Marie-Josée LinteauProcurement Executive Director

Government of QuebecJune 2006

E- PROCUREMENT

The Quebec Government Experience

• Presentation of the Organization

• Procurement Consolidation

• E-Procurement

• The Current Procurement Portal

• Navigation Modules for the Procurement Portal

• The E-Commerce Market of Tomorrow

Presentation Plan

Presentation of the Organization

• A new approach to sharing processes, technologies, knowledge and expertise

• To promote and have administrative goods and services accessible to public agencies

• Through consolidating and grouping needs

• To optimize these services and reduce costs

• By ensuring that internal expertise on administrative services is shared and developed

The « Centre de services partagés du Québec »

• A Government agency in operation since 1938

• Specialized in negotiating contracts, setting up procurement groups and the disposal of excess goods

• A multidisciplinary team specializing in the acquisition of goods, services and information technologies

• Specialists who are constantly concerned with accessibility, fairness and transparency

• Responsible for applying the ecologically responsible procurement policy

Procurement General Directorate (PGD)

Major Mandate

Consolidate procurement power and simplify the procurement process in order to:

Generate economies of scale and processes

Facilitate suppliers’ access to government contracts

Facilitate access to excess goods

Current Business Volume of $411 million:

$296 million in consolidated procurement

$115 million in purchases, mandated by clients

Procurement General Directorate (PGD)

Consolidated Procurement

Consolidated Procurement

• 25 IT groups (microcomputers, printers, servers, etc.)

• 71 goods and services groups(press review, printing, moving, etc.)

• 2,100 suppliers registered in the Portal • Purchasing Guides (information on purchasing

terms and conditions) in electronic mode only

Economies of Scale

• Periodical analysis of the economies of scale achieved through procurement groups

• Information sheets on savings are published in purchasing guides

• Methodology checked by specialists in research and internal auditing

Overall Results of Economies of Scale as of March 31, 2006

Categories Value ofContractsWithout

ProcurementGroups

Annual Value ofGroups

Procurement

Savings$

Savings %

Goods $56.8 million $48.8 million $8.0million

14.1 %

IT $103.1 million $77.7 million $25.4million

24.6 %

AuxiliaryServices

$42.7 million $31.7 million $11.0million

25.7 %

Printing $6.6 million $5.2 million $1.4million

21.5 %

Total $209.2 million $163.4 million $45.8million

21.9 %

E-Commerce

Business to Consumer (B2C) * in 2003

World $270 billion

USA $135 billion

Canada $2.1 billion

Québec $233 million

* Statistiques Canada and « Journal du Net »

Statistics

Business to Business (B2B) * in 2004

World $5,900 billion

USA $2,700 billion

Canada $26 billion

* Statistiques Canada , Journal du Net and Déclic.net, Gartner Group and Forrester

… Statistics

• Internet sales hit $19 billion in 2003, 40% more than in 2002

• Internet retail sales were $6 billion in 2003, representing a 51% increase

• Inter-business e-commerce reached $13 billion in 2003, a 35.2% increase

*Study on E-commerce and Technology (SECT) 2003

Situation in Canada

Percentage of Businesses using Internet to sell their products and services

Manufacturing Businesses 12%

Wholesaling Businesses 14%

Retail Businesses 11%

Cultural Businesses 22%

Education Businesses 14%

All others 27%

*Estudy on E-Commerce and Technology (SECT) 2003

… Situation in Canada

Situation in Québec

• On February 2005, 1/3 of Quebecers visited a Provincial Government Web site, 25% more than on February 2004 (*)

• 1/3 of Web surfers used Internet as a source of information on health, representing a 24% increase.

• In 2005, more than 4 Quebecers out of 10 (42.9%) consider that online purchases are secure, and 9.7 % of adults have bought something on the WEB

* Infomètre Cefrio

The Procurement General Directorate Procurement Portal

The Procurement General Directorate Procurement Portal

Objectives

• To facilitate public acquisitions

• To provide access to detailed information on procurement consolidation (procurement guide)

• To offer online ordering for a variety of goods and services with chosen suppliers

• To quickly provide management information to client organizations and the Procurement General Directorate

History

May 1997 Work on the portal began

March 2000 Office supplies and furniture available for online orders

Oct. 2000 to2006

A variety of products andservices can be ordered online

Information on all of theProcurement General Directorateprocurement consolidated(procurement guides)

Technological Infrastructure

Upgraded in 2002

• Multiple prices-products-suppliers

• Configuration interfaces for the options

• Suppliers updated products, services, and prices

• Much improved navigation and search engine

… Technological Infrastructure

• 3 dedicated servers: One for development Two for production (WEB Access and SQL database)

• Commerce server 2000 (Microsoft)• Crystal report 10• Windows 2000• Visual basic 6.0• SQL server 2000• Biztalk 2002

Current Acquisition Process

Portal Clientele:• Health network • Education network• Municipalities• Citizens• Suppliers

PGD Procurement Portal

• Configurator• Buying Guide• Electronic exchange

of information (XML) FIRMS Clientele:• Departments

and agencies• Suppliers

PGDCatalogues

• Directories• Buying groups

Portal Clients FIRMS Clientele

Rech.

Suppliers

Electronic orders

Paper orders

Government ERP

Other applications:• Electronic call for tenders system (ECTS)

Products and Services That Can Be Ordered On Line

Nearly 35,000 articles are available, many of which can be ordered on line from suppliers:

•Office supplies and furniture

•Training courses

•Heavy equipment rental

•Car rental

•Hotel room reservations

•Conference room reservations

•Repair service for chairs, partitions, and furniture

•Printing service for pamphlets and envelopes

… Products and Services That Can Be Ordered On Line

• Microcomputers

• Servers

• Ink cartridges

• Products and services related to cell phones

• Pagers

• Software from a variety of manufacturers

• Lubricants and grease

• Lighting products

Target Clientele

• Quebec Government Departments and Agencies

• Health and Social Services network (hospitals and social services organizations)

• Education network (universities, colleges and school boards)

• Municipality network (municipalities and related organizations)

7,400 potential customers, half of which use the portal on a regular basis for consultation or ordering

Use Statistics

Period Number of Orders

Processed

Amount

2003-2004 53,885 $20.8 M

2004-2005 59,650 $23.1 M

2005-2006 66,300 $26.1 M

Business volume and the number of orders are continually growing

Challenges of Implementation

• The varied needs and interests of our clientele • Uniformizing the presentation structure of

consolidation procurement groups

• Maintaining an interesting and dynamic visual presentation

• Data integrity (articles and prices corresponding to those in supplier contracts)

• Maintaining client interest (regular and targeted updates with a limited budget)

• The complexity of updating

… The Challenges of Implementation

• The involvement of suppliers

• Uniform management of very different services

• Adjustments to the procurement process

• The obligation to use the portal exclusively on procurement consolidated orders

Navigation Modules

Procurement Guide

Ordering Microcomputers

Ordering Supplies

The E-Commerce Market of Tomorrow

• Multi-organization, multi-network, multi-media, multi-product, multi-service platform

• Extensive informational content on new and used products

• Transactional tool that facilitates and standardizes the acquisition processes

• Technology that allows interoperability with a variety of Enterprise resource planning (ERP)

Electronic Market

Future Acquisition Process

Clientele:• Departments and agencies

• Health network• Education network• Municipalities• Citizens• Suppliers

Electronic Market

CSPQ Products and Services• Acquisitions of goods and

services• Mail and messaging

• Government reproduction service

• Distribution and marketing of publications

• Telecommunications services

CSPQCatalogues

Catalogue updates

Single access point

Clientele

Electronic exchange of information

Suppliers

orders

Suppliers’ Catalogues

Other applications (*)

XML

Link

Government ERP

(*)• Electronic Calls for Tenders System (ECTS)• Electronic Bid System (EBS)• Surplus Valuation System (SVS)

Conclusion

The electronic way of procurement is a business solution that:Promotes the re-evaluation of public procurement

strategies

Automates the purchase of a larger number of products and services

Allows access to a bigger client-base

Promotes economies of scale and economies of process for clients and suppliers

Facilitates quick access to valid information management

Questions ?