E-procurement will change everything: EI Tuesday, June 08 2004 by Anthony Quinn
State body Enterprise Ireland has warned suppliers to prepare for changes that electronic procurement is bringing into the market.
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A new on-line booklet published by Enterprise Ireland warns that businesses who fail to respond appropriately -- in areas such as the reliability of their IT systems -- risk losing business to other companies both in Ireland and abroad.
The "Public Sector eProcurement: Advice for Suppliers" booklet aims to inform suppliers about e-procurement and its planned growth in the public sector, along with the associated changes in purchasing practice which can be a threat to companies who fail to adequately prepare for them.
The National Public Procurement Policy Unit (NPPPU) was established in 2003 to initiate public procurement reform in Ireland. In order to achieve e-procurement objectives, a number of targets were established by the Department of Finance to be reached by the end of 2007. These include that 80 percent of all payments should be carried out electronically and that 90 percent of all tenders should be carried out electronically.
The government has already calculated that e-procurement will generate cumulative potential public purse savings of over USD400 million by 2007, with potential annual savings of about EUR175 million a year thereafter.
The booklet was published because Enterprise Ireland was aware of the impact that e-procurement had when it was introduced by some organisations in the private sector; Enterprise Ireland could see the state sector coherently moving down the same road, according to Lorcan O'Sullivan, manager of Enterprise Ireland's eBusiness Unit.
"Since many of the changes necessary for e-procurement can't be implemented overnight, we wanted to give a more coherent and clear direction to companies, because our role is to advise in advance," he told ElectricNews.Net.
Suppliers are advised in the booklet to ensure that their IT systems are reliable and adequately managed, to intensify efforts to improve efficiencies, and to use e-tendering sites or tender alert agencies. The new publication also advises companies to consider collaborating in order to cope with the move towards a smaller number of larger contracts, and to consider tendering for work from foreign public bodies.
Changes being brought to the market include tender notices appearing on-line rather than in newspapers, increased competition from foreign companies, greater levels of electronic interaction with suppliers and a general move towards larger and possibly longer contracts with more e-business friendly companies, said Enterprise Ireland.
Companies that supply, or plan to supply, products or services to government departments, local authorities, semi-state bodies, hospitals or any other part of the public sector could be affected by the changes, added O'Sullivan. "Different suppliers will need to respond in different ways to these changes. Our booklet is designed to help you identify the correct response for your business," he said.
On the upside, Enterprise Ireland is letting companies know that e-procurement can also reduce paperwork and administration costs, enabling companies to compete for business from overseas governments.
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