UK Online for Business Supplier Adoption Paul Keegan 3 November 2003 Paul Keegan Partner Relationship Manager UKon4b Supplier adoption is the supplier buy in to e- Procurement the necessary matching of supplier competence to the purchasers e procurement systems.

ukonlineforbusiness.gov.uk/ supplieradoption Ukonlineforbusiness.gov.uk/supplieradoption is an excellent resource website which I urge you to visit.

Opportunity; Local Authorities’ Economic Development Role £25bn market with 800,000 existing suppliers ……majority SMEs and not e enabled many in local economy; research shows LA business vital for survival Local Authorities’ Economic Development Role “classic” e procurement stance not applicable; must take interest in developing suppliers Real business case compeller for SMEs What are the Opportunities? Big market, large numbers! Lots of opportunities for penetrations and significant interventions

Threat; LA Purchasing Consolidation could marginalise smaller suppliers Online LA’s will have access to wider choice of suppliers Non e-enabled suppliers will be excluded Rural business with poor telecomms provision disadvantaged Threats just too awful to contemplate you could end up with just a few international suppliers providing responses to juggernaut orders lack of flexibility and innovation and no business opportunities!

So……why should Local Authority Procurement Directors be interested in supplier adoption? Here’s a quote ; One of the problems is that for a procurement professional the real aim is consolidate suppliers, take costs out of the system but

“Supplier participation in your e-procurement project is essential - after all, if you can't find it you can't buy it... without active supplier participation you will be left with a limited-use electronic requisitioning system." Successful Delivery Toolkit, Suppliers Guide http://www.ogc.gov.uk/sdtoolkit/, published by The Office of Government Commerce If HM Treasury’s agency Office of government Commerce says it then you can belive it. You do need someone to play with, You need some suppliers to make your expensive procurement kit work. Effective e-procurement SME investment in integrated ICT reduces costs, increases productivity and stimulates new product development. Councils benefit from innovative, tailored solutions at lower cost. The supplier base is broadened and deepened, reducing reliance on a small number of key suppliers, and healthy competition helps to ensure continuous improvement.

Here’s another quote…… and……why should Local Authority Economic Directors and regional Development Agencies be interested in supplier adoption? Here’s another quote……

Sir Robin Wales, Mayor, London Borough of Newham "Procurement policy should not be made in a vacuum. Procurement decisions can have far reaching impacts on the local economy and community. These impacts can be both positive and negative.” "This means such things as working with local suppliers who are particularly crucial to the local economy so that they can adapt to changes in Newham's procurement policies." Sir Robin Wales, Mayor, London Borough of Newham At Newham the Local Economic Impact Assessment found; Local economic risk highly concentrated in a few wards with the commercial centre the most vulnerable Loss of even part of this business activity would have a strong negative impact on local economy and reduce skilled employment opportunities disproportionately. Newham are using the findings of the Impact assessment to target vulnerable companies Working to confirm spending departments suppliers Work with BSOs to assist local business with transition to e commerce Run an @london pilot scheme to offer an easy route for SMEs to move to e trading with the council and other corporate and public sectors customers.

2 + 2 = 5 and……on a more positive commercial note; Local economic vitality Investment by the SME sector in integrated ICT creates a multiplier effect in the local economy. ICT creates improvements and opportunities in many different parts of the business and the changes in one area have impacts in other areas, there is interaction and stimulation: efficiency improvements reduce costs and improve services making firms more competitive they are then able to exploit their new competitiveness through the global reach of the internet this happens not just in one firm but in many firms, who then use the technology to work more closely together in manufacturing, distribution and marketing firms expand and new, higher skilled jobs are created (and wages are spent with local firms) a vibrant networked local economy continues to develop and grow, with the local council acting as a catalyst for further growth The net output is greater than the net input; or put simply: 2 + 2 = 5

UK Online for Business Supplier Adoption Paul Keegan 3 November 2003 paul.keegan@dti.gsi.gov.uk 020 7215 1623 Paul Keegan Partner Relationship Manager UKon4b Supplier adoption is the supplier buy in to e- Procurement the necessary matching of supplier competence to the purchasers e procurement systems.