South Wales Local Authorities Streamline Sourcing, Contract Management & Supplier Management
Six county and city councils use a shared eProcurement
system to collaborate, standardise and gain increased buying
power.
Profile
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.
Challenge
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.
Why PROACTIS?
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.
Results
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.
