Digital Transformation of the Procurement Function and Sustainable Performance of Private Logistics and Warehousing Firms in Nairobi County, Kenya.

Abstract

Digital transformation has become a strategic imperative in modern organizations, particularly within procurement functions, where the integration of digital tools, data systems and agile processes enhances efficiency, transparency and accountability. In Kenya, procurement accounts for about 10–13% of GDP, yet although more than 80% of public entities have implemented platforms such as IFMIS, only about 52% use them consistently, and logistics and warehousing firms continue to face low system utilization, inadequate technical skills, unreliable infrastructure and weak alignment between digital strategies and procurement objectives. Therefore, the purpose of this study was to examine the influence of digital transformation of the procurement function on sustainable performance of private logistics and warehousing firms in Nairobi County, Kenya. It specifically examined the effects of digital strategy alignment, technological capabilities, data-driven proficiency and process agility on sustainable procurement performance. The study was anchored on the Resource-Based View, Dynamic Capabilities Theory, the Technology Acceptance Model and Institutional Theory. A descriptive and explanatory research design was adopted, targeting 1,250 active logistics and warehousing firms in Nairobi County, with procurement officers, supply chain managers, ICT personnel and operations managers as the units of observation. A sample of 93 firms was determined using Nassiuma's formula and selected through purposive and stratified sampling, with one respondent per firm. Primary data were collected using a structured questionnaire, and both descriptive and inferential statistical methods, namely Pearson correlation and multiple regression analysis, were used to analyse the data, which were presented in tables and discussed. The findings revealed that the four dimensions of digital transformation jointly explained 46.5% of the variation in sustainable procurement performance. Technological capabilities had the strongest positive and significant effect, followed by data-driven proficiency and digital strategy alignment, while process agility had a positive and significant but comparatively modest effect. The study, therefore, recommends that firms should upgrade ICT infrastructure and strengthen system integration and platform reliability, invest in analytics tools and staff training in procurement analytics, fully integrate procurement policies with digital transformation frameworks, and streamline procurement workflows to eliminate task duplication, so as to enhance sustainable procurement performance in logistics and warehousing firms in Nairobi County.