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Ontario Education Collaborative Marketplace Leading Change in Supply Chain Management Canadian Assoc


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Title: Ontario Education Collaborative Marketplace Leading Change in Supply Chain Management Canadian Assoc

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Ontario Education Collaborative
Marketplace Leading Change in Supply Chain
Management Canadian Association of University
Business Officers June 20, 2006
  • OECM Overview Franca Gemignani
  • e-Marketplaces Overview Daniel Orenstein
  • OECM Progress Update and Next Steps Renata
  • OECM Representatives and Contact Info

OECM Overview
  • What is OECM? Our key objectives
  • Who is participating in OECM? The institutions
    currently involved
  • Why OECM? The value for institutions,
    purchasing professionals, suppliers

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
  • OECMs longer term operating and governance
    models are currently under consideration
  • OECM initiative is being supported by the
    Ministry of Finance

What is OECM? The Proposed Model
June 20, 2006
What is OECM? The Proposed Model
June 20, 2006
  • Requisitioning / shopping cart and approvals
    processed in marketplace
  • Post-requisitioning processed handled by entitys
    back-end systems
  • Pricing, descriptions for goods / services
    through catalogues

  • All purchasing transactions (requisitioning /
    shopping cart to invoice entry) created, reside
    in marketplace
  • Invoice data sent to entitys back-end systems
    (similar to PCard)

EduBuys Plus
  • 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

Supplier Portal
  • 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
  • Conduct reverse and standard auctions
  • Notify subscribed suppliers of auction events

  • Electronic analysis of purchasing data to
    determine spending patterns and trends for a
    given entity

Spend Analysis
  • Create, store, edit and manage any type of
  • Monitor supplier contract compliance

Contract Management
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.
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
  • Queens 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

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)

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.
Why OECM? The Value for Institutions
June 20, 2006
  • Will meet the needs of the majority of
    institutions regardless of size, governance,
  • Design, development and implementation of the
    marketplace are supported by the Ministry of
    Finance for institutions signing commitment
  • 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.
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.
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 Associations (OUPMA) missions and
goals OECM directly supports OUPMAs mission to
foster closer cooperation and exchange of
information (e.g. purchasing best practices), AND
goal of cooperative purchasing ventures to
leverage institutional spending.
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 catalogues on the
  • Find better products and services OECM can
    connect institutions with a wider range of
  • 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

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
  • Improve competitive position suppliers of all
    sizes, geographic locations can compete to supply
    same buyers

One-Stop Access to a 2B Market OECMs
significant value proposition to suppliers will
facilitate larger product selection at the best
possible prices for participating institutions.
e-Marketplaces Overview
  • Underlying Technology of
  • Evolution of e-Marketplaces (North America,
    Public Sector)
  • Case Study 1 eVA
  • Case Study 2 Quebec Hospitals
  • Key Implementation Challenges

e-Marketplaces Underlying TechnologyKey
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

  • Provides hardware/networks for n-tier
    architecture applications
  • Supports application, security and integration

System Infrastructure
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
  • 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.

Evolution of e-marketplaces (Public Sector)
June 20, 2006
  • Public sector a key beneficiary of e-procurement
  • High total expenditure from distributed points of
  • Can leverage total spend to get best possible
  • Deal with many suppliers at high degree of
  • 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
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.
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

Case Study 1 eVA
June 20, 2006
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
  • 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

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

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
  • Implemented procurement best practices
  • Implemented marketplace and content management
    solutions and integration services using
  • Global Health Exchange (GHX) Connect Plus
  • GHX Content Centre

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
  • Eliminated obsolete, duplicate, and inaccurate
    product information
  • Significantly reduced transaction errors by
    eliminating need to re-input documents

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
OECM Progress Update and Next Steps
  • OECM Progress Update
  • OECM Next Steps
  • Participating Institutions Representatives
  • OECM Key Contacts

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

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
  • Validate the technology readiness of
    e-marketplaces in large, broader public sector
  • Identify audit e-paper trails to satisfy all

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

Participating Institutions Representatives
June 20, 2006
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_at_rogers.com
  • (416) 627-3489

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