems to share and retrieve information, and runs a one-stop service, including "automatic collection of bidder's qualification data, delivery report, e-invoicing and e-payment" [16]. According to PPS, the system has boosted efficiency, considerably reduced transaction costs, resulted in increased participation in public tenders and has considerably improved transparency. In addition, the Korean Fair-Trade Commission makes use of an automated KONEPS system for detecting suspicious bid strategies (named BRIAS), which has sharply decreased instances of corruption by preventing illegal practices and collusive acts. So-called 'Cover quoting', during which a tenderer submits more than one tender is illegal and to prevent this from happening, the government of Korea introduced "Fingerprint Recognition e-Bidding", limiting a tender to only one per company. The government also eased market accessibility through the use of smartphones during the bidding process [16].

#### *4.2.4 Zambia's public E-procurement*

E-procurement has not been widely used in by governments in Africa to date. According to the World Bank the three main reasons for the slow adoption of e-procurement in Africa have firstly been a low level of capacity building by African governments, secondly a lack of ICT infrastructure as well as limited internet access bandwidth challenges; and lastly, archaic administrative processes and restrictive cultures in African governments [44].

*Technological Approach to Ensure Ethical Procurement Management DOI: http://dx.doi.org/10.5772/intechopen.98650*

Policy makers in the Zambian government published the Public Procurement Regulations in 2011, under the strict provisions of the 2008 Public Procurement Act, under the auspices of the Zambia Public Procurement Authority (ZPPA), an autonomous regulator mandated to regulate procurement of services, goods and works in Zambia. Since the publication, research indicates that public entities and local authorities have been in support of a move to e-procurement as it is expected to yield several advantages, such as reduced opportunities for corrupt practices, access for prospective bidders to tender opportunities whether residing within the country or abroad, and compliance to public sector procurement legislation, thereby preventing service providers or procuring entities from deviating from the procedures set out by ZPPA [46]. E-procurement is also less expensive in terms of "hardcopy bid filing" which was required for the previous centralised traditional filing system, as well as saving money for participants in terms of lodgings in and transport to Lusaka. However, there are some concerns regarding non-availability of internet facilities or as a result of connectivity issues preventing possible participants in deep rural areas from submitting their electronic bids [47].

#### **5. Advantages of E-procurement**

It has been noted that implementing e-procurement is potentially valuable in guaranteeing a more efficient public procurement process which results in reduced costs for goods or services, a decrease in procurement cycle time periods, administrative cost and improving communication. The active involvement of bidders during a real-time procurement, being continuously informed of their competitors' bids and what their prospects of success are, further increases transparency and may even reduce corruption within the process [44].

The use of e-procurement may also reduce administration costs, the number of procurement staff required, and improve communication through swifter access to information the online availability of tender documents and information which can be updated regularly and promptly. Governments will further be able to publicly identify its regular suppliers thereby promoting transparency whilst at the same time promoting value for money in contracting with reliable suppliers. At the same time, competition can still be maintained by using various suppliers. The main benefit of introducing e-procurement recorded by the World Bank has been a marked upturn in transparency and competition [44].

#### **6. Disadvantages of E-procurement**

With e-procurement being a relatively new form of procuring goods and services, it has been up against a number of challenges, notwithstanding the proven benefits of using electronic means in procurement. In a 2004 UK wide study, Wong and Sloan in [48] found that only 48% of respondents indicated that they were able to conduct e-procurement effectively. The complete list of barriers ranked by this study was:


Progress within the traditional procurement function has been slow and many governments have battled to gain traction, with varying levels of resistance to change [48] and an unwillingness to transfer to e-procurement systems, especially when structural change in business processes are necessary. In addition, the level of technological awareness of e-procurement system users to be, so-called "tech-savvy", is still lacking, requiring increased efforts to raise awareness of procurement-enabling technologies, and opportunities raised by these disruptive innovations [40]. In addition, ICT failure (whether that be a failure in the infrastructure or a failure in the equipment) during the procurement process is a reality; a lack of technical expertise knowledge and access to information technology are limitations to upcoming contractors. A lack of legal certainty underpinning e-procurement; and a failure by management to provide adequate infrastructure, are some disadvantages of e-procurement. The benefits of e-procurement can only be realised if the processes are properly improved and not simply by automating the existing methods of working [44].

A further possible threat is an increase in collusion where there are only a small number of suppliers of the required product or service. A lack of legal certainty underpinning e-procurement may be a further barrier to the successful implementation of e-procurement [48]. The benefits of e-procurement can only be realised through, amongst others, in-depth training of all stakeholders and adoption of an "electronic attitude" by suppliers. The use of mathematical formula's during evaluation can be problematic when public procurement is used as a tool to also achieve secondary objectives such as quality and socio-economic considerations. Different mathematical formulas must be developed for all types of procurement [44].

#### **7. Conclusion**

Although there are successes to be found where e-procurement has provided governments with the opportunity to improve their public procurement processes in terms of value for money, transparency, and integrity. Globally governments are only slowly starting to embrace the fourth industrial revolution, with technological advances being incorporated in order to survive in today's uncertainties. Public sector procurement entities are hard-pressed to accept the technology innovations to curb unnecessary costs and strengthen transparency measures to ensure that ethics are upheld throughout all the business processes [47]. In order to maximise the benefits of e-procurement, preparatory actions such as increased awareness of all stakeholders is essential as well as migration of all information pertaining to tender processes in order to successfully implement and maintain trust in an electronic

*Technological Approach to Ensure Ethical Procurement Management DOI: http://dx.doi.org/10.5772/intechopen.98650*

procurement system. More importantly, senior public management support will be crucial in establishing and maintaining a trustworthy, transparent, and wellgoverned e-procurement system, supported by the necessary infrastructure and well-trained staff [44]. Faced with ever-increasing pressures on state funds to be spent for the greater good of all, the benefits of e-procurement will prove to outshine the disadvantages associated with a movement to technology. Less corruption, undue influence of tender awarding processes, and the reduction of other unethical behavioural risks are the advantages which will outweigh the disadvantages of the initial expenditure on technology, training of staff, and migration of all processes to an e-procurement environment. E-procurement provides the strategic foundation towards, transparent and cost-effective collaboration throughout the entire public procurement lifecycle [48].
