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Strategic eGP Foundations:
Assessment , Planning &
Implementation
Prof. Namrata Agrawal
National Institute of Financial Mgmt.
Ministry of Finance , GOI
nagrawal@nifm.ac.in
Assessment : Worth implementing ?
Process Cost
Transparency Efficiency Reduction
Core Objectives
Supports Economic Of e-procurement Paper less
Development
environment
New supplier Real Time
Streamlining discovery
Procurement Monitoring
processes
Assessment : Why eGP ?
• Cost Reduction : up to 25% or more
• Anti-corruption tool: promotes transparency
• Better Access: Any firm(small/medium) may
participate in national or international markets.
• Process Cycle time Reduction
(Supported by the REPORTS ………)
Supported by REPORTS
Yes
1. e-Procurement Benchmark Report –04
by Aberdeen Group
Key Findings:
• Reduced requisition-to-order cycles by 66%
• Reduced requisition-to-order cost by 58%
• Reduced prices by 7.3% for spend brought back onto
contract
• Increased total spend under mgmt of procurement group
by 20%. Each new dollar brought under mgmt can yield
5% to 20% cost reductions
E-Procurement Benchmark Report -Aberdeen Group
E-procurement Impact (Average Performance)
Performance Area Before E-Pro After E-Pro
% of spending that is off-contract 38% 14.2%
(”maverick”)
Price savings on maverick - 7.3%
purchases brought into
compliance
Requisition –to-order cycles 20.4 days 3.8 days
Requisition to-order-costs $56 $23
% of spend under management of 56% 69%
the procurement group
Source:AberdeenGroup, December 2004
E-procurement Performance :2001 vs 2004 (Average)
Performance Area 2001 2004
Number of suppliers enabled 30 253
Number of users 1000 2,309
% of users currently versus planned 12% 43.5%
Number of transactions /month 1,340 5,244
% of indirect spending managed via e-pro 18% 37.6%
% of services spending managed via e-pro -- 32.7%
Source:AberdeenGroup, December 2004
This increase is also attributed to lower license fees
& implementation & maintenance costs than
previous years.
Assessment ….
2. Key findings of white paper dt 06.08.03 on e-sourcing by
International Association of e-Govt professionals in association with
US-ASEAN Business Council:
FINDINGS:
Estimated level of savings –
10 % – minimum level of savings expected
16 % – average level of savings expected
• 35 % – maximum level of savings expected
The study was based on the impact of e-Procurement in 5 Asian
countries ( Indonesia, Malaysia, Philippines, Singapore & Thailand)
(Contd..)
Assessment ….
E-Sourcing's Potential Impact on Annual National Government Deficits
In $US Millions
Country Deficit (Surplus) Deficit Savings % of Deficit
before (Surplus) after (Surplus)
e-Sourcing e-Sourcing Eliminated
Indonesia 7,701 6,740 961 12
Maylasia 5,203 4,384 819 16
Phillippines 3,069 2,528 541 18
Singapore (9,270) (9,913) 643 (7)
Thailand 2,687 1,904 783 29
(Parenthesis denotes surplus)
Assessment …. Amazing
Average Savings Sector-wise using Competitive Biddings
Automotive
Over 16% Average Savings
on Over $2 Billion Volume
Diversif ied manuf acturing in 2002
Energy and Processing
Aerospace
Cosumer
High Tech.
Public Sector
0 5 10 15 20 25 30 35 40
Savings
Assessment – Convincing ….
3. World Bank report(Country Procurement Assessment Report, 2002)
on performance of public procurement in India:
- The total value of public procurement by ministries, departments,
municipal and other local bodies, statutory corporations and public
undertakings both in center & in state put together is of the order of
US $ 100 billion representing 13% of the national budget and over
20% of the Gross Domestic Product.
(xchg rate of US $1 = Rs.45.00 at the time of study)
- Going by a conservative estimate even 10% savings through e-
procurement can boost the economy by about 2% of GDP.
go for eGP ?
YES
Planning: Where r we ?
eGP status in India (Readiness)
-The private sector e-procurement in the country has touched
more than US $2 billion, whereas has been implemented in
clusters by some progressive state Govt like
STATES
- AP: targeting transactions worth Rs25,000cr by 31st March,05.
Has processed around 1640 tenders by 31st Jan 05. It may be
among the world’s largest G2B market place. 9PWD or
Irrigation deptt)
- Karnataka: To the tune of 300 tenders. State Road Transport,
Karnataka Irrigation Dept
-MP: MP State Electricity Deptt, MP Rural Road Development
Authority
Planning: Where we r?
eGP status in India
- Assam: PWD, Assam Electricity
-Chhattisgarh : PWD
- States intending to opt eGP: Delhi(MCD tender), Punjab,
Rajasthan, Gujrat, Maharashtra
-eBIZ Project: Pilot project based on PPP. Taken up by
DIPP(Deptt of Industrial Policy & Promotion) funded by Central
Govt. It will connect the state Govt deptt like -Sales Tax,
Municipality, Power Distribution , Industry in UP, Haryana,
Maharashtra, AP, to the Central Govt deptt( CBEC, CBDT, DCA
etc.)
Facility centre to be set up by Pvt players.
Planning: Where we r?
eGP status in India
Indian Railways: e-tendering since 2003
Finance Ministry of some countries like
Malaysia, Singapore , Ireland , Guatemala
etc is the lead agency for eGP.
Finance Ministry of India has directed each
ministry to spend 3 % of its annual budget
on IT.
What Next ?
Suggested Course of Action
1. National Policy to promote eGP
- Government’s support - changes are not plug & play
2. Legal Framework
- Supporting Legislation
- Digital Signature Security & Act
- Amended Procurement Law to remove barrier to eGP
- On-line dispute resolution facility
What Next ?
Suggested Course of Action
3. Technological Infrastructure
- Public-Pvt-Partnership(PPP)
- Facility Centers
- Portals & Supplier Catalogs
- Connectivity
4. Appropriate Standards
- Interoperability
- cross-border trading
- Security standards
What Next ?
5. Phased Implementation
Phase 1 Information Service
Tender Advertising
Document Down-Loads
Results Disclosure
E-Tendering
Phase 2a Bid Qualification
Bid Up-Loads
Bid Processing
Legislation
Security
Bid Securities
Policy
Phase 2b Contract Management E-Contract
Contract Development Management
Phase 3a Catalogue Purchasing
Online Transactions
Online Workflow
E-Purchasing
Phase 3b Online Bidding
Reverse Auctions
Prof. Namrata Agrawal
nagrawal@nifm.ac.in
