Procurement Transformation Generates Efficiency Savings for Scottish Borders
Local government authority achieves process efficiency savings
using PROACTIS
Profile
Scottish Borders is a region within South East Scotland that
covers over 1,800 square miles and is governed by a unitary council
of 34 single member wards, originally set up in 1995 following a
reorganisation of local government. The Council is charged with
delivering major services such as Education, Social Work, Roads and
Transport, Housing, Leisure and Recreation, Environmental Health
and Cleansing across the region.
Like many local authorities, Scottish Borders Council spends
hundreds of millions of pounds on goods and services each year. In
2004, the Scottish Executive called for all local government
authorities to implement eProcurement systems to address the
challenge of maintaining control and visibility of this spend.
Scottish Borders Council recognised the benefits that eProcurement
could bring and wanted a system that would truly meet its unique
requirements. Above all, the council wanted the ability to devolve
purchasing responsibilities to staff throughout the organisation,
whilst maintaining central control and visibility over its spend
and reducing the costs associated with processing transactions.
Challenge
Historically, responsibility for procurement within the Council
lay with the Corporate Procurement Unit, but ad hoc purchases could
be made by other members of staff across the organisation.
Processes, such as commitment accounting, were in place to try to
manage spending and achieve visibility of the cost pipeline but
these were not mandatory. What's more, complex accounting codes and
procedures discouraged staff in some departments from complying
with procurement policy. Purchases weren't always made by staff
with the correct authority or knowledge about the goods and
services required.
Not only did the procedures meet with resistance from staff but
they also gave rise to an extensive paper chase, which becomes
apparent when you consider that the Council deals with on average
100,000 purchase orders and some 8,000 different suppliers each
year.
With so much paper being chased from department to department,
it was difficult to get an overall view of the organisation's spend
and cost pipeline at any one time, and maintaining audit trails was
next to impossible. Information available from the Council's
financial ledger was somewhat limited. It could only provide a
record of invoices which had been paid and while it was able to say
that, for example, £1,000 was spent on stationery it could not
provide the capability of drilling down to find out exactly what
had been bought, by whom and from which suppliers.
Why PROACTIS?
If Scottish Borders Council was to get real visibility of all of
its spend, it needed to implement a system that would handle every
single purchase, from stationery to toiletries, and deliver
valuable management information about that spend. They needed a
system that would make it easy for staff to buy the goods and
services they need to do their job but difficult to buy those items
they aren't authorised to purchase. This would require some degree
of business process transformation and culture change, so it was
vital to choose a system that was easy-to-use in order to secure
the buy-in of a user base of 1,500 staff.
The ability to configure a system that would fit its unique
requirements was very important to the Council as it needed to set
up specific cost codes, departments and most importantly an
authorisation hierarchy that would allow the right departments and
people to authorise the right products and services. Equally, being
able to mix and match the modules of an eProcurement solution would
allow the organisation to only implement the modules it really
needed.
Results
After a rigorous review of eProcurement technologies on the
market, Scottish Borders Council selected PROACTIS to implement a
purchase-to-pay solution that could meet all of its needs. The two
organisations worked together to identify the Council's unique
requirements and configure the system accordingly. The system went
live, piloted among two small departments, and by the end of the
first year, 85 members of staff outside of the Purchasing and
Finance teams were using the system.
The system is now live in four of the council's six major
departments with over 400 users trained on the system, providing
greater control and visibility of spend for those departments.
By implementing a system that was easy to use, yet met all of
its requirements, Scottish Borders Council was able to change
internal culture and devolve purchasing to enable the Procurement
team to focus on their core skills. The team has achieved a
transparent overview of the entire purchasing process. Not only can
it see a full audit trail of the authorisation process but it can
also drill down into valuable management reports which draw
information from the Council's financial system. Visibility of its
payment pipeline now enables the organisation to ensure that it
does not overspend and that it is able to track any payments that
are expected.
Success is already visible, with 75 percent of orders being
transmitted electronically, by email or fax, and all invoiced
transactions are now being scanned - these scanned images are now
visible for users from their own desktops right across the
organisation. Based on the experience of the implementation pilot
Scottish Borders Council is hoping to make efficiency process
savings right across the user community within the organisation by
processing transactions in a more streamlined fashion.
Ewan Forrest, Senior eProcurement Officer at Scottish Borders
Council, comments: "We have known PROACTIS to be very reliable,
responsive, forward looking and particularly customer focused in
implementing its solutions, which is why we chose the company and
its eProcurement solution in the first place."
