Most of what you spend is not cataloguable

1. Most of what you spend is not cataloguable • NePP research suggests 2.8% average savings from e-Procurement in Local Authorities • This is primarily derived from online ordering of low value high volume commodity goods and services • However these account for no more than 15% - 20% of local authority spend • The rest is spent on complex services • These need a different approach

2. i before e- Procurement Research Project • Research project in West London, led by Brent Council, involving 6 Boroughs • 2 avenues of research: • The opportunity: investigate the scope for savings in complex service areas - we chose Roads Maintenance and Council Housing Renovation • The technology: look at what tools are available, specify and develop case study demo of what’s required and how it would work

3. The Opportunity • What costs are Construction suppliers passing on? • Having to hold large inventories • Having to build in capacity ‘buffers’ • Having to employ premium skills at short notice • Having to buy supplies inefficiently at short notice • What could we do about it? • Improve forward demand planning • Share forecasts with each other and with suppliers • Standardise products and materials • Source aggregated requirements direct from materials suppliers; provide call-off arrangements for contractors… etc.

4. The Opportunity • But to do that we would need detailed planning information: • Standardised spending schedules • brought together and aggregated • and shared with suppliers. • Today we don’t have that information. • It is buried under a ton of paper in a lot of offices across the councils, who don’t even talk to each other

5. Research Results • We looked for – and found - potential savings opportunities in road maintenance & council house renovation • We identified potential for savings of 10-15%pa from consolidation across boroughs and closer working with suppliers • This will take a number of years to come into full effect due to existing term, pfi and other framework arrangements in place, but even 5% in the short-term is better than e-procurement is achieving • The most important opportunity is not materials consolidation (15% of spend) but labourdemand and local capacity planning • Similar opportunities are available in other complex service areas, eg Social Services care provision

6. But do we have the tools? • We looked for - and found – an online contract management tool that will: • Create a contract register and provide online diarisation of contract renewal • Embed best practice and regulations into contract management workflow, ensuring consistent, auditable performance improvement • Save tender handling time, raise quality of evaluation, automate building of SLAs, KPIs • Enable sharing of data across councils for collaborative forward planning

8. Benefits from Contact Management: Woking Council Case Study • Time from tender creation to lodgement fell by 61% • Time to handle tender response receipting, data entry and data analysis dropped by 80% • Overall time to process tenders was reduced by 58% • This represents an efficiency cost saving of £6,000 per average tender • Plus savings in printing, production and distribution • Suppliers also found the process saved them time in completing questions by as much as 25%

9. Collaborative Forward Planning • Contract Management tools would bring you efficiency savings within 6 months • Using these tools would enable you to share forward planning data with your neighbouring councils • This could lead to 10-15% savings opportunity in Construction and Housing materials • But much more significant is the ability it would provide to forecast and develop sustainable local labour capacity to meet needs • And a similar opportunity exists in Social Services That’s what I call Joined-up e-Procurement!