Bargain Hunt II: Introduction to eSourcing

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• Bargain Hunt II Introduction to eSourcing
• Alan Gray Due North
• Beverley Lewis e-Three

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eSourcing

• Agenda
• Intro to Due North
• What is eSourcing
• The NWCE solution from a Procurer and Supplier
  perspective
• What is an eAuction
• Processes
• Benefits
• Intro to eThree

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Due North

• A software development company
• Specialise in eSource applications
• Developed by LGAs for LGAs
• First Tender application in Jan.2002
• Systems now used in over 100 organisations
• Work in Local Government, NHS,
• Higher Education and Emergency Services

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What is eSourcing?

• eSourcing is the discipline of applying internet
  technology to improve operational efficiency as
  well as spend reduction during the Purchasing
  cycle

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What is eSourcing
Or Obtaining competitive contracts with the
best suppliers, at the best market
prices, quickly and efficiently, using
specialist internet tools.
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Why should you use eSourcing?

• Efficiency
• Consistency
• Repeatability
• Collaboration
• Accountability
• Cost savings
• Major Police Force 950/tender
• Buying Consortium 360,000 in one year

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Benefits of eSourcing

• Buyers
• Access to more Suppliers
• Assess more suppliers efficiently
• Web-based (No email, paper or post!)
• Send suppliers electronic information (Pictures,
  Specs)
• Drives project discipline (EU compliance)
• Suppliers
• Share information around their organisation
• Repeatable
• Simple structure to follow

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What has NWCE purchased?

• ProContract
• An intuitive and flexible software solution
• Enables Procurers to source suppliers - goods
  services
• Has integrated Auction
• Enables Contracts to be managed from inception to
  completion
• Fully Hosted and Managed Service

Initiate
Source
Award
Manage
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Due North ProContract - Initiate

• Enables Procurers to map all steps in sourcing
  and contract management
• From these steps a library of Templates is
  created and stored
• Collaboration rules are set up and roles assigned
  to procurement teams
• The workflow for the complete contract cycle is
  established
• Templates guide procurer through all steps in
  sourcing cycle

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Due North ProContract - Initiate
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Due North ProContract - Initiate
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Due North ProContract - Initiate
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Due North ProContract - Source

• Advertises forthcoming contract opportunities
• Software manages Expressions of Interest and Pre
  Qualification
• Approved publisher of OJEU notices
• Fully Manages all types of tendering from Request
  for Quotation to Invitation to Tender
• Includes an integrated Reverse Auction Tool
• Including transformation eAuctions

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Due North ProContract - Source
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Due North ProContract - Source
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Due North ProContract - Award

• Provides fully weighted Evaluation Tool
• Tool is library driven
• Enables post tender clarification
• Informs successful and unsuccessful suppliers of
  the results

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Due North ProContract - Evaluate
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Due North ProContract - Manage

• Contract Monitoring
• Record Key events
• Undertake meaningful Supplier Reviews
• Multi contract review
• Reporting
• Contract Register
• Transparency

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Due North ProContract - Manage
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Due North ProContract - Manage
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Due North ProContract - Supplier

• Supplier View
• Free Service
• Their own private area
• Can update their own details
• Reminders to update their own details
• Once registered, they get informed of
  opportunities
• Ability to track opportunities
• Improved communication with Procurers

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Due North ProContract Suppliers view
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Due North ProContract Suppliers view
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Due North ProContract Suppliers view
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Due North ProContract Suppliers view
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Due North ProContract Search for Opportunity
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Due North ProContract - Benefits

• Helps Generate Savings
• Process efficiencies
• Collaboration and Aggregation
• Monitors Supplier Performance
• Clear Supplier communication
• Key Activity prompts and escalation
• Transparent Process
• Access to software 24/7

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Due North ProContract Supplier Benefits

• Free service
• Never miss Contract Opportunities
• Creates more opportunity
• Easier Communication during Tenders
• Fair Transparent Tendering Process
• Saves Time, Money and Resource
• Intuitive Software - User Friendly
• Access to software 24/7

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What is an eAuction?

• A dynamic online negotiation process between
  pre-selected suppliers for a specific piece of
  business.

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eAuction vs Traditional Key Differences

• Traditional negotiation
• Buyer issues paper PQQ, ITT, inc. specs SLA.
• Suppliers prepare quotes.
• Supplier and buyer negotiate acceptable price.

• eAuction
• Buyer publishes electronic PQQ, ITT, inc. specs
  SLA.
• Suppliers prepare quotes.
• Suppliers compete with one another for buyers
  business.

Negotiation
Negotiation
Negotiation
Negotiation
Supplier A
Supplier B
Supplier C
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eSourcing V TraditionalProcess Benefits
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Key benefits for buyers?

• Buyers
• Suppliers and Buyers utilise an incorporated
  messaging facility
• Online evaluation tool aids scoring and
  evaluation
• Buyers can invite more than one representative
  from a supplier
• Material Costs
• Environmental Sustainability

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Key benefits for suppliers?

• Suppliers
• Online messaging facility and access to FAQs
• Respond to ePQQs/eITTs much quicker
• Access specifications, SLAs, contract
  information online
• Shorter sales cycle (30 days OJEU, 35 days ITT)
• Reduction in material costs

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Introduction to e-Three

• Software independent eSourcing specialists
• OGC framework eAuction providers
• Average savings achieved
• 18 private sector
• 26 public sector
• Established in 2002
• Procurement specialists from diverse industries
  and sectors with significant category management
  experience

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e-Three Services
Sourcing
Procurement
Products
Spend Visibility / Opportunity Assessment
Supplier identification/ Low cost Country Sourcing
Contract Negotiation / RFPs/Qs / eAuctions
Contract Writing
Contract Implementation
Category Management Spend Compliance
Collaboration
Collaborative Sourcing
Co-Procurement Supply Chain Forum
Tender Train
Public Sector Collaborative Sourcing
Solutions
Helpdesk Telephone support
Assisted Buying Specialist resource on-demand
Change Mgt Self-enablement via training support
Outsourcing Outsourced Sourcing Outsourced
Category Mgt
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Tender Train Model
Bespoke Contracts
Fragmented Spend
Local Borough Council
NHS Trust
Public Transport Organisation
Public Transport Organisation
Local Borough Council
County Council
Civil Service Organisation
NHS Trust
County Council
Leverage Volume
Civil Service Organisation
Process Synergy
Common Supply management
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Elements of e-Three Support
ePQQ
eITT
eAUCTION
Data Collection/Management
PQQ Template Creation
Bid Day Management/Support
Post bid reporting support
Bid Parameter Creation
Cost breakdown Creation
End to end Project Management
EU Procurement Directive Guidance
Supplier Management
Competitive Positioning
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e-Three Category Knowledge
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Agency Staff Wiltshire County Council

• Project Summary
• Collaborative projects between 6 local
  authorities
• Objective implement cost-effective tiered
  framework
• Annual spend 7 million

• Process Suppliers
• 103 expressions of interest
• 65 ePQQ, 30 ITT
• 26 Suppliers in eAuction
• Bidding workbook with all line items and volumes

• Results
• 25 savings
• Rationalised supply base
• Top 3 suppliers in each category bid similar
  pricing
• 3 year collaborative framework contract
  implemented covering various disciplines from
  social care, legal, manual and admin to IT and
  accountancy

• Critical Success Factors
• Supplier training
• Collaboration
• Inclusion of internal stakeholders

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Architectural Services

• Project Summary
• Transportation organisation
• 27M per year 4 year contract, total spend 108M
• Objective implement cost-effective framework

• Process Suppliers
• Specs from incumbent.
• Bidding workbook with all line items and volumes.
• 32 Suppliers

• Results
• 18 savings
• Rationalised supply base
• Improved quality more niche suppliers included,
  with competitive pricing
• 4 year framework contract implemented covering
  all architectural requirements

• Critical Success Factors
• Supplier training hand-holding suppliers
  are not good at tendering, and have little
  eAuction experience

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Office Furniture Liverpool City Council

• Project Summary
• Merseyside Collaborative Group led by Liverpool
  City Council
• 4M annual spend
• Objectives Cost savings collaboration

• Process Suppliers
• Full Sourcing process including OJEU, PQQ, ITT,
  product evaluation and eAuction

• Results
• Transformation eAuction
• 40 savings
• Rationalised supply base 1 local supplier

• Critical Success Factors
• Clear definition of product spec and product
  evaluation
• Robust cost-breakdowns
• Supplier Training

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Office Supplies Knowsley MBC

• Project Summary
• Merseyside Collaborative Group led by Knowsley
  MBC
• 4M annual spend
• Objectives Cost savings alignment with
  proactive supplier to manage spend

• Critical Success Factors
• Clear definition of product spec, plus
  alternative product proposals
• Robust cost-breakdowns

• Process Suppliers
• Full OJEU Tender utilising eSourcing platform,
  ePQQ, eITT and eAuction
• Core basket of top demand products for each of
  the collaborative authorities
• Quality evaluation completed prior to eAuction
  those of a min. quality invited to eAuction
• Catalogue Discount Lot
• 8 suppliers

• Results
• 25 savings
• Supplier rationalisation contract awarded to
  one supplier

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Examination Gloves

• Project Summary
• Collaborative tender process between Bristol City
  Council, UBHT and other NHS Trusts, local
  authorities and the police.
• Approx. annual spend of 1million
• Requirement for non sterile examination gloves

• Critical Success Factors
• Supplier day to explain eAuction process and
  tender opportunity
• Product sampling session
• Collaboration
• Transparency of process

• Process Suppliers
• OJEU procedure
• PQQ
• ITT 20 suppliers
• eAuction -9 suppliers
• Pro-active supplier management

• Results
• Savings of 40 for Bristol City Council and 20
  for UBHT
• Collaborative Framework

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Questions