Soeren Jakobsen Malta, Thursday 26 January 2006

1. The Danish National Procurement Ltd. (Statens og Kommunernes Indkøbs Service A/S – SKI) Centralised Purchasing Systems and Electronic ProcurementPresentation of the Danish System for centralised purchasing: SKI Soeren Jakobsen Malta, Thursday 26 January 2006

2. Agenda • A few facts about the company SKI • The company’s new strategy (as from Dec. 2002) • Co-ordinated purchasing • The future strategy of SKI • SKI – the interactive company … • Our vision for a “Centre for Public Procurement” • Our electronic tendering system; ETHICS • Comments and questions

3. A few facts about the company SKI • Established in 1994 as a limited company. • Business model • A percentage (typically 1%) of turnover on contracts from vendors • Field of activity • Contributing to greater efficiency in the area of public purchasing by establishing and maintaining attractive framework agreements • Number of employees: 43 • Number of framework agreements: approximately 50 • Owners • Ministry of Finance (55%) • KL, the National Association of Local Authorities (45%) The company is situated in the heart of Copenhagen

4. A few facts about the company SKI Present activities • Framework contracts(on large ’standardized’ procurement areas) • Advise on public procurement(data collection and handling, choice of supplier and solutions, procurement policy, tools for estimating procurement volume, green procurement) • Consultative services(procurement analysis, e-commerce, advice in obtaining internal compliance) • E-commerce initiatives(customer-related price lists, advice on implementation of e-commerce) • Building of qualifications(courses and seminars, user-groups, dissemination of knowledge) • Tools(electronic tendering system ETHICS, mini-tenders, e-auctions) • Other services(guides, best practices, articles, PR, advice on how to communicate internally)

5. A few facts about the company SKI’s focus on products and services 150 billion DKK Building and construction Roadwork Special software Clothing Cleaning Hospital equipment Window-cleaning Medicine Special hardware Low Craftsman services Eldercare IT operation Hospital articles Ambulance-service & patient transport IT- and management consultancy services Lawyer- and accountant-service IT-outsourcing Level of Standardization Open Source Handicap aid Advertising SKI’s focus in 2006 Scanning of construction drawings Newspapers/magazines SKI’s focus in 2003 Gas High Electricity Printed matters Food Financial services Travel services 4 billion DKK Cleaning articles Tele- and data communication Office stationary 8 billion DKK IT-standard software Furniture IT for education IT-standard hardware White goods Vehicles Fuel Office machines Large Potential turnover Small

6. A few facts about the company Turnover breakdown by product areas, 2004 Auditing serv. Energy XY= 342 m.DKK/23,3% Food Telephony & data transmission Electrical articles Lab. equipment Kitchen hardware %-growth from ’03 to ’04. Furniture Paper Clothing IT Travel services Cover articles Office supply Cars Source: SKI’s 2004 result Turnover 2004 (DKK)

7. A few facts about the company SKI’s turnover 2004 +45% (million DKK.) 5.128 +23,3% 2004 47% 30% 10% 13% -3,5% +5,8% +8,5% 4.112 4.027 3.886 3.712 1998 56% 25% 15% 4% +12,2% +20,4% 3.082 +13% 2.748 +37% +36% +24% Est. 2005 Ordinary turnover: 6.600 m. DKK= 950 m. EUR Result: 3,8 m. DKK 2004 Total turnover: 5.100 + 1.000 = 6.100 m. DKK = 880 m. EUR Result: 9,1 m. DKK

8. A few facts about the companySKI’s turnover and result 2004 2000 1999 Est. 2005 2001 Years result (in million DKK) Budget 2006 2004 2003 2002 Total turnover from framework contracts (in 1.000 DKK)

9. The company’s current strategy (as from Dec. 2002)Mission • National Procurement Ltd. creates increased returns of scale in public procurement to the benefit of its customers and the welfare of the Danish citizens. • The advantages are secured by maintaining close ties between customers as well as suppliers, but at the end of the day National Procurement Ltd. acts primarily in the interest of the public sector. • The customers are secured a more attractive price and quality than they would be able to obtain themselves, procurement expenses are held to a minimum as there is no need for them to carry out own tenders and electronic procurement systems secure efficient buying. • The suppliers are secured lower costs due to reduced public tendering and reduced marketing costs due to National Procurement Ltd.’s centralised marketing and e-procurement systems. • National Procurement Ltd acts in accordance to commercial principles and at the same time promotes green and energy saving procurement.

10. The company’s current strategy (as from Dec. 2002)Vision • By securing attractive framework agreementsthe Danish National Procurement Ltd. wants to play a central role in contributing to greater efficiency in the public procurement. • By establishing close partnerships with the public procurement agents, National Procurement Ltd. wants to establish and maintain framework agreements that are in demand, make a difference for our customers and strengthens the company. • National Procurement Ltd. wants to improve the professional dialogue and cooperationwith public procurement agents, suppliers to the public sector and consultants. • National Procurement Ltd. is committed to a policy of acting as an innovative and committed employerwith the capacity for attracting, maintaining and developing skilled and motivated staff.

11. The company’s current strategy (as from Dec. 2002)Strategies and specific action plans Priority • Discontinue unsatisfactory framework agreements • Strengthen analyses and follow-up • Strengthen user-involvement • Extend co-ordinated purchasing 1. Attractive framework agreements Why? How? • Dissemination of knowledge • Meetings for procurement agents • New marketing strategy • Partnership programmes • Education and training of customers • Offer consultancy • Publish guides to public procurement 2. Partnerships with public procurement agents • By securing attractive framework agreements National Procurement Ltd. wants to play a central role in contributing to greater efficiency in the public procurement • By establishing close partnerships with the public procurement agents National Procurement Ltd. wants to establish and maintain framework agreements that are in demand, make a difference for our customers and strengthens the company • National Procurement Ltd. wants to improve the professional dialogue and cooperation with public procurement agents, suppliers to the public sector and consultants • National Procurement Ltd. is committed to a policy of acting as an innovative and committed employer with the capacity for attracting maintaining and developing skilled and motivated staff • Adjustment of the organisation • Project-groups regarding tendering • Further improvement of qualification • Involvement of employees • Further improvement of management • Benchmarking of efficiency • Secure key qualifications 3. Revitalising the organisation • Customer prioritisation • Differentiated targeting of customers • Prioritise use of resources to match potential turn-over • Partnerships with consultancy firms and architects • Commercial use of ETHICS 4. Focused marketing activities 5. Focus on profitability • Strengthen financial control • Strengthen debtor control • Strengthen employees knowledge of expenditure • Create benefits for suppliers • Marketing in cooperation with suppliers • Consultancy regarding choice of supplier • Precision of demands to suppliers 6. Active supplier-policy • The Public Procurement Portal must function according to demand • Development of an e-procurement catalogue that is independent of e-marketplaces 7. Dissemination of e-procurement • Establish close relationships to: • Shareholders • Interest groups • Trade organisations • Consultants • Media 8. Strengthen closepartner-relationships

12. The company’s current strategy (as from Dec. 2002) SKI’s primary goal • SKI’s main challenge: How can SKI secure attractive framework contracts, that are better than the contracts that each of our customers in the public sector can obtain themselves? • Exactknowledge concerning the demands and needs of the customers through their active involvement in SKI’s processof generating framework contracts • Co-ordinated purchasing where the customers before and during the tendering process are invited to pool their expected turnovers on the different framework areas • Secure an effective competition amongst the potential suppliers.

13. One or more customers One or more customers One or more customers One or more customers One or more customers One or more customers One or more customers One or more customers One or more customers One or more customers Co-ordinated purchasing.Basic principle. Large and small SKI-customers both obtain larger discounts and/or lower prices through co-ordination than they could obtain themselves Discount from supplier Additional discount through co-ordination Total turnover

14. Before the tender During the tender After the tender • Market-analysis • Customer- and • supplier- • analysis • Turnover expectations are distributed between suppliers • Co-ordination with • other customers Co-ordinated purchasing. Co-ordination - before and after the tender. Attractive framework contracts – pooling of expected turnovers • Binding turnover expectations are • collected • Customers are invited to join the process

15. The future strategy of SKI “The Procurement Function of the Future” Increased focus on the creation of value (savings, efficiency and quality) Today Tasks Dialogue with mgt. Co-operation Growth through technology Total costs ”Make or buy” Competence Development of vendors Involvement of users Accelerate use of contract Follow-up Automation Decentralization Tasks IT Search for and selection of vendors Requirement assessments Contracting Dispositions Requisitions Control of invoices Future De- velop- ment New quali-fications needed De- velop- ment Sourcing Contracts Sourcing eTendering Contracts Transactions Value chain Integrated eProcure-ment system Transactions

16. The future strategy of SKI Primary focus points 1. wave 2. wave 3. wave 2005 2007 • A deepening and broadening of partnerships • Knowledge sharing & value-based leadership • Marketorientation • Revitalisation of the organisation • Processes and systems • Buildingup of competences

17. The future strategy of SKISKI – the interactive companyThe main challenge • We must ensure that cooperation exists and that knowledge, experience and attitudes are exchanged. If not it will be impossible to develop the right solutions, of high quality and at the lowest possible cost. • We must combine what is individual and what is common. Make what is individual relevant for and possible in the community. In short: Create room for the individual in the community and room for what is common in the individual. • We must optimise processes and systems that make is possible for knowledge to be transported round in the organisation and ensure that knowledge is at hand where it is needed to generate value, increase creativity and innovation.

18. The future strategy of SKISKI – the interactive company. Overview • Attractive work-place • Competence-building • Recruiting • Job appraisal interviews • Curiosity • Social competence • Partnerships • Structural frame • Building • Culture • Values • Knowledge-sharing Talented colleagues Unique organisation SKI the interactive company Externally Internally Value-adding Productivity • CRM • ETHICS • ERP • Electronic archives • Growth • Simplification • Prioritising • Management training Good management Supporting technologies

19. The future strategy of SKI SKI’s vision: ”Centre for Public Procurement” Aims: • Openness • Cooperation –internally and externally • Flexibility • Proximity to customers, suppliers and cooperating partners Vision: SKI wants – supported by an attractive building - to be the natural and inspiring focus point for all persons and organisations involved in public procurement. The elements of the concept • Other organisations are invited to become tenants • Project facilities • Seminar and conference facilities • Showroom facilities • Service for visitors

20. Our electronic tendering systemETHICS is a central element in our new strategy Besides being an exciting business opportunity ETHICS offers: Compliance with EU rules • Complies with thresholds, time frames, methods and standards Efficiency Transparency • Internal productivity • Development and re-use of knowledge and legal terms • Workflow controlled execution • Document Library • Easy involvement of new users • Management overview and control • Growth in turn-over • Strengthen user-involvement and accelerate use of contracts • Efficient use of experts in the evaluation phase • Help customers run own tenders • No complaints from vendors have lead to legal issues • Ability to handle an increasing number of complaints in the future • Involvement of users easy and meaningful [inno:vasion]

21. Comments and questions …