The January edition of FOCUS reported on the launch of an e-Procurement service for Local Government. Co-operative Purchasing Services Ltd (CPS) has taken a major step into the world of e-Commerce by providing a system whereby Councils can do their purchasing online.
CPS has been providing a procurement service to Councils, statutory authorities, not for profit and charitable organisations since 1989. CPS provides services to members in Victoria, Tasmania and South Australia and has current business partnership arrangements with State Local Government Associations in Western Australia, New South Wales, Queensland, Tasmania and South Australia.
CPS has also developed a number of national supply contracts able to be accessed by all participants. The strength of CPS buying power encourages a good mix of relevant suppliers and has seen the number of member buyers rapidly grow, particularly since the release of the e-Procurement option.
CPS has entered an agreement with Exchange Solutions Pty Ltd, a wholly owned business-to-business e-commerce subsidiary of the Brisbane based public company Webmatchit Interactive Marketing Ltd, to form a new joint venture company.
The new company, called the Australian Public Procurement Exchange (APPEX), will be open for participation to all Local Government and statutory authorities nationally. APPEX intends to roll out a number of State and Regional Marketplaces all of which will have the option of access to the national CPS suppliers catalogue.
The CPS member market (CMM) will be the first of these available in the immediate future to members in Victoria, South Australia and Tasmania. In addition there are already groups in New South Wales, Queensland and the Northern Territory who are keen to explore opportunities for utilising the system in their States.
CPS Member Councils, Council groups and statutory authorities will be able to participate in this new and exciting online market place this year.
Over the next 12 months all the existing CPS contracts and many other Council supply contracts will be available in the Member Market making it the largest public sector market place in the southern hemisphere.
Exchange Solutions offers innovative ‘best of breed’ procurement technologies in a ‘technology partnership’ model that provides extremely cost efficient exchange procurement technology to its partners. Exchange Solutions has partnered with a growing number of third party technology and service companies to allow participants the ability to implement integrated business-to-business e-commerce at a pace and to an extent consistent with their own internal organisation requirements and local business rules.
The strength of Exchange Solutions is the ability to proactively assist small and medium sized enterprises (SMEs), who may be less technically astute than the larger organisation, to become Internet and e-Commerce enabled, and thus more capable of participation as suppliers.
As e-Marketplaces are launching at an unprecedented rate, unless e-marketplaces are able to proactively assist their suppliers to participate, they are doomed to failure. As most e-marketplaces are technology driven, ‘build it and they will come’, it is not surprising that the average number of suppliers in the typical exchange is seven!
Exchange Solutions delivers two key components to the e-marketplace – leading edge e-procurement technology and value added services to ensure the efficient operation of the marketplace. The flexibility of the underlying technology, together with a partnership philosophy, allows Exchange Solutions to deliver either stand alone procurement platforms or alternatively a completely managed integrated procurement exchange.
Members of the CPS Market will have access to a growing range of services providing benefits for buyers and suppliers.
The catalogue system
This enables members to browse, make selections, generate a purchase request, seek authorisations where necessary and place the order with the supplier. The catalogue will include all those CPS contracted suppliers already frequently used by Councils and in addition CPS will work with each Council to encourage local businesses and Council contracted suppliers to participate.
The CMM offers a great opportunity to small businesses to expand to their individual potential by having access to a national market. This proactive approach to supplier enablement is extremely attractive to Councils.
The ability to ‘roll in’ existing Council contracted suppliers and other local Council suppliers means that Councils can be seen to be assisting their local businesses in a real way. An early implementation of the system has been successfully used by government departments in Queensland since 1998 (5,000 current users).
The CMM system conforms to a number of communication protocols including the following.
Open Buying on the Internet – OBI
Commerce XML – CXML
Electronic Data Interchange – EDI
Xtensible Mark-up Language – XML
This means that members who elect to use the system now are not ‘locked in’ but are free to use any other purchasing arrangements they wish now and in the future. This is good for competition and will enable members to judge for themselves just how good the product is and how competitive CPS suppliers are.
The CMM catalogue will certainly provide efficiencies in the ordering process, however, the maximum gains will be achieved when a Council is able to be fully integrated.
The CPS integration goal is for a Council purchasing officer to be able to quickly search the catalogue, make a selection, generate an order which is emailed to the supplier and capture that information in the council Financial Management Information System (FMIS), there is a similar integration goal for suppliers.
CPS and Exchange Solutions are currently negotiating solutions with FMIS providers. AxsOne (Computron) have already provided a solution compatible with CMM and Whitehorse City Council will be the first to use it.
Aubrey Jansen, Whitehorse’s Supply Coordinator Purchasing and Tendering Management, has played a very proactive role in the Whitehorse decision making process to implement an online purchasing system for his Council.
Once installation of system software and hardware has been completed training will commence followed by online procurement. Ultimately, around 180 Whitehorse staff will have access to online procurement through the CPS portal.
Exchange Solutions and CPS are currently speaking with other FMIS system providers and integration solutions will progressively follow as a result of these negotiations.
Online auctions and dynamic pricing platforms
These are included in the Exchange Solutions technology, providing a number of innovative dynamic pricing modules for reverse, forward, comparative and multi parameter auctions. Essentially online auctions allow greater competition between bidders in a transparent but totally secure environment. While mainly utilised for spot buying of standardised well specified products, dynamic pricing and auction platforms can also be utilised within a tender process where allowance needs to be made for non price, such as quality and brand preference, criteria.
Online tender platforms
These are also included allowing councils to post tender opportunities in a central registry and receive tender responses for evaluation. The platform is fully e-commerce enabled to permit payment for tender documentation if required. Future capabilities will include tender evaluation software in accordance with buyer defined evaluation rules.
Bulletin boards allow notification processes to take place for group purchasing opportunities in a user friendly format.
CPS welcomes inquiries from anyone interested in more information. Visit the CPS web site www.cps.asn.au or alternatively CPS staff would be happy to speak with you, on (03) 9801 2811. People wishing to speak to technology partner Exchange Solutions, should call (07) 3251 4141.
Keep in focus with the latest developments in e-Commerce for Local Government by looking out for further progress reports in Local Government FOCUS.
