1

2

Executive board

Director General: Kenneth Plummer

Media Director: Lars Grarup

Director of Programmes: (vacant)

Director of Economy: David Hellemann

3

Strategic goals

•01 DR will create value for everybody•02 DR must engage, inspire and challenge•03 DR must provide unique experiences•04 DR whenever and however you like•05 DR means efficiency and job satisfaction

4

Facts

Income: • appx. 3,5 mia. DKK (2006) / 470 million EUR

Expenses: • 3,3 mia. DKK (2006) / 442 million EUR

Employees: • 3300

Procurement:Appx. 1 mia DKK/120 million EUR

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Organisation

Procurement in DR

6

Procurement in DR

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Agenda

• Procurement – Procurement analyses– Procurement policy– Fewer suppliers – the use of SKI– Internal storage in DR

• The procurement process – the use of Oracle e-business suite– E-matching - order and invoice– E-invoice – the experience – Use of electronic tools – i.e. marked places

• The future of procurement – case DR

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Procurement policy in DR

• Plans for development of suppliers • Plans for reporting• Plans for the use of e-commerce• Plans for the use of central contracts• Plans for co-operation with other

institutions • Guidelines for which persons have the

authority to enter contracts• Plans for how to uphold the principles• Plans for development of competences• Plans for how to develop procurement in

DR

Often forgotten

Procurementpolicy

Procurement strategy

Plans for items and supplier

Many compan

ies have this

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Supplier policy in DR

DR uses contracts made by SKI (National Procurement Ltd.)

in the following circumstances:

• Contracts of little value to DR• Contracts where DR are not able to obtain better

terms than SKI

DR has co-operated with SKI on EU-tenders i.e. tenderfor chairs and tables for office purposes

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Procurement analyses in DR

• We do them ourselves

– Analyses on the procurement pattern in DR• Procurement Project in DR – result 180

mio. DKK / 30 million EUR in savings

– Analyses of the procurement process in DR

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Method

•Analysis on: –Costs on goods and services

–Cost on processes

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Procurement in mio. dkkapp. 900 mio. dkk

220

145

95

72

46

45

37

34

28

26

100

8

9

10

33

Technical equipment

Telecom

IT, hosting, licens mv.

Services

Consultanties

Datamedia

Goods

Office furniture and props

Transportation

Travel

Energy

Marketing

Insurance

Text

Office supply

Procurement analyses in DR

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Target – Procurement project

0

16

44

76

109

141

0,3

21,6

57,8

98,8

139,8

180,9

141

181

0

20

40

60

80

100

120

140

160

180

200

2002 2003 2004 2005 2006 2007 Total

År

mil.

kro

ner

Akk. target

Total obtained

14

4858

77 78 81

0

10

20

30

40

50

60

70

80

90

2002 2003 2004 2005 2006

%

Loyalty – procurement contracts

15

17

40

65

7888

0

10

20

30

40

50

60

70

80

90

2002 2003 2004 2005 2006

%

Loyalty – procurement system

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The procurement process

– the use of Oracle e-business suite

• We store the invoice images in Oracle • We store the list of the approvers in Oracle • We use Microsoft Outlook to forward

information about invoices• We keep the invoices inside Oracle as long as

the financial transactions – in DK 5 years

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Previous to e-handling of invoices

• 64.000 invoices handled manually • The lowest benchmark cost of handling an invoice

manually was DKK 350 / 47 EURo The cost in DR was much higher

• DR paid around DKK 300.000 / 40.000 EUR annually in interests

• 3.000 invoices disappeared in DR• 30 days from receiving an invoice, until it was approved• 11 staff in AP department

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Today with Fakturius

• All invoices are handled via the electronic system –40.0000

• The cost of handling an invoice is now DKK 150 / 20 EUR• DR pays DKK 50.000 / 6.700 EUR annually in interests • Very few invoices disappear in DR (and only because

they’re not being sent directly to the credit bookkeeping)• 6 days from receiving an invoice, until it is approved• 6 staff in AP department

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Focus in 2007 – Contracts module

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Winning bid price

Price before auction

Prisniveau

Expecxted longterm price

Case: e-auktion – IT hardware

Savings : 10%

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Internal storages in DR

•Used to have a large internal storage

•Cost benefit analysis – not financial sound solution for DR

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DR BYEN- a world class media house

What the future holds – Coherent services for the customers

case: Analyses on services in DR

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DR BYEN – a world class media house

• For the Danish public this means: – Better programs – More to choose between

• For the employers in DR this means:– A flexible and open workplace – Cooperation and creativity

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The task in 2005

• Find the service solution, that is best for DR – in terms of quality, competences, flexibility and finance

– Goal – savings 8 mio. DKK / 1 million EUR

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How to choose the best solution

• Description of possible solutions

• Analysis of how to obtain the goal of savings

• Pros and cons of the chosen scenario

• Risks and considerations

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Two possibilities where investigated

EU tender

Service contract that ensures the level of quality and 8 mio. dkk in yearly savings

Some are outsourced others are remaining internal

Option 1 Option 2

EU tender

All services to be outsourced

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Parameters for choice of solution

• Quality in the solution• Steering of services -

organisation• Good-will • Finance• Innovation in services• Flexibility in services • Know-how• Time• Image

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Choice

It is about making decisions • Capacity• Quality• Culture• Co-operation

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The chosen solution

2EjendomsserviceRengøring, vinduespolering og udvendig renholdIndvendig og udvendig bygnings-vedligeholdInventarvedligeholdTerrænvedligeholdTilstandsvurderingFlytningerBrandberedskabParkeringsadministration og - serviceRenovation og afløbvagt

1Intern serviceOmstillingReceptionIntern postDistributionKopiserviceMødelokaleadministrationViceværtopgaverKontrollører og Garderobe

3ForretningsserviceMedarbejder Restaurant - interne spisestederRestaurantBistroKiosk

Internal services Outsourced service

Internt i DR Udbydes i projektkonkurrence

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The contract: partnership

– Joint DR/ISS project group was formed with the purpose to analyze, negotiate and establish the contract.

– Yearly budget DKK 34 mio. / 4,6 million EUR

– 5 year contract

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Co-operation

Customer

Service supplier – internal and external

Service management and

administration

Service requestsNegotiation of service contract

Supply of services

Payment

Evaluation of services and partnership

Evaluation – satisfaction with services supplied

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The ordering of services

•On the intranet

•Service rapport

•Tracking of services

•Controlling

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Balanced scorecard

Measurements via joint balanced scorecard

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•High quality

•Service level agreements must be followed

•Good working environment

•Yearly innovation plans

Joint goals for the process

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Focus

• The role of the procurement department, responsibility and tasks

• Competencies of the future procurement consultant

Role, responsibility and tasks

• Innovative thinking

• Look at procurement as part of a larger entity

The future of procurement

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To create value

• Lower procurement prices• Administrative effectiveness – lower cost of

processes• More competent suppliers and partners• Focus on total cost of ownership• Focus on total solutions for customers

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The future – reinventing procurement

Clear vision/mission Logic and effective

processesContracts with thechosen suppliers

Value creation

Integrated procurementsolutions

Reduction ofsuppliersSupplier

management

Procurementanalysis

Procurementstrategy

Full potential

38

The challenges

• Develop bullet proof analysis and foundation for measurements

• Internal focus on the importance of loyalty towards supplier contracts

• Measurements

• Holistic approach

• Controlling

• Marketing and customer focus