Rapid technological advancements have completely revolutionalised the way things are done in the business world today. Proliferation of the internet and related technologies in the 1990s made it possible for companies to do business over the internet and it became easier and faster to do business both with suppliers and customers. With the ushering in of electronic business (e-business), many organisations including the public sector have since implemented various forms of its applications such as e-procurement, e-service, e-government and many others. As a matter of necessity organisations that want to sustain their businesses in such an environment must adapt their business strategies to meet the demands of the day and also be able to take advantage of the benefits of doing business electronically. Many such benefits have been cited which include reduction in costs, better communication among supply chain players and increased levels of productivity. It is also important to understand how such applications as e-procurement are impacting on intra organisational systems as this is just as important as inter organisational systems such as external supply chains. Internal processes are a vital part of the supply chain and the effect of e-procurement on internal processes is vital as it has a bearing on the level of customer service within the organisation which could also have a bearing on the level of external customer service. According to Michael Porter’s value chain, procurement is clearly a support function and it must add value to primary activities such as production. E-procurement therefore must create value that will be appreciated by primary activities within the organisation otherwise it is not worth undertaking. It is important for organisations to see where value can be added along the supply chain and find ways of improving on current processes in order to increase profits and decrease costs. Improvements in delivery times for example, as a result of e-procurement can add significant value to the external customer. This thesis therefore has sought to find out the effects of e-procurement on internal customer service and also to find out if internal customer service has any effects on external customers. The results of this research are that e-procurement affects internal customer service positively and that internal customer service affects external customers. The qualitative method has been used in this research work and the works of many different authors have been drawn upon.

The study has focussed on a particular application of e-business which is e-procurement and how this affects Internal Customer Service. This is because E-Business is becoming almost ubiquitous in its many different applications and we have picked a small area of its application to see what effects it has on Internal Customer Service. No doubt, many of our readers have heard of e-business and even used some of its applications such as internet buying, sending e-mails, e-procurement, mobile business, withdrawing money from an Automatic Teller Machine (ATM), ordering merchandise by a retailer using Electronic Data Interchange (EDI) network or a supplier’s extranet, electronic invoicing of customers and many others. An interesting question would be why should Internal Customer Service be considered important as the concept may never even have been heard of by some readers. The authors have been able to find out from the literature that internal customers have a very important role to play in the overall success of the organisation as they are the ones who drive the operations of the organisation. In the globalised world of today, these internal customers who, in this thesis are referring to employees, can only be neglected at the organisation’s own peril because the organisation will not be able to survive the harsh business environment without satisfying internal customers first. Satisfied employees will lead to satisfied external customers and this will ultimately lead to the overall success of the organisation. Even if employees are forced by management through systems and procedures, this will not last and sooner or later the external customer will be affected. Businesses exist to create and keep customers and it is important to understand that the customer is not just the one who pays for the goods or services the organisation sells, what about the Marketing manager who needs flyers to be brought in by the procurement department by a certain date or have bills paid for advertising space by the accounting department? If his needs are not satisfied and at the right time for that matter, the external customer will surely suffer the consequences and so will the profits of the organisation. Another important thing to understand is that the experiences of internal customers are very similar to those of the external customers and it would be a good idea to gauge the quality of the external service encounters by assessing the quality of the internal service encounters. If a sales representative can not be polite and courteous to those who need his services within the organisation, it naturally follows that he will treat the external customers the same way. The authors have considered e-business and Internal Customer Service to be important areas that organisations operating in the 21st century should not afford to neglect as they can be important sources of competitive advantage.