Influence of Strategic Procurement Practices on Performance of Public Water and Sewerage Companies in Kenya

Abstract

The current study sought to establish the influence of strategic procurement practices on performance in water sector in Kenya. Specifically, the study aimed at establishing the influence of strategic sourcing, strategic contract management, staff training, strategic procurement planning and to establish the moderating effect of information technology on the relationship between strategic procurement practices and performance of public water companies in Kenya. The study was based on strategic choice theory, stakeholder’s theory, Bloom’s taxonomy of learning theory, resources-based view theory and technology, organization and environment model. It was anchored on positivism research philosophy and descriptive research design. The target population comprised of Procurement Managers, Finance Managers and CEOs of 79 water companies in Kenya. Simple random sampling was used to select 150 respondents from a target of 237. Primary data was collected through use of questionnaires. The results of the analysis revealed existence of a high relationship between strategic procurement practices and performance of public water companies in Kenya (R= 0.858) and that 73.6% on variations in the performance of public water companies can be accounted by strategic sourcing, strategic contract management, staff training and strategic procurement planning. Information technology was found to positively and significantly influence the relationship between strategic procurement practices and performances of public water companies in Kenya. The study further established that strategic sourcing, strategic contract management, staff training and strategic procurement planning positively and significantly influence performance of public water companies in Kenya as depicted by Beta values of 0.419, 0.175, 0.162 and 0.306 respectively. This implies that increase in one unit of each of the variables results to an increase in the performance levels with the respective beta values. It can be concluded that practices such as creation of collaborative business environment and creation of optimal cost allocation during procurement, leads to improved service delivery, reduction in sewerage and water spillage and has enhanced customer service provision and response time during complaints. Creation of harmonious delivery mechanism, supplier cooperation platforms, enhances provision of quality services, timely provision of services, reduction of water spillage, enhanced response to customers and have increased revenue from service provision. Training clarifies procurement policies and guidelines in an organization, it enhances employee’s professional development, creates a culture of innovation and creativity and aids in preparation of annual training programs. Budgetary planning of procurement needs, continuous departmental needs and assessment, preparation of department goods utilization matrix and accounting for all procurement activities enhances provision of services by public water companies. Use reliable E-procurement software, E-tendering, and payment, coherency procurement information has enhanced the influence of strategic procurement practices on performance of public water companies in Kenya. It was recommended that there is need for public water companies to pursue collaborative business environment with their suppliers. There is need for public water companies in Kenya to enhance their contract management so as to achieve harmony on goods and services delivery, understanding of all stakeholders. Strategic training can be achieved through setting of training targets and mentorship programs. There is need for public water companies to embrace strategic procurement planning this would aid in provision of quality services. There should be measures and mechanisms aimed at paperless tendering process so as to enhance delivery of quality goods and provision of reliable services.