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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 l.jpg

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.


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©


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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. ©