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eMarkets Susan L. Fitzgerald, CPPO, C.P.M. © Winbourne and Costas, Inc. Wednesday, September 26, 2001 GSA/CommerceNet, White House Conference Center Washington, D.C. e-Procurement Trends e-Catalogs, e-Malls, e-Shopping Carts Vendor Product & Service Offerings On-Line

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emarkets

eMarkets

Susan L. Fitzgerald, CPPO, C.P.M.©

Winbourne and Costas, Inc.

Wednesday, September 26, 2001

GSA/CommerceNet, White House Conference Center

Washington, D.C.

slide2

e-Procurement Trends

  • e-Catalogs, e-Malls, e-Shopping Carts
    • Vendor Product & Service Offerings On-Line
    • Open Market, Contracts/Agreements or Schedules
  • e-Bidding
    • Solicitation Distribution
    • Receive & Tabulate e-Bids or Proposals
    • Reverse Auctioning
  • e-Marketplace
    • Bring Buyers & Sellers Together
    • Punch Out
  • Control & Reconciliation
    • Level 3 Data
    • Workflow

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

fee revenue models
Fee & Revenue Models
  • Government Pay
    • Initial Investment or Fee Per Purchase Order
  • Vendor Pay
    • Transaction Fee Per Order
    • Subscription, Bid/Quote Fee
    • Catalog Maintenance/Hosting Fee
    • Software License Fee
  • Fee Determined by Market
    • Different for Vendor Type, Commodity or Order Cap
  • Reverse Auctions
    • % of Savings, Transaction, Subscription, Hosting Fee
  • Revenue Generating

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

fee principles
Fee Principles
  • Fee Creates Behavior—Value Judgment
  • e-Procurement Provider Needs to Eventually Get Paid—ROI
  • Fee Should Support Behavior You Deem Necessary for Long Term Success
    • If no one uses, transaction volume does not increase and host does not obtain dollars to get back initial investment.
    • Transaction volume, great open market prices, and free to government is dependent on significant usage.
  • Everyone Shares in the Costs and Benefits of Conducting Business Online
  • Does Fee Pass Through to Government?
    • Value Proposition & Measurement
  • To Make Money, Requires Usage—To Get Usage Requires Political Consensus

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

cultivating a new paradigm
Cultivating a New Paradigm
  • At the end of the day, is e-Procurement going to help you…
    • Attain Organization Mission
    • Achieve Better Prices,Values and Controls
    • Reduce Administrative Burden
    • Satisfy Stakeholder Requirements
    • Manage Your Business?

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

how could it affect you
How Could It Affect You?
  • Small Purchases
  • Sourcing
  • Socio-Economic Initiatives
  • Best Value
  • Reverse Auctions
  • Service Contracting
  • Authentication
  • Open Integration

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

impediments risk and fear
Impediments—Risk and Fear
  • Legislative Authority
  • Mandatory vs. Voluntary Use
  • “Customer” Satisfaction
    • Investment in Time—Value Add—Easier than Current Processes
    • One Point of Data Entry
  • Funding
    • Budget & Appropriations
    • Vendor Acceptance & Impact on Small, Minority, Disadvantaged
  • Ownership
    • ASP or Government
  • Functionality
    • Process Reengineering
  • Integration to Front & Back-end Systems

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

keys to success
Keys to Success
  • Attainable Goal(s)—Focus on Vision
    • Walk Before You Run—Method(s) of Procurement
  • Simplicity—Easier than Current Process
  • Executive & Government Support
    • Governing Body, Executive, Finance, IT, Procurement
  • Investment of Customer—Focus Groups
  • Supplier Enablement & Engagement
  • Current, Accurate Data
    • What do you use now? What does the data look like? How do you leverage?
  • Fees, Revenues and Impact—Value & Savings
    • Communication and Marketing

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

market research
Market Research
  • ROI Promises
    • Government & Vendor Perspective
  • Guarantee of Expenditures Levels
    • System Spend = Expectation for Suitable Procurement Candidates through Solution
  • Catalog Content Management
    • Who does it and what does it mean?
    • Government vs. ASP vs. Vendor
  • Total Cost and Fee(s) & Potential Pass Through
    • Transaction, Catalog, Subscription, Bid/Quote
  • Government and Administrative Functions
  • Provider Reliability & Continuity

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

slide10

Government Benefits—ROI

  • Simple and Easy to Use—Faster Transactions
  • Contracts at Buyer’s Fingertips
  • Immediate Access to Small Purchase Vendors
  • Leverage Buying Power
  • Increased Reporting Capabilities
  • Search Socio-Economic Vendor Requirements
  • Reduction in Administrative Processing Costs
    • Average Cost to Process PO Manually = $75 to $150
    • Average Cost to Process Electronically = $1.50
  • Focus on making better buying decisions and negotiating complex procurement actions

Saves Taxpayer’s Dollars

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

vendor benefits
Vendor Benefits
  • Enhances Market Visibility & Access
    • Capture Greater Market Share
    • Ensure Vendor is Everywhere that Customer is Buying
    • Publish Once & Sell to Many
  • Increases Sales Productivity
    • Reduce Cost of Selling to Fragmented and Regulated Market
    • Promote Products with 24 x 7 Digital Sales Agents
    • Free Sales Staff to Focus on High End Sales and Customer Service
  • Streamlines Order Processing—Speeds Delivery
  • Reduces Administrative Costs
    • Reduce Cost of Doing Business with Government

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

policy decisions
Policy Decisions
  • Mandatory vs. Voluntary Utilization
    • Optional Yields Approx. 15-20% of Transactions
    • Mandatory Yields Approx. 80-90% of Transactions
  • Funding Model and Limitations
    • Appropriated vs. Vendor
  • Key Legislative & Stakeholder Buy-in
    • Governing Body, Executive Office, CIO, CFO
  • Small & Disadvantaged Community Impact
    • Balance Transaction Fee and Impact
  • Government Hosted vs. Application Service Provider (ASP)
  • Integrate with Front & Back-End Systems

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

implementation race
Implementation Race
  • High Usage & Dollar Items—Repetitive Buys
  • Contract & Price Agreement Spend
    • Maximize Utilization
    • Eliminate Administrative Expenses
  • Work Flows & Approvals
    • Change Purchase Thresholds
  • Audit Trails & Protest Disposition
  • Stakeholder Buy-In and Expectations
    • Executive, Regulatory, Administrative, Customer, Vendor, Other Governmental Entities
  • Leverage Existing and Future Technologies

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

making your vision a reality
Making Your Vision a Reality
  • 30 Ft View – How will it improve financial position and procurement function, while facilitating the attainment of governmental initiatives?
  • What is impact on government procurement reform?
  • What are government priorities and how does it affect everyday business?

Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©