Pilot project attracts big names in e-procurement

A Government pilot may open the way for many more public sector e-procurement portals, writes ADAM GIFFORD.

Some of the biggest names in electronic procurement have lined up to tender for a Department of Work and Income e-procurement pilot.

The pilot is seen by many as a forerunner to a whole raft of government electronic procurement portals proposed by the Government's new electronic commerce unit, housed in the State Services Commission. The sponsor for both projects is DWI chief financial officer Gary Lewis.

The Business Herald has been told that, of the 10 consortiums to tender, five made the short list: SupplyNet (which uses Commerce One software) with implementers Deloitte; Oracle with Cap Gemini Ernst & Young; Electronic Data Services (EDS) with SolNet/Sun, offering the Sun/Netscape iPlanet BuyerXpert solution; e://volution with Westpac and Metiom; and Accenture (the former Andersen Consulting) with Epylon, which uses the Ariba e-procurement engine.

Mr Lewis said the DWI pilot was part of the department's continuing efforts to improve its processes.

DWI already has a shared service centre in Rotorua which does all its back office work.

The pilot will initially involve up to six suppliers, including furniture, office stationery and probably service providers such as plumbers and electricians.

"The proposal in the tender document is for the trial to be at no cost to the department and no obligation - it's purely a pilot to see what is workable," Mr Lewis said.

"We said to tenderers unless they provide a URL with something that works, we're not interested."

The tender says the pilot will run for three months and involve executive assistants from the national office in Wellington, and Rotorua purchasing staff.

Objectives include greater automation, having a user-friendly application which requires little staff training, and having an application which allows DWI to maintain existing supply relationships, including the ability to place manual purchase orders with smaller suppliers.

While some overseas government e-procurement projects have involved extremely large implementations, the New Zealand situation is different because the government sector has shrunk since 1985.

DWI is one of the five remaining large departments, with about 5000 equivalent full-time positions.

The other four are Police, Defence, Corrections and Inland Revenue.

All have SAP financial information systems, although Defence has contracted out most of its procurement to Yakka Apparel Solutions.

A September 2000 survey of 40 central Government departments showed the "big five" spent a total of $758 million on goods and services.

This did not include specialised spending specific to a department, such as the $419 million of military equipment.

The other 36 departments totalled $494 million in non-specialised spending.

Crown entities, including health and education, but not state-owned enterprises, were estimated to spend a further $3.5 billion on goods and services.

Mr Lewis said issues to be considered for the whole of the government project included how to aggregate spending by smaller agencies, and whether other Crown entities would be involved.

A paper on the project is expected to go to cabinet in a few weeks.

The companies shortlisted for the DWI pilot said they were prevented by the tender terms from discussing specifics of their bids.

SupplyNet is a venture,formed by GSB Supplycorp Group, which grew out of the Government Stores Board, to develop electronic solutions around the Commerce One platform.

Epylon was set up to provide hosted e-business software for educational and government institutions. It formed an alliance last July with Ariba and Accenture to develop solutions for the public sector, a market in which Ariba felt it was trailing Commerce One.

The SolNet-EDS consortium will propose iPlanet BuyerXpert. iPlanet is a joint venture between Sun Microsystems and Netscape to design e-commerce solutions and has a reference site is the Western Australia state Government, which has an iPlanet infrastructure across all departments for about a year.

Oracle already has a number of e-procurement systems working, place, including at Waitemata Health, and the portal it built for the School Trustees Association.

The e://volution bid involves the company integrating e-procurement software built by Metiom (formerly Intellisys) a Nasdaq-listed company whose founders include expatriate New Zealander Robert Barnes.

WestpacTrust spokesman Peter Thornbury said the bank was involved as a partner in Metiom - its parent has a shareholding in Metiom Australia - and as the Government's banker.

Links

State Services Commision

Epylon

Ariba

iPlanet

Oracle

Government Supply Brokerage Corporation

Evolution

Metiom

Accenture