Strategic eGP Foundations: Assessment , Planning & Implementation Prof. Namrata Agrawal

1. National Institute of Financial Management Strategic eGP Foundations: Assessment , Planning & Implementation Prof.Namrata Agrawal National Institute of Financial Mgmt. Ministry of Finance , GOI nagrawal@nifm.ac.in

2. Assessment : Worth implementing ? Cost Reduction Transparency Process Efficiency Core Objectives Of e-procurement Paper less environment Supports Economic Development New supplier discovery Real Time Monitoring Streamlining Procurement processes

3. Assessment : Why eGP ? • Cost Reduction : up to 25% or more • Anti-corruption tool: promotes transparency • Better Access: Any firm(small/medium) may participate in national or international markets. • Process Cycle time Reduction (Supported by the REPORTS ………)

4. Supported by REPORTS Yes 1. e-Procurement Benchmark Report –04 by Aberdeen Group Key Findings: • Reduced requisition-to-order cycles by 66% • Reduced requisition-to-order cost by 58% • Reduced prices by 7.3% for spend brought back onto contract • Increased total spend under mgmt of procurement group by 20%. Each new dollar brought under mgmt can yield 5% to 20% cost reductions

5. E-Procurement Benchmark Report -Aberdeen Group E-procurement Impact (Average Performance) Source:AberdeenGroup, December 2004

6. E-procurement Performance :2001 vs 2004 (Average)

7. Assessment …. • 2. Key findings of white paper dt 06.08.03 on e-sourcing by International Association of e-Govt professionals in association with US-ASEAN Business Council: • FINDINGS: • Estimated level of savings – • ·10 % – minimum level of savings expected • ·16 % – average level of savings expected • 35 % – maximum level of savings expected • The study was based on the impact of e-Procurement in 5 Asian countries ( Indonesia, Malaysia, Philippines, Singapore & Thailand) • (Contd..)

8. Assessment …. E-Sourcing's Potential Impact on Annual National Government Deficits In $US Millions (Parenthesis denotes surplus)

9. Assessment …. Amazing Average Savings Sector-wise using Competitive Biddings Over 16% Average Savings on Over $2 Billion Volume in 2002

10. Assessment – Convincing …. • 3. World Bank report(Country Procurement Assessment Report, 2002) on performance of public procurement in India: • - The total value of public procurement by ministries, departments, municipal and other local bodies, statutory corporations and public undertakings both in center & in state put together is of the order of US $ 100 billion representing 13% of the national budget and over 20% of the Gross Domestic Product. • (xchg rate of US $1 = Rs.45.00 at the time of study) • Going by a conservative estimate even 10% savings through e- procurement can boost the economy by about 2% of GDP.

11. go for eGP ? YES

12. Planning: Where r we ? • eGP status in India (Readiness) • The private sector e-procurement in the country has touched more than US $2 billion, whereas has been implemented in clusters by some progressive state Govt like • STATES • AP: targeting transactions worth Rs25,000cr by 31st March,05. Has processed around 1640 tenders by 31st Jan 05. It may be among the world’s largest G2B market place. 9PWD or Irrigation deptt) • - Karnataka: To the tune of 300 tenders. State Road Transport, • Karnataka Irrigation Dept • MP: MP State Electricity Deptt, MP Rural Road Development Authority

13. Planning: Where we r? • eGP status in India • - Assam: PWD, Assam Electricity • Chhattisgarh : PWD • States intending to opt eGP: Delhi(MCD tender), Punjab, Rajasthan, Gujrat, Maharashtra • eBIZ Project: Pilot project based on PPP. Taken up by DIPP(Deptt of Industrial Policy & Promotion) funded by Central Govt. It will connect the state Govt deptt like -Sales Tax, Municipality, Power Distribution , Industry in UP, Haryana, Maharashtra, AP, to the Central Govt deptt( CBEC, CBDT, DCA etc.) • Facility centre to be set up by Pvt players.

14. Planning: Where we r? eGP status in India Indian Railways: e-tendering since 2003 Finance Ministry of some countries like Malaysia, Singapore , Ireland , Guatemala etc is the lead agency for eGP. Finance Ministry of India has directed each ministry to spend 3 % of its annual budget on IT.

15. What Next ? Suggested Course of Action • 1. National Policy to promote eGP • - Government’s support - changes are not plug & play • 2. Legal Framework • - Supporting Legislation • - Digital Signature Security & Act • - Amended Procurement Law to remove barrier to eGP • - On-line dispute resolution facility

16. What Next ? Suggested Course of Action • 3. Technological Infrastructure • - Public-Pvt-Partnership(PPP) • - Facility Centers • - Portals & Supplier Catalogs • - Connectivity • 4. Appropriate Standards • - Interoperability • - cross-border trading • - Security standards

17. What Next ? 5. Phased Implementation Phase 1 Information Service Tender Advertising Document Down-Loads Results Disclosure Phase 2aBid Qualification Bid Up-Loads Bid Processing Bid Securities Phase 2b Contract Management Contract Development Phase 3aCatalogue Purchasing Online Transactions Online Workflow Phase 3b Online Bidding Reverse Auctions E-Tendering Policy Legislation Security E-Contract Management E-Purchasing

18. National Institute of Financial Management Thank U for your attention Prof.Namrata Agrawal nagrawal@nifm.ac.in