Executive board

2. Executive board Director General: Kenneth Plummer Media Director: Lars Grarup Director of Programmes: (vacant) Director of Economy: David Hellemann

3. Strategic goals • 01DR will create value for everybody • 02 DR must engage, inspire and challenge • 03DR must provide unique experiences • 04DR whenever and however you like • 05 DR means efficiency and job satisfaction

4. Facts Income: • appx. 3,5 mia. DKK (2006) / 470 million EUR Expenses: • 3,3 mia. DKK (2006) / 442 million EUR Employees: • 3300 Procurement: Appx. 1 mia DKK/120 million EUR

5. Organisation Procurement in DR

6. Procurement in DR

7. Agenda • Procurement • Procurement analyses • Procurement policy • Fewer suppliers – the use of SKI • Internal storage in DR • The procurement process – the use of Oracle e-business suite • E-matching - order and invoice • E-invoice – the experience • Use of electronic tools – i.e. marked places • The future of procurement – case DR

8. Procurement policy in DR • Plans for development of suppliers • Plans for reporting • Plans for the use of e-commerce • Plans for the use of central contracts • Plans for co-operation with other institutions • Guidelines for which persons have the authority to enter contracts • Plans for how to uphold the principles • Plans for development of competences • Plans for how to develop procurement in DR Many companies have this Procurement policy Often forgotten Procurement strategy Plans for items and supplier

9. Supplier policy in DR DR uses contracts made by SKI (National Procurement Ltd.) in the following circumstances: • Contracts of little value to DR • Contracts where DR are not able to obtain better terms than SKI DR has co-operated with SKI on EU-tenders i.e. tender for chairs and tables for office purposes

10. Procurement analyses in DR • We do them ourselves • Analyses on the procurement pattern in DR • Procurement Project in DR – result 180 mio. DKK / 30 million EUR in savings • Analyses of the procurement process in DR

11. Method • Analysis on: • Costs on goods and services • Cost on processes

12. Procurement analyses in DR

13. Target – Procurement project

14. Loyalty – procurement contracts

15. Loyalty – procurement system

16. The procurement process – the use of Oracle e-business suite • We store the invoice images in Oracle • We store the list of the approvers in Oracle • We use Microsoft Outlook to forward information about invoices • We keep the invoices inside Oracle as long as the financial transactions – in DK 5 years

17. Previous to e-handling of invoices • 64.000 invoices handled manually • The lowest benchmark cost of handling an invoice manually was DKK 350 / 47 EUR • The cost in DR was much higher • DR paid around DKK 300.000 / 40.000 EUR annually in interests • 3.000 invoices disappeared in DR • 30 days from receiving an invoice, until it was approved • 11 staff in AP department

18. Today with Fakturius • All invoices are handled via the electronic system –40.0000 • The cost of handling an invoice is now DKK 150 / 20 EUR • DR pays DKK 50.000 / 6.700 EUR annually in interests • Very few invoices disappear in DR (and only because they’re not being sent directly to the credit bookkeeping) • 6 days from receiving an invoice, until it is approved • 6 staff in AP department

19. Focus in 2007 – Contracts module

20. Case: e-auktion– IT hardware Prisniveau Price before auction Expecxted longterm price Winning bid price Savings : 10%

21. Internal storages in DR • Used to have a large internal storage • Cost benefit analysis – not financial sound solution for DR

22. DR BYEN • a world class media houseWhat the future holds – Coherent services for the customerscase: Analyses on services in DR

23. DR BYEN – a world class media house • For the Danish public this means: • Better programs • More to choose between • For the employers in DR this means: • A flexible and open workplace • Cooperation and creativity

24. The task in 2005 • Find the service solution, that is best for DR – in terms of quality, competences, flexibility and finance • Goal – savings 8 mio. DKK / 1 million EUR

25. How to choose the best solution • Description of possible solutions • Analysis of how to obtain the goal of savings • Pros and cons of the chosen scenario • Risks and considerations

26. Two possibilities where investigated Option 1 Option 2 All services to be outsourced Some are outsourced others are remaining internal EU tender EU tender Service contract that ensures the level of quality and 8 mio. dkk in yearly savings

27. Parameters for choice of solution • Quality in the solution • Steering of services - organisation • Good-will • Finance • Innovation in services • Flexibility in services • Know-how • Time • Image

28. Choice It is about making decisions • Capacity • Quality • Culture • Co-operation

29. 2 Ejendomsservice Rengøring, vinduespolering og udvendig renhold Indvendig og udvendig bygnings-vedligehold Inventarvedligehold Terrænvedligehold Tilstandsvurdering Flytninger Brandberedskab Parkeringsadministration og - service Renovation og afløb vagt 3 • Forretningsservice Medarbejder Restaurant - interne spisesteder Restaurant Bistro Kiosk • Intern service Omstilling Reception Intern post Distribution Kopiservice Mødelokaleadministration Viceværtopgaver Kontrollører og Garderobe 1 The chosen solution Internt i DR Udbydes i projektkonkurrence Outsourced service Internal services

30. The contract: partnership • Joint DR/ISS project group was formed with the purpose to analyze, negotiate and establish the contract. • Yearly budget DKK 34 mio. / 4,6 million EUR • 5 year contract

31. Co-operation Negotiation of service contract Service requests Payment Evaluation – satisfaction with services supplied Service management and administration Evaluation of services and partnership Customer Supply of services Service supplier – internal and external

32. The ordering of services • On the intranet • Service rapport • Tracking of services • Controlling

33. Balanced scorecard Measurements via joint balanced scorecard

34. Joint goals for the process • High quality • Service level agreements must be followed • Good working environment • Yearly innovation plans

35. The future of procurement Focus • The role of the procurement department, responsibility and tasks • Competencies of the future procurement consultant Role, responsibility and tasks • Innovative thinking • Look at procurement as part of a larger entity

36. To create value • Lower procurement prices • Administrative effectiveness – lower cost of processes • More competent suppliers and partners • Focus on total cost of ownership • Focus on total solutions for customers

37. The future – reinventing procurement Logic and effective processes Contracts with the chosen suppliers Clear vision/mission Full potential Value creation Procurement strategy Integrated procurement solutions Procurement analysis Reduction of suppliers Supplier management

38. The challenges • Develop bullet proof analysis and foundation for measurements • Internal focus on the importance of loyalty towards supplier contracts • Measurements • Holistic approach • Controlling • Marketing and customer focus