Purchasing-Related Electronic Information Management
Economic, Social and Political Considerations

Roger Clarke
Australian National University

Prepared for Purchasing Australia,
Commonwealth Department of Administrative Services
as part of the PREIM Consultancy Project

© Commonwealth of Australia, 1994


Purchasing interacts with other aspects of society, and the application of increasingly powerful information technology must be expected to affect those interactions. In some cases existing problems may be ameliorated and new opportunities created; in other instances, however, problems may be exacerbated and new problems may arise.

These interactions may be considered at various levels of abstraction and from various perspectives. Three broad groups of interactions are adopted for use in this study, and are characterised as:

The PREIM Project is concerned to identify the interests which are likely to be affected by applications of IT to support purchasing, and ways in which negative affects can be prevented or dealt with and positive outcomes encouraged.

This background document is intended to lay out the more obvious aspects of the analysis, as a means of teasing out additional information, views and arguments. The primary economic, social and political considerations are discussed below, under the headings of people as employees, people as consumers, urban and regional development, people as communities, the environment, and international considerations.


A1. Educational Background

The workforce in 2005 will comprise managers born 1965-75, whose secondary schooling was undertaken in 1980-95, and whose tertiary education was in 1983-97. Operational staff will have been born in 1975-85, and attended secondary school 1989-03. Post-secondary education will be the norm (minimum associate diploma level). This will include IT literacy, training and usage, plus considerable home and community IT usage.

A2. Job Destruction

IT can improve the quality of purchasing, and can enhance the buyer's power and thereby squeeze sellers' margins and reduce the returns to shareholders in manufacturing and selling companies. But it also offers the scope for improved productivity in the purchasing process, and the primary way in which it does this is through decreasing labour-waste, removing the need for some tasks, reducing the time taken on others, and hence reducing the total number of employees required to handle a given quantity of purchasing.

Chief among the job classifications which appear to be at risk in the near future are:

This effect may be ameliorated to the extent that the numbers of people involved was already small (and the total savings add up to less than one job), or the size of orders is decreased, the number increased, and hence the total workload remains more or less unchanged.

Unless it is evident to the workforce that the job displacement occasioned by the implementation of IT is justified, necessary and inevitable, and that their interests are being addressed in a reasonable manner, it would be only natural for industrial relations to be negatively impacted, and resistance to change to be substantial.

A3. Job Redefinition

IT is seldom at its most effective when it is merely used to for the automation of existing procedures. At the very least some degree of rationalisation is needed, and there is increasing emphasis on 'business process re-engineering', in some cases within the selling or within the buying organisation, but in other cases between successive organisations along the industry value-chain.

Every change wrought by, or encouraged by, or made in conjunction with, the implementation of IT, inevitably involves change for the staff involved. There is a danger that 'information overload', and, in serious cases, 'employee burnout' may be induced by the new environment, because of its tendency to bombard employees with ever more data.

This implies that change management procedures need to be adopted by organisations participating in the process, including advance advice to, participation of, and consultation with employees. Induction and training schemes need to be planned and implemented. In addition, enterprise agreements need to incorporate provisions dealing with IT-sourced productivity, and care needs to be taken to ensure that job demarcation issues do not represent barriers to improved productivity.

One of the most significant impacts on work arising from IT generally in the coming decade will be the increased location-independence of tasks. This is already very much in evidence in the form of 'computing on the move' particularly by salesmen, meter-readers and executives, and 'telework', including 'telecommuting' and the 'electronic cottage', variously from serviced offices and community centres, and from the home. It is increasingly apparent that controls can be conceived and implemented which are satisfactory substitutes for that of visual surveillance by a supervisor, and a Commonwealth Award has recently been finalised. A related concept, sometimes referred to as 'hot-desking', is increasingly being used by professional services firms (in such areas as accountancy, audit, software and consulting). This involves staff working almost entirely from clients' premises and their own homes, with infrequent visits to their employer's (or agency's) offices requiring advance-booking of a desk-space.

Another possible impact arises in relation to increasing expectations of accessibility of products and services. In many different forms of shop and service location, extended opening hours are becoming increasingly common. This is particularly the case where significant inventories are not held locally, but rather prompt delivery is expected. This may result in some areas of government agencies which have hitherto functioned 9-5, five days per week, needing to operate shifts.

A4. Job Creation

New roles arise in the new environments created by IT applications. Many of these may tend to be outside the conventional purchasing sections within organisations. For example, many of them may have to do with the expression of requests for data in terms consistent with available tools (skills hitherto largely associated with the library profession), and with the selection and presentation of information using textual, tabular, and graphical forms.

There is considerable scope for enhanced services to be offered by intermediaries, such as value-added network operators, and integrated transportation companies. From the viewpoint of government agencies as buyers, the effect may well be similar to outsourcing, in that a larger proportion of the jobs created may be outside buying organisations, and a larger proportion of the jobs destroyed may be inside them. Depending on the political perspective adopted, this may not be in itself a bad thing, but it does require human resource management planning, as well as adjustment of contracts such that propriety and controls are sustained in the new environment.

The level of education and expertise needed by applicants for the new kinds of jobs which are being and will be created, are substantially more demanding than used to be the case. IT familiarity will be crucial, but so also will adaptability, and the capacity to learn new skills quickly and often during their working lives.

International on-line directories and tendering processes will enable Australian companies to be aware of, compete for and win more overseas business, and companies which exploit these opportunities will need staff to support their increased sales volumes.

There is a considerable degree of expectation that the current upturn in the business cycle will not be accompanied by increases in full-time jobs to anything like the extent experienced in the past. The incidence of job-sharing, of part-time jobs and of shorter-hour 'full-time' jobs may be increasing, partly as a result of IT-enabled productivity increases.


There is a strong trend towards service delivery through IT-mediated systems. This is already established practice in relation to the acquisition of tickets for public transport, cash from financial institutions, access to government welfare payments, and the purchase of many kinds of goods including petrol from petrol stations and goods of many different kinds from department stores. It is emergent in relation to the acquisition of information from government agencies, and about tourism and entertainment.

IT-based service delivery may quickly become much more generally available, and then the norm, in relation to both information gathering and shopping. It is likely that it will not be limited to specially-designed terminals in public locations, but will also be possible using general-purpose workstations in the workplace, and workstations and entertainment centres in the home.

The productivity of counter-staff is enhanced if customers are only served after they have captured details of their request into an electronic form. To support this trend, substantially more consumer-convenient capture mechanisms than the QWERTY keyboard are becoming available, including voice-activation, programmable push-button screens and smart-card storage.

Employees acting on behalf of buying organisations will participate in systems of these kinds, especially when they are acquiring mainstream consumer products such as travel, petrol, miscellaneous items of stationery, taxis, and postage and courier services.

An additional area of concern to some people is an increasing tendency towards the identification of individuals in many transactions which have been hitherto anonymous. IT brings with it the possibility of relatively very cheap, and therefore much more broadly practised surveillance based on the monitoring of data rather than on the observation of overt behaviour. If institutions and governments exploit this scope in ways, or with an intensity, which are unacceptable to the populace, civil disobedience and worse can be anticipated, resulting in low data quality, additional repressive measures, and general distrust throughout the community.


The capability provided by modern IT for computing and communications to be undertaken in different locations, and on the move, may have substantial effects on living locations. People may be able to live further away from their employers' primary locations because they will make less frequent visits to those sites. The long-standing population drift towards urban areas, at least among those of working age, and the resulting urban sprawl, may change. It may be that satellite towns will attract larger number of people: towns which are within occasional-commuting distance of major population centres, and are regarded as pleasant places to live, may become more prosperous. Their citizens may become highly competitive with city-based people, as a result of lower costs of living and of overheads such as office rental and travel time.

All organisations, whether involved in manufacturing, selling, purchasing or service delivery would be likely to be affected by such a change. Under this scenario, traditional commuting would decrease, but the incidence of medium-distance travel may well increase, with many workers visiting their offices of the order of once per week or fortnight, from more distant homes.

Teleworking generally, but especially some of its variants such as 'hot-desking', may have the effect of reducing the number of professional services people who are in CBDs at any one time, resulting in a decrease in the demand for CBD office-space. Hence the economic recovery may not result in the filling of presently empty buildings. There would be a flow-on effect on retailers, both at department-store and boutique levels, who would lose clientele. This would result in lower prices for shop-front premises. The conversion of office to residential accommodation may increase.


Progressively, the workforce appears likely to be dominated by IT-literate people, with those with low propensity for those kinds of work relegated to less well-paid jobs, and to under-employment and unemployment. This is likely to result in at least ill-feeling among those people who are less highly regarded as employees, and who would quite reasonably suffer from feelings of rejection and worthlessness. Luddite behaviour may result, against IT artefacts; and negative, class-based behaviour, against IT-literate and the employed.

The information society is expected by many to involve more people spending more time closer to home and in the home. There is some doubt as to whether a large proportion of the population is likely to adjust well to those patterns, especially where incomes and self-esteem are low due to unemployment or serious under-employment. On the other hand, some families are likely to find such patterns to their liking, particularly where both partners are pleased to sustain part-time work.

Productivity 'progress' will only be progress for society as a whole if everyone participates in the payback. IT support for the purchasing process is one element in the general pressure towards the transfer of a 'social wage' to all members of society, independently of whether and in what way they contribute their work.


There is a variety of potential impacts of IT support for purchasing on the degree of competitiveness within industry sectors and segments. There are several factors that cause harm to small companies and favour large ones, including: On the other hand, IT may create new opportunities for existing intermediaries which are fleet of foot, and for new forms of small business which can provide services that larger companies are happy to use.

These factors may be particularly problematical in sectors and segments in which concentration already exists, variously due to legislated monopoly, accidental monopoly and oligopoly, and protections, including tariffs.

Another concern is the likelihood of impediments slowing down the implementation of IT in purchasing. In some areas, the lack of a catalyst has resulted in little or no progress in applying, for example, EDI, despite wide agreement that the technology is both beneficial and inevitable. A major reason for this problem is that there are often inadequate returns to those organisations which must make the investment.

Other delays may result from inadequacies in the services available. For example, many companies and agencies are currently concerned about the poor quality of inter-connectivity and inter-operability provided by the various value-added network services providers. In addition, adaptation of application software (both packages and in-house applications) to interface with communication services is often very slow. Underlying these problems are commonly lack of awareness among executives, of appreciation among managers, and of expertise among professionals.

In addition, legal factors may constrain development. The law of evidence represents a barrier to proving transactions. Security is far from sufficient in many of the services offered to date, especially in relation to authentication of the origin of messages. There will also need to be new balances struck, and recognised by tribunals and courts, relating to fiscal propriety.


To the extent that a tendency towards reduced short-distance commuting actually arises and is sustained, there would be reductions in energy committed to transport, and in exhaust emissions. This may, however, be balanced out by increased long-distance travel.

As government procurement becomes increasingly manageable, it is likely to become more frequently used as an explicit weapon in the implementation of government policies generally. One important area is likely to be the environmental impact of goods and services, with preference given to 'green', environmentally-friendly products, with reference to re-cycling, energy efficiency, scarce-resource efficiency, low-waste technology and 'good corporate citizen' behaviour. Other factors which may attract government business may include such government policies as occupational health and safety, job-generation, and compliance with equal employment and affirmative action.


Australia as a nation has obligations which arise from international conventions. Relevant instances include the General Agreement on Tariffs and Trade (GATT), trading preferences, as with New Zealand, and in the future with nations of the Asia-Pacific Economic Council (APEC), and perhaps the Association of South-East Asian Nations (ASEAN) and even other regional groupings such as NAFTA and the EC.

Balanced against the international perspective are concerns about local content, and buying Australian-made where the quality and price are competitive.

In addition, initiatives have been launched in several leading countries and in international fora which will give considerable impetus to the 'informaticisation' of leading nations in our reference group. Among these are the U.S.A.'s National Information Infrastructure, various Directives within the European Community, and national community systems in Asian countries, especially the 'IT 2000' programme in Singapore, but also in Taiwan, Korea and Thailand.

If, as expected, these initiatives bear fruit, it will be essential for Australia to match progress in such countries in order to remain competitive with them, and to be able to participate in the emerging information world order.


Go to Roger's Home Page.

Go to the contents-page for this segment.

Send an email to Roger

Last Amended: 14 October 1995

These community service pages are a joint offering of the Australian National University (which provides the infrastructure), and Roger Clarke (who provides the content).
The Australian National University
Visiting Fellow, Faculty of
Engineering and Information Technology,
Information Sciences Building Room 211
Xamax Consultancy Pty Ltd, ACN: 002 360 456
78 Sidaway St
Chapman ACT 2611 AUSTRALIA
Tel: +61 6 288 6916 Fax: +61 6 288 1472