Presentation on theme: "EProcurement The NHS Experience Scott Haldane - Director of Finance / Deputy Chief Executive NHS National Services Scotland."— Presentation transcript:
eProcurement The NHS Experience Scott Haldane - Director of Finance / Deputy Chief Executive NHS National Services Scotland
eProcurement Scotl@nd 2 Session Objectives Overview of eProcurement Scotl@nd NHS Scotland approach Local implementation experience
eProcurement Scotl@nd 3 What IS eProcurement? Electronic tools that support and expedite the transactional purchasing process including: The use of on line catalogues Placing requisitions Routing for approval Sending to suppliers (Essentially it is a buzzword for doing procurement activities via the internet)
eProcurement Scotl@nd 4 What is eProcurement Scotl@nd? Scottish Executive-wide initiative A nationally negotiated subscription based service Harness internet-based technologies A step-change in procurement practice An environment for more effective SRM A flexible approach that can be adapted across the Public Sector
eProcurement Scotl@nd 5 ‘eProcurement Scotl@nd’ is designed to achieve: Scottish Executive PECOS Suppliers improved process efficiency improved Financial Control Government eBusiness Targets
eProcurement Scotl@nd 6 PECOS is based on Remote Hosting PECOS application hosted by Elcom in Boston, Massachusetts No new hardware or software required Only require a web browser Can be accessed from anywhere within your organisation Available 24 hours, 7 days a week ‘Plug and Play’
eProcurement Scotl@nd 7 An opportunity for the NHS (and Local Authorities?) Scottish Executive PECOS Suppliers NHS Highland NHS Tayside Suppliers
eProcurement Scotl@nd 8 Analysis of the use of the System Showed: Scottish Executive PECOS Supplier A NHS Highland NHS Tayside Supplier B Supplier C …the NHS was using different suppliers for the same things…
eProcurement Scotl@nd 9 Analysis of the system also showed: Scottish Executive PECOS Supplier A NHS Highland NHS Tayside Supplier B …even when we bought from the same suppliers, we bought slightly different things…or the same things at different prices… SE items & pricing Highland items & pricing Tayside items & pricing
eProcurement Scotl@nd 10 A bright idea - NHS wide items and pricing NHS NSS PECOS Stationery Supplier NHS Highland NHS Tayside NHS items & pricing IT Supplier 1 Travel Supplier NHS items & pricing IT Supplier 2 NHS items & pricing But, we need to link it in to other activities…
eProcurement Scotl@nd 11 The challenge… to improve procurement practice across the NHS PECOS BETTER BUYING (STRATEGIC SOURCING) ePROCUREMENT SCOTLAND (PECOS) LOGISTICS (Bulk Supplies to point of use) BEST PROCUREMENT IMPLEMENTATION (BPI)
eProcurement Scotl@nd 13 Benefits Process efficiency eAuctions eTendering Greater use of National Contracts Strategic sourcing Value for money from suppliers Improved Financial Control Government eBusiness Targets
eProcurement Scotl@nd 14 What PECOS is: A system that provides: content of products requisitions to be created on-line approval for spend on-line automatic transfer of order to supplier full audit trail reporting suite contract compliance reduction in time taken to process documentation reduction in overall lead time reduction in stock required reduction in paper records and hence stationery costs improved query process
eProcurement Scotl@nd 15 What PECOS does: Access to Supplier Catalogues electronically Orders handled on-line eMail “Punch Out” CXML However, this assumes that supplies are eEnabled….. a major risk for the programme!
eProcurement Scotl@nd 16 What PECOS isn’t: A Finance system …but is capable of integration to FMIS A Stock system… …this is being assessed at a national level An automatic link to a cost-centre budget… …but can be used to effect greater budgetary control.
eProcurement Scotl@nd 17 Next Steps: Full integration to Finance Systems NHS Shared Services Purchase to Pay improvements Link with Ward Product Management Systems Support NHS Logistics Inter-Agency Collaboration Streamlined Public Sector procurement….
eProcurement Scotl@nd 19 Context…. The need to modernise Procurement and Supplies Management across NHS Scotland (NHSS) is widely recognised. NHSS needs to adopt a more “corporate approach” to improve service delivery, leverage total spend and significantly reduce costs. A key enabler for this will be the effective deployment of the right technology - The eProcurement Scotl@nd (ePS) service The Blueprint Strategy proposes a planned and co-ordinated roll out of ePS which maximises the use of available resources across NHSScotland.
eProcurement Scotl@nd 20 A standard process for collecting and analysing the data from Health Boards was developed and followed…………. 1.Meet with Health Boards and agree the process to be followed 2.Data Collection from Health Boards 3.Data Validation exercise and review meetings with Health Boards 4.Summarise all Health Board data 5.Develop initial roll out/Blueprint strategy 6.Review proposed Blueprint strategy with all Health Boards 7.Sign-off and commitment to Blueprint by all Health Boards
eProcurement Scotl@nd 21 Data collected from Health Boards was subject to a number of limitations that need to be acknowledged… Was a department fully implemented? Were departments placing orders themselves or via Procurement? Initial data was occasionally miscoded by users There was some unmapped/obscure data that was difficult to define Health Board resource availability to validate the data Departments paying for goods/services did not necessarily instigate the purchase order
eProcurement Scotl@nd 22 Exclusions were agreed and the validated figures are in line with share of NHSS spend per Health Board…. Agreed exclusions from this phase In-scope expenditure for Health Boards based on 2004 data collected Approx % share of national spend per Health Board Drugs Income Recharges Rent & Rates Capital Expenditure - New Buildings Professional Fees and Services (50% of spend) Telecoms (being reviewed) Training Expenses Travel & Subsistence (excluding leased cars) Postage & Carriage Utilities (being reviewed) Transportation & Portering Other Admin/Board Expenses Waste Disposal Publications Subscriptions & Information Services
eProcurement Scotl@nd 23 Department Roll Out Sequence takes the following Components of the Blueprint Strategy into Account…….. 1.Award of Strategic Sourcing Contracts & Contract Renewal and possible savings that can be made 2.Fitting in with NHS Logistics timetable for the implementation of Ward Product Management 3.Current approved HB plans 4.Rolling out to the same departments at the same time (or pilot first then roll out all other departments together) to aid easier central supplier adoption 5.Size of Spend 6.Stock Integration 7.Shared Services
eProcurement Scotl@nd 24 Blueprint Department Order for continued eProcurement rollout…
eProcurement Scotl@nd 25 Agreed Key performance indicators have been set up to measure the success of the implementations by Health Boards…….. Key Performance Indicators Percentage of In-scope spend covered Value of transactions against target spend with respect to local project plan Statistics that will also be tracked, although not measured against Volume of transactions Split between Level 1 & Level 2 catalogues Number of suppliers adopted vs suppliers identified in local supplier adoption Users trained vs planned for departments (estimate) Active vs Registered Suppliers Active vs Registered Users Break-down of Supplier Content by catalogue, non-catalogue, punch-out Break-down of Order Routing by fax, email, cXML
eProcurement Scotl@nd 26 Agreed Health Board Targets… Heath BoardIn-scopeePS Start Date Target by 31/3/06 Target by 31/3/07 Target by 31/3/08 Argyll & Clyde £35MNov 04£6.7M (19%)£18M£35M Ayrshire & Arran £35MFeb 05£13M (37%)£21M£35M Dumfries & Galloway £18MApr 05£5.4M (30%)£10M£18M Forth Valley £21MMay 04£19M (90%)£20M£21M Grampian £46MOct 04£7.8M (17%)£29M£46M Highland £21MMay 02£15M (70%)£17M£21M Lanarkshire £35MJul 04£15M (43%)£25M£35M Lothian (PCT) £20MMay 05£6.7M (33%)TBA Will incl. Acute TBA Will incl. Acute Tayside £41MOct 02£25M (60%)£33M£41M NSS £40MApr 04£25M (63%)£35M£40M SAS (included for completeness) £35MMay 03 Total £347M
eProcurement Scotl@nd 27 What do we have…. An Agreed roll out strategy signed up to by all NHSS Scotland Health Boards A Roll out plan that co-ordinates the efforts of the national and local resources and effort Agreed KPI markers that are common to all organisations and are deliverable to the Scottish Executive A co-ordinated plan that takes into account the needs of local and national initiatives
eProcurement Scotl@nd 28 Everything you wanted to know about an eProcurement implementation (but were afraid to ask) Peter Shinton Project Manager- eProcurement NHS National Services Scotland
eProcurement Scotl@nd 29 Scottish Executive Initiative- Scott NHS Initiative- Margaret NSS Initiative Scottish Executive Initiative- Scott
eProcurement Scotl@nd 30 What’s the theory? Process improvement Accurate information, produced quicker Make strategic sourcing decisions Contract compliance £
eProcurement Scotl@nd 31 Process improvement Accurate information, produced quicker Make strategic sourcing decisions Contract compliance Nothing on PECOS that shouldn’t be “Do I have to raise an indent…?” Easy to keep tabs on progress Info for this still from Fin Systems and the practice?
eProcurement Scotl@nd 32 Process improvement Accurate information, produced quicker Make strategic sourcing decisions Contract compliance Ensure only contract suppliers and items are adopted Monitor all transactions through existing methods to ensure non-contract purchasing isn’t continuing What are you trying to improve?
eProcurement Scotl@nd 33 Process improvement Accurate information, produced quicker Make strategic sourcing decisions Contract compliance Ensure the commodities are suitable for eProcurement Don’t add complexity / bureaucracy to the processes Making today’s processes electronic doesn’t automatically improve them! What are you trying to improve?
eProcurement Scotl@nd 34 Process improvement Accurate information, produced quicker Make strategic sourcing decisions Contract compliance Decide what you want the information for Should you push ALL transactions through the system, or are you targeting particular commodities? What are you trying to improve?
eProcurement Scotl@nd 35 Process improvement Accurate information, produced quicker Make strategic sourcing decisions Contract compliance Ensure you obtain the information you want Ensure you have the opportunity and ability to make use of the information What are you trying to improve?
eProcurement Scotl@nd 36 To snatch defeat from the jaws of victory, you must ensure you have no… clear implementation strategy dedicated resource defined scope or end point clear responsibilities …amongst other things! An implementation is a project but ongoing system use belongs to the business
eProcurement Scotl@nd 37 Thank you for listening Any questions? Peter Shinton Project Manager- eProcurement Corporate Programme Office Tel: 0131 275 6769 (Internal No 6769) Email: email@example.com NHS National Services Scotland, Gyle Square, 1 South Gyle Crescent, Edinburgh, EH12 9EB