| A broad look at procurement in other nations
A
quick overview shows that the average development and implementation
time for a suitably customized, web-based system was twelve
months. However, variations were quite large with some systems
being implemented in only 4 months while others required more than
three years to see full implementation.
On account of the range
of the numbers involved, ranging from recently established to well
established systems, it is obvious that efficient scalability is a key
requirement. Especially systems that scale in a cost efficient
manner.
Specifically, the systems involved in the study showed:
Number of buyers: 25 to 25,000+
Number of suppliers: 1,000 to 100,000+
No. of transactions: 15,000 to 25+ million
These
systems also shared many features, such as signing on through a single
web page, standardized documentation, the ability to download
bid-related documents, online addendums, and some form of an audit
trail.
It is interesting to note that these nations used "e-
Tendering
(high value low volume contracts for goods services and infrastructure
and sometimes known as e-Bidding)", or e-procurement, as their starting
points, moving from there to online reverse auctions and e-purchasing
(low value, high volume).
Highly customized systems do carry
their costs. While it is nearly impossible to determine the exact
cost of such a system, the best figures available from Europe vary the
costs from as little as 70,000 euros to 10.5 million euros (approx.
$100,000 to $15 million).
Many systems use PKI (Public Key
Infrastructure), by way of digital certificates/signatures, for
security while the remaining rely on SSL, with less than a handful of
examples of both PKI and SSL being used to enhance security. Even
in these cases, this security was evident only in specific instances,
i.e. encrypted message delivery in one case and confidentiality
regarding submitted bids in another.
While it is difficult to
implement strong and effective security on such systems, these rather
obvious lacks underline that security remains a subject that is not
easy to grasp. It is also necessary to understand that a great
deal of security, such as protecting passwords, relies on good
management practices.
Supplier concerns were amongst the main
lessons learned and problems addressed. The typical resistance
the suppliers expressed in these countries was a lack of confidence in
this system, which in part included a "fear of losing contracts because
the bidding process is now more transparent and more
competitive". Additionally, many suppliers are not particularly
computer literate, so a learning curve must be overcome.
The
same holds true for buyers. Many on the buyer side are not
particulraly computer literate, thus the same learning curve must be
overcome. This makes a strong case for such a system to be as
user friendly and intuitive as possible. Additionally, the
implementation of such a system often presents the same risk as any
other streamlinging or automation: the loss of jobs. It is only
natural for employees to resist a system that may cost them or their
colleagues their jobs.
All this goes to show that the system
must be as scalable and intuitive as possible, so that once the initial
resistance 'hump' is overcome the system can easily adapt to growing
from 25 suppliers to accomodate more than one thousand times
that number without having to redesign it from the ground up.
Further, the system should empower existing employees rather than force
them out of their jobs, to help make e-procurement out to be the boon
that it is rather than
a competitive force that will drive to unemployment.
That
is perhaps the single key factor: empowerment. A fully capable
e-procurement solution empowers both the buyer as well as the
suppliers. As soon as the alarmist miasma of fear surrounding
computers and the Internet is overcome, taking this necessary step
should become as much second nature as sending e-mails.
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