Transcript Document

Ontario Education
Collaborative Marketplace
Leading Change in Supply Chain Management
Canadian Association of University Business Officers
June 20, 2006
Agenda:
 OECM Overview – Franca Gemignani
 e-Marketplaces Overview – Daniel
Orenstein
 OECM Progress Update and Next
Steps – Renata Faverin
 OECM Representatives and Contact
Info
OECM Overview
e-Marketplaces Overview
OECM Progress Update and Next Steps
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
OECM Overview
e-Marketplaces Overview
OECM Progress Update and Next Steps
OECM Representatives and Contact Info
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
What is OECM? The Proposed Model
June 20, 2006
OECM Marketplace
Buyers
Suppliers
Contract
Management
Supplier
Portal
Spend
Analysis
Marketplace
Services
Browser
Browser
Requisitions
Orders
Purchasin
g System
Catalogues
Bids
Order
Management
System
Transactions / Enterprise
Application Integration
6
What is OECM? The Proposed Model
EduBuys
EduBuys
Plus
Supplier
Portal
June 20, 2006



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


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 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

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
eRFX

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
Who is Participating in OECM?
Current OECM participating
institutions generate an estimated
$1.3B in annual spending:
June 20, 2006
Significant
Buying Power
Ontario schools,
colleges, universities
represent
approximately
$2B in annual
spending.
8
Who is Participating in OECM?
June 20, 2006
And the momentum is growing…
Expressions of Support
Expressions of Interest
• 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
• 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
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)
E-procurement is less time-consuming, more efficient,
cheaper than traditional methods of procurement
Hours / Order
0.33
7
Steps / Order
Cost / Transaction
3.46 hours
$12
E-procurement
Source: U of T Survey Feb 2003
29+
$129
Traditional procurement
10
How $85M in Savings* Can Be Achieved
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
* Savings are a combination of process savings of $75 per transaction as well as savings realized on the price of
purchased items.
11
Why OECM? The Value for Institutions
 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
June 20, 2006
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
Why OECM? The Value for Institutions
 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
June 20, 2006
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.
 Reduced supply chain technology
investments for each participating
institution
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Why OECM? The Value for Purchasing
Professionals
 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
June 20, 2006
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.
 $ reinvested in education
14
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 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
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Why OECM? The Value for Suppliers
 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
June 20, 2006
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.
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e-Marketplaces Overview:
 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
OECM Overview
e-Marketplaces Overview
OECM Progress Update and Next Steps
OECM Representatives and Contact Info
e-Marketplaces – Underlying Technology
June 20, 2006
Key Components
Four key e-Marketplace technology components:
Marketplace
Applications
B2B / A2A
Interface
Layer
Security
System
Infrastructure
 Provides marketplace functionality
 Supported by multiple servers and databases
Technology is
an enabler for
continuously
improving
procurement
practices.
 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
 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 layers
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Evolution of e-marketplaces
June 20, 2006
(North America)
Late 1990s
2000 – 2001
 e-Marketplaces
introduced with entry of
viable e-procurement
software offerings
 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.
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Evolution of e-marketplaces
June 20, 2006
(Public Sector)
 Public sector a key beneficiary of eprocurement:
 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
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Case Study 1: eVA
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
June 20, 2006
Single Face for
Procurement
In May 2000,
Governor James
Gilmore mandates
the implementation
of a new eprocurement
system to establish
a “single face for
procurement” for
Commonwealth
users and vendors.
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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
Automated
Procurement
Activities
eMall
Online Access
to Catalogues
Online Vendor
Registration
Integration with
Commonwealth
ERP Systems
Vendor and
Purchasing Data
Warehouse
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Case Study 1: eVA
June 20, 2006
eVA Portal
Purchasing
Transactions
Warehouse
Vendor Data
Warehouse
eMall
Orders,
Solicitations
Bids,
Vendor Data
Push / Public
Posting
Bidding /
Contracting
Vendor
Data
Requisitionin
g & Ordering
Order
Received
Vendor
Registration
Real-time
Catalogues
Auctions
Receiving &
Invoicing
Agency Procurement System
Authentication
Bids Submitted,
EDI Invoices
Vendors
Integrity
Efficiency
Completeness
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Case Study 1: eVA
The Results
 $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
June 20, 2006
eVA is the most
comprehensive
e-procurement
solution in the
US, and the
fastest state-wide
procurement
system rollout
ever achieved.
eVA is
repeatable.
 983 catalogues
 32,482 vendors
 171 agencies, 492 localities
 9,100+ users
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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
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
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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
Key Implementation Challenges
 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)
June 20, 2006
Effective change
management –
not technology –
is the critical
success factor in
the successful
implementation
of e-marketplaces
 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
28
OECM Progress Update and Next Steps:
 OECM Progress Update
OECM Overview
 OECM Next Steps
e-Marketplaces Overview
 Participating Institutions’
Representatives
 OECM Key Contacts
OECM Progress Update and Next Steps
OECM Representatives and Contact Info
OECM – Progress Update
August 2005
March 2004
OntarioBuys is
initiated
June 20, 2006
OECM begins Phase 1
to evaluate potential for
implementation of
e-procurement
marketplace
April 2006
OECM Phase
2 funding of
$1.2M
received
March 2005
November 2005
May 2006
Small group of
procurement
professionals from
universities, colleges,
school boards (SCU)
develop joint funding
proposal to MoF
OECM completes
Phase 1, identifying
significant
economic,
operational savings
OECM begins
Phase 2:
Software
Selection and
Detailed Design
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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
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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
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
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Participating Institutions’ Representatives
MEMBER
June 20, 2006
PARTICIPATING INSTITUTION
DAVIES, John
VP Administrative Services
Humber Human Institute of Technology and Advanced Learning
EVELYN, Allan
Director, Financial Services, Seneca College
FAVERIN, Renata – Chair
Director, Procurement Services, York University
HAYES, Lorraine
Manager, Purchasing Services, Trent University
KYRITSIS, Terry
Assistant Comptroller, Administrative Services
Toronto District School Board
MOORE, Bob
Director, Purchasing, The University of Western Ontario
PITMAN, Wade
Manager, Purchasing and Payment, Ryerson University
SBAHI, Abder
Director, Materials Management Services, University of Ottawa
WHITTAKER, Stephen
Director, Procurement Services, University of Toronto
34
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
[email protected]
(416) 627-3489
35
Thank You