Ev. 1 Electronic Procurement – A Big Step Towards Transparency and Efficiency The Asian Development Bank’s Perspective Jeff Taylor, Senior Procurement Specialist

Ev. 2 Electronic Procurement, Its Origins  Its not new:  Materials Requirements Planning (MRP) 1960s  Electronic Point of Sale (EPOS) 1980s  Organization for Data Exchange by Tele- Transmission in Europe (ODETTE) 1984  COVISNET (US Automotive/Oracle) 2000

Ev. 3 It’s Not a Panacea  The pyramids were built without it  It offers little transactional value for CAPEX  Toyota a global procurement benchmark using Kanban – paper  Rubbish in Rubbish Out. Computers Cannot Think

Ev. 4 There are Negatives  It passes on transaction costs  Requires power asymmetry to impose  It does not measure absent suppliers  It can be used to limit competition

Ev. 5 Seven Types of E-Procurement Trading Models  EDI Networks, few partners, simple transactions, batch processing.  Business to Business Hubs, simplest e- catalogue, complex requisition and payment. 1T1 or MTM.  Corporate Procurement Portals – such ADB’s CMS

Ev. 6 Seven Types of E-Procurement Trading Models  First Generation Trading Exchanges distributors/manufacturers aggregation  Second Generation Exchanges integrated requisitioning, price and product discovery  Third Generation Trading Exchanges, real- time fulfillment. Information for inventory  Industry consortia and the virtual factory

Ev. 7 E-procurement Benefits  Pareto optimal, 80:20 Rule (main private sector driver), TCE  Transparency – (main public sector driver)  Standardization  Data capture and spend analysis  E-government and e-governance

Ev. 8 E-procurement Challenges The Business Case Standardizing specifications Line item level, contract or unit? Commodity Coding In-house or out sourced project development? Functional Design Regulatory and Legislative Environment

Ev. 9 E-procurement Challenges  Best Fit or Custom Build  Financing – supply side or demand?  Integration with Existing Systems  Purchasing power  OS  Federal Vs State

Ev. 10 ADB Supported Initiatives  Its own Consulting Procurement  CMS CMS  E-GEPS in the Philippines  NCB Procurement in India  NCB Procurement in Indonesia  The Asia Pacific Procurement Initiative