Case Studies in G2B .. transforming business environment J Satyanarayana As part of the Capacity Building Workshop under the Joint Economic Research Program (JERP)

Overview of Presentation e-Government & Productivity e-Procurement Issues in Public Procurement Basic Concepts of e-Procurement Case Study of e-Procurement in AP, India MCA21 Objectives Business Model Current Status

e-Government & Productivity

What is e-Government ? It is the Transformation of government to provide Efficient Convenient & Transparent Services to the Citizens & Businesses through Information & Communication Technologies

Essence of e-Government Enhanced Value for Customer

G2B Life Cycle – multiple interactions Approvals Permissions Returns Taxes Permits Compliance Expand Approvals Compliance Close Operate Start-up Explore Opportunities Approvals Permissions Registrations Project Profiles Infrastructure State Support

Productivity Enhancements in Government & Business More effective Regulation improves the economy Higher Growth Rate due to Productivity increase in Business, Manufacturing, Education Increase in FDI due to better investment climate Business Improved business ecosystem Increased Velocity of Business Ease of doing business with Government Transparency leads to higher investments Time & Effort saved, goes to productive tasks

e-Procurement - efficiency & transparency

Issues in Public Procurement Lack of a common Public Procurement Policy Public Procurement Law and regulations Dedicated Agency Transparency in Procurement Act Lack of model bidding documents and contract documents Complicated procedures for bidding, approvals and payments. Lack of skilled resources No centralized system of registration of suppliers Delays in making payments to suppliers

Range of Procurement Services Indent Generation & Approval Procurement Process Tenders, Auctions, Reverse Auctions, Rate Contract, Catalogue Buying Demand Aggregation Bid Evaluation Award & Purchase Order Supply Management Quality Management Inventory Management Payments Management MIS & EIS

Categorization of Procurements By Category of Goods & Services Goods Services Civil Contracts By Nature of Procurement Tenders Rate Contract & Catalogue Buying Auctions, Reverse Auctions LCB, NCB, ICB By Size / Volume of procurement High Value, low volume Low value, High Volume By Portfolio of services needed Requisition, Bid Process Evaluation, Award, PO Supply, Quality check, Inventory Management Payment, Accounting, Audit MIS, EIS

What is e-Procurement ? It’s a collaborative procurement of goods, works and services using electronic methods in every stage for bringing in efficiency & transparency

Objectives of e-Procurement To act as the catalyst for procurement reform To enhance transparency, monitoring and control in procurement process To bring in economies of scale through aggregation of demand To reduce cost of doing business for both government and suppliers To establish level playing field and “fair” competitive platform for the suppliers

typical e-Procurement System Components of a typical e-Procurement System E-Auctions Contract Management Indent Management E-Tendering Catalogue based Procurement

e-Procurement Scenario Payment Systems Consultants e-Procurement System Buyers Suppliers Contractors Logistics Systems

The Buy-side Issue Approach Complexity of Procurement Procedures Procurement Reforms Wide Range of items to be procured Goods Works Services Conduct an ABC Analysis Select ‘A’ items initially Organizational Resistance Change Management Lack of IT Skills among employees Training Lack of resources with Government Public-Private-Partnership

The Sell-side Issue Approach Difficulties in changing over to new systems of tendering Supplier adoption Low levels of technological skills Training Help Desk Difficulties in access to site E-Procurement help centres Resistance to change Change Management

The ‘e-Procurement system’ side Issue Approach Difficulties in establishing & maintaining the system By sharing responsibility through PPP Lack of Financial resources for maintenance & transaction handling Designing appropriate business model Levy of service charges Concerns of Confidentiality of bids Authenticity of bids Digital Signature Certificates Varying requirements of Multiple Departments Process Reforms Standards-based system

A case Study in e-Procurement

International Experiences Public Procurement Service, Korea GeBiZ, Singapore State of Andhra Pradesh State of North Carolina, USA Gatetrade, Denmark

Case Study of e-Procurement in the State of Andhra Pradesh, India Idea arose in 2000 Workshop on e-Procurement held Involving key e-Procurement vendors Pilot designed with 4 government agencies Focus on e-tendering PPP Model designed Proposal sought from top 10 e-Procurement vendors in the world. Project entrusted to the bidder offering least fee for providing e-Procurement services Extensive training given to buyers & suppliers Help Desk established for hand-holding

GoAP e-Procurement – Key Achievements Achieved transaction volume of about US$ 10 bil since launch in Jan 2003 Currently 70% of Government procurement happens through the portal Reduction in average tender processing time from 6 months to 1.8 months Increased participation in bids through online submission noticed to the extent 70-100% in many cases Significant cost savings average reduction to the extent of 20% Over 600 Departmental users and over 1500 suppliers provided hands-on training Winner of Golden Icon Award for Exemplary e-Governance Initiative

Critical Success Factors of e-Procurement Effective Procurement Policy & Reform Process re-engineering to transform government procurement Sound legislative and regulatory framework Well-designed Business Model Adequate participation and commitment from participants Effective Communication Strategy to disseminate benefits Strategies for adoption of buyers & suppliers Flexible systems for meeting requirements of all agencies Effective Training and Change Management plan Developing effective skill-base in new procurement methodologies Open standards based, interoperable technology infrastructure

Case Study on MCA21 .. a project that transforms all G2B transactions under Company Law

Vision of MCA21 To provide all the Companies registered in India, a convenient and secure access to Government services, anytime, anywhere with certainty and speed.

Benefits to Stakeholders Businesses Registration of Companies & filing of returns Citizens Access to records Grievance redressal Professionals (Chartered Company Secretaries) Efficient services to clients Financial Institutions Registration & verification of charges of Companies Ministry of Company Affairs Ensuring better Compliance with Company Law Employees Efficiency in delivery of services

Approach to Implementation Extensive consultations with Stakeholders Proof-of-Concept developed Public Private Partnership Model adopted transparent process for selection of Partner Goal is delivery of efficient services not the supply of Technology components Project is driven by Service Level Agreement with rewards & penalties Sharing of Risks & Rewards

Architecture of MCA21 STAKEHOLDERS Virtual MCA HQrs Disaster Front Office STAKEHOLDERS MCA HQrs Disaster Recovery Centre RD Data Centre MCA Gateway Portal Physical Front Offices Showcase(4) Non-Showcase (41) SEZs (8) Temporary(4) ROC Govt Secure Repository PAO MCA = Ministry of Company Affairs; RD = Regional Director ROC = Registrar of Companies ; PAO= Pay & Accounts Officers

Highlights of Technology Model Based on Service Oriented Architecture XML Standards, Web Services Introduction of Digital Signatures compliant with IT Act 2000 International Standards of Security compliant with BS 7799 Disaster Recovery Centre Public Trust & Confidence in a PPP model through Government Secure Repository Digitization of 60 million legacy records of Companies Workflow Automation in 27 Offices of MCA Interoperability through MCA Gateway & Standards Comprehensive Training & Change Management by Partner

Business Model of MCA21 Business Model driven by rigid SLA 18 parameters of Service 9 customer-facing 3 employee-facing 6 technology related Flexibility to bidders to optimize costs Open Standards based solution Open Competitive Bidding Process Payments to Partner for provision of Services, not for supply of technology components Bid Process is neutral to the number & capacity of individual components deployed by Partner Compliance to SLA is the touchstone

MCA21 Portal

Current Status of MCA21 Project Rolled out throughout India Data of over 600,000 companies available online Over 50 services provided online e-Filing mandated from 16th September 06 Program Management Unit set up To monitor compliance with SLA To assess quality of Services

Conclusion National Productivity can be enhanced through effective G2B initiatives e-Procurement enhances transparency & efficiency in public procurement Electronic Interface with Companies can save time, effort and cost. PPP models are ideal for G2B projects

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