Ramanathan SM'

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Experiences of Indian States on e-GP Platforms

• Ramanathan SM.
• e-Procurement Specialist, NISG

28th November 2006
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Agenda

• What is e-GP ?
• e-GP experiences
• Indian International
• National e-GP MMP Development Challenges
• People
• Process
• Technology
• Resources
• Possible Course of Action

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Part I What is e-GP ?
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What is e-GP?

• Electronic Government Procurement
• or e-GP
• is a collaborative procurement
• of goods, works services
• using electronic methods
• in every stage
• for bringing in
• efficiency transparency

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Objectives of e-GP

• To act as the catalyst for procurement reform
• To enhance transparency, monitoring and control
  in procurement process
• To bring in economies of scale through
  aggregation of demand
• To reduce cost of doing business for both
  government and suppliers
• To establish level playing field and fair
  competitive platform for the suppliers

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Range of Procurement Services

• Indent Generation Approval
• Demand Aggregation
• Procurement Process
• Tenders, Auctions, Reverse Auctions, Rate
  Contract, Catalogue Buying
• Bid Evaluation
• Award Purchase Order
• Supply (Contract/Rate Contract) Mgmt.
• Quality Management
• Inventory Management
• Payments Management
• Accounting, MIS and EIS

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Categorization of Procurement (1 of 2)

• By Category of Goods Services
• Goods
• Services
• Civil Contracts
• By Nature of Procurement
• Tenders
• Rate Contract Catalogue Buying
• Auctions, Reverse Auctions
• LCB, NCB, ICB
• By Size / Volume of procurement
• High Value, low volume
• Low value, High Volume

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Categorization of Procurement (2 of 2)

• By Centralization of procurement
• Centralized Tendering, Centralized Ordering
• Centralized Tendering, Decentralized Ordering
• Decentralized Tendering, Decentralized Ordering
• By Portfolio of services needed (sample)
• Requisition, Bid Process MIS
• Contract Mgmt, Payment, Accounting MIS
• Inventory Management Quality Management

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e-GP Functional Architecture
e-Tendering
Contract Management
Indent Management
e-Auctions
Catalogue Management
Suppliers and Buyers Master Data
e-Payment, Accounting and MIS
Dept. 1
Dept. 2
Supplier 1
Dept. n
Supplier 2
Supplier n
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e-GP for Enhanced Efficiency
e-GP Functionality
Benefit
e-Tendering
Competitive bids due to enhanced competition
Catalogue Management
Economies of scale achieved from effective
utilization of rate contracts
Online Workflow
Reduction in time taken for decision making
Centralized Supplier Registration
Enables faster bid evaluation
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e-GP for Enhanced Transparency
e-GP Functionality
Benefit
e-Tendering
Free and fair competition for government
contracts
MIS Reports
Enhanced clarity on procurement expenditure
Contract Management
Project status information publicly available
e-Payment
Expeditious processing of payments due to
contractors
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Part II Indian International e-GP Experiences
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State of e-GP Internationally

• Few countries have had good success in
  implementing e-Procurement (e.g.) Korea,
  Singapore, Denmark, Local bodies in England, some
  State Governments in USA and Australia
• The European Union has developed a plan of action
  for implementing e-Procurement community wide.
• Multi-lateral Development Banks (e.g. ADB) have
  come together to assist developing countries in
  implementing e-Procurement
• Many nations in the South American continent have
  gotten onto the e-Procurement bandwagon
• Most developing countries have embarked on
  e-Procurement in some form.

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State of e-GP in India

• The State of Andhra Pradesh has pioneered the
  implementation of a State-wide e-GP system
• NIC DGSD have launched e-GP initiatives
• The Governments of Karnataka, Rajasthan and
  Chhattisgarh have embarked on implementing
  State-wide e-GP systems
• Only the e-Tendering aspects of e-Procurement
  mainly implemented, though there is increased
  interest in the other components of e-GP.
• There is wide-spread awareness on e-GP

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Few Prominent Indian International e-GP
Experiences
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Critical Success Factors of e-GP

• Effective Procurement Policy Reform
• Process re-engineering to transform government
  procurement
• Sound legislative and regulatory framework
• Well-designed Business Model
• Adequate participation and commitment from
  participants
• Effective Communication Strategy to disseminate
  benefits
• Strategies for adoption of buyers suppliers
• Flexible systems for meeting requirements of all
  agencies
• Effective Training and Change Management plan
• Developing effective skill-base in new
  procurement methodologies
• Open standards-based, interoperable technology
  infrastructure

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NISGs Experience with e-GP

• Provided Strategic Consultancy to the State
  Governments of Karnataka Chattisgarh in
  implementation of State-wide end-to-end e-GP
  systems
• Process reform recommendations
• Business model
• Operational and Deployment SLAs
• Private-Public-Partnership (PPP) Modeling work
• Model e-GP cell for program management
• Conducted e-GP specific capacity building program
  to senior government officials from Orissa,
  Chhattisgarh and Karnataka

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Part III National e-GP MMP Development Challenges
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e-GP rests on Four Pillars
e-GP
People
Process
Technology
Resources
There are Challenges around each pillar
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People Architecture Challenges (1 of 2)

• Capacity building amongst a very large audience
  of
• Senior government officials engaged in e-GP
  project development
• CVC, CAG and other regulatory bodies
• Adoption of consultative approach
• Development of nodal public procurement focused
  institutions at the State level
• Similar nodal institutions are required at the
  Ministry, PSU and the National levels

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People Architecture Challenges (2 of 2)

• Development of e-GP PMU at the State Level for
• Managing the roll-out of e-GP across the
  Ministry/State/PSU
• Monitoring the performance of e-GP Service
  Providers
• Provision of training to end users
• Coordinating the issuance of digital signatures
• Similar PMU structure will be required at the
  Ministry PSU levels
• Development of e-GP PMU at the National level
  for
• Expediting implementation of e-GP across the
  Nation
• Sharing of best practices across e-GP
  implementations
• Setting standards for inter-operability
• Regulation of e-GP Service Providers
• Model e-GP cell organization at the National
  level

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Process Architecture Challenges (1 of 2)

• Key underlying philosophy
• Avoid Translation Instead attempt
  Transformation
• Sample Reforms
• Development of a standard Item Code
  classification
• Effective advertisement of government tender
  opportunities (Auto generated e-mails)
• Enables aggregation of demand
• Multi-point supplier/contractor enrolment
• Centralized supplier registration development
  of a National supplier database recommended
• Enhanced Transparency is a key requirement
• Online publication of tenders
• Public opening of bids
• Online project management viewable by the public

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Process Architecture Challenges (2 of 2)

• Outdated procedures still being followed
• Measurement book still prepared by govt.
  employees
• Distinct lack of standardization in processes and
  formats used in public procurement
• Acts as a road-block on supplier participation
• Delays in payment
• In Korean e-GP system, payment is done within 48
  hours of bill submission
• Poor overview of public procurement expenditure
• The inadequacy can be addressed through the MIS
  functionality
• Mandate e-GP
• Publish model e-GP legislation, enact e-GP Law
• Process Reform is a Process and not an event

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Technology Architecture Challenges

• Implementation of robust e-GP systems
• Secure, reliable, available and scalable
• Avoidance of Monopolies, where possible
• Monopoly in Service Providers
• Monopoly in Technology
• Development of a National e-GP Architecture
• Open standards-based e-GP exchange
• Interoperable with other e-Gov systems
• Standard interfaces protocols
• Metadata Schemas for e-GP sector
• Service Oriented Architecture

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Model e-GP Exchange
XML Based Gateway
Transaction Services i. e-Tendering ii.
e-Auctions iii. Contract mgmt iv. Rate contract
mgmt v. Indent Management
Govt. Agency 1
Govt. Agency 2
Govt. Agency 3
Payment Gateway
Govt. Agency n
ASP 1
XML
e-GP Exchange
ASP 2
XML
Core Services Supplier Registration Buyer
Registration e-Payment
Contractor 1
XML
Contractor 2
ASP 3
Contractor 3
XML
ASP n
Contractor n
External Systems
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Business Model / Resources (1 of 2)

• Development, deployment and maintenance of e-GP
  requires heavy upfront investments
• Development of the Contract Management module
  (one of the 6 modules) in a government agency
  alone could cost in Crores of rupees
• PPP approach found effective for sharing risks
  and responsibilities in e-GP implementation
• Zero upfront payment made to the Service Provider
  
• Private partner paid on a per transaction basis

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Business Model / Resources (2 of 2)

• Inadequately developed Computing and Networking
  infrastructure
• Many SWAN implementations are underway
• Agencies implementing e-GP will require funds for
  procurement of computers, printers, digital
  signatures, CAD systems etc.
• Robust funding required for sustaining e-GP PMU
  cells across the Nation
• Implementation of e-GP will result in huge
  savings for the Governments
• Investments made on e-GP will be a miniscule of
  the savings

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e-GP Needs a Holistic Approach
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Part IV Possible Course of Action
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Possible Course of Action

• Constitution of Institutional Infrastructure
• A cross functional high powered committee to
  govern the implementation of the e-GP MMP
• An e-GP cell at the National level for managing
  the day-to-day activities of e-GP implementation
• Preparation of a Detailed Project Report (DPR)
  for National e-GP MMP
• Envisioning e-GP Enterprise Architecture
• Envisioning e-GP Technology Architecture
• Approach for implementation of process reforms
• e-GP Capacity Building Knowledge Management
  Strategy

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Possible Course of Action
Challenge of Implementing e-GP is Worth Pursuing
Invoke the Mission in the Mission Mode Project
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Thank You

• rs_at_nisg.org

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Model e-GP Cell Organization
National e-Government Procurement (e-GP) Cell
Back
State Governments
Ministries
Enterprises (PSE)
e-GP
e-GP
e-GP
e-GP cell
e-GP cell
e-GP cell
State 1
Min. 1
PSE 1
e-GP
e-GP
e-GP
e-GP cell
e-GP cell
e-GP cell
State 2
Min. 2
PSE 2
e-GP
e-GP
e-GP
e-GP cell
e-GP cell
e-GP cell
State n
Min. n
PSE n