eProcurement goes mainstream

Citation

(2004), "eProcurement goes mainstream", International Journal of Productivity and Performance Management, Vol. 53 No. 2. https://doi.org/10.1108/ijppm.2004.07953baf.002

eProcurement goes mainstream

Since October 2002, when the UK Office of Government Commerce (OGC) Supervisory Board approved a strategy for the adoption of electronic procurement by central civil government, a number of significant milestones have been achieved.

For example, the Office of the Deputy Prime Minister, along with the Department for Transport, has recently completed the implementation of their electronic purchasing system. The system is integrated with their finance system and utilises electronic catalogues, automatic workflow, electronic orders and electronic invoices. The system will enable the two Departments to process at least 60 per cent of their routine transactions electronically.

Continuing the drive towards improving eProcurement, OGC – alongside government departments – is promoting the use of eProcurement tools and solutions and supporting trials for a common IT language.

What is eProcurement?

OGC defines eProcurement as the use of electronic methods in every stage of the purchasing process from identification of requirement through to payment, and potentially to contract management.

The eProcurement strategy for central civil government follows extensive research into how eProcurement can bring added value to departments’ procurement activity. The strategy is composed of three main work strands.

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  Establishment of framework agreements. To procure commercial off the shelf (COTS) tools for interoperable systems to e-enable the procurement and sourcing processes.

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  Change management. To influence policy direction and best practice and to establish a common approach for central civil government over the next three years.

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  Carrying out a feasibility study for an eHub. Examining how a single point of entry using common standards of communication language and coding convention might provide a data translation service between Government and supplier systems.

This year, OGC and BASDA (Business Applications Software Developers Association) announced they are working together on XML schemes: a joined up approach between Government and industry to resolve the issue of information sharing across different computer systems. Trials are under way to establish common IT standards for eProcurement, which will enable suppliers and public sector buyers to conduct business online more easily.

For buyer and supplier systems to transact successfully, the information they exchange must be understood by both parties’ systems. To facilitate this understanding, the eGIF (eGovernment Interoperability Framework), has adopted eXtensible Markup Language (XML) as a core standard for data integration between Government and business.

Given the growing number of items that can be purchased online, a method of identifying similar items (goods and services) is required. Commodity coding is the method of assigning common codes to item records (at the part number level) and to purchase orders (at the line item level) to help a user when searching for a particular item to buy and, subsequently, in providing structure for Management Information (MI) reporting.

The OGC recommends UN-SPSC (United Nations Standard Product and Services Code) as the commodity coding structure for the UK’s central civil government eProcurement requirement. (UN-SPSC can be downloaded free of charge at www.un.spsc.net/) The CPV (Common Procurement Vocabulary) is already used for OJEC notices (Official Journal of the European Communities), following a recommendation by the European Commission in 1996.

Money-saving eAuctions

eAuctions have been used by a number of government departments to significantly reduce the contract price of products and services. They also help make the bidding process more transparent and open to suppliers.

The Environment Agency, for example, has achieved savings totalling £1 million in nine months after using electronic reverse auctions to award contracts for goods and services. So far, auctions have taken place for the supply of electricity, IT consumables, paper and stationery.

OGC has recently published guidance on the use of eAuctions and is collating case studies, data on the implementation of eProcurement tools and figures on the savings generated by eProcurement across central civil government.

For further information please visit www.ogc.gov.uk and click on eProcurement.