The six South Wales local authorities currently utilising a shared PROACTIS eProcurement platform:
- Blaenau Gwent County Borough Council
- Cardiff County Council
- Pembrokeshire County Council
- Rhondda Cynon Taf County Borough Council
- Swansea City Council
- Torfaen County Borough Council
Another ten local authorities in the region also manage their tenders and contacts.The combined spend sourced and monitored annually through the PROACTIS system is over £800m, with over 11,000 active suppliers, over 1,200 contracts, and an average of about 300 active tender exercises being managed at any point in time. Each Authority processes purchase orders through their own business system. Those include systems from SAP, Oracle, and Civica.
In today's economic climate, executives in both the private and public sector are more than ever seeking to drive efficiencies throughout their organisations. One approach being taken by a growing number of organisations is to establish shared services or shared support platforms across multiple organisations. For instance, in the public sector, local authorities in a number of regions are looking for ways to combine their purchasing power to gain increased value with suppliers, and for ways to collaborate on improved procurement processes. That is exactly what a group of South Wales local authorities wanted to do when they decided to establish a shared strategic eProcurement platform.
Although the organisations' procurement executives had established a good level of communication and knew they wanted to work together, they recognised that with individual systems and methods, it was extremely difficult to collaborate on combined sourcing efforts, and that they had no practical way of incorporating best practices from each other into their respective processes. In addition, they were each incurring the full cost and effort required to manage their respective procurement systems. Working together they felt they could improve on all those issues.
Part of the reason this group of procurement executives was already communicating was that they had all chosen the PROACTIS software solution to support sourcing, contract management and supplier relationship management. In the earlier stages, they worked together with PROACTIS to jointly refine the software for their needs, but they were still all running their own individual systems. They decided that it would be much more beneficial to actually use a single common system where they could each manage their respective activities as before, but where they could also share data, and better collaborate on shared tenders and contracts.
Since the system was web-based and multi-organisational in design, PROACTIS suggested that they could centrally host a common system in support of the entire group. That would give each member all the capabilities they already had while enabling a far greater level of co-operation and collaboration. The group readily agreed, built a compelling business case, and gained the approval of their respective councils.
Today, the original group of five local authorities has grown to six and procurement collaboration has expanded to as many as 16 of the region's authorities. All are supported by a single system, centrally hosted by PROACTIS. Works, service and supply contracts are managed on the system from a secure web portal. Sourcing can be done in a traditional manner or using a full eTendering approach. Contracts range from low value schemes to schemes above the EU threshold.
Suppliers also access a web portal to register and apply for approved supplier status, browse open tenders, receive early tender advice, gain access to restricted tenders, view the status of submitted responses, and review awarded contracts. In addition, suppliers can download and upload documents electronically.
Much progress has been made in terms of establishing collaborative, standardised processes. "We've all worked together to develop standard templates for various sourcing processes," says Andrew Maisey, Head of Procurement for Torfaen CBC. "Each organisation can tweak the procedures as needed, but using the standard activity sets we've jointly developed in PROACTIS, we can be confident each sourcing event is performed in a consistent and proper manner."
With the ability to more easily collaborate on joint sourcing, the number of shared contracts is going up. As anticipated, the increased buying power is making it possible to negotiate better prices and increased value from suppliers - a key benefit.
Contract and supplier management is being streamlined as well. Key information for contracts is maintained in a central electronic file, with all activities identified for the life of each contract. PROACTIS email alerts automatically tell appropriate people when various events are coming up. Supplier performance information is held at both the supplier and contract level.
Speaking about the impact within his own organisation, Maisey says: "Because PROACTIS monitors all scheduled contract activities we have a lot more visibility for workload planning. Even more importantly, we're doing a better job of mitigating supplier risk by performing appropriate reviews when they come due. Social care contracts are a good example of where that is of critical importance."
Another advantage comes from the web-based nature of the system: "I often need to work from home," says Maisey. "With PROACTIS, all the information about suppliers, contracts, and tenders is accessible wherever I am day or night. I can perform any function any time. That's a huge productivity advantage for me, and for others, I'm sure."
Finally, the PROACTIS system is having a positive impact on procurement costs. Besides sharing the system operation costs across multiple organisations, less and less paper is being printed and mailed, saving both cost and environmental impact.