Ontario Education Collaborative Marketplace Leading Change in Supply Chain Management Canadian Assoc

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(No Transcript)
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Ontario Education Collaborative
Marketplace Leading Change in Supply Chain
Management Canadian Association of University
Business Officers June 20, 2006
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Agenda

• OECM Overview Franca Gemignani
• e-Marketplaces Overview Daniel Orenstein
• OECM Progress Update and Next Steps Renata
  Faverin
• OECM Representatives and Contact Info

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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

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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)
• OECMs longer term operating and governance
  models are currently under consideration
• OECM initiative is being supported by the
  Ministry of Finance

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What is OECM? The Proposed Model
June 20, 2006
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What is OECM? The Proposed Model
June 20, 2006

• Requisitioning / shopping cart and approvals
  processed in marketplace
• Post-requisitioning processed handled by entitys
  back-end systems
• Pricing, descriptions for goods / services
  through catalogues

EduBuys

• All purchasing transactions (requisitioning /
  shopping cart to invoice entry) created, reside
  in marketplace
• Invoice data sent to entitys back-end systems
  (similar to PCard)

EduBuys Plus

• 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

Supplier Portal

• 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

• Conduct reverse and standard auctions
• Notify subscribed suppliers of auction events

Auctions

• Electronic analysis of purchasing data to
  determine spending patterns and trends for a
  given entity

Spend Analysis

• Create, store, edit and manage any type of
  contract
• Monitor supplier contract compliance

Contract Management
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Who is Participating in OECM?
June 20, 2006

• Current OECM participating institutions generate
  an estimated 1.3B in annual spending

Significant Buying Power Ontario schools,
colleges, universities represent approximately
2B in annual spending.
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Who is Participating in OECM?
June 20, 2006

• And the momentum is growing

• Expressions of Support
• Brock University
• Carleton University
• Dufferin-Peel Catholic District School Board
• Fleming College
• George Brown College
• Georgian College
• Lakehead University
• Laurentian University
• Queens University
• University of Guelph
• University of Windsor
• Wilfrid Laurier University
• McMaster University

• Expressions of Interest
• 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

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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)

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How 85M in Savings Can Be Achieved
Savings are a combination of process savings of
75 per transaction as well as savings realized
on the price of purchased items.
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Why OECM? The Value for Institutions
June 20, 2006

• 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

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.
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Why OECM? The Value for Institutions
June 20, 2006

• 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
• Reduced supply chain technology investments for
  each participating institution

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.
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Why OECM? The Value for Purchasing Professionals
June 20, 2006

• 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
• reinvested in education

OECM supports Ontario University Purchasing
Management Associations (OUPMA) missions and
goals OECM directly supports OUPMAs mission to
foster closer cooperation and exchange of
information (e.g. purchasing best practices), AND
goal of cooperative purchasing ventures to
leverage institutional spending.
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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
June 20, 2006

• 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

One-Stop Access to a 2B Market OECMs
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

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e-Marketplaces Underlying TechnologyKey
Components
June 20, 2006
Technology is an enabler for continuously
improving procurement practices.

• Four key e-Marketplace technology components

• Provides marketplace functionality
• Supported by multiple servers and databases

Marketplace Applications

• 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

B2B / A2A Interface Layer

• Provides secure data transmissions, firewalls,
  virus and intrusion detection / protection and
  user authentication

Security

• Provides hardware/networks for n-tier
  architecture applications
• Supports application, security and integration
  layers

System Infrastructure
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Evolution of e-marketplaces (North America)
June 20, 2006

• Late 1990s
• e-Marketplaces introduced with entry of viable
  e-procurement software offerings

• 2000 2001
• 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 (Public Sector)
June 20, 2006

• Public sector a key beneficiary of e-procurement
  
• 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
June 20, 2006

• 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

Single Face for Procurement In May 2000,
Governor James Gilmore mandates the
implementation of a new e-procurement 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

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Case Study 1 eVA
June 20, 2006
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Case Study 1 eVA
June 20, 2006
The Results
eVA is the most comprehensive e-procurement
solution in the US, and the fastest state-wide
procurement system rollout ever achieved. eVA is
repeatable.

• 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
• 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

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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

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Key Implementation Challenges
June 20, 2006

• 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)
• 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

Effective change management not technology is
the critical success factor in the successful
implementation of e-marketplaces
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OECM Progress Update and Next Steps

• OECM Progress Update
• OECM Next Steps
• Participating Institutions Representatives
• OECM Key Contacts

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OECM Progress Update
June 20, 2006
August 2005 OECM begins Phase 1 to evaluate
potential for implementation of e-procurement
marketplace
March 2004 OntarioBuys is initiated
April 2006 OECM Phase 2 funding of 1.2M received
November 2005 OECM completes Phase 1,
identifying significant economic, operational
savings
May 2006 OECM begins Phase 2 Software Selection
and Detailed Design
March 2005 Small group of procurement
professionals from universities, colleges, school
boards (SCU) develop joint funding proposal to MoF
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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

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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
June 20, 2006
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OECM Key Contacts
June 20, 2006

• Renata Faverin,
• Chair, OECM Steering Committee and Director,
  Procurement Services,
• York University
• [phone]
• Franca Gemignani,
• Project Coordinator, OECM
• fmgeminan_at_rogers.com
• [phone]

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Thank You