21112012 case studies procurement scotland

Collaborative Procurement 1

Procurement Scotland

‘Sectors’

APUC (Education)

Scotland Excel (Local Government)

National Procurement (Health)

Central Government

20 December 2012 – Iain Wicking


• Over 100 separate public sector organisations on a single supporting information

service with many more seeking to access the Procurement Scotland service;

• Over US7.5billion transacted at the end of 2010/11;

• Participants:

• 100,000+ regular users across the Scottish Public sector;

• 100,000+ active suppliers;

• 145,000 live catalogues;

• 1,500 cXML punch-out connections and integration into over 60 ERP systems;

• No of PO's transacted per annum - 700,000 orders with 2,900,000 order lines;

• A 40% reduction in procurement administrative costs across the Scottish Public

Sector and payment days reduced to ten for suppliers trading electronically;

• Elimination of over 360,000 paper invoices via the integration of procurement

cards and eInvoice services, and;

• Fully audited savings as at 2008/2009 of $1.18Billion - made up of better

purchasing across the government, reduced ICT costs and process efficiencies.

Procurement Scotland


Procurement Hub

Portal Access for Buyers and Suppliers

Mobile and Tablet

Access


Buyers Suppliers

P-Card/AP

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Bill

Payment

eInvoice match &

settlement

Billing data file

Settlement

Payment

Good & services delivered

Purchase Order

Purchase Order

Accepted

Receipted

Goods

eInvoice

Payment

authorisation

eInvoice

Approval

Search

Requisition

Receipted goods

HUB Buyer & Community Activities

1. Add/update users

2. Add/update org. structure

3. Supplier upload

4. View and track documents –

PO’s, Invoices, etc

5. Community announcements

Supplier & Community Activities

1. Add/update users

2. View and track documents –

PO’s, Invoice, etc

3. Edit/update facility

4. Management announcements

Receiver

Buyer

Approver

Procurement/

Finance Dept.

Issuing Bank

Supplier

Acquiring

Bank

Procurement Hub - Information Flows


P2P Individual User View


Approval Summary and Actions


Reporting


• Rule and Decision Engine drives the Approval Process is a powerful and

versatile feature in the system. Administrators are able to define the Approval

Roles to be used in the Approval Plans. These define workflow processes,

assign approval plans to users and determine which users are to fill the approval

roles in those plans uniquely in each organisation.

• Requisition and Order Request approval can be combined to enable the

creation of powerful and detailed approval rules tailored for each organisation.

Rule and Decision Engine


• Promote localised

collaboration;

• Supplier and Buyer adoption;

• Shared learning;

• Centres of Excellence;

• Consistent programme

resource, and;

• Link with ‘e-City’ Initiative,

associations, Enterprise

initiatives, etc.

9

Regional ‘Hubs’ Support Community Management

Highlands

Grampian

Tayside

Lothian and Borders

West of Scotland


...collective implementation ensures an affordable least cost service

All Government Departments participate:

• Although there is clearly a benefits case for eProcurement in

most organisations many of the Agencies and NGO’s would

not have business case because they are so small.

• By banding them together in Procurement Scotland has been

able to reduce the cost and create a business case.

All Government Departments


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25

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39 ...the programme

was initiated to

drive the

efficient use of

Government

Funding across

the University

sector.

• ALL 62 Universities and

Colleges use APUC

and nearly all use

PECOS P2P

• Centre of Expertise

created

• Strategy and Policy

sharing

• Sharing contracting

strategies

All of Education is on the Procurement Scotland System


APUC is a ‘Sector’ of Procurement Scotland

Advanced Procurement in Scotland's Universities

and Colleges (

Advanced Procurement for Universities and Colleges

(APUC) is the procurement Centre of Expertise for

Scotland's 60 (formerly 62, reduction due to merger)

Universities and Colleges.

Membership comprises the participating institutions who

are stakeholders in the organisation. Established in

response to the Review of Public Procurement in Scotland

(by John F McClelland CBE) of 2006, APUC was formed in

January 2007 to lead the Public Procurement Reform

Programme in the sector, to act as its representative body

(in matters related to procurement), provide best practice

guidance and support, and operationally lead and

facilitate collaborative contracting for client institutions.

APUC was also tasked with implementing the

eProcurement Service (Procurement Scotland - PECOS)

across this sector.


APUC Overview

• Purchasing from those 25,000 suppliers either through

catalogues on the system or through Punch Out.

• Total net potential cashable and non-cashable benefits

of over £10m per year;

• 110 contracts available via APUC to client institutions by

end of Q1 2011 (either led, jointly-managed or

facilitated), with Buyers Guides in place. It is estimated

by steady state, due in the 2011/12 academic year,

around 130 agreements will be available, and;

• This is in addition to the tenders/contracts put in place

via the APUC College Support team which usually has

over 40 tenders in hand at any one time.

However, this has entailed/entails a degree of pump-

priming (in this case from Scottish Government and then

from the SFC) and there will be a development curve in

terms of skills and awareness (particularly among smaller

institutions) aided by design and introduction of improved

tools and performance management solutions.

Governance Model

APUC is a private company limited by guarantee, wholly

owned by all of its member institutions across Scotland, it

is grant funded by the Scottish Funding Council. The Chief

Executive Officer, on behalf of the Board, provides

progress reports to the Scottish Funding Council (SFC) and

member stakeholders.

APUC is a core member of the Scottish Government Procurement Reform Delivery Group and as such also reports progress on behalf of itself and its client institutions in relation to the Public Procurement Delivery Plan.

Key Statistics

• From the standing start in January 2007 to the end of

June 2012, Scotland’s Universities and colleges have

placed 715,000 Purchase Orders covering 1,650,000

line items over the past twelve months.

• There are 12,000 registered PECOS users in Institutions

and 25,000 suppliers to the sector registered in PECOS.


APUC Overview

team with client institutions, is key to delivering

sustainable value and success .

Operational Objectives:

• To operate as a representative body for the University

and College sectors in Scotland in matters related to

procurement;

• To operate as a Centre of Expertise to support client

institutions in delivering advanced procurement

performance in line with the McClelland Review

recommendations;

• The development of strengthened collaborative

procurement, Comprehensive implementation and

support for utilisation of the PECOS eProcurement

solution, and;

It is anticipated that this structure will realise sustained

benefits into the long term as well as in the early years,

the build up-phase as such, is something that will take

years rather than months to fully embed.

APUC aims to work jointly, as one team with client

institutions, to support the embedding and consistent

application of good procurement practice within

Scotland's universities and colleges, and to increase the

sustainable value for money from institutions'

procurement expenditure through the implementation of

advanced procurement practice. This will maximise the

contribution that advanced procurement makes to

Scotland's investment in teaching, research and

knowledge transfer such that institutions can deliver more

with the funds available in a risk managed and compliant

environment.

APUC has found that after initially taking a more

independent approach, working in partnership, as one


APUC Overview

49 projects for 20 colleges were completed, with an

annual value of £ £5.8M.

A further 50 projects are in progress with an annual value

of £7.5M. Additionally, a further 51 projects are planned

for, with an annual value of £13.3M. These numbers

demonstrate the extensive use of the CS team across

colleges. It is estimated that by the end of July 2011, CS

will have assisted in tendering 84 completed procurement

projects. These are managed to wherever possible provide

knowledge transfer to client institutions throughout the

support process.

• Increase the level of procurement expertise and

capacity to universities and colleges and assist in

further development of the skills already in place.

Achievements and Benefits

By the end of March 2011 PECOS had been implemented

in 47 institutions and 3 other institutions are being

supported with alternative eProcurement systems.

The Centre of Expertise has been working on collaborative

procurement contracts and this is done using a further

collaboration model so that many are jointly put in place

with other Centres of Expertise or regional purchasing

consortia across the UK, thus avoiding as far as possible

needless duplication of resources, while maximising

leverage. As mentioned above, the current total of 110

should rise to a steady state of circa 130.

In addition to collaborative procurements, APUC, Colleges

Support (CS) team has also been working on higher

value/capital projects. Since January 2010,


Scotland Excel

collaborative

content is

available to ALL

32 Local

Authorities and

the school

system through

Procurement

Scotland....

All 32 Local Authorities

and Schools participate

• ABC – Authorities Buying

Consortium in the West of

Scotland

• Tayside and Forth Valley

Purchasing Consortia

• Aberdeen Shared Service

Procurement

• Centre of Expertise

• Collaborative

Procurement

• Four regional hubs –

Paisley, Edinburgh,

Aberdeen and Inverness

All of Local Government is on the Procurement Scotland System


Excel is a ‘Sector’ of Procurement Scotland

Scotland Excel

Scotland Excel is the Centre of Procurement Expertise for

the local government sector. Launched on 01 April 2008,

its remit is to work collaboratively with members and

suppliers to raise procurement standards, secure best

value, and to improve the efficiency and effectiveness of

public sector procurement in Scotland.

Scotland Excel is a non-profit making organisation funded

by participating local authority members, and hosted by

Renfrewshire Council as the lead authority.

Profile: Public Sector, Local Authority

Why: Improve efficiency and reduce costs by encouraging

collaborative procurement initiatives.

What: Development of a scalable procurement solution

which can be used collaboratively by all local authorities in

Scotland.


Excel Overview

• Deliver and mobilise best value contracts which achieve

measurable benefits for our members.

• Practise responsible sustainable purchasing by taking a

holistic view of the social, economic and environmental

implications of product and service choices.

• Foster effective partnerships by engaging with

customers, suppliers and other stakeholders.

• Champion a professional approach to public sector

procurement by providing relevant learning and

development opportunities to staff and stakeholders.

• Promote and share best practice among local

authorities through effective communications and the

work of the Procurement Improvement Programme.

• Develop Scotland Excel as a Centre of Procurement

Expertise through a programme of continuous

improvement which maintains industry-recognised

standards.

How: Scotland Excel was launched on 01 April 2008; All

32 Councils in Scotland are now members.

Where: Head office in Paisley and regional teams in

Edinburgh, Aberdeen and Inverness.

Governance Model

Joint Committee of one or more members from each Local

Authority responsible for strategic direction and approves

annual budget and business plan. Executive Sub-

Committee meets regularly to approve contract awards

and other business decisions.

The Chief Executive Officers' Management Group (6 local

authority CEO's) responsible for monitoring performance

against business plan and objectives, approving Associate

Member applications and the range of products and

services that appear on contracts.

Key Objectives


Excel Overview

• As of February 2010, 43 delegates had achieved

Chartered Institute of Purchasing and Supply (CIPS)

professional qualifications through courses offered by

Scotland Excel in partnership with Glasgow Central

College.

• First public sector body in Scotland to achieve CIPS

accreditation for Excellence in Purchasing Policies and

Procedures.

• Responsible Sustainable Procurement strategy launched

in February 2010.

• As of February 2010, Scotland Excel had attended more

than 34 supplier events to educate and inform suppliers

about the public sector contract opportunities open to

them.


• By the end of 2010, 37 new collaborative contracts had

been delivered with an estimated value of more than

£170m per annum. Savings forecasts vary by contract

and local authority, (mean average c. 6.5% across all

new contracts).

• Savings model developed to monitor and report actual

contract savings for each local authority.

• In December 2009, Scotland Excel initiated a

Procurement Improvement Programme in partnership

with local authorities to develop and implement

strategies for improving procurement performance.

• Since January 2009, over 700 delegates from more than

60 organisations have attended Enhancing Procurement

Capabilities courses.


Excel Overview

• Recipients of the first Government Opportunities

Awards Scotland (GO) John F McClelland Collaborative

Procurement Award in October 2008.

• Scotland Excel was also Highly Commended at the 2010

Awards for the Graduate Trainee Programme and the

work of its Catering and Cleaning Commodity Team.

• In recent months, Scotland Excel has developed a

number of contract opportunities within construction

and social care and are exploring include financial

services and facilities management in 2011-12.


...the business case

across Health

recognised the need

for a sector –wide

implementation of

Procurement

Scotland services

to deliver benefits...

All 14 Health Boards

participate along with:

• Scottish Ambulance

Service

• National Services

Scotland

• Other smaller health

organisations

• Supported by:

• Procurement Strategy

• Category Management and

National Contracts

• First line Procurement

Scotland Support

• National Logistics

All of Health is on the Procurement Scotland System


National Procurement is a ‘Sector’ of Procurement Scotland

NHS National Procurement

NHS Scotland's Procurement Centre of

Expertise established in 2005 to provide

goods, services technology solutions and

procurement advice to NHS Scotland's 14

Regional Health Boards and 8 Special Health

Boards.

Profile: Public Sector, NHS Scotland,

Centre of Procurement Expertise

Why: provide more efficient procurement tools

for health service in Scotland in face of

challenging economic climate.

What: delivery of collaborative procurement

tools to the various NHS Boards in Scotland to

ensure significant financial and service

efficiencies.


National Procurement Overview

Objectives

National Procurement 2009-2010 objectives:-

• £8m of savings delivered from National Contracts,

• £9.7m benefits released from our logistics service,

• OTIF (On Time In Full) performance of 98%,

• Achieve PCA (Procurement Capability Assessments)

Superior Performance for 75% of NHS Scotland in scope

spend,

• 50% of invoices to be received electronically,

• 2% efficiency savings against agreed budgets.


The success of the Capability Assessment Process

developed by National Procurement in their role as a

centre of excellence is now being used as a model for the

rest of the public sector following successful deployment

in NHS Scotland.

How: application of eProcurement to achieve best

practice strategic sourcing; working more effectively with

stakeholders to ensure robust demand management and

obtaining best value products from key suppliers.

Governance Model

Seven working groups in operation during year 2009-2010

to identify, review and embed best practice across NHS

Scotland under the aegis of the NHS Procurement Reform

Steering Group.

Key Statistics

• NHS Scotland cumulative spend of over £1.5 billion a

year on procurement of goods and services. Cumulative

savings of over £100 million since inception.

• National procurement contracts saved an estimated

£24m in 2009-10.

• National Logistics service saved c. £11m in 2009-10.


National Procurement Overview

National Procurement are working with Audit Scotland

and Scottish Procurement Directorate to evolve and

support this process and to meet the target of getting 75%

of spend being managed by Superior Performing Boards in

practice and behaviour terms of the 12 attributes

articulated in the McClelland Report 2006 (Governance,

Organisational Structure, Resources and Skills, Practices

and Processes, Information Systems, Collaboration,

Corporate and Social Responsibility, Reporting,

Benchmarking, EU guidelines, Supplier Policy/Strategy and

Overall Value of Results).

Health Advertising Portal http://www.publiccontractsscotland.gov.uk/ designed to:-

• Stimulate economic growth in Scotland;

• Enable the Scottish Public Sector to achieve Best Value

for money, and;

• Standardise procurement documentation, for Pre-

qualification questionnaires and to aid completion by

suppliers and evaluation by purchasers.

21112012 case studies procurement scotland

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