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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

				
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