joão n. veiga malta sr. procurement specialist jveigamalta@worldbank

João N. Veiga MaltaJoão N. Veiga MaltaSr. Procurement SpecialistSr. Procurement [email protected]@worldbank.org


e-GPe-GPFrom publication to transaction From publication to transaction

and beyond - LACand beyond - LAC



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Role of governments, Role of governments, WB, ADB, IDB…WB, ADB, IDB…

• developmentdevelopment• transparencytransparency• operational efficiencyoperational efficiency

CommunityCommunity

• technology literacytechnology literacy• opportunityopportunity• just-in-time trainingjust-in-time training• lifelong learninglifelong learning

EconomyEconomy• capacity buildingcapacity building• market accessmarket access• connectivityconnectivity• skills developmentskills development

Organisation Organisation • new servicesnew services• new deliverynew delivery• new resourcesnew resources• new efficiencynew efficiency

Why e-Procurement ?Why e-Procurement ?Why e-Procurement ?Why e-Procurement ?

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Why e-GPWhy e-GPWhy e-GPWhy e-GP

Capacity-building in e-GP targets three key donor objectives for one third of government expenditures

Capacity-building in e-GP targets three key donor objectives for one third of government expenditures

GOVERNANCETransparencyAccountability

IntegrityPublic Confidence

GOVERNANCETransparencyAccountability

IntegrityPublic Confidence

EFFECTIVENESSEfficiency

Informed ManagementValue-for-money

Quality Outcomes

EFFECTIVENESSEfficiency

Informed ManagementValue-for-money

Quality Outcomes

ECONOMIC DEVELOPMENTBusiness development

CompetitivenessTechnological Enablement

Market Access

ECONOMIC DEVELOPMENTBusiness development

CompetitivenessTechnological Enablement

Market Access

e-GP OBJECTIVES

e-GP OBJECTIVES

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Current situation in LACCurrent situation in LACCurrent situation in LACCurrent situation in LAC

All countries in Latin America and several in the All countries in Latin America and several in the Caribbean have e-GP portalsCaribbean have e-GP portals

Systems range from publication of procurement Systems range from publication of procurement information to full interactioninformation to full interaction

All countries using MDB e-GP roadmap and All countries using MDB e-GP roadmap and guidelines as blueprint for their systemsguidelines as blueprint for their systems

Procurement becoming more strategic Procurement becoming more strategic

All countries in Latin America and several in the All countries in Latin America and several in the Caribbean have e-GP portalsCaribbean have e-GP portals

Systems range from publication of procurement Systems range from publication of procurement information to full interactioninformation to full interaction

All countries using MDB e-GP roadmap and All countries using MDB e-GP roadmap and guidelines as blueprint for their systemsguidelines as blueprint for their systems

Procurement becoming more strategic Procurement becoming more strategic

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back office function

sourcing considerations

largely goods

suppliers

simple process

low value, low risk

central to strategic management

strategic business decisions

complete service solutions

strategic partners

complex contracts & relationships

high value, high risk

Changing Nature of Government BuyingChanging Nature of Government Buying

Government procurement is being driven by budget and performance expectations to become more complex and strategic

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Value ChainValue Chain

Re-Focus of Procurement Systems and Re-Focus of Procurement Systems and CapabilitiesCapabilities

Re-Focus of Procurement Systems and Re-Focus of Procurement Systems and CapabilitiesCapabilities

Potential GainPotential Gain

Simple Procurement

Basic Expertise

Codified Process

Compliance Management

Transactions Technology

Complexity & Risk

Complexity & Risk

Complex Procurement

High Level Expertise

Risk Process

Performance Management

Knowledge TechnologyTo extract maximum benefit from procurement governments need to move up the value chain and e-GP is an important element of this

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Procurement HierarchyProcurement HierarchyProcurement HierarchyProcurement HierarchyC

om

pl e

x ity

an

d R

i sk

Co

mp

l exi

ty a

nd

Ri s

k

Potential GainPotential Gain

PURCHASED SERVICE OUTPUTS

CO-ORDINATED SERVICES

CONSTRUCTION WORKS

SINGLE SERVICES

SINGLE GOODS

Value ChainValue Chain

Most budget and efficiency gains in e-GP have focused only on simple procurement where substantial savings are available but there remains very substantial potential for efficiencies in more complex procurement. How much potential? Douglas North estimated that 45% of GDP is the cost of transactions. The potential benefits of driving these online technologies into the economy are therefore very large

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Procurement HierarchyProcurement HierarchyProcurement HierarchyProcurement Hierarchy

Value ChainValue ChainSINGLE GOODS

&SIMPLE SERVICES

To

tal

Co

st

Volume

Price paid

Transaction costs

Most budget and efficiency gains in e-GP have focused only on simple procurement where substantial savings are available but there remains very substantial potential for efficiencies in more complex procurement

Simple low value procurement

E-GP

E-GP

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Procurement and Market DynamicsProcurement and Market DynamicsProcurement and Market DynamicsProcurement and Market Dynamics

BuyersBuyers

SuppliersSuppliers

Alliance ContractsAlliance

Contracts

Spot Markets

+

Panel Contracts

Spot Markets

+

Panel Contracts

Reverse AuctionsReverse Auctions

AuctionsAuctionsAn e-GP strategy needs to understand market dynamics and manage all of these

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Current situation in LACCurrent situation in LACCurrent situation in LACCurrent situation in LAC

Several countries redeveloping systemsSeveral countries redeveloping systems

Procurement Network – cooperationProcurement Network – cooperation

WB and IDB fully harmonisedWB and IDB fully harmonised

Bank provides ongoing technical support to Bank provides ongoing technical support to countries countries

Several countries redeveloping systemsSeveral countries redeveloping systems

Procurement Network – cooperationProcurement Network – cooperation

WB and IDB fully harmonisedWB and IDB fully harmonised

Bank provides ongoing technical support to Bank provides ongoing technical support to countries countries

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Key IssuesKey IssuesKey IssuesKey Issues

Regional integrationRegional integration AuthenticationAuthentication

Digital Signatures vs Electronic SignaturesDigital Signatures vs Electronic Signatures Cross certificationCross certification

Product CodificationProduct Codification International standardInternational standard

Supplier registriesSupplier registries Free trade agreementsFree trade agreements

Regional integrationRegional integration AuthenticationAuthentication

Digital Signatures vs Electronic SignaturesDigital Signatures vs Electronic Signatures Cross certificationCross certification

Product CodificationProduct Codification International standardInternational standard

Supplier registriesSupplier registries Free trade agreementsFree trade agreements

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Standards and Government PolicyStandards and Government PolicyStandards and Government PolicyStandards and Government Policy

Executive Government

Policy Settings

Technical Standards

e-Standards require government policy to be articulated to target the facilitation of the technological activation of the economy as well as the efficient reform of government operations

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Key IssuesKey IssuesKey IssuesKey Issues

What drives change What drives change Law Vs SystemLaw Vs System

Second generation systemsSecond generation systems Operation modelsOperation models Government ownedGovernment owned OutsourcedOutsourced

What drives change What drives change Law Vs SystemLaw Vs System

Second generation systemsSecond generation systems Operation modelsOperation models Government ownedGovernment owned OutsourcedOutsourced

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Full Electronic Market CycleFull Electronic Market CycleFull Electronic Market CycleFull Electronic Market Cycle

Buyers

Suppliers

Supplier Search

CreateRFQ

Catalogues

AgencyContracts

CUC

RFQResponse

E-PO to Supplier

FMIS

E-Invoice

PO Receipt

Fax PO E-PO

E-Workflow

- Requisitions

- Approvals

- POs

- Receipting

- Reporting

e-GP requires integrated solutions if maximum benefits are to be gained by both buyers and suppliers

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Partial Electronic Market CyclePartial Electronic Market CyclePartial Electronic Market CyclePartial Electronic Market Cycle

Buyers

Suppliers

Supplier Search

CreateRFQ

Catalogues

AgencyContracts

CUC Fax PO E-PO

Proprietary FMISWorkflow

- Requisitions

- Approvals

- POs

- Receipting

-Reporting

Limited functionality is often preferred by staff who fear ‘disintermediation’ – another reason why an e-GP strategy is required

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Online Contract DevelopmentOnline Contract DevelopmentOnline Contract DevelopmentOnline Contract DevelopmentDesigned to allow users to define, plan, develop, track and

manage the contracting processDesigned to allow users to define, plan, develop, track and

manage the contracting process

Best Practice Guidelines & Checklists

Templates and Case Studies

Records Library

Tendering Information & Process Management

Office systems

E-Tender

e-Contract Development is about reform of administration

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How it was achievedHow it was achievedHow it was achievedHow it was achieved

LAC was test bed for Harmonised workLAC was test bed for Harmonised work

Utilised procurement networkUtilised procurement network

Supported regional working groupsSupported regional working groups

E-GP became Integral component of procurement E-GP became Integral component of procurement reform reform

LAC was test bed for Harmonised workLAC was test bed for Harmonised work

Utilised procurement networkUtilised procurement network

Supported regional working groupsSupported regional working groups

E-GP became Integral component of procurement E-GP became Integral component of procurement reform reform

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How it was achievedHow it was achievedHow it was achievedHow it was achieved

Regional competitionRegional competition Civil societyCivil society Bank use of systemBank use of system

Ranging from publication to transactionRanging from publication to transaction

Regional competitionRegional competition Civil societyCivil society Bank use of systemBank use of system

Ranging from publication to transactionRanging from publication to transaction

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Lessons Learned - PitfallsLessons Learned - Pitfalls Lessons Learned - PitfallsLessons Learned - Pitfalls

Technical direction drives e-GPTechnical direction drives e-GP

If it is so easy why is the success rate so low – If it is so easy why is the success rate so low – realistic expectationsrealistic expectations

No business model – lack of sustainability No business model – lack of sustainability “Someone has to pay”“Someone has to pay”

What is the reason for implementing e-GPWhat is the reason for implementing e-GP

AuthenticationAuthentication

Technical direction drives e-GPTechnical direction drives e-GP

If it is so easy why is the success rate so low – If it is so easy why is the success rate so low – realistic expectationsrealistic expectations

No business model – lack of sustainability No business model – lack of sustainability “Someone has to pay”“Someone has to pay”

What is the reason for implementing e-GPWhat is the reason for implementing e-GP

AuthenticationAuthentication

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Lessons Learned - PitfallsLessons Learned - PitfallsLessons Learned - PitfallsLessons Learned - Pitfalls

No reform = making the inefficient more efficientNo reform = making the inefficient more efficient

No plan = Lack of strategic directionNo plan = Lack of strategic direction

Failing to learn from the mistakes of othersFailing to learn from the mistakes of others

Transaction costsTransaction costs

Anyone who purchased online at Amazon is a Anyone who purchased online at Amazon is a e-procurement expert e-procurement expert

No reform = making the inefficient more efficientNo reform = making the inefficient more efficient

No plan = Lack of strategic directionNo plan = Lack of strategic direction

Failing to learn from the mistakes of othersFailing to learn from the mistakes of others

Transaction costsTransaction costs

Anyone who purchased online at Amazon is a Anyone who purchased online at Amazon is a e-procurement expert e-procurement expert

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E-GPSTRATEGY

GOVERNMENT & INSTITUTIONAL

LEADERSHIP

MANAGEMENT, LEGISLATION,

REGULATION & POLICY

PRIVATE SECTOR ACTIVATION

INFRASTRUCTURE & WEB

SERVICES

FUNCTIONALITY & STANDARDS

Business Activation• Contracted suppliers

Sell value proposition Letters, online follow-up Meetings and training

• Non contracted suppliers Sell value proposition ‘Procure-link’ connectivity Industry association

• Service industry development Catalogue development Business systems integration

• ETAs• Business selection and listing policies• Remote business strategy• Metropolitan strategy• Charge policies• etc

Management, Regulatory & Policy• Inter-jurisdictional agreements & interoperability• E-law capability

Low value online High value off line

• Legislative review & enactment• E-business process policy• ISMS – QA• Management e-gp• Guidelines & templates• E-gp policies• Reporting• etc

Infrastructure• Connectivity enablement• Kiosk services• Service industry development

Catalogue development Business systems integration

• ETAs• Peering facilitation• Procure-link• Bandwidth design• Responsiveness / performance• etc

LEADERSHIP• Cabinet signoff• A vision and objectives for e-GP.• Lead agency role definition and

coordination. • Procurement management

reform and implementation.• Stakeholder activation• Resource support (influence,

funding & expertise) • Consultation• Multi-level information strategy• Education & training• E-tender implementation• Change management & re-

engineering• Design collaboration• Public policy & governance

integration• Business proposition• etc

An e-GP strategy is an efficient & affordable vehicle to drive governance and economic reforms in developing countries – the leapfrog effect

Functionality & Standards• Ownership & management• Providers• E-tendering• E-contracting• E-procurement• Banking integration – suppliers• Banking integration – buyers• Document managment• Purchase card integration• Data warehouse mapping• Supplier-supplier connectivity• Standards policy• Open standards• Standards orgs• stc

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Lessons LearnedLessons LearnedLessons LearnedLessons Learned

A Strategic Plan doesnA Strategic Plan doesn’’t guarantee success but t guarantee success but the lack of one guarantees failure the lack of one guarantees failure

A Strategic Plan doesnA Strategic Plan doesn’’t guarantee success but t guarantee success but the lack of one guarantees failure the lack of one guarantees failure






and beyond - LACand beyond - LACThank YouThank YouThank YouThank You

joão n. veiga malta sr. procurement specialist jveigamalta@worldbank

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