Electronic procurement aims to speed path to e-government

James Rogers reports on the launch of a government initiative to encourage councils to use e-procurement technologies

James Rogers reports on the launch of a government initiative to encourage councils to use e-procurement technologies

Earlier this month the Government launched the Delivering E-procurement initiative in an effort to speed up the technology's introduction in local government.

The project will provide e-procurement support and guidance to the 388 councils in England and share best practice with their Scottish and Welsh counterparts.

A structured framework will be used to help to plan implementation and identify key elements of the e-procurement process, which is expected to reduce costs, help to drive the UK's e-government agenda and help councils to meet the Government's 2005 deadline for electronic delivery of services.

The initiative follows recent calls for the public sector to speed up the purchasing process, specifically for IT products. The tendering process for large local authority contracts can take up to a year, which could prove a frustrating drag on public sector attempts to meet the 2005 deadline. The national e-procurement strategy, however, is likely to cover everything from PCs to pencils.

Industry experts have given a cautious welcome to the scheme, while pointing out the Government's limited success in delivering e-procurement so far. James Roper, chief executive of industry body the Interactive Media in Retail Group, said, "I would love to see the Government do something. There has been a lot of noise about e-procurement, but what has been delivered?"

One of the main challenges will be dealing with the constantly changing e-commerce environment. "The culture of government is struggling in the rapidly evolving domain of technology-enabled commerce," Roper said.

A spokesman for the Office of Government Commerce, which is the centre of excellence for public sector procurement, acknowledged that developing large-scale e-procurement projects can take time. "Progress is being made in implementing e-procurement - it will take time but it is only one part of the solution," he said. The way the Government looks at major procurement projects and breaks them down into smaller, more manageable, parts could also be a key factor, the spokesman added.

If, however, the Government does succeed in implementing a national procurement strategy for local authorities the financial rewards for councils could be massive. With 1.8 million employees and an annual spend on bought-in goods and services of £25bn, the buying power of local government is immense.

Figures from the Improvement and Development Agency suggest that e-procurement could lead to an 8% reduction in the price of goods and services, while freeing up staff to work on other, more valuable tasks. The agency estimates that savings could cut council officers' time and transaction costs by up to 70%.

However, the success of the e-procurement strategy depends on the co-operation of the private sector - local government's suppliers. The private sector is no stranger to e-procurement, so local government officials are keen to tap the corporate world's knowledge. Even the strategy itself is being project-managed by IT best-practice organisation Buy IT.

The list of private sector companies that have used e-procurement includes big players, such as Littlewoods, Guinness, Rolls-Royce, Halifax Bank of Scotland and Cable & Wireless.

Caroline Stanger, head of modernisation at Cambridgeshire County Council and chairperson of the national e-procurement project, highlighted the role that the private sector will play in the strategy. "I don't think that we can implement anything like this without the support of the private sector. We need to work in partnership both with e-procurement suppliers and our existing suppliers," she said.

Bearing in mind that only 10 out of 136 councils questioned in a recent survey had e-procurement systems in place, councils need all the help they can get, although at least 84 councils plan to use e-procurement, according to the research by Buy IT.

Stanger acknowledged that some councils may find the prospect of devising an e-procurement strategy daunting but sought to assure them that they will receive help and guidance as part of the project. "We will help councils to prioritise which parts of e-procurement they should be looking at first, depending on their own individual spending patterns," she said.

Developing e-procurement standards for councils and suppliers will also be key, Stanger said. "We will provide template documents in the area of e-procurement specifications," and help councils to match their requirements to what the market is offering, she added.

Local government's initial response to the e-procurement strategy has been positive. Bob Griffith, national secretary of the Society of IT Management (Socitm), the public sector IT managers lobby group, said, "Any more information on e-procurement is useful - it reinforces the efforts that are currently being made by councils to meet e-government targets."

The initiative cannot come soon enough for some council IT managers. Bryn Davies, project manager of Norfolk County Council's "Super"

e-government project, said, "It has to be a positive development - anything that simplifies procurement is a good thing."

There can be little doubt that it makes sound economic sense for local authorities to streamline their procurement by using technology. After all, the global economic slowdown means that the power of the public sector purse has never been stronger, so why not get the most out of it.

But despite the obvious benefits most councils appear to have done little to put the grand vision of e-procurement into action. Clearly, the national e-procurement strategy is the start of a long, uphill journey.

For her part, Stanger is realistic about the challenges that councils face, although she believes that those with good existing procurement processes will have little problem e-enabling them.

"Anyone working in e-anything has to be prepared for a climate of continual change and development. As long as you have a clear and flexible procurement strategy you are well prepared for the changes in technology," she said.

What the e-initiative offers
The national project will incorporate a structured programme of support and guidance to include:
  • A simple "tool kit" to help plan the stages of implementation and select the relevant elements of e-procurement

  • A programme of local authority experience-sharing, including interaction with other public and private sector early-adopters

  • Standards and products tailored to local authority requirements.

The size of the procurement process
  • Annual spend (bought-in goods and services): £25bn

  • Annual spend on purchasing process: £2.5bn

  • Number of purchases per annum: 35-38 million

  • Number of suppliers: 800,000

  • Number of employees: 1.8 million

Source: Improvement and Development Agency (Idea)

The benefits of e-procurement
The Improvement and Development Agency has estimated that savings from e-procurement in both cost and time could, for many authorities, be significant:
  • Reductions in the price of goods and services could be as much as 8%

  • Officers' time and transaction costs could be cut by up to 70%

  • Combined savings could result in a reduction as large as 15%.

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