Effect of Electronic Procurement on Budget Performance Among Non-governmental Organizations in Kenya

Abstract

Financial resources are essential for Non-Governmental Organizations’ (NGOs) expansion, maintenance, and long-term viability (NGOs). NGOs however find it challenging today, to raise money in the conventional manner because most funding sources are not able to keep up with the organizations' expanding demands and the rising costs connected with ongoing operations. In view of this, a majority of NGOs are adopting strategies aimed at enhancing their cost efficiency for alignment between expenses and the available grants and donations. Key among these include the adoption of e-procurement practices. It however remains unexplored in the Kenyan body of knowledge, how e-procurement has influenced budget performance among NGOs, hence this research. The objective of this study is to determine the effect of electronic procurement on budget performance among NGOs in Kenya. This study is anchored on the Agency theory, Technology Acceptance Model and the Transactional Cost Economic Theory. The target population consisted of all 12,020 NGOs registered by the NGO Council of Kenya. The study used simple random technique to select individual respondents, who were traced based on their contact details as lodged with the NGO Council of Kenya. The study used secondary data sources project and procurement records as were furnished by the individual NGOs. A secondary data collection sheet was used in this regard. This research then made use of both descriptive and inferential statistics in analyzing data. Results indicate that e-sourcing (β=.600, Sig.= .031<.05), e-ordering (β=.547, Sig.= .001<.05), e-invoicing (β=.883, Sig.= .000<.05) and e-payment (β=.625, Sig.= .026<.05) have a significant and positive effect on budget performance among NGOs in Kenya. It is thus concluded that an increase in the adoption of e-payment, e-sourcing, e-invoicing and e-ordering is related to these observed trends and can be associated with a strong and favorable budget performance improvement among NGOs in Kenya.