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									Delivering procurement efficiencies…


Daniel Quinn       …Real life examples of eSourcing,
BravoSolution UK
                               eTendering, eAuctions
     What? – ePurchasing vs. eSourcing
eProcurement Lifecycle
The eProcurement Lifecycle comprises two aspects – eSourcing supporting
sourcing activity and ePurchasing supporting transaction purchasing.

                                          Payment                  Initiate Project
                                                                                      Establish Business Need


                  Invoice/GPC                                                                   Develop Business Case


                                                                                                        Assess Market

        Receive
                                                                                                            Produce Requirements


                                                                                                                Define Procurement Strategy

                                                     Management
                                                                                                                Advertisement/Notice
     Order
                                                     Information
                                                                                                                EOI/PQQ


      Workflow/                                                                                             ITT/ITN
      Approval

                                                                                                        Negotiate/Auction


              Selection/                                                                        Award Contract
              Requisition
                                                                                      Implement Contract
                                                                   Close Project
                                Content Management    Contract
                                                      Management
       Why? - Business rationale

                                  Governance
                               How do we keep track of all
                               decision making activities
                                     and policies?



      Savings                                                     Cycle Time
 How can we improve the                                         How can we conclude our
   performance of our                                           sourcing initiatives in the
     negotiations?                                               quickest time possible?




             Risk                                                  Focus
   How do we ensure appropriate                  How do we free buyers to focus time and energy
products/services are procured from              on value adding areas? – supplier performance,
        reliable suppliers?                      contract management, managing specifications,
                                                       global sourcing, eAuctions etc. etc.
        Typical eSourcing Evolution

                                                                                                    STRATEGIC


             Traditional incremental
              approach takes time                                                           eSourcing
               and unlocks value
                      slowly                                              Strategic
                                                                         Programme
                                                                          eAuctions

   Value                                                 Full
                                                      eTendering
Potential
                                       Basic
                                  eTendering

               Opportunistic           BravoSolution allows you to start at any point (depending on your comfort
                eAuctions              zone) or leapfrog previously necessary development stages and go
                                       straight to eSourcing, saving time and delivering greater strategic value
                                       faster.
            TACTICAL


                                                    Time Line
             OGCbuying.solutions eSourcing Framework

    Elements of the eSourcing Service…                                  •   Fully Hosted solution
                                                                        •   Customisation & user access control
                                                                        •   Sophisticated security
                                                                        •   High availability
Core                                                                    •   System Set-up
Service                                                                 •   System Administration
                                                                        •   Upgrades included
                                                                        •   Comprehensive Help Desk support
                                                                        •   Basic Training
                                                                        •   Technical / integration Services
                                                                        •   EU compliant for public sector users




Service
Elements



               eCollaboration            eTendering             eEvaluation                 eContract Management
                                  (eVendor Mgt & eAuctions)


Additional                                                                                     Extended
Services            Consultancy                     Training Services
                                                                                           Helpdesk Support
                    Using the “toolkit”
              Sourcing using eSourcing
              Offered in a modular format, you can choose the service modules that match
              your requirements. In combination, the four service modules facilitate the typical
              best practice end-to-end sourcing process.

                 eCollaboration                                      eEvaluation                      eContract Management

                   Collaboratively develop tender                      Conduct Complex                 Finalise          Manage      Monitor
                   documents                                           Evaluation                      contract          contract    performance
Buy Side




                                                                                         Evaluation               Winning supplier
                               Technical Spec           Supplier
                                                         Replies                         Report                   proposal
                                & Other Doc‟s



                     eTendering
                                                Typical Public Sector Sourcing Process
                       Supplier
                       search/
                                                                                                  Award
                                                                                          Negotiate/
                                            RFI/PQQ       ITT/RFQ       Evaluation
                                                                                          Auction
                       OJEU/EOI
Supply Side




                    Express               Respond                  Respond           Participate
                    Interest               to RFI                   to ITT           in eAuction

                                                     Suppliers
       Which is appropriate for me?

    Number of                   High

    evaluators
                                                      eSourcing
  /stakeholders


   Geographic
                       Evaluation                        Full
   dispersion
                       Complexity
                                                      eTendering
Detail of evaluation
       model
                                         Post-Box
                                        eTendering
                                Low
Supplier feedback                        Low                             High
  requirements                                         Procurement
                                                        Complexity

  Buy in required
                                    Strategic importance       Scope & complexity
                                        Experience                of requirements
                                         Risk Value            Number of suppliers
      Analysing the traditional approach…

Introducing the ‘Task Cube’…



 Non-Price
 Questions


   -Quality
  -Service
-Specification
  -Finances
    -CSR
  -Etc etc.                                                              Stakeholder
                                                                         Evaluators

                                Supplier Responses

                  Questions x Responses x Evaluators = Task Count
                 Minutes per task x task count = Total Evaluation Time
    Calculating the „Task Cube‟




  100


   x


Non-Price
Questions


                                                                 5 x Stakeholder
                                                                   Evaluators

                         50 x Supplier Responses
            100 Questions x 50 Responses x 5 Evaluators = 25,000 Tasks
            X 10mins per task = 250,000 minutes (4,166 Hours = 520 days)
     Understanding the burden organisation wide

Hosted Managed Service
The task cube concept helps illustrate the (often hidden) manual approach to
undertaking offline procurement exercises….



                                                  Now calculate:
                                                  • Single RFI (PQQ)
                                                  • Single RFQ (ITT)
                                                  • Single project (Tender)
                                                  • Department per month
                                                  • Department per annum
                                                  • Organisation per annum

                                                  • Now consider the cost.
      Shrinking the cube…
Hosted Managed Service
The process and burden can be significantly automated with the application of
eSourcing tools and tactics….
                                                 Tactics:
                                                 • Online questionnaires (web-forms)
                                                 • Maximise ‘Closed’ questions
                                                 • Minimise ‘Open’ questions
                                                 • Automated financial analysis
                                                 • Automated Scoring
                                                 • Weighting
                                                 • Filtering
                                                 • Stage-gates
                                                 • eEvaluation
                                                 • Instant tabulation
                                                 • Scenario analysis
                                                 • Vendor Management
                                                 • Pre-assessed supplier lists/profiles
                                                 • Eliminate RFI/PQQ stage
                                                 • Lotting
                                                 • Templates
 „Real life‟ Headline Benefits

94% of users agree that eTendering reduces the cost
and timescales of tendering.
83% of users agree that eTendering provides better
information to suppliers.
97% of users agree that eTendering provides greater
auditability and control.
68% of users also see more than 20% time and effort
reduction with electronic RFIs/PQQs (20% saved greater
than 50%).
76% of users also see more than 20% time and effort
reduction with electronic RFQs/ITTs (17% saved greater
than 50%).
The average cash saving on electronic Auctions is c15%
private sector, c20% public sector.
                                    Source: Survey of BravoSolution users
 Example – Auto-Scoring (with Weights & Filtering)




         Section Totals                                      Section Totals



Supplier X Total Non-Price Score                     Supplier X Total Price Score


                           Supplier X Total Weighted Score
                      Example: Automation Drives Price Improvements
Number of Suppliers




                                          Potential Savings
                                                     Collaboration/OJEU/PQQ
               Example: Stage Gates & eEvaluation…
                                                                                                                                      ITT Phase                                                                 Evaluate/eAuction/Contract

                             INTERNAL STAKEHOLDERS




                                                                                                                                                                                                           Stakeholders
                                                                                                                                                                                                            review ITT
                                                                                                                                                                                                            responses
               eEvaluation




                                                                                                                                        Build online
                                                                                                                                      Evaluation model
                                                                                                                                                                                                                                 Gate 3
                                                                                                                                                                                                                                  Reports &
                                                                                                                                                                                                                                  Feedback
                                                                                                                                                                                                                                  generated
BUY SIDE




                                                                                           PQQ RESPONSE DEADLINE




                                                                                                                                                                                 ITT RESPONSE DEADLINE
                                                                                                                   Gate 1                                                                                  Gate 2
                                                                                                                                                             Use Secure                                       Review ITT            Invite to:
                                                       Build Tender   Create & Publish                             Evaluate PQQ                          Messaging to interact                                                                     Award contract
                                                                                                                                      Create & Publish                                                   responses & shortlist     - eAuction
                                                             &          PQQ online                                  responses &                            on clarifications                                for stakeholder
                                                                                                                                         online ITT                                                                                  - BAFO
                                                       OJEU Notice     questionnaire                               shortlist to ITT                                                                            evaluation        - Final Round
               eTendering
 SUPPLY SIDE




                                                                          Register,                                                                          Use Secure                                                          Participate in:    Contract Award
                                                                                                                                      Receive invite &
                                                                      Express Interest &                                                                 Messaging to interact                                                     - eAuction             or
                                                                                                                                       complete ITT        on clarifications                                                                       Receive Feedback
                                                                       Complete PQQ                                                                                                                                                  - BAFO
                                                                                                                                                                                                                                 - Final Round
            Why? - Business rationale summary

                                               Governance
                                           -Visibility, Audit trail, reporting
                                       - “What gets measured, gets managed”




           Savings                                                                   Cycle Time
-   eAuctions drive cashable savings                                                  - 20-40% less time/effort
        across diverse categories
                                                                                     - Faster end to end process
     - Increased supplier numbers
                                                                                 - More projects with same resource
         = increased competition                                                    or same projects with reduced
                                                                                               resource




                   Risk                                                              Focus
      Best practice processes, mitigate                                 Time freed can drive value elsewhere
     risk by fact based decision making                                   – supplier performance, contract
                                                                       management, specifications, eAuctions
                                                                                       etc. etc.

								
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