Acquisitions Business Model Business Innovations and To-be Model Version 5 – July 10 , 2009

Objectives Information provided Present the Acquisitions as-is business model Elaborate the proposed innovations Present the Acquisitions to-be business model Information provided For the innovations to the business model: The challenges The proposed actions The benefits The changes to the business model For the business model: Description of the canvas and the components of the business model (in the annex)

Procurement As-is Suppliers OGDs Treasury Board IT Service Branch SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Suppliers - goods & services OGDs own authority delegated authority Treasury Board IT Service Branch Staff Instruments IT tools Commodity Classification Authorities Data Staff Inter-departmental committees Account executives Events 1-800 service Acquisitions Stewardship Contracting Specialized Complex Standard Custom Common Unique Low-dollar value Routine Commodity Expert Services Government of Canada OGDs Other governments SMEs Create & administer contracts & instruments Advise clients Analyse data and trends Marketing & communications Training Vendor registration Operations staff Phone, fax, e-mail IT tools and web sites Electronic interfaces E-tendering Canadian Commercial Corp. Salary and O&M IT transfer IT maintenance & development Appropriations Fees

CHALLENGES Acquisitions Stewardship Contracting Commodity SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Standardize our terminology to describe procurement Re-balance workload, with clients taking responsibility for routine procurement Support clients that lack capacity or capability to do routine procurement Emphasize PWGSC’s increased focus on value added, complex procurement Acquisitions Stewardship Contracting Specialized Complex Standard Custom Common Unique Low-dollar value Routine Commodity Expert Services

INNOVATIONS SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES  Clients have responsibility for routine procurement  Align delegated authorities with client capability Implement classification of procurement based on Dynamic Baseline Model   Focus Contracting service on added value service Enterprise Complex Standard  Create a client-procurement support service bundle Commodity management Routine procurement Full cost recovery for routine procurement support service 

BENEFITS SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Clients have responsibility for routine procurement   Align delegated authorities with client capability Implement classification of procurement based on Dynamic Baseline Model  A common reference for procurement across the GC Client focus is on lower dollar and routine procurements, where time to delivery is important PWGSC focus is on higher complexity and risk, where we provide key added value For clients who do not have capacity for routine procurement, a support service will be in place Full cost recovery for work we do under the routine procurement support service.  Focus Contracting service on added value service Enterprise Complex Standard  Create a client-procurement support service bundle Commodity management Routine procurement Full cost recovery for routine procurement support service 

Procurement To-be Suppliers Staff Acquisitions Stewardship Instruments SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Suppliers - goods & services GC dept’s & Agencies Routine procurement Treasury Board IT Service Branch Commodity Classification Staff Instruments IT tools Expanded delegation of authority Data standards & reporting Acquisitions Stewardship Contracting Enterprise Complex Standard Procurement support Commodity management Routine procurement Expert services Appropriations Fees Routine procurement

CHALLENGES Staff Inter-departmental committees Account executives SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Staff Inter-departmental committees Account executives Events 1-800 service The phone help service is a referral service that lacks in-house expertise, most often clients rely on line-staff for assistance The primary contact and information source for clients is the line staff In order for clients to take on more of the routine procurement they will need active (person) support – passive (information) support may be insufficient We lack a significant, regular departmental client engagement event as a venue for high level organization- based discussions on trends and challenges in public sector procurement We lack an effective mechanism for knowledge sharing across our department and with our clients

INNOVATIONS SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Create support centres beginning with routine procurement   Linkage to departmental service fairs Create communities of practice as a resource for clients  Create communities of practice as a resource and communications channel for staff   Commit funds to design and operate procurement support centres 

BENEFITS SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Create support centres beginning with routine procurement  Focussed support for clients to enable them to do routine procurement Improved communications and best practices sharing across our organization Improve opportunities for clients to find resources of knowledge and best practice for procurements within their authority (legislated or delegated)  Linkage to departmental service fairs Create communities of practice as a resource for clients  Create communities of practice as a resource and communications channel for staff  Commit funds to design and operate procurement support centres 

Procurement To-be Inter-departmental committees SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Staff Inter-departmental committees Account executives Events Support centres Bi-Annual Conference Communities of Practice Create & administer contracts & instruments Advise clients Analyse data and trends Marketing & communications Training Vendor registration Information sharing (communities) Salary and O&M IT transfer IT maintenance & development Support centres

CHALLENGES Staff Instruments IT tools Commodity Classification SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Staff Instruments IT tools Commodity Classification Authorities Data Instruments are hard to find, understand and use Variations and differences in tools make them hard to use It is hard to find what you need and hard to understand what you find Operations staff Phone, fax, e-mail IT tools and web sites Electronic interfaces E-tendering Canadian Commercial Corp.

INNOVATIONS   Re-design instruments to focus on client usability SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES  Re-design instruments to focus on client usability  Improve access and reduce variation in our tools Bring information resources, tools and interfaces together under a single portal   Enable client access to information on procurements through the portal

BENEFITS   Re-design instruments to focus on client usability SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES  Re-design instruments to focus on client usability  Improve access and reduce variation in our tools Optimized instruments and tools through increased access and usability Focussed support for clients to enable self-serve routine procurement Better information sharing with clients on the status of their procurements  Bring information resources, tools and interfaces together under a single portal  Enable client access to information on procurements through the portal

Procurement To-be Staff Optimized instruments and IT tools SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Staff Optimized instruments and IT tools Expanded delegation of authority Data standards & reporting Operations staff Phone, fax, e-mail Acquisitions portal E-bidding Canadian Commercial Corp.

CHALLENGES Operations staff Phone, fax, e-mail IT tools and web sites SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Electronic communications are increasingly the norm for a large segments of the business communities The Government of Canada is lagging behind other comparable jurisdictions in the implementation of electronic commerce Operations staff Phone, fax, e-mail IT tools and web sites Electronic interfaces E-tendering Canadian Commercial Corp.

INNOVATIONS SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES    Resolve legal and policy impediments to the implementation of electronic bidding  Extend electronic tendering to include the submission of electronic bids 

BENEFITS SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES  Resolve legal and policy impediments to the implementation of electronic bidding Renew Canada’s leadership in the development of public sector electronic commerce Engage supplier community in commodities where electronic bidding has become the norm or a common process Extend electronic tendering to include the submission of electronic bids  

Procurement To-be Operations staff Phone, fax, e-mail SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Operations staff Phone, fax, e-mail Acquisitions portal E-bidding Canadian Commercial Corp.

CHALLENGES Staff Instruments IT tools Commodity Classification SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Staff Instruments IT tools Commodity Classification Authorities Data The GC commodity classification (GSIN) terminology and labels are an increasing problem. The GSIN suffers from duplication and discrepancies in the classes and groups and it requires major revision There are incompatibilities between PWGSC procurement data and department financial system data that increase the difficulty of providing effective business intelligence Data gathering for intelligence in commodity management and spend analysis is a major effort for PWGSC

INNOVATIONS SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES  Adopt an international standard for commodity classification managed  Take a leadership role in the development of data standards and reporting on procurement for the GC  Partner with TB on data standards and reporting

BENEFITS SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Adopt an international standard for commodity classification managed   Take a leadership role in the development of data standards and reporting on procurement for the GC Easier for businesses to work with the GC (using common private sector classification references) Reduce management burden for PWGSC Improve capability of PWGSC to provide business intelligence by standardizing information provided by clients Improved integration with information form procurement systems and potential for reduced reporting burden  Partner with TB on data standards and reporting

Procurement To-be Suppliers Staff Optimized instruments and IT tools SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Suppliers - goods & services GC dept’s & Agencies Routine procurement Treasury Board IT Service Branch Commodity Classification Staff Optimized instruments and IT tools Expanded delegation of authority Data standards & reporting

Procurement To-be Inter-departmental committees Suppliers SERVICES CHANNELS RELATIONSHIPS CLIENTS REVENUE STREAMS COST CENTRES KEY RESOURCES PARTNER ACTIVITIES Staff Inter-departmental committees Account executives Events Support centres Bi-Annual Conference Communities of Practice Suppliers - goods & services GC dept’s & Agencies Routine procurement Treasury Board IT Service Branch Commodity Classification Staff Optimized instruments and IT tools Expanded delegation of authority Data standards & reporting Government of Canada GC Dept’s & Agencies Other governments SMEs Acquisitions Stewardship Contracting Enterprise Complex Standard Procurement support Commodity management Routine procurement Expert services Create & administer contracts & instruments Advise clients Analyse data and trends Marketing & communications Training Vendor registration Information sharing (communities) Operations staff Phone, fax, e-mail Acquisitions portal E-bidding Canadian Commercial Corp. Salary and O&M IT transfer IT maintenance & development Support centres Appropriations Fees Routine procurement

The Business Model Canvas The business model describes the rationale of how an organization creates, delivers and captures value Offer Clients Infrastructure The canvas elaborates the business model through nine basic building blocks that cover the four main areas of a business: clients, offer, infrastructure, and financial viability. The business model is a blueprint for a strategy to be implemented through organizational structures, processes, and systems Finance

The Nine Building Blocks of the Business Model Value Propositions Solve client problems and satisfy client needs with value propositions Clients Client Segments An organization serves one or several client segments Channels Value propositions are delivered to clients through communication, distribution, and sales channels Customer/Client Relationships Client relationships are established and maintained with each customer segment

INFRASTRUCTURE Financial Viability Key Resources Key resources required to offer and deliver the value propositions ... Key Activities … by performing a number of key activities Key Partnerships Key partnerships are formed to acquire some resources and perform some activities Financial Viability Revenue Streams Revenue streams result from value propositions offered to clients Cost Structure All the infrastructure elements result in costs