MAF and Internal Affairs lead the way to e-procurement system

By ADAM GIFFORD

The Department of Internal Affairs and the Ministry of Agriculture and Forestry are taking the lead role in moving onto the Government's GoProcure electronic procurement system.

Project manager Greg Nicholls said phase one of the roll-out involved two large agencies taking the full suite of Oracle e-procurement software, which would allow them to buy goods and services electronically from a range of suppliers. The initial phase includes the Forest Research Institute in Rotorua, representing crown research institutes, the University of Auckland, a district health board and a small Government department to test how the application works on a reduced scale. The expected cost of the project has also dropped from $7.5 million to $5.5 million over five years.

Nicholls said this was because the scope of the project had changed as the State Services Commission got a better idea of what was required.

"The original price was based on 30 agencies requiring the full suite. We are now basing it more on 90 agencies using the transaction hub," Nicholls said.

"The price goes up if more agencies go for the full suite."

Agencies which use the full suite will pay between $50,000 and $150,000 a year, depending on the number of transactions they put through.

Agencies which just use the hub, which translates the electronic formats used by buyers and sellers, will pay between $35,000 and $50,000 a year.

GoProcure is being put together by consulting firm Cap Gemini New Zealand using marketplace technology from Oracle, which is hosting the system.

MAF chief financial officer Doug Graham said his ministry expected to be using the system by May. It is consolidating control of purchasing, which is currently done manually throughout MAF, into one business group, and talking to key suppliers about putting electronic catalogues into the system.

"We are starting with one of our laboratories first to implement, so we are looking at stationery and specialised lab equipment," Graham said. "When we extend, it, we will pick up a number of the other suppliers."

He said MAF expected the system would pay for itself through process efficiencies and by getting better information on its purchasing.

The big-spending Government agencies such as police, defence and social policy have their own electronic procurement systems but are expected to channel purchases through the hub.

Nicholls said GoProcure was a combined purchase of solution on behalf of medium and small organisations, rather than being a "big Government" system.