e-Procurement What is it? And what are you going to do about it? A presentation by Peter Duschinsky Managing Director, The Imaginist Company

The Imaginist Company Imaginist was set up in 2002 to help small companies survive and thrive in e-business Our experience with public sector e-procurement comes from:  Developing best practice guidance for local authorities as part of the National e-Procurement Project  Advising over 100 local authorities on their e-Procurement plans Our experience with working with SMEs includes:  Helping over 150 East London companies adopt e-commerce as part of a KickStart project  Working with another 200 SMEs to build e-commerce capacity in a pre-Olympics Business Online project

What is happening in the Local Government market? Local government is undergoing massive change under pressure to become more efficient Rationalisation of ‘back office’ admin processes, modernisation of systems and use of web technology are enabling them to cut costs and focus resources on front line services This includes procurement:  London councils are spending £millions on goods and services, of which no more than about 20% is typically spent with local SMEs  and this is coming down even more as they undertake new rationalisation initiatives

What is e-Procurement? e-Procurement is the automation of all the processes involved in sourcing, purchasing, managing and paying for goods and services It provides large organisations like local authorities the opportunity to:  Analyse what they are buying, from which suppliers, at what cost  Centralise and improve tendering and management of contracts  Aggregate low-value transactions  fewer, larger contracts  Control ‘maverick’ and adhoc spending in departments  Make significant process and cost savings

What does that mean for SMEs like you? e-Procurement potentially disadvantages local SME suppliers Already local authorities are buying many of their commodity goods and services online from centrally or regionally negotiated contracts Central and regional buying organisations and consortia are awarding more and more contracts as shared frameworks Eventually smaller suppliers will find little work coming their way from the buyers in the local departments unless they:  are specialist or niche suppliers  have found another way to gain and retain business locally, possibly as sub-contractors to a larger supplier.

What should you do about it? There are really only 4 responses: 1.Specialise and find ways of adding value 2.Sub-contract to larger suppliers 3.Continue the way you are for as long as you can, accepting an ever-decreasing share of the market 4.Get out of the public sector market Assuming you opt for 1 or 2, what does this mean you need to do?

You will need to: Update your systems and processes to work electronically Upskill to meet the new e-challenges Understand how to find out about work, bidding & winning business via the web Accept more cost and risk chasing fewer, larger contracts… or Accept lower margins and less control as a sub-contractor Improve quality of service and widen geographic reach

Getting ‘e-ready’ to trade online with public sector customers 70% of SMEs have access to internet but less than 10% have e-commerce Broadband availability is no longer a constraint Cost of e-commerce is not a barrier Real problem is lack of time, skills, understanding

“But I already have a website and …” Most websites are ‘brochure’ sites – they don’t contribute much to your business Your buyers are changing – you need to keep up  They will increasingly look for suppliers which can accept orders, generate invoices and accept payment electronically ie e-commerce Your Business is under threat  Its the larger companies that are gaining market share

So why haven’t you adopted e-commerce? This is what companies have told us:  e-Commerce is too expensive and difficult to implement  We have had no business from our existing web site  We don’t understand search engines and web marketing  We are having problems integrating our web presence into our general business  We don’t know what e-procurement is, or what it means for us  Our IT is out-of-date and we don’t have an IT manager  I don’t have time Not won’t do…can’t do YES YOU CAN!

What do you need for e-commerce? A Basic PC  The technology will work with most computers An Internet Connection  Broadband is essential for online trading An Address  A simple, free address such as one from BT or Yahoo will suffice An account with an e-commerce service provider  We are PLC  Why?

“Cheap and easy e-Commerce” - this is what we looked for  Simple to use, self managed web sites  No technical knowledge required  Automatic integration with online merchant facilities  Integrated catalogue management  Automatic submission to search engines  Additional channels to new business  A reliable commercial service, used and rated by thousands of businesses We found it: PLC We have done the hard work for you - now take advantage of it!

What do you get? Secure web hosting eInvoicing Customer database Account management Multi-level pricing Integration with Sage line 50 accounts Online catalogue editing Detailed statistics, traffic and purchase tracking Multi-currency VAT calculation Integration with merchant account This service is being used by companies to trade multi-£millions online

And how much does it cost? Do it yourself online:  Alpha 1 page basic e-commerce website £48 p/a  50e 50 e-commerce catalogue (products or services) £120 p/a  100e 100 e-commerce catalogue£240 p/a  200e 200 page e-commerce catalogue£360 p/a  2000e 2000 page e-commerce catalogue£480 p/a Or take advantage of our £499 Business Online package:  On-site half-day business consultant visit  Full telephone and online site build service  50e e-commerce website  A year’s telephone and online support

Newham Council have funded a partnership project for local companies to work with us:  East London Small Business Centre - business advice  Business Online – e-commerce  SupplyNewham – supply chain advice This scheme entitles you to:  An e-commerce website free for a year  A free domain registration if you need one If you live or work in Newham, you might be able to get this free! If you qualify, contact us today!

To sum up: setting up an e-commerce account could not be easier Do it yourself - or ask us for help to start Set up your website… in hours, not days! Work on it from the office, at home, anywhere you have a broadband connection Your website can feature products or services You can set up a trading account or just use it to book seminars, take specifications, send out information on request You don’t need expensive web designers – you can enter and change all the content yourself… in minutes! What are you waiting for?

What should I do now? Peter Duschinsky at: Contact us!