Agenda:

2. Ontario Education Collaborative Marketplace Leading Change in Supply Chain ManagementCanadian Association of University Business OfficersJune 20, 2006

3. OECM Overview e-Marketplaces Overview OECM Progress Update and Next Steps OECM Representatives and Contact Info • OECM Overview – Franca Gemignani • e-Marketplaces Overview – Daniel Orenstein • OECM Progress Update and Next Steps – Renata Faverin • OECM Representatives and Contact Info Agenda:

4. OECM Overview e-Marketplaces Overview OECM Progress Update and Next Steps OECM Representatives and Contact Info • What is OECM? – Our key objectives • Who is participating in OECM? – The institutions currently involved • Why OECM? – The value for institutions, purchasing professionals, suppliers OECM Overview:

5. What is OECM? June 20, 2006 • OECM is an electronic marketplace that connects buyers and suppliers together to facilitate more effective, efficient procurement • OECM is buyer-led (our institutions are key beneficiaries) • OECM’s longer term operating and governance models are currently under consideration • OECM initiative is being supported by the Ministry of Finance 5

6. OECMMarketplace Suppliers Buyers Contract Management Supplier Portal Spend Analysis Marketplace Services Browser Browser Requisitions Purchasing System Order Management System Orders Catalogues Bids Transactions / Enterprise Application Integration What is OECM? The Proposed Model June 20, 2006 6

7. What is OECM? The Proposed Model June 20, 2006 EduBuys • Requisitioning / shopping cart and approvals processed in marketplace • Post-requisitioning processed handled by entity’s back-end systems • Pricing, descriptions for goods / services through catalogues EduBuys Plus • All purchasing transactions (requisitioning / shopping cart to invoice entry) created, reside in marketplace • Invoice data sent to entity’s back-end systems (similar to PCard) Supplier Portal • Supplier integration services, catalogue hosting, automated validation • Compare prices for catalogue items posted by multiple suppliers • Add-on services (e.g. catalogue creation, invoice generation) available eRFX • Electronic management of RFIs, RFPs, RFQs and public posting of RFX documents (in parallel to posting at MERX) • Multiple users can collaborate on building electronic contracts Go-Live Functionality Planned Functionality Auctions • Conduct reverse and standard auctions • Notify subscribed suppliers of auction events Spend Analysis • Electronic analysis of purchasing data to determine spending patterns and trends for a given entity Contract Management • Create, store, edit and manage any type of contract • Monitor supplier contract compliance 7

8. Who is Participating in OECM? June 20, 2006 • Current OECM participating institutions generate an estimated $1.3B in annual spending: • Significant Buying Power • Ontario schools, colleges, universities represent approximately • $2B in annual spending. 8

9. Who is Participating in OECM? June 20, 2006 • And the momentum is growing… • Expressions of Support • Brock University • Carleton University • Dufferin-Peel Catholic District School Board • Fleming College • George Brown College • Georgian College • Lakehead University • Laurentian University • Queen’s University • University of Guelph • University of Windsor • Wilfrid Laurier University • McMaster University • Expressions of Interest • Conseil scolaire catholique Franco-Nord • Huron Superior Catholic District School Board • Board of Governors of the Niagara College of Applied and Technical Arts • Upper Grand District School Board 9

10. E-procurement is less time-consuming, more efficient, cheaper than traditional methods of procurement Hours / Order 3.46 hours 0.33 Steps / Order 29+ 7 Cost / Transaction $129 $12 E-procurement Traditional procurement Source: U of T Survey Feb 2003 Why OECM? June 20, 2006 • Within the education sector, institutions have long been sharing ideas for better ways to manage procurement activities • Want to leverage procurement best practices, success stories from U of T and public sector, such as eVirginia (eVA) 10

11. OECM Process Savings Cost Savings Steps per transaction Unit cost via leverage with suppliers  Time per transaction Supply chain tech costs / institution  Order accuracy (reduced returns) Contract compliance  Data for better buying decisions Common contracts Legislative, policy compliance Supplier consolidation Selection at better prices Leverage Leading Practices How $85M in Savings* Can Be Achieved * Savings are a combination of process savings of $75 per transaction as well as savings realized on the price of purchased items. 11

12. Why OECM? The Value for Institutions June 20, 2006 • Will meet the needs of the majority of institutions – regardless of size, governance, geography • Design, development and implementation of the marketplace are supported by the Ministry of Finance for institutions signing commitment letters • Institutions’ willingness to participate is very positively viewed by MoF, MTCU, MoE • Coming this Fall 2006: Institutional Membership Campaign • OECM looks forward to welcoming new institutional members from universities, colleges and school boards! We will provide the Ministry of Finance with an updated membership list, as per its request. 12

13. Why OECM? The Value for Institutions June 20, 2006 • Maximize efficiency in the back office – make complex processes more user-friendly, less costly • Better buying experience for researchers, administrators, teachers, etc. • Improved leverage with suppliers – greater standardization, better processing services • Reduced supply chain technology investments for each participating institution • What will you do with your share of the savings? • OECM is projected to result in process efficiency and strategic sourcing savings of over $85 million by FY 2009/2010. 13

14. Why OECM? The Value for Purchasing Professionals June 20, 2006 • Ensure purchasing policies are followed – OECM workflow will ensure applicable policies, legislation/approvals are followed • Free up time – OECM will simplify purchasing process, and reduce manual, paper-based tasks • Facilitate accountability, full audit trail – OECM will record actions, decisions taken for every transaction • Stretch budget dollars – • Automation will reduce cost/buying transaction • Stronger collective buying power will result in lower prices for those on the marketplace • $ reinvested in education • OECM supports Ontario University Purchasing Management Association’s (OUPMA) missions and goals • OECM directly supports OUPMA’s mission to foster closer cooperation and exchange of information (e.g. purchasing best practices), AND goal of cooperative purchasing ventures to leverage institutional spending. 14

15. Why OECM? The Value for Purchasing Professionals June 20, 2006 • Receive goods & services sooner – e-Marketplace will reduce transaction processing time • Improve order accuracy via OECM online, supplier-maintained catalogueson the e-Marketplace • Find better products and services – OECM can connect institutions with a wider range of suppliers • Gain better insight into purchasing activities – • Order the right amount at the right time • Better leverage for contract negotiations • Better management reporting capability • Stay up-to-date – OECM will bring product updates/changes via supplier maintained catalogues 15

16. Why OECM? The Value for Suppliers June 20, 2006 • Ability to grow revenues – common access point for universities, colleges, schools with $2B in total annual spend • Minimize cost of goods sold – OECM provides one common procurement process for all participating buyers • Improve competitive position – suppliers of all sizes, geographic locations can compete to supply same buyers • One-Stop Access to a $2B Market • OECM’s significant value proposition to suppliers will facilitate larger product selection at the best possible prices for participating institutions. 16

17. OECM Overview e-Marketplaces Overview OECM Progress Update and Next Steps OECM Representatives and Contact Info • Underlying Technology of e-Marketplaces • Evolution of e-Marketplaces (North America, Public Sector) • Case Study 1: eVA • Case Study 2: Quebec Hospitals • Key Implementation Challenges e-Marketplaces Overview:

18. e-Marketplaces – Underlying TechnologyKey Components June 20, 2006 • Technology is an enabler for continuously improving procurement practices. • Four key e-Marketplace technology components: • Provides marketplace functionality • Supported by multiple servers and databases Marketplace Applications • EAI tools connect marketplace applications to institutions’/suppliers’ back end systems • Ready-built templates available to expedite information transfer between marketplace applications and institutions’/suppliers’ back-end systems B2B / A2A Interface Layer • Provides secure data transmissions, firewalls, virus and intrusion detection / protection and user authentication Security • Provides hardware/networks for n-tier architecture applications • Supports application, security and integration layers System Infrastructure 18

19. Evolution of e-marketplaces (North America) June 20, 2006 • Late 1990s • e-Marketplaces introduced with entry of viable e-procurement software offerings • 2000 – 2001 • e-Marketplace consolidation following Dot-Com bust • Late 1990s to 2000-2001 • Private and public sector rush to establish e-marketplaces. • Marketplace segmented into: • buyer-anchored marketplaces; • supplier-anchored marketplaces; and • third-party marketplaces. • 2000-2001 to Present • e-Marketplaces evolve from offering all services to all participants to offering set of services for key needs of participants. • Continuing emergence of marketplaces based on lesson learned from late 1990s, maturing of software technology. 19

20. Evolution of e-marketplaces (Public Sector) June 20, 2006 • Public sector a key beneficiary of e-procurement: • High total expenditure from distributed points of order • Can leverage total spend to get best possible prices • Deal with many suppliers at high degree of openness • Several examples of e-marketplaces, 2 cases provided here • Case Study 1 eVA • Case Study 2 Quebec Hospitals • “The public sector potentially, and eventually, has the greatest benefits to gain from the use of electronic procurement, because they have a very high total expenditure and in general highly distributed points of order.” • Andy Kyte • VP B2B Research Director, Gartner Group 20

21. Case Study 1: eVA June 20, 2006 The Challenge • Procurement activities decentralized across 180+ entities (including schools, colleges and universities) – system and process redundancies • Procurement activities used variety of desktop applications, automated purchasing systems, manual processes • Collective buying power not leveraged • Lack of vendor and purchasing data reporting • Inconsistent use of latest technology, industry standards, best business practices • Single Face for Procurement • In May 2000, Governor James Gilmore mandates the implementation of a new e-procurement system to establish a “single face for procurement” for Commonwealth users and vendors. 21

22. Automated Procurement Activities eMall Online Access to Catalogues Online Vendor Registration Integration with Commonwealth ERP Systems Vendor and Purchasing Data Warehouse Case Study 1: eVA June 20, 2006 The Solution • Automated procurement activities – entire process (point-of-need to award) streamlined, accelerated • eMall – buyers search, compare offers online; vendors get one-stop access to government market • Online vendor registration – eliminates multiple vendor registrations; buyers have single source for locating vendors • Integration with Commonwealth ERP systems – enables procurement system “plug-and-pay” with eVA for Commonwealth entities • Vendor and purchasing data warehouse – identify savings opportunities on common products, real-time financial information for decision-making 22

23. eVA Portal Bids Submitted, EDI Invoices Orders, Solicitations Bids, Vendor Data Order Received Real-time Catalogues Purchasing Transactions Warehouse Vendor Data Warehouse Agency Procurement System Vendors Authentication Integrity Efficiency Completeness eMall Vendor Data Push / Public Posting Vendor Registration Requisitioning & Ordering Bidding / Contracting Auctions Receiving & Invoicing Case Study 1: eVA June 20, 2006 23

24. Case Study 1: eVA June 20, 2006 The Results eVA is the most comprehensive e-procurement solution in the US, and the fastest state-wide procurement system rollout ever achieved. eVA is repeatable. • $114M in savings • $36.5M in annual savings, cost avoidance • Reduced cost/purchase order by 50% • Reduced solicitation to award processing time by up to 70% • 960,000+ orders processed • $8.8B in orders • 983 catalogues • 32,482 vendors • 171 agencies, 492 localities • 9,100+ users 24

25. Case Study 2: Quebec Hospitals June 20, 2006 • The Challenge • Five participating hospitals (11,000+ employees) using different infrastructures, legacy systems, process flow, business procedures – system and process redundancies • Purchasing process long, manually-intensive, duplication of tasks • Order errors due to manually-intensive re-typing • Lack of up-to-date product information • Collective buyer power not leveraged • Inconsistent use of latest procurement technology, industry standards and best business practices 25

26. Case Study 2: Quebec Hospitals June 20, 2006 • The Solution • Implemented first SAP Application Service Provider (ASP) model in Quebec healthcare sector • Streamlined practices, proposed standardized processes • Implemented procurement best practices • Implemented marketplace and content management solutions and integration services using: • Global Health Exchange (GHX) Connect Plus • GHX Content Centre 26

27. Case Study 2: Quebec Hospitals June 20, 2006 • The Results • Reduced order completion time from 2 days to an average of 10 minutes • Hôpital Sacré-Coeur anticipates savings of $1.8M in nursing hours over next 5 years, $1.2M in costs • Eliminated obsolete, duplicate, and inaccurate product information • Significantly reduced transaction errors by eliminating need to re-input documents 27

28. Key Implementation Challenges June 20, 2006 • Defining functionality that meets critical needs of all participating institutions • Establishing, maintaining buy-in from a wide range of stakeholders (i.e. buyers, suppliers, government, and citizens) • Establishing governance, MOU between participating entities and the marketplace • Maintaining commitment, ongoing involvement of OECM steering committee • Obtaining credible e-Marketplace expertise to deliver OECM • Effective change management – not technology – is the critical success factor in the successful implementation of e-marketplaces 28

29. OECM Overview e-Marketplaces Overview OECM Progress Update and Next Steps OECM Representatives and Contact Info • OECM Progress Update • OECM Next Steps • Participating Institutions’ Representatives • OECM Key Contacts OECM Progress Update and Next Steps:

30. OECM – Progress Update June 20, 2006 August 2005 OECM begins Phase 1 to evaluate potential for implementation of e-procurement marketplace March 2004 OntarioBuys is initiated April 2006 OECM Phase 2 funding of $1.2M received March 2005 Small group of procurement professionals from universities, colleges, school boards (SCU) develop joint funding proposal to MoF November 2005 OECM completes Phase 1, identifying significant economic, operational savings May 2006 OECM begins Phase 2: Software Selection and Detailed Design 30

31. OECM – Next Steps June 20, 2006 • Spring/Summer 2006 • Phase 2: Software Selection and Detailed Design begins (CGI engaged) • Develop communications and marketing plan to ensure all stakeholders are continually updated • Website under development and will be ready by fall • Newsletters being developed for the three sectors and will be distributed through Associations (NPC will be provided updates for CAUBO) • Develop buyer, supplier adoption strategies • Develop future OECM governance model 31

32. OECM – Next Steps June 20, 2006 • Spring/Summer 2006 • Develop Due Diligence Framework to: • Validate the financial model and assumptions based on an independent review of the business case • Validate the technology readiness of e-marketplaces in large, broader public sector environments • Identify audit “e-paper trails” to satisfy all stakeholders 32

33. OECM – Next Steps June 20, 2006 • Fall 2006 • Deliver four (4) regional in-depth workshops to universities, colleges, schools on OECM project • Institutional Membership Campaign begins • Supplier Membership Campaign continues • Begin design of marketplace 33

34. Participating Institutions’ Representatives June 20, 2006 34

35. OECM Key Contacts June 20, 2006 • Renata Faverin, • Chair, OECM Steering Committee and Director, Procurement Services, • York University • (416) 736-5143 • Franca Gemignani, • Project Coordinator, OECM • fmgeminan@rogers.com • (416) 627-3489 35

36. Thank You