E-Procurement Are we playing it safe

1. E-Procurement �Are we playing it safe? Nicole Edbrooke Strategic Procurement Manager Essex County Council

2. Objectives of presentation A definition of e-procurement The Essex experience Future State � where are the challenges?

3. E-procurement Toolkit

4. Procurement Process & role of Solutions

5. E-procurement Is: A tool Part of a Procurement Strategy An enabler Purchase to Pay (P2P) Is not: An end in itself Driven by Government targets A tick in the box for the National Procurement Strategy

6. Drivers Poor management information account code v procurement classification Who is buying what from which suppliers Maverick spend � poor compliance with existing contracts Tactical Procurement Strategy Focus resources on high value, high risk requirements

8. The Essex Vision This diagram sets out the blocks that will deliver this � these blocks can be applied to any of the services that you�re involved with. The actual implementation and operation of these blocks may vary slightly, depending on the goods or services being bought, but the principle applies just the same. EG a social worker sits with a client at the client's home, and arranges a home care package. They type the details onto a hand-held or tablet computer and the information is (immediately, or with short time lapse) downloaded to the office system. This triggers a number of actions including: Commissioning delivery of the package (where it is within the agreed approval limits and conditions) Setting up payment details and getting payments underway, invoicing the client, if appropriate Providing the mechanism for an electronic match for the invoice (from the care provider) Providing the basis for automatic payment once matched Recording commitment of the funds Recording the package for performance management purposes Providing the basis for easy, largely automated, access for managers in the service and at the centre to financial and performance information Providing the basis for more formal reports on that information, again largely automated� This particular example is complex � and it requires close integration with some of the other transformational projects such as the Assessment review. Nevertheless, it serves to demonstrate the vision of the programme. This diagram sets out the blocks that will deliver this � these blocks can be applied to any of the services that you�re involved with. The actual implementation and operation of these blocks may vary slightly, depending on the goods or services being bought, but the principle applies just the same. EG a social worker sits with a client at the client's home, and arranges a home care package. They type the details onto a hand-held or tablet computer and the information is (immediately, or with short time lapse) downloaded to the office system. This triggers a number of actions including: Commissioning delivery of the package (where it is within the agreed approval limits and conditions) Setting up payment details and getting payments underway, invoicing the client, if appropriate Providing the mechanism for an electronic match for the invoice (from the care provider) Providing the basis for automatic payment once matched Recording commitment of the funds Recording the package for performance management purposes Providing the basis for easy, largely automated, access for managers in the service and at the centre to financial and performance information Providing the basis for more formal reports on that information, again largely automated� This particular example is complex � and it requires close integration with some of the other transformational projects such as the Assessment review. Nevertheless, it serves to demonstrate the vision of the programme.

10. Critical Mass � 104m spend in FY 05/06 Over 43,000 Purchase Orders raised 2500 Users 6000 Suppliers 3 Punch-outs 38 Catalogues

12. Objectives Direct content through catalogues and punch outs Capture the 80% services spend Reduce off-contract spend Scalable options for suppliers � don�t disenfranchise small or local suppliers Host catalogues externally Web based

13. Benefits Streamlined back end processing Visibility & management of spend Better compliance with existing contracts

14. Learning Resources � don�t under estimate Diversity and size of organisation Top level sponsorship & mandate Engagement & communications at lower levels Review policies and procedures Supplier Engagement � 99% of our suppliers can trade with us electronically

16. Where Next for Essex Targets: �100m efficiency target by 2008 �36m procurement savings target 06/07 �4.9m from e-procurement 06/07 �650k from e-invoicing Introducing e-Invoicing Increasing compliance with contracts and the e-procurement system Applying learning to complex spend areas

17. Benefits of E-Invoicing Free up front line resources to focus on value-added activities through automation of existing manual processes Reducing the cost of providing central financial support services Maximise leverage with suppliers through the introduction of an electronic end to end purchase to pay cycle

18. Challenges for e-invoicing Providing a scalable solution for all suppliers which delivers mutual benefit Automatic matching between invoice, receipt and purchase order, automating the payment and improving BVPI8 return Applying e-procurement principles to complex spend areas

19. E-procurement and complex spend Potentially a big prize given numbers / spend and budget pressures Is consistent with strategic procurement focus Leverages investment made to date in e-procurement Benefits of visibility of spend, control & compliance and reduction in process cost for buyer & supplier as relevant, if not more so, in service contracts

20. Moving to Complex Spend Areas and connection to service based business systems

21. E-procurement and complex spend The challenges: Cultural and organisational � evidencing the case for change in front line service delivery areas Legacy systems � consider whether to adapt, migrate or connect Suppliers � ensuring suppliers get equal value from the use of e-procurement in order that they themselves become advocates Procurement Strategy � obtaining acceptance that there is a role for e-procurement in one form or another, within the management of complex procurements

22. Questions Have you maximised the efficiencies from the full P2P cycle? How good is your visibility of all spend? Do you still need to deliver further efficiency's? If a 2% saving available from 50 of top 100 suppliers what would this equate to ? Is it worth exploring further ?

23. Any Questions?