Transcript PECOS Training Introduction - A.S.S.I.S.T – Facilities

eProcurement
The NHS Experience
Scott Haldane - Director of Finance / Deputy Chief Executive
NHS National Services Scotland
Session Objectives
 Overview of eProcurement Scotl@nd
 NHS Scotland approach
 Local implementation experience
eProcurement Scotl@nd
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What IS eProcurement?
• Electronic tools that support and expedite the transactional
purchasing process including:
• The use of on line catalogues
• Placing requisitions
• Routing for approval
• Sending to suppliers
(Essentially it is a buzzword for doing
procurement activities via the internet)
eProcurement Scotl@nd
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What is eProcurement Scotl@nd?
 Scottish Executive-wide initiative
 A nationally negotiated subscription based service
 Harness internet-based technologies
 A step-change in procurement practice
 An environment for more effective SRM
 A flexible approach that can be adapted across the Public
Sector
eProcurement Scotl@nd
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‘eProcurement Scotl@nd’ is designed to achieve:
 improved process efficiency
 improved Financial Control
 Government eBusiness Targets
PECOS
PECOS
Scottish
Executive
eProcurement Scotl@nd
Suppliers
5
PECOS is based on Remote Hosting
 PECOS application hosted by Elcom in Boston,
Massachusetts
 No new hardware or software required
 Only require a web browser
 Can be accessed from anywhere within your
organisation
 Available 24 hours, 7 days a week
 ‘Plug and Play’
eProcurement Scotl@nd
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An opportunity for the NHS (and Local Authorities?)
Scottish
Executive
PECOS
PECOS
Suppliers
NHS
Highland
Suppliers
NHS
Tayside
Suppliers
eProcurement Scotl@nd
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Analysis of the use of the System Showed:
…the NHS was using different suppliers for the same things…
Scottish
Executive
PECOS
PECOS
Supplier A
NHS
Highland
Supplier B
NHS
Tayside
Supplier C
eProcurement Scotl@nd
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Analysis of the system also showed:
…even when we bought from the same suppliers, we bought
slightly different things…or the same things at different prices…
Scottish
Executive
PECOS
PECOS
Supplier A
NHS
Highland
SE items
& pricing
Highland
items &
pricing
Supplier B
Tayside
items &
pricing
NHS
Tayside
eProcurement Scotl@nd
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A bright idea - NHS wide items and pricing
NHS NSS
PECOS
PECOS
Stationery
Supplier
IT Supplier 1
NHS
Highland
IT Supplier 2
NHS
Tayside
Travel
Supplier
But, we need to link it in to other activities…
eProcurement Scotl@nd
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NHS
items &
pricing
NHS
items &
pricing
NHS
items &
pricing
NHS
items &
pricing
The challenge… to improve procurement practice across the NHS
BEST PROCUREMENT IMPLEMENTATION (BPI)
ePROCUREMENT SCOTLAND
BETTER BUYING
PECOS
LOGISTICS
(PECOS)
(STRATEGIC SOURCING)
(Bulk Supplies to point
of use)
eProcurement Scotl@nd
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Impact of Strategic Sourcing approach:
NHS NSS
NSS
items &
pricing
NHS
Highland
Highland
items &
pricing
Supplier
BETTER
BUYING
(STRATEGIC
SOURCING)
NHS
items &
pricing
Supplier
Supplier
NHS
Tayside
Tayside
items &
pricing
eProcurement Scotl@nd
Supplier
12
Benefits
 Process efficiency
 eAuctions
 eTendering
 Greater use of National Contracts
 Strategic sourcing
 Value for money from suppliers
 Improved Financial Control
 Government eBusiness Targets
eProcurement Scotl@nd
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What PECOS is:
A system that provides:
• content of products
• requisitions to be created on-line
• approval for spend on-line
• automatic transfer of order to supplier
• full audit trail
• reporting suite
• contract compliance
• reduction in time taken to process documentation
• reduction in overall lead time
• reduction in stock required
• reduction in paper records and hence stationery costs
• improved query process
eProcurement Scotl@nd
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What PECOS does:
Access to Supplier Catalogues electronically
Orders handled on-line
eMail
“Punch Out”
CXML
However, this assumes that supplies are eEnabled…..
a major risk for the programme!
eProcurement Scotl@nd
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What PECOS isn’t:
A Finance system
…but is capable of integration to FMIS
A Stock system…
…this is being assessed at a national level
An automatic link to a cost-centre budget…
…but can be used to effect greater budgetary
control.
eProcurement Scotl@nd
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Next Steps:
 Full integration to Finance Systems
 NHS Shared Services
 Purchase to Pay improvements
 Link with Ward Product Management Systems
 Support NHS Logistics
 Inter-Agency Collaboration
 Streamlined Public Sector procurement….
eProcurement Scotl@nd
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eProcurement Scotland
NHSScotland Blueprint Strategy
Hamish Paterson
NHSS ePS Programme
Implementation Manager
eProcurement Scotl@nd
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Context….
 The need to modernise Procurement and Supplies Management across
NHS Scotland (NHSS) is widely recognised.
 NHSS needs to adopt a more “corporate approach” to improve service
delivery, leverage total spend and significantly reduce costs.
 A key enabler for this will be the effective deployment of the right
technology - The eProcurement Scotl@nd (ePS) service
 The Blueprint Strategy proposes a planned and co-ordinated roll out of ePS
which maximises the use of available resources across NHSScotland.
eProcurement Scotl@nd
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A standard process for collecting and analysing the data from Health
Boards was developed and followed………….
1. Meet with Health Boards and agree the process to be
followed
2. Data Collection from Health Boards
3. Data Validation exercise and review meetings with Health
Boards
4. Summarise all Health Board data
5. Develop initial roll out/Blueprint strategy
6. Review proposed Blueprint strategy with all Health Boards
7. Sign-off and commitment to Blueprint by all Health Boards
eProcurement Scotl@nd
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Data collected from Health Boards was subject to a number of
limitations that need to be acknowledged…
 Was a department fully implemented?
 Were departments placing orders themselves or via
Procurement?
 Initial data was occasionally miscoded by users
 There was some unmapped/obscure data that was difficult to
define
 Health Board resource availability to validate the data
 Departments paying for goods/services did not necessarily
instigate the purchase order
eProcurement Scotl@nd
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Exclusions were agreed and the validated figures are in line with
share of NHSS spend per Health Board….
Agreed exclusions from this phase
•Drugs
•Income
•Recharges
•Rent & Rates
•Capital Expenditure - New Buildings
•Professional Fees and Services (50% of spend)
•Telecoms (being reviewed)
•Training Expenses
•Travel & Subsistence (excluding leased cars)
•Postage & Carriage
•Utilities (being reviewed)
•Transportation & Portering
•Other Admin/Board Expenses
•Waste Disposal
•Publications
•Subscriptions & Information Services
Approx %
share of
national
spend per
Health Board
In-scope
expenditure
for Health
Boards
based on
2004 data
collected
eProcurement Scotl@nd
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Department Roll Out Sequence takes the following Components of
the Blueprint Strategy into Account……..
1. Award of Strategic Sourcing Contracts & Contract Renewal
and possible savings that can be made
2. Fitting in with NHS Logistics timetable for the implementation
of Ward Product Management
3. Current approved HB plans
4. Rolling out to the same departments at the same time (or pilot
first then roll out all other departments together) to aid easier
central supplier adoption
5. Size of Spend
6. Stock Integration
7. Shared Services
eProcurement Scotl@nd
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Blueprint Department Order for continued eProcurement rollout…
eProcurement Scotl@nd
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Agreed Key performance indicators have been set up to measure the
success of the implementations by Health Boards……..


Key Performance Indicators

Percentage of In-scope spend covered

Value of transactions against target spend with respect to local project plan
Statistics that will also be tracked, although not measured against

Volume of transactions

Split between Level 1 & Level 2 catalogues

Number of suppliers adopted vs suppliers identified in local supplier adoption

Users trained vs planned for departments (estimate)

Active vs Registered Suppliers

Active vs Registered Users

Break-down of Supplier Content by catalogue, non-catalogue, punch-out

Break-down of Order Routing by fax, email, cXML
eProcurement Scotl@nd
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Agreed Health Board Targets…
Heath Board
In-scope
ePS Start
Date
Target by
31/3/06
Target
by
31/3/07
Target by
31/3/08
Argyll & Clyde
£35M
Nov 04
£6.7M (19%)
£18M
£35M
Ayrshire & Arran
£35M
Feb 05
£13M (37%)
£21M
£35M
Dumfries & Galloway
£18M
Apr 05
£5.4M (30%)
£10M
£18M
Forth Valley
£21M
May 04
£19M (90%)
£20M
£21M
Grampian
£46M
Oct 04
£7.8M (17%)
£29M
£46M
Highland
£21M
May 02
£15M (70%)
£17M
£21M
Lanarkshire
£35M
Jul 04
£15M (43%)
£25M
£35M
Lothian (PCT)
£20M
May 05
£6.7M (33%)
TBA
TBA
Will incl. Acute
Will incl. Acute
Tayside
£41M
Oct 02
£25M (60%)
£33M
£41M
NSS
£40M
Apr 04
£25M (63%)
£35M
£40M
£35M
May 03
SAS
(included for completeness)
Total
eProcurement Scotl@nd
£347M
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What do we have….
 An Agreed roll out strategy signed up to by all NHSS Scotland
Health Boards
 A Roll out plan that co-ordinates the efforts of the national and
local resources and effort
 Agreed KPI markers that are common to all organisations and
are deliverable to the Scottish Executive
 A co-ordinated plan that takes into account the needs of local
and national initiatives
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Everything you wanted to know
about an eProcurement
implementation
(but were afraid to ask)
Peter Shinton
Project Manager- eProcurement
NHS National Services Scotland
eProcurement Scotl@nd
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Scottish
ScottishExecutive
ExecutiveInitiativeInitiative-Scott
Scott
NHS Initiative- Margaret
NSS Initiative
eProcurement Scotl@nd
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What’s the theory?
Contract
compliance
Make strategic
sourcing decisions
£
Process
improvement
Accurate information,
produced quicker
eProcurement Scotl@nd
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and the practice?
Contract
compliance
Nothing on
PECOS that
shouldn’t be
Accurate
Process
information,
improvement
produced
quicker
“Do I have to
raise an
indent…?”
eProcurement Scotl@nd
Easy to keep
tabs on
progress
31
Make
strategic
sourcing
decisions
Info for this
still from Fin
Systems
What are you trying to improve?
Contract
compliance
Accurate
Process
information,
improvement
produced
quicker
Make
strategic
sourcing
decisions
Ensure only contract suppliers and items are adopted
Monitor all transactions through existing methods to
ensure non-contract purchasing isn’t continuing
eProcurement Scotl@nd
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What are you trying to improve?
Contract
compliance
Accurate
Process
information,
improvement
produced
quicker
Make
strategic
sourcing
decisions
Ensure the commodities are suitable for eProcurement
Don’t add complexity / bureaucracy to the processes
Making today’s processes electronic
doesn’t automatically improve them!
eProcurement Scotl@nd
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What are you trying to improve?
Contract
compliance
Accurate
information,
produced
quicker
Process
improvement
Make
strategic
sourcing
decisions
Decide what you want the information for
Should you push ALL transactions through the system,
or are you targeting particular commodities?
eProcurement Scotl@nd
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What are you trying to improve?
Contract
compliance
Accurate
information,
produced
quicker
Process
improvement
Make
strategic
sourcing
decisions
Ensure you obtain the information you want
Ensure you have the opportunity and ability to make use
of the information
eProcurement Scotl@nd
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To snatch defeat from the jaws of victory,
you must ensure you have no…
•
•
•
•
clear implementation strategy
dedicated resource
defined scope or end point
clear responsibilities
…amongst other things!
An implementation is a project
but
ongoing system use belongs to the business
eProcurement Scotl@nd
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Thank you for listening
Any questions?
Peter Shinton
Project Manager- eProcurement
Corporate Programme Office
( Tel: 0131 275 6769 (Internal No 6769)
+ Email: [email protected]
NHS National Services Scotland, Gyle Square, 1 South Gyle
Crescent, Edinburgh, EH12 9EB
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