Case Studies in G2B.. transforming business environment

J Satyanarayana

As part of the Capacity Building Workshop under the Joint Economic Research Program (JERP)

Overview of Presentation

1. e-Government & Productivity

2. e-Procurement

Issues in Public Procurement

Basic Concepts of e-Procurement

Case Study of e-Procurement in AP, India

3. MCA21

Objectives

Business Model

Current Status

e-Government&

Productivity

What is e-Government ?

It is the Transformation of government

to provide

EfficientConvenient &Transparent

Servicesto

the Citizens & Businesses

through Information & Communication Technologies

Essence of e-Government

Enhanced Value for Customer

G2B Life Cycle – multiple interactions

Close

Expand

Operate

Start-up Explore Opportunities

•Approvals•Permissions•Registrations

•Returns•Taxes•Permits•Compliance

•Approvals•Permissions

•Project Profiles•Infrastructure•State Support

•Approvals•Compliance

Productivity Enhancements in Government & Business

Business

• Improved business ecosystem

• Increased Velocity of Business• Ease of doing business with Government

• Transparency leads to higher investments• Time & Effort saved, goes to productive tasks

Government

• More effective Regulation improves the economy• Higher Growth Rate due to Productivity increase in

• Business, Manufacturing, Education• Increase in FDI due to better investment climate

e-Procurement- efficiency & transparency

Issues in Public Procurement

• Lack of a common Public Procurement Policy

• Public Procurement Law and regulations • Dedicated Agency• Transparency in Procurement Act

• Lack of model bidding documents and contract documents

• Complicated procedures for bidding, approvals and payments.

• Lack of skilled resources• No centralized system of registration of

suppliers• Delays in making payments to suppliers

Range of Procurement Services

• Indent Generation & Approval• Procurement Process

• Tenders, Auctions, Reverse Auctions, Rate Contract, Catalogue Buying

• Demand Aggregation• Bid Evaluation• Award & Purchase Order• Supply Management• Quality Management• Inventory Management• Payments Management• MIS & EIS

Categorization of Procurements• By Category of Goods & Services

• Goods• Services• Civil Contracts

• By Nature of Procurement• Tenders• Rate Contract & Catalogue Buying• Auctions, Reverse Auctions• LCB, NCB, ICB

• By Size / Volume of procurement• High Value, low volume• Low value, High Volume

• By Portfolio of services needed• Requisition, Bid Process• Evaluation, Award, PO• Supply, Quality check, Inventory Management• Payment, Accounting, Audit• MIS, EIS

What is e-Procurement ?

It’s a collaborative procurement of

goods, works and services using electronic methods in every stage for bringing in efficiency & transparency

Objectives of e-Procurement

• To act as the catalyst for procurement reform

• To enhance transparency, monitoring and control in procurement process

• To bring in economies of scale through aggregation of demand

• To reduce cost of doing business for both government and suppliers

• To establish level playing field and “fair” competitive platform for the suppliers

Components of a typical e-Procurement System

Indent Management

E-Tendering

E-Auctions

Contract Management

Catalogue based

Procurement

e-Procurement Scenario

e-Procurement System

Suppliers

Consultants

Buyers

Logistics Systems

Contractors

PaymentSystems

The Buy-side

Issue Approach

Complexity of Procurement Procedures

Procurement Reforms

Wide Range of items to be procured -Goods-Works-Services

•Conduct an ABC Analysis

•Select ‘A’ items initially

Organizational Resistance Change Management

Lack of IT Skills among employees

Training

Lack of resources with Government

Public-Private-Partnership

The Sell-side

Issue Approach

Difficulties in changing over to new systems of tendering

Supplier adoption

Low levels of technological skills

•Training•Help Desk

Difficulties in access to site E-Procurement help centres

Resistance to change Change Management

The ‘e-Procurement system’ side

Issue Approach

Difficulties in establishing & maintaining the system

By sharing responsibility through PPP

Lack of Financial resources for maintenance & transaction handling

•Designing appropriate business model•Levy of service charges

Concerns of • Confidentiality of bids•Authenticity of bids

Digital Signature Certificates

Varying requirements of Multiple Departments

•Process Reforms•Standards-based system

A case Study in e-Procurement

International Experiences

GeBiZ, Singapore

Public Procurement Service, Korea

State of North Carolina, USAGatetrade, Denmark

State of Andhra Pradesh

Case Study of e-Procurement in the State of Andhra Pradesh, India

• Idea arose in 2000• Workshop on e-Procurement held

• Involving key e-Procurement vendors

• Pilot designed with 4 government agencies• Focus on e-tendering• PPP Model designed

• Proposal sought from top 10 e-Procurement vendors in the world.

• Project entrusted to the bidder offering least fee for providing e-Procurement services

• Extensive training given to buyers & suppliers

• Help Desk established for hand-holding

GoAP e-Procurement – Key Achievements

☻ Achieved transaction volume of about US$ 10 bil since launch in Jan 2003

☻ Currently 70% of Government procurement happens through the portal

☻ Reduction in average tender processing time from 6 months to 1.8 months

☻ Increased participation in bids through online submission noticed to the extent 70-100% in many cases

☻ Significant cost savings ☻ average reduction to the extent of 20%

☻ Over 600 Departmental users and over 1500 suppliers provided hands-on training

☻ Winner of Golden Icon Award for Exemplary e-Governance Initiative

Critical Success Factors of e-Procurement• Effective Procurement Policy & Reform

• Process re-engineering to transform government procurement

• Sound legislative and regulatory framework

• Well-designed Business Model• Adequate participation and commitment from

participants• Effective Communication Strategy to disseminate benefits • Strategies for adoption of buyers & suppliers• Flexible systems for meeting requirements of all agencies

• Effective Training and Change Management plan• Developing effective skill-base in new procurement

methodologies

• Open standards based, interoperable technology infrastructure

Case Study on

MCA21.. a project that transforms all

G2B transactions under Company Law

Vision of MCA21

To provide all the Companies registered in India,

a convenient and secure access to Government services,

anytime, anywherewith certainty and speed.

Benefits to Stakeholders

• Businesses• Registration of Companies & filing of returns

• Citizens• Access to records • Grievance redressal

• Professionals (Chartered Company Secretaries)

• Efficient services to clients

• Financial Institutions• Registration & verification of charges of Companies

• Ministry of Company Affairs• Ensuring better Compliance with Company Law

• Employees• Efficiency in delivery of services

Approach to Implementation• Extensive consultations with Stakeholders

• Proof-of-Concept developed

• Public Private Partnership Model adopted• transparent process for selection of Partner

• Goal is delivery of efficient services • not the supply of Technology components

• Project is driven by Service Level Agreement • with rewards & penalties

• Sharing of Risks & Rewards

Architecture of MCA21

Data Centre

MCA Gateway

MCA HQrs

RD

ROC

PAO

DisasterRecovery Centre

GovtSecure

Repository

Virtual Front Office

Virtual Front Office

Physical Front Offices

•Showcase(4)•Non-Showcase (41)•SEZs (8)•Temporary(4)

STAKEHOLDERS

Portal

MCA = Ministry of Company Affairs; RD = Regional Director ROC = Registrar of Companies ; PAO= Pay & Accounts Officers

Highlights of Technology Model• Based on Service Oriented Architecture

• XML Standards, Web Services

• Introduction of Digital Signatures• compliant with IT Act 2000

• International Standards of Security• compliant with BS 7799• Disaster Recovery Centre

• Public Trust & Confidence in a PPP model• through Government Secure Repository

• Digitization of 60 million legacy records of Companies

• Workflow Automation in 27 Offices of MCA • Interoperability through MCA Gateway &

Standards• Comprehensive Training & Change Management

by Partner

Business Model of MCA21• Business Model driven by rigid SLA

• 18 parameters of Service– 9 customer-facing– 3 employee-facing– 6 technology related

• Flexibility to bidders to optimize costs• Open Standards based solution

• Open Competitive Bidding Process• Payments to Partner for provision of

Services, not for supply of technology components

• Bid Process is neutral to the number & capacity of individual components deployed by Partner

• Compliance to SLA is the touchstone

MCA21 Portal

Current Status of MCA21

• Project Rolled out throughout India• Data of over 600,000 companies

available online• Over 50 services provided online• e-Filing mandated from 16th

September 06• Program Management Unit set up

• To monitor compliance with SLA• To assess quality of Services

Conclusion

• National Productivity can be enhanced through effective G2B initiatives

• e-Procurement enhances transparency & efficiency in public procurement

• Electronic Interface with Companies can save time, effort and cost.

• PPP models are ideal for G2B projects

Thank You

ceo@nisg.org