IMPLEMENT E-PROCUREMENT TO ACCELERATING BUSINESS PROCESSES AND

DRIVING PURCHASING COMPLIANCE

Provide by

WHAT IS E-PROCUREMENT

“eProcurement is a fully capable electronic Web application for purchasing goods and services”-- Vanderbilt University

“eProcurement is also a procurement automatization process” -- Henriksen & Mahnike

“eProcurement is the business-to-business or business-to-consumer or business-to-government purchase and sale of supplies, work, and services through the Internet as well as other

information and networking systems, such as electronic data interchange and enterprise resource planning”

-- wikipedia

E-PROCUREMENT TRANSACTION CLASSIFICATION

PUBLIC WEB, By public web (Internet), buyers have the opportunity to identify the potential suppliers by using search tool such as Google.com, Yahoo.com

EXCHANGE, B2B Transaction via E-Procurement provides the Auction, Bidding, and Sharing Price list via Catalog

MARKETPLACE, Market (marketplace) is a place where there are a lot of suppliers and products (multi-supplier/multi-products)

COMPANY HUB, Company hub is almost the same as marketplace, because the buyer takes the role as a host and manages the catalog or the list of multi-supplier/multi-product

EXTRANET, Extranet is a protector which protects the internet link between the buyer and the seller. Extranet is usually used to share data and to collaborate, such as to send data about Pricing Negotiation, Document legal submission.

CALCULATING BENEFIT OF IMPLEMENTING E-PROCUREMENT

A Quality eProcurement system will include a supplier registration module, so potential suppliers come to you, and you don’t waste time searching for them yourself. By using an online system, supplier information can be presented in a clear, standardized format for easy comparison. Information can be updated by the supplier whenever necessary.

eProcurement Indonesia delivers integrated eProcurement Solutions to some of the world’s leading organizations, accelerating business processes and driving purchasing compliance.

Properly planned and executed an eProcurement system will be deliver much more benefit, as follows :

1. GETTING SUPPLIERS TO COME TO YOU

This takes you from a long list to a shortlist of qualified potential suppliers at the press of a button, and the system can maintain categorized and approved lists of suppliers. • Ability to Review Suppliers Qualification• Ability to Review Supplier Legal Document• Ability to Review Supplier Experiences

2. GRAB QUALIFIED POTENTIAL SUPPLIERS

eProcurement brings with it the added bonus of providing an effective document management system. There’s no more need to hunt down stray pieces of paper or to wade into paper files for ancient documents. All your ‘Digital Paperwork’ is in one place, including process and procedure documentation.

4. PAPERLESS DOCUMENT MANAGEMENT – GREEN COMPANY

E-PROCUREMENT CAN REDUCE COST FOR ADMINISTRATIVE EFFECTIVENESS

Gartner Group States that Manual Procurement is, on average an 11 Step Process in Administration, and using Systemize with eProcurement system can be reduce this cost by as much as 80%. -- Gartner Group

80%

see that your procurement is transparent, and schedules are clearly set out, that they get better notice of ITTs (Invitations to Tender), that your processes respect the integrity of deadlines, and that everyone is on a level playing field, they’ll feel better about doing business with you. Why does that matter? Because with a better relationship your organization gets better access to new products, materials, innovations, ideas, special rates and deals, and better loyalty - all of which has value.

3. KEEP THE BEST SUPPLIERS ON SIDE

CALCULATING BENEFIT OF IMPLEMENTING E-PROCUREMENT

eProcurement Indonesia having Ability to workflow management. This lets you set date per process limits and process flows, so that, for instance, the appropriate person has to sign-off activity at the right time. Also when colleagues make a change on a tender, or a supplier posts a response, email alerts let you know what’s happened. It keeps everyone on the same page, eliminating duplication and confusion. And it keeps the process moving. eProcurement Indonesia system will give you the flexibility to set up processes, workflows at whatever level and granularity you need - departmental, Team,office or site.

5. PROCUREMENT GO WITH AUTOMATIC FLOW

Some of Procurement Workflow that support by eProcurement Indonesia, are :• E-Auction Flow for Construction • E-Auction Flow for Fast Moving Goods• E-Bidding, E-Evaluation, and E-Catalogue• etc

Ability of E-evaluation Using a data-centric system, E-evaluation can not only ‘read’ binary ‘yes/no’ responses, but can give different weightings to the answers in individual sections or even to individual questions. It can ‘read’ numbers and collate bids accordingly. At the press of a button you can get a side-by-side comparison of every bidder. The system can even send email notifications to suppliers telling them they’ve been eliminated or have gone forward.

6. HIGH VALUE OF E-EVALUATION

Organizations increasingly want accountability, transparency and compliance. eProcurement gives you a secure history of every tender. Every keystroke, email, comment and bid is documented. Every access to the system and every action in the workflow, whether it’s reviewing, authorizing, commenting, tendering, uploading or amending, is recorded. Internal audit will love you. In addition, tender procedures and policies can be configured into the solution so that all procurement staff can only operate within organizationally approved processes.

7. ACCOUNTABILITY, COMPLY AND SECURE PROCESS

CALCULATION OF COMPLIANNCES BENEFITS CAN BE ESTIMATED : eProcurement Indonesia Audit and Control Access System able to

Remove Indirect Cost such as Data-Correction, Dispute Management, Request for Duplicate Copies, and Woring Approval Process.

Reduce Indirect Cost ,and able to Generate Savings > 80% from Indirect Cost -- eProcurement White Papaer- Wax Digital - England

80%

CALCULATING BENEFIT OF IMPLEMENTING E-PROCUREMENT

Because eProcurement systems automate repetitive administrative tasks, buyers can invite 20 suppliers to bid in virtually the same time it takes to invite two. As we’ve seen, you can process and evaluate all the bids much more quickly as well. The net result is that you get more suppliers involved, and with increased competition you get Competitive or may be lowest Price.

8. SAVING MONEY , Part 1 : GRAB COMPETITIVE PRICE

AVOID OVER BUDGET PROJECT COST, EVEN GIVE SAVING WITH AVERAGE SAVING FROM PROJECT COST BUDGET

Another strategy for price-reduction is to conduct eBidding where the lowest bid price from aprevious tender is used to open the auction, driving the price down even further. A good eProcurement system will enable you to run these auctions at the press of a button.

9. SAVING MONEY , Part 2 : USING E-BIDDING TO DRIVE PRICE DOWN

20%

Aside from the environmental benefits, by doing less printing and copying, and using less paper, toner, stationery, postage and courier fuel, you’ll save money too. See How to work out what you’ll save (below) to calculate how significant that saving could be for your organisation.

10. SAVING MONEY , Part 3 : SIGNIFICANT SAVING FOR ORGANISATIONS

Prime buyer will include the savings made by each prime contractor’s sub-tender costs as well as your own.

11. SAVING MONEY , Part 4 : PROJECT COST SAVINGS ON SUB TENDERS

With eProcurement you get a system that is compatible with Purchasing and Finance System, leading to efficient and timely for Payment Process. You can also manage contracts much more effectively going forward because an eProcurement system puts all the information youneed at your fingertips.

12. SAVING MONEY , Part 5 : AVOID PENALTY FEE BECAUSE OF LATE PAYMENT

“Savings of up to 90% on purchase order costs have been quoted by HP (£100– £10) and

70% at US-based Amgen (£40–£12 using the Chemdex marketplace)”

“Automatic Integration with Finance System , Able to Create Zero Defect, Penalty Fee Never appear because of Late Payment to Suppliers”

ZERO DEFECT

CALCULATING BENEFIT OF IMPLEMENTING E-PROCUREMENT

13. UTILIZING E-CATALOG FOR SAVINGS AND CONTROL

Using Catalog Management at e-Catalog Feature• Many Supplier Submit Their Product Information and Price• Search Engine for Product Information• Data Catalog Grab from Valid and Verified Supplier• Helpful to define range Price for Procurement Events ( COGS )

Indication from Several Suppliers :• Suppliers charging different prices to customers for exactly the same products• Single Suppliers or Non Competitor Supplier give Extreme Price for Buyer• Internal Human Intervention able to impact increase Price for Buyer

UTILIZING DATA FOR SAVINGS AND CONTROL

Organizations are increasingly concerned with BCM. This often has a big impact on procurement as businesses want to identify critical suppliers and to mitigate their exposure by having alternative suppliers lined up. eProcurement systems make it easy to keep track of these key suppliers and to keep the organization's supply chain risks under review.

15. BUSINESS CONTINUITY MANAGEMENT ( BCM ) MADE EASY

eProcurement makes the overall procurement cycle time considerably shorter - in fact by an impressive 66 percent on average. This is in part because the system handles routine administrative tasks much more efficiently. Things like responding to supplier enquiries and converting requests for quotations into purchase requisitions can be done muchmore quickly. And there’s no more need to produce the same letter 20 times or make repetitive phone calls. The time taken to mail documents and wait for them to arrive is eradicated entirely.

eProcurement systems can also schedule the whole tender process, setting timeframes for when things need to happen by. A good system will support that with automated messages and alerts to everyone involved. The net result is that much more can be achieved in a shorter timeframe - and it puts you in complete control.

14. REDUCED CYCLE TIMES

MODULE SUB MODULE MANAGABLE TRANSPARANCY COMPLY BUSINESS SUPPORT User - Employee V V User - Vendor V V User - Committee Registration V V Activation and Verification Vendor Legal Document V V Vendor Information Detail V V V Vendor Blacklist V V Workflow V Announcements V V Activity Reminder V Catalogue Category V Catalogue Approval V V V Evaluation based on Administration V V Evaluation based on Technical V V Evaluation based on Price V V

E BIDDING Auto Rank V V V

USER MANAGEMENT

VENDOR MANAGEMENT

WORKFLOW MANAGEMENT

CATALOGUE MANAGEMENT

EVALUATION

CALCULATING BENEFIT OF IMPLEMENTING E-PROCUREMENT

Back in the day, eProcurement packages got the name of being hard work - difficult to configure, expensive to install, laborious to use. The new generation of eProcurement systems isn’t like that. eProcurement Indonesia are designed to be intuitive to use so the training burden is lifted. They can be hosted in the cloud or Web Application in Your Host Server, so implementation time is short and the cost is quickly recouped by the savings made. All you need is a web browser and you can access all eProcurement has to offer.

16. MATURE E-PROCUREMENT SYSTEM ARE SAVING COST AND SPEED IMPLEMENTATION

WEB APPLICATION

MATURE TECHNOLOGY IMPLEMENTED BY E-PROCUREMENT INDONESIA

SECURE AND AVOID ROBOT SYSTEM

LOW BANDWITH AND FAST REPONSE TIME

MATURE TECHNOLOGY

RESPONSIVE – MULTI DEVICE ACCESS

ACCESS ANYWHERE AND ANYTIME – 24 x 7

CUSTOMIZABLE – BASED ON CUSTOMER REQUEST

NO ANNUAL LICENSE

FLEXIBLE AUCTION FLOW

SMS AND EMAIL INTEGRATION

INTEGRATION WITH EXISTING PURCHASING SYSTEM

FEATURE MODULE

MODULE SUB MODULE

USER MANAGEMENT User - Employee User - Vendor User - Committee

VENDOR MANAGEMENT Registration Activation and Verification Vendor Legal Document Vendor Information Detail Vendor Blacklist

WORKFLOW MANAGEMENT Workflow Announcements Activity Reminder

CATALOGUE MANAGEMENT Catalogue Category Catalogue Approval

EVALUATION Evaluation based on Administration Evaluation based on Technical Evaluation based on Price

E BIDDING Auto Rank

Management

ProcurementDepartment

Vendors andBusiness Partners

Audit and Public Sector

TRANSPARANCY

COMPLY

MANAGABLE

BUSINESS SUPPORT

FLEXIBLE PROCUREMENT PROCESS FLOW

InitiateProcess FlowPROCUREMENT ADMIN ACTIVITIES

Master Procurement process Flow Creation

PROCUREMENT COMMITTEE

ChooseMaster Flow

Event / Lelang Management• Flexible Workflow• Different Event, Different Process• Reminder Activity• Announce Event and Lelang• Comply and Auditable• Paperless• Avoid Fraud

VENDOR MANAGEMENT

REGISTRATI

ON

DETAIL VENDOR INFORMATION

VENDOR

LEGAL

Softcopy Document Reposority :NPWPSIUPTDPAkta Pendirianetc

VENDOR

PROFILE

Detail InformationExperienceExpertiseSupporting Equipmentetc

VENDOR APPRAISAL

AKTIFATION

•Registration•User Name•Password

VERIFICATION

•Detail Information•Legal Document•Experience and Supporting Equipment

BLACKLIST

•Manual Adjustment•Period Blacklist

Vendor Appraisal• User Friendly Notification• Black List Management

E-BIDDING

DIRECT TRANSACTION

• Direct Offering

AUTO RANK SETUP

• Based on Lowest or Highest

COUNTDOWN TIMER

• Time to Finish Bidding Information

AUTOMATIC CLOSE BIDDING

• Automatic Close and Go To The Next Step•

VENDOR EVALUATION MATRIX

EVALUATION CRITERIA

•Administrative•Technical•Price

EVALUTION TEAM

•Evaluation by Cross Department•Final Evaluation by Committee

SUMMARY EVALUTION

USER FRIENDLY NOTIFICATION

Announcement

Activation and Verification Notification

Expired Document Notification

Activity Reminder

EVERY AUCTION STEP ARE OPTIONAL TO ONLINE PROCESS OR OFFLINE PROCESS

SANGGAHAN

ONLINEOFFLINE

SAMPLE - SCREENSHOOT E-PROCUREMENT INDONESIA SYSTEM

1.Avoid unnecessary

purchase /project

( Achterstraat, 2011 )

2.Real time access

information or real time bidding

( Ndou, 2004 )

3.Automation of

procurement process

( Henriksen&Mahnike,

2005 )

4. Increase competition among the bidder or supplier

( Hanna, 2010; IMF, 2010; Mahmood, 2010; Thai,

2001 )

5.Reduce human

intervention in bidding process

( Khannapuri, et al, 2011;

Magrini, 2006 )

6.Standardization

enactment ( consistently

in procurement phase)( UN,

2006 )

7.Monitoring and tracking application

( Achterstraat, 2011; Hanna,

2010; Zhang & Yang, 2011 )

8.Efficient and secure

document transmission ( AG, 2005;

Chang, 2011; Hanna, 2010,

Zhang & Yang,2011 )

9.Managerial control and

collaboration ( enriksen&

Mahnke, 2005 )

10.Transparency and

accountability ( Croom & Brandon-

Jones, 2005; Panda, Sahu &

Gupta )

11. Make a procurement process faster

and easier ( Hanna, 2010 )

12.Obtain the best

quality/price ratio

( Kaliannan, Raman &

Dorasamy, 2009 )

SUMMARY – THE IMPORTANCE OF E-PROCUREMENT

CLOSE COLLABORATION WITH CUSTOMER TO ENHANCE ACCELERATE BUSINESS PERFORMANCE AND CREATE TANGIBLE VALUES

ITPI TECHNOLOGYPT. ITPreneur Indonesia Technology Sinar mas Land Lantai 12AJln Pemuda 60 – 70 Surabaya 60271

Telp. +62-31-5914.098Fax. +62-31-2899.7001

www.eprocurement-Indonesia.com

INFORMATION DETAIL :