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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