eProcurement strategy
Definition of e-Procurement
eProcurement is about the Council ‘doing business’ electronically with suppliers and is defined
by the National Procurement Strategy as the use of electronic systems to acquire goods, works
and services and payments from third parties.
Drivers and targets for eProcurement
The main objective of using technology in procurement is to reduce the cost of the procurement
process for both the Council and its suppliers and contractors. The government also wants
local authorities to implement eProcurement, mainly through;
 ODPM Priority Services Outcomes, and
 National Procurement Strategy targets on Doing Business Electronically.
ODPM Priority Services Outcomes for eProcurement are:
Priority Area
Required outcomes
“Good” outcomes
“Excellent” outcomes
5. e-Procurement1
Online facilities to be
available to allow:
Establishment of a single
business account (i.e. a
cross-departmental
‘account’ run by the local
authority whereby
businesses are allocated
a unique identifier that
can be stored and
managed via a corporate
CRM account facility
supporting face-to-face,
website and contact
centre transactions) (G8)
Access to virtual eprocurement ‘marketplace’
established (E5);
To support
business
improvement
through cost
effective and
efficient purchasing
of goods and
services through
corporate
implementation of
e-procurement.
Working with local
suppliers to equip
them to take
advantage of eprocurement
activities.
Appropriate eprocurement
solutions in place,
including as a
minimum paperless
ordering, invoicing
and payment (R9).
Regional co-operation on
e-procurement between
local councils (G9).
Inclusion of Small and
Medium Enterprises (SMEs)
in e-procurement
programme, in order to
promote the advantages of
e-procurement to local
suppliers and retain
economic development
benefits within local
community (E6);
Agreed targets for efficiency
savings by December 2005,
including the % of
undisputed invoices paid in
30 days (BVPI 8) (E7).
National Procurement Strategy ‘Doing Business electronically’
The following targets are included in the National Procurement Strategy;
 Appropriate e-Procurement solution implemented
 Using government procurement card or equivalent for low value purchases
 Progress of e-Procurement being measured
 Accessing an appropriate e-Marketplace
1
i.e. automation of the internal and external processes associated with buying goods and services.
Jan 2007
eProcurement at Allerdale Borough Council
In February 2006 the Council undertook a review of its future requirements for e-procurement.
This was also done in collaboration with all Cumbrian authorities so that a ‘Cumbria wide’
position could be established. The report made a number of recommendations which have
been included in this document.
Benefits of implementing eProcurement
As well as aiming to reduce the cost of the procurement process, other eProcurement benefits
include;
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Savings through reduction in processing costs and paperwork
More centralised control over purchasing
Slicker, more streamlined processes and purchasing
Better supplier management and communication
More accurate supplier and spend information
Improved controls on maverick spend
Reduction in number of suppliers
Meeting government targets
Summary of strategy
It is envisaged that, for any of the initiatives identified below, a business case would need to be
approved and the necessary resources available for implementation. Through the work of the
Cumbria Procurement Initiative the Council will to work with all the Cumbrian authorities towards
common solutions for the technologies required. In summary the strategy, over three years,
includes;
Year 1
Electronic system which enables;
 Electronic purchase order processing and approval
 Electronic Request For Quotation (e-RFQs)
 Visibility of contractors catalogue content available for browsing on eMarketplace
 Agreed programme for engaging with suppliers
Year 2
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Electronic invoicing
Electronic tendering system
Online publication of contract notices
Year 3
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web-based information for suppliers (e.g. web portal for supplies through CPI)
use of procurement cards for low value purchases
e-auctions (collaborative)
Electronic contract management software
* some activities between Year 2 and 3 may swap depending on priorities for CPI
Jan 2007
Type of
eProcurement
Purpose
What will we do to achieve
this?
Electronic Ordering
Allows any member of staff to raise an order electronically, have the order authorised by the
manager electronically and submit it to the supplier by email, automated fax or paper.
Electronic purchasing and invoicing processes can result in savings for the council by
reducing officer time and eliminating the paper trail normally associated with purchase
ordering, invoicing and payment.
This allows the buyer to issue a request for a quotation to potential suppliers. The system
tracks all transactions between the buyer and supplier until a quote has been accepted or
rejected.
This is the electronic issue of an invoice from the supplier to the buyer once goods/services
have been despatched. Once the buyer has receipted the goods/services on their purchase
ordering system, the invoice can be automatically matched to the purchase order, for price,
and the goods received for quantity, and with the 3-way match complete, automatically
approved for payment.
An e-marketplace is an internet based facility that enables trade between one (or a number
of) councils and a variety of chosen suppliers. Suppliers post catalogues of goods and
services, or provide ‘punch out’ access to their websites, onto the marketplace and council
buyers make purchases from them. This facility enables Councils to take advantage of prices
that reflect the combined expenditure of several councils or public sector bodies whose
suppliers catalogues are on the marketplace.
Payments are transferred electronically to supplier’s bank accounts through use of BACS.
Instruction to pay suppliers needs to be sent from the electronic ordering system to Ross.
E-Tendering systems handle the full life cycle of the tendering process for both the buyer and
the supplier, from initial notification of requirement, expressions of interest, to issue and
receipt of tenders through to evaluation. All actions are managed and recorded electronically
right up to acceptance/rejection notification.
Contract and supplier management software can be used to; flag up when contracts are due
for renewal, manage supplier performance, record details on suppliers such as spend,
contract documents, pre-qualification checks, company details.
IDeA Marketplace (P2P workflow)
to be implemented
The e-auction is typically hosted by a third party who provides the software and management
of the event, and suppliers bid to provide the goods/services to the Council. Suppliers can
view the lowest price offered and decide whether to improve their offer to win the business.
Corporate purchasing cards can be used for low value, frequent transactions or for one-off
purchases where it would not be cost effective to create new supplier records on the financial
system. Suppliers are paid promptly and the council reduces the number of invoices
processed by the Council.
Too expensive to run as an
individual authority so would need
to collaborate.
Identify suitable card and pilot
first.
Electronic Request
for Quotation
Electronic Invoicing
Electronic
catalogues /
eMarketplace
Electronic payment
processing
Electronic tendering
Electronic contract
and supplier
management
E-Auctions
Purchasing Cards
Jan 2007
IDeA Marketplace (P2P workflow)
to be implemented
IDeA Marketplace (P2P workflow)
to be implemented
IDeA Marketplace (eMarketplace)
to be implemented
IDeA Marketplace (requires
integration with Ross FMS)
Identify a system collaboratively
with other Cumbrian authorities.
Cumbria County Council to lead.
Identify system collaboratively with
other Cumbrian authorities.