E-Procurement in Norway

Third Global conference on

Electronic Government Procurement

Mr. Dag Strömsnes

Washington, 9th of November 2009

Agency for Public Management and

eGovernment (DIFI), Department for

Public Procurement

An advisory and policy enabling unit for Public Procurement and eProcurement issues within the Norwegian Government

Mission to cater for better, more efficient and trustworthy Procurement in the public sector in Norway

Ethics and anti-corruption

Follow up of “Action plan for environmental friendly and socially responsible public procurement”

Coordinator of the PEPPOL (Pan-European Public Procurement OnLine) project

Value creationPublic procurement regulations

Internal control

Sourcing strategy

Systems and technologies

Performance measurement

Organizational and competence development

Strategicsourcing process

Roles and responsibilities

Operational purchasing

process

Broad persepective on

e-procurement

National e-procurement program includes

entire public sector (both government and municipalities)

Consistency with relevant European initiatives

Simplicity for both buyers and sellers(Buyer-driven, seller-friendly solutions)

Electronic support to all procurement processes

Source Procure Pay

Main goals for e-procurement

Better procurementIncrease loyalty to framework agreements

Increase negotiation power

More effective procurementEffective workflow

Effective communication

Safer procurementReduce error handling (eg. invoices)

Increase traceability and transparency

The ”tool-box” (I)

E-sourcing:

Tender notices (Operator: Millstream Ass. Ltd)

mandatory database for electronic submission

of tender notices (mandatory above € 60.000)

E-sourcing (Two alternative operators)

Complete electronic workflow and communication from

planning phase to contract signing

Including support for eSignatures (eg. signing offers/proposals)

Supporting all legal public procedures (including eAuctions)

The ”tool-box” (II)

E-procurement and -invocing:

E-procurment plattform (Private Operator: IBX)

Many-to-many integration buyers and suppliers

(E-catalogues, e-orders, e-order confirmations)

eCatalogue management and search engine

Order and invoice handling (3 alternative operators)

supporting electronic workflow for buyer on

ordering and invoice-handling

Business model (I)

All solutions runned by external, private operatorsCentral negotiated contracts Difi vs Operators

Subscription agreements

- Buyers vs Operator and

- Suppliers vs Operator

All solutions delivered

as ASP-services

Business model (II)

Mainly user-financedConnection fee

Subscription fee

Additional services (change management, training, support,…)

No transaction fees

E-procurement adoption

Some numbers…

Public entities sending e-tenders All

E-tenders in 2008 10.218

Public entities on e-sourcing 169

Public entities on e-procurement 60

Active suppliers on e-procurement 453

Aggregated e-Order value (last 12 months) USD 536.250.000

Number of e-Orders (last 12 months) 255.000

E-Ordering – hard work, positive trend

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

3,500,000,000

Sep 2002

Sep 2003

Sep 2004

Sep 2005

Sep 2006

Sep 2007

Sep 2008

Sep 2009

3,002,991,796

Turnover in Norwegian kroneraggregated last 12 months

Adoption in different sectors (I)

Universities and university collegesEntire sector will be operative during 2010

HospitalsApproximately 60 % of Norwegian hospitals are operative or are

presently preparing implementation

Central government Only a few are operative

Government Agency for Financial Management is piloting

e-procurement and are planning to operate e-procurement on

behalf of a large number of Government entities

(presently piloting Norwegian Tax Administration)

Adoption in different sectors (II)

Municipalities30 of 435 municipalities are operative, mainly the largest and

some medium sized municipalities

None of the many small municipalities are operative

Government enterprisesNational Railway Administration and Airport Administration are

operative

Military forcesPartly using national e-sourcing solutions

Own solutions for e-ordering and e-invoicing and their volumes

are not included in our statistics.

Still a way to go…

Main challenge is to reach higher volumes:

Attract new users

Stimulate excisting users to explore further potential

Good reason to be optimistic

A constantly increasing focus on procurement

and ”e-maturity”

Some have succeeded…

Many have made good strategic foundations

Many new stakeholders are seeking information

Eprocurement gets better and

cheaperIBX won the tender of the new electronic

procurement portal, contract signed on 2nd

November 2009.

In operation as of 1st July 2010 with new

functionality:

Function for simple ordering for small enterprises

Better catalogue handling

Simple request

Invoice

Open market place

Reduced prices

Other reasons for optimism

The Norwegian Government: increased

priority for eprocurement

Compulsory electronic invoicing gives

synergy effects

The Norwegian Goverment Agency for

Financial Management (SSØ), pilot on

eprocurement

Common infrastructure in Europe gives

durable solutions enabling crossborder

eprocurement

Keys to success

Top leader commitment

Clear goals

Dedicated and competent

project team

Focus on change management

Information, training and

support

Strict routines – ”one way only”

Sanction disloyalty

.. But the most important..

Sourcing strategy

Systems and technologies

Performance measurement

Organizational and competence development

Strategicsourcing process

Roles and responsibilities

Operational purchasing

process