eMarkets

1. eMarkets Susan L. Fitzgerald, CPPO, C.P.M.© Winbourne and Costas, Inc. Wednesday, September 26, 2001 GSA/CommerceNet, White House Conference Center Washington, D.C.

2. e-Procurement Trends • e-Catalogs, e-Malls, e-Shopping Carts • Vendor Product & Service Offerings On-Line • Open Market, Contracts/Agreements or Schedules • e-Bidding • Solicitation Distribution • Receive & Tabulate e-Bids or Proposals • Reverse Auctioning • e-Marketplace • Bring Buyers & Sellers Together • Punch Out • Control & Reconciliation • Level 3 Data • Workflow Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

3. Fee & Revenue Models • Government Pay • Initial Investment or Fee Per Purchase Order • Vendor Pay • Transaction Fee Per Order • Subscription, Bid/Quote Fee • Catalog Maintenance/Hosting Fee • Software License Fee • Fee Determined by Market • Different for Vendor Type, Commodity or Order Cap • Reverse Auctions • % of Savings, Transaction, Subscription, Hosting Fee • Revenue Generating Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

4. Fee Principles • Fee Creates Behavior—Value Judgment • e-Procurement Provider Needs to Eventually Get Paid—ROI • Fee Should Support Behavior You Deem Necessary for Long Term Success • If no one uses, transaction volume does not increase and host does not obtain dollars to get back initial investment. • Transaction volume, great open market prices, and free to government is dependent on significant usage. • Everyone Shares in the Costs and Benefits of Conducting Business Online • Does Fee Pass Through to Government? • Value Proposition & Measurement • To Make Money, Requires Usage—To Get Usage Requires Political Consensus Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

5. Cultivating a New Paradigm • At the end of the day, is e-Procurement going to help you… • Attain Organization Mission • Achieve Better Prices,Values and Controls • Reduce Administrative Burden • Satisfy Stakeholder Requirements • Manage Your Business? Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

6. How Could It Affect You? • Small Purchases • Sourcing • Socio-Economic Initiatives • Best Value • Reverse Auctions • Service Contracting • Authentication • Open Integration Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

7. Impediments—Risk and Fear • Legislative Authority • Mandatory vs. Voluntary Use • “Customer” Satisfaction • Investment in Time—Value Add—Easier than Current Processes • One Point of Data Entry • Funding • Budget & Appropriations • Vendor Acceptance & Impact on Small, Minority, Disadvantaged • Ownership • ASP or Government • Functionality • Process Reengineering • Integration to Front & Back-end Systems Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

8. Keys to Success • Attainable Goal(s)—Focus on Vision • Walk Before You Run—Method(s) of Procurement • Simplicity—Easier than Current Process • Executive & Government Support • Governing Body, Executive, Finance, IT, Procurement • Investment of Customer—Focus Groups • Supplier Enablement & Engagement • Current, Accurate Data • What do you use now? What does the data look like? How do you leverage? • Fees, Revenues and Impact—Value & Savings • Communication and Marketing Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

9. Market Research • ROI Promises • Government & Vendor Perspective • Guarantee of Expenditures Levels • System Spend = Expectation for Suitable Procurement Candidates through Solution • Catalog Content Management • Who does it and what does it mean? • Government vs. ASP vs. Vendor • Total Cost and Fee(s) & Potential Pass Through • Transaction, Catalog, Subscription, Bid/Quote • Government and Administrative Functions • Provider Reliability & Continuity Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

10. Government Benefits—ROI • Simple and Easy to Use—Faster Transactions • Contracts at Buyer’s Fingertips • Immediate Access to Small Purchase Vendors • Leverage Buying Power • Increased Reporting Capabilities • Search Socio-Economic Vendor Requirements • Reduction in Administrative Processing Costs • Average Cost to Process PO Manually = $75 to $150 • Average Cost to Process Electronically = $1.50 • Focus on making better buying decisions and negotiating complex procurement actions Saves Taxpayer’s Dollars Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

11. Vendor Benefits • Enhances Market Visibility & Access • Capture Greater Market Share • Ensure Vendor is Everywhere that Customer is Buying • Publish Once & Sell to Many • Increases Sales Productivity • Reduce Cost of Selling to Fragmented and Regulated Market • Promote Products with 24 x 7 Digital Sales Agents • Free Sales Staff to Focus on High End Sales and Customer Service • Streamlines Order Processing—Speeds Delivery • Reduces Administrative Costs • Reduce Cost of Doing Business with Government Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

12. Policy Decisions • Mandatory vs. Voluntary Utilization • Optional Yields Approx. 15-20% of Transactions • Mandatory Yields Approx. 80-90% of Transactions • Funding Model and Limitations • Appropriated vs. Vendor • Key Legislative & Stakeholder Buy-in • Governing Body, Executive Office, CIO, CFO • Small & Disadvantaged Community Impact • Balance Transaction Fee and Impact • Government Hosted vs. Application Service Provider (ASP) • Integrate with Front & Back-End Systems Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

13. Implementation Race • High Usage & Dollar Items—Repetitive Buys • Contract & Price Agreement Spend • Maximize Utilization • Eliminate Administrative Expenses • Work Flows & Approvals • Change Purchase Thresholds • Audit Trails & Protest Disposition • Stakeholder Buy-In and Expectations • Executive, Regulatory, Administrative, Customer, Vendor, Other Governmental Entities • Leverage Existing and Future Technologies Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©

14. Making Your Vision a Reality • 30 Ft View – How will it improve financial position and procurement function, while facilitating the attainment of governmental initiatives? • What is impact on government procurement reform? • What are government priorities and how does it affect everyday business? Susan L. Fitzgerald, CPPO, C.P.M., M.P.A. ©