João N. Veiga Malta Sr. Procurement Specialist jveigamalta@worldbank

1. João N. Veiga Malta Sr. Procurement Specialist jveigamalta@worldbank.org e-GP From publication to transaction and beyond - LAC

2. Why e-Procurement ? Role of governments, WB, ADB, IDB… Economy • capacity building • market access • connectivity • skills development • development • transparency • operational efficiency Organisation Community • new services • new delivery • new resources • new efficiency • technology literacy • opportunity • just-in-time training • lifelong learning

3. Why e-GP e-GP OBJECTIVES ECONOMIC DEVELOPMENT Business development Competitiveness Technological Enablement Market Access GOVERNANCE Transparency Accountability Integrity Public Confidence EFFECTIVENESS Efficiency Informed Management Value-for-money Quality Outcomes Capacity-building in e-GP targets three key donor objectives for one third of government expenditures

4. Current situation in LAC • All countries in Latin America and several in the Caribbean have e-GP portals • Systems range from publication of procurement information to full interaction • All countries using MDB e-GP roadmap and guidelines as blueprint for their systems • Procurement becoming more strategic

5. back office function central to strategic management sourcing considerations strategic business decisions largely goods complete service solutions suppliers strategic partners simple process complex contracts & relationships low value, low risk high value, high risk Changing Nature of Government Buying Government procurement is being driven by budget and performance expectations to become more complex and strategic

6. Re-Focus of Procurement Systems and Capabilities Value Chain Complex Procurement High Level Expertise Risk Process Performance Management Knowledge Technology To extract maximum benefit from procurement governments need to move up the value chain and e-GP is an important element of this Complexity & Risk Simple Procurement Basic Expertise Codified Process Compliance Management Transactions Technology Potential Gain

7. Procurement Hierarchy Value Chain • PURCHASED SERVICE OUTPUTS Public Bidding CO-ORDINATED SERVICES CONSTRUCTION WORKS Complexityand Risk 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 SINGLE SERVICES SINGLE GOODS Potential Gain

8. Procurement Hierarchy Value Chain SINGLE GOODS & SIMPLE SERVICES E-GP Price paid Simple low value procurement E-GP Transaction costs Total Cost 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 Volume

9. Procurement and Market Dynamics Buyers Spot Markets + Panel Contracts An e-GP strategy needs to understand market dynamics and manage all of these Auctions Reverse Auctions Alliance Contracts Suppliers

10. Current situation in LAC • Several countries redeveloping systems • Procurement Network – cooperation • WB and IDB fully harmonised • Bank provides ongoing technical support to countries

11. Key Issues • Regional integration • Authentication • Digital Signatures vs Electronic Signatures • Cross certification • Product Codification • International standard • Supplier registries • Free trade agreements

12. Standards and Government Policy Executive Government 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 Policy Settings Technical Standards

13. Key Issues • What drives change • Law Vs System • Second generation systems • Operation models • Government owned • Outsourced

14. Suppliers Buyers Full Electronic Market Cycle • E-Workflow • - Requisitions • - Approvals • - POs • - Receipting • - Reporting RFQ Response Supplier Search E-PO to Supplier FMIS Create RFQ CUC Fax PO E-PO Agency Contracts PO Receipt Catalogues E-Invoice e-GP requires integrated solutions if maximum benefits are to be gained by both buyers and suppliers

15. Suppliers Buyers Partial Electronic Market Cycle • Proprietary • FMIS • Workflow • - Requisitions • - Approvals • - POs • - Receipting • Reporting Supplier Search Create RFQ CUC Fax PO E-PO Agency Contracts Catalogues Limited functionality is often preferred by staff who fear ‘disintermediation’ – another reason why an e-GP strategy is required

16. Online Contract Development Designed to allow users to define, plan, develop, track and manage the contracting process Best Practice Guidelines & Checklists Templates and Case Studies Tendering Information & Process Management Office systems e-Contract Development is about reform of administration Records Library E-Tender

17. How it was achieved • LAC was test bed for Harmonised work • Utilised procurement network • Supported regional working groups • E-GP became Integral component of procurement reform

18. How it was achieved • Regional competition • Civil society • Bank use of system • Ranging from publication to transaction

19. Lessons Learned - Pitfalls • Technical direction drives e-GP • If it is so easy why is the success rate so low – realistic expectations • No business model – lack of sustainability “Someone has to pay” • What is the reason for implementing e-GP • Authentication

20. Lessons Learned - Pitfalls • No reform = making the inefficient more efficient • No plan = Lack of strategic direction • Failing to learn from the mistakes of others • Transaction costs • Anyone who purchased online at Amazon is a e-procurement expert

21. 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 • 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 GOVERNMENT & INSTITUTIONAL LEADERSHIP FUNCTIONALITY & STANDARDS MANAGEMENT, LEGISLATION, REGULATION & POLICY • Infrastructure • Connectivity enablement • Kiosk services • Service industry development • Catalogue development • Business systems integration • ETAs • Peering facilitation • Procure-link • Bandwidth design • Responsiveness / performance • etc E-GP STRATEGY • 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 & WEB SERVICES PRIVATE SECTOR ACTIVATION • 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 An e-GP strategy is an efficient & affordable vehicle to drive governance and economic reforms in developing countries – the leapfrog effect

22. Lessons Learned • A Strategic Plan doesn’t guarantee success but the lack of one guarantees failure

23. João N. Veiga Malta Sr. Procurement Specialist jveigamalta@worldbank.org e-GP From publication to transaction and beyond - LAC Thank You