Designing and implementing e-procurement.pdf

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Designing and implementinge-procurement

CHAPTER ONE: Background Study

Overview

The project is designing and implementing e-procurement on business-to-business transactions, it firstidentifies current procurement process and explores how to implement procurement that involves mainstaydrivers and problems of e-procurement system usage and investigate the effect on the performance of the

Ministry in terms of e-government and transparency in the Federal Ministry of Science and technology. Thesolution essentially involves in creating all the requirement details/ specs, of a tender to be floatedelectronically, in parameterized form; so that subsequent evaluation & comparative chart preparationexercises could be automated to a large extent.

The term procurement can be referred to as the buying of tangible and intangible merchandise fororganizations which can be executed through agency or company. Procurement is not an event. It is a processand signifies a continuing relationship between the government and its suppliers. Procurements are alwaystaken as an important task in the government environment and always handled in a strictly secured andcontrolled manner (Dunleavy, 1994). According to Nwokak, et al. (2007) procurement is also one of thesectors that remains insulated against any process improvements. At the moment, it is been recognized worldover, that Information and Communication Technology (ICT) can eliminate the existing bureaucratic problemsand make the government's performance more resourceful, easily reached and clear as crystal, besides beingcost-effective.

The procurement process in the Ministry of science and technology (www.fmst.gov.ng)is a complex processthat starts and ends in a cycle. Procurement cycle starts from Raising of the requirements for an item or aservice and ends only after settlement of supplier payments as shown in the diagram below.

The Concept of E-Procurement

Electronic Procurement can describe as purchasing order that release a communication over the internetthrough authorized internet seller catalogue. E-procurement is the electronic purchase of goods and servicesfor an organization; Turban et al. (2006) from an easy phrase, electronic purchase can be described asprocedure to purchase tangible and intangible merchandise by the use of internet for a company or institution.For example, within Nigeria, the majority of companies in the petroleum Industries, United Parcel Service,Plc.(Ups) Federal Express Plc (Fedex), communication industries etc are some of the few organizations thatpractice e-procurement in material purchase (Nwokak et al, 2009). The reason is so, because the industrieshave advanced and developed their technology usage of e-procurement keeping up with the changes in the

business environment as it pertains to information and technology. Furthermore, electronic procurement ormerchant trade is the business-to-consumer (B2C) or company-to-company (C2C) acquisition as well as tradeof tangible and intangible goods by electronic means and various information and network system, like theEnterprise Resource Planning (ERP) and Electronic Data Interchange (EDI) (Nwokak et al, 2009). Electronicprocurement systems permit competent and valid user to search for buyer or seller of tangible as well asintangible merchandise. No matter which method, buyer or seller may as well state the outlay and request forbidding. Dealings can then be welcomed.

Other Concepts in E-procurement

Reverse Auction

The traditional auction is a Forward Auction. It is a process through which a seller offers an itemfor auction, and prospective buyer competes with one another other for acquisition. By doing

this, the price continue to move up upon the time nobody will be able to go up further.In the reverse auction, several dealers of a product vie for the trade of one single purchaser. Insuch a way the price moves downward.

There are 3-4 flavours of reverse auction, called as: English Auction, Dutch auction, Sealed BidAuction etc.

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to him.

In reverse auction competition is high; bidders get tempted to bid lower and lower to clinch thedeal, until they are unwilling to go any further.

At the conclusion the lowest bidder emerges as winner of the auction.

Benefits

To Buyers:

Significant reduction in cost due to Dynamic Bidding process. Inefficiencies in the supply chain

reduce.

With real time competition, suppliers are on their toes

It is an effective way of measuring and assessing price discovery and making the negotiation

process an easy effort. Often used along with Tendering.

To Vendors:

Ensures Savings in marketing cost / distributor margins

Facilitates flexibility in pricing decision.

Transparency increases

Allows vendors to assess their pricing power from close quarters of competition.

E-payment

Commonly available modes for effecting EMD/ Fee/ other payments electronically, from within a softwareApplication, are: -

Online payment through Credit cards/ Debit cards or

Direct Account Debit (using Gateway for Internet Banking)

Depending on the actual need and usage constraints, the appropriate mode could be chosen and

integrated into the s/w application.

Credit cards could conveniently be integrated for use if the payment amounts involved are not

substantial.

For all other cases where payment amounts could be heavy, payments through Direct Debits from

concerned accounts, using Internet Banking is the only alternative.

Scope of E-procurement solution to the Ministry

Purchasing of all kinds of goods and services, works etc.

Types of Tenders - Open, Limited, Expression of Interest

Hybrid Mode of Operation

Electronic and Paper Based Bid Submission (Initial Stages of Implementation)

Mode of Payments (Tender Fee, EMD)

e-Payment, as well as

Conventional Payment Modes (DD etc.)

The Importance of Procurement

The purchasing of merchandise, works, and services has a main effect on the efficient execution of anassignment. To a great degree the quality, cost, and judicious achievement of a task determined on thesupervision and managing of purchase of materials needed. Use of articulated policy and practice, consideredby unbiased, just, and transparent measures, is vital, not only to create reliable and steady market that will becapable to catch the fancy of competent contractor and supplier, but also to uphold the paradigm ofaccountability and the cost-efficient use of civic treasury.

The importance of procurement in delivering key aims and mission of the ministry, and as a result theprocurement of merchandise, facility and services is of strategic significance to the Ministry:

It has an undeviating force on the Ministry's general overheads, and price of service prerequisiteto public.


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environment, egalitarianism and cost-effective improvement.

It operate in multifaceted dog matic structure that should be followed.

Benefits of E-Procurement to Ministry of Science and Technology.

For years, improvement to purchase has been attempted, frequently by means of information technology. Theconcrete opportunity for development today lies in the use of e-procurement, the electronic process ofobtaining goods and services for an organization Nwokak et al, (2009). They further to ascertain that byautomation and reformation the thorough and arduous routine of obtain task, purchase professional will havethe opportunity to pay more attention, on other tactical purchase, in order to achieve these set of objectives:

Growing the efficiency of purchase agent (by giving enough period as well as decreasing thework stress)

Reducing the procure price by merchandise homogeny reverse auctions, quantity price cut, andalso through purchase consolidation.

Getting better information stream and organization (for example supplier information and price).

Reducing or elimination of the purchase through unqualified vendors, in that way eliminatingnonconformist buying.

Getting better the disbursement procedures and savings due to expedite disbursement (forseller)

Ensure just in time delivery always

Slash order-fulfilment and handling period through the use of computerization

Reduce skill as well as instruction need of purchase agent.

Reduce numeral figure of supplier

Reformation of purchase procedure, creating it easy, better and speedy (may involve authorize)

Requests to carry out purchase on their desktop, bypassing purchasing unit.

Reformation of account statements and difference of opinion decision

Reduce organizational handing out expenditure for each bid a s to a great extent of 90%

Getting fresh supplier and vendor that will be able to provide goods and services quicker andmore so,

More cost effective due to better sourcing.

Integrate budgetary measures in purchase procedure.

Reduction or elimination of individual error in trade or transport procedure

Monitor as well as regulate exchange activities.

The various benefits are listed below

Transactional Benefits

Electronic purchase enable purchaser to process transaction through internet. For instance, an internet-basetransacts means through which things can be chosen mostly from an identified catalogues and submit forauthorization.

The device can be connected in same direction of the backside part of ERP structure for access,imbursement of invoice, and arrangement of organization information. Electronic procedures (together withcomputerization of p-card purchase) lead to immense period saving as well as effectiveness owing to:

universal, computerized process incorporate finest tradition as well as eliminate needlessactions;

electronic processing enable affiliation with supplier, which speed purchase phase period andfacilitate contractor feat improvement; and

better data correctness, which minimize order in accuracy as well as provide the necessary basefor enhanced supervision from side to side control and scrutiny.

Compliance Benefits

A lot of instances in a company, conformity and unconventional expenditure is an important problem - not forthe reason that workers intentionally procure outside of favoured arrangements, but to a certain extent through




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easy and speedy request-to-pay procedure together with a easy to use interface and pre-sourcecatalogues modified to the needs of different client;

easy and speedy tactical source procedure with benchmark purchase process and apparatus,without diff iculty accessing information

Electronic purchase structure, the only purchase method obtainable.

Management Information Benefit

This statement analyze the important of data's cost centre, commodity codes, etc. is hard coded in oppositionto the user significantly reduce code error and provide extremely exhaustive as well as effortlessly availabledata. This is very important information to make the rule of the monetary revenue of tactical source. Asuccessful e-procurement performance will give high value, complete management information and willreverse the need for data warehousing or resource heavy data mining, by David Eakin (2002).

The capability to display to your supplier that you are using e-procurement as an apparatus to make sure finaluser do respect their union significance will augment ability to bargain along the prices through:

Better improved capture and as a result, trustworthiness of expenditure information; and

Better assurance that costs volume can be assured from better conformity with the structure,

hence allow degree price breaks and discount to achieve.

These include the capacity to improve management of business cash flow as well as control the proficientimbursement of supplier because of the further rationalized procurement procedures giving additional suitableand precise information to the accounts payable department. Possible benefit includes limited staff a "hard"benefit only if improvement can bring about head count decrease) and brings down expenditure on postagesas well as stationeries.

Throughout negotiations the procurement manager can further credibly guarantee the supplier a level ofprompt payment, which was not possible prior to e-procurement. David Eakin (2002). However, the electronicinvoice benefit is frequently unexamined and uncared for.

Reduction in Procurement & Contracts cycle time

Cost Reduction

Efficient & streamlined Procurement Processes

New Supplier Discovery

Close Monitoring of Activities/ Vendor Performance

Rich MIS and Analytics

New Improved Image

Standardized formats and Uniform tendering practices

Increased visibility/ Less artificial barriers

Increased business opportunities,

Greater degree of transparency

Cycle time reduction in participation and award of Contract

Supplier Enablement and Ease of Participation

For high-value items, purchasing personal in the Ministry spends most of their work period on procurementactivities. These functions involve developing relationship with considered supplier, negotiating prices as wellas terms, qualifying supplier, and bringing out suppliers certification as well as evaluation. When buyer isoccupied in the midst of information of lesser things (especially MROs), they have less period to adequatelyengage in the purchase of the high - value item. Other problems can happen in traditional purchase. Theseinclude delay in paying a lot for hasten order. Purchase inadequacy is nonconformist exchange, (impromptuprocurements of merchandise needed hurriedly, unintentionally at non-pre-negotiated soaring price. Theconventional purchase procedure, as discuss over, is therefore ineffective. In other to avoid a repeat of thisevent, the ministry needs to re-engineer the process of purchasing, by carrying out of new purchasing modelsin general, through the introduction of electronic purchase. From this stage, we shall gaze at whate-procurement means in B2B market.

The issues are summarized below:

Lack of a general Public Procurement Policy. Nigeria lack up to date regulation on PublicProcurement and enduring supervision and supervise purchase entity.

Transparency in Procurement Act, The finance Control and Management Act, 1958, jointly withFinancial policy which sets basic regulations for managing public expenses have gap, deficiency




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were regularly gnarled consequential in abuse, top amongst include is split of contract.

Complicated procedures for approvals, bidding and payments.

There is a large number of tenders' board that are alleged by the private sector as a source ofdelay as well as non intelligibility. Furthermore, those tenders' board appear to encompassinadequate mandate amid power to choose contracted faction active through the permanentSecretary as well as Minister/ Commissioner.

Inadequate skilled resources.

There is no centralized system of registration of suppliers.

Delays in making payments to suppliers who's Procurement are sometimes executed throughstaffs that substantially lack the required experience.

E-government procurement is the collaborative purchase of tangible and intangible merchandise by the civicdivision using electronic methods at every stage ensuring transparency and efficiency. Ideally, it covers the full'life cycle of procurement'. The intention is to automate, possibly, the whole purchasing processes, along withtender offer submission as well as payment from supplier; in an automated computerized concurrent situation.E-procurement could resolve many of the constraints/ delays of traditional procurement. In David Eakin(2002).Summary, e-Procurement is the business-to-business buying and selling of supplies and services

online. The e-procurement helps both the buyers and the suppliers to decrease the cycle time, needless paperwork, waiting in long queues and at the same time maintain the simplicity in the entire process. David Eakin,(February, 2003).

Which are to:-

Reduce cycle times of procurement

Increase supplier access to ensure wider participation

Reduce costs of procurement through competitive bidding and Reverse Auctioning

Remove cartelisation by supplier groups (Reverse Auctioning)

enhance transparency in the procurement procedure

Almost complete elimination of paperwork, for speedy and efficient functioning

Inefficient function In the Ministry is because of:

Lack of a general civic procurement policy

Lack of consistency in enforcing procurement practice & procedures

Low competence - labour-intensive process

call for of intelligibility in procurement leading to fraud & pilferage of the treasury

unethical practice by suppliers

Cartel creation Influence selection by bribing unit personnel

Advances in electronic procurement by the use of safe internet-enabled means have not beingused in an extensive method

Approach to a Procurement Solution

Before looking for an e-Procurement solution, a relook on existing procurement procedures/ practices isessential: -

'As Is' Analysis, Re-engineering for optimized processes

Optimization/ reduction in process-flow steps

Uniformity/ standardization in formats/ practices/ procedures

Organization wide use of 'unified item-codification structure'

Automation of Processes

Critical Determinants of a procurement SolutionGood authentication - Role based access

Security, Secrecy (of bids) - Signing, Encryption

Ease of Use, Tender Templates, e-Payment integration etc.




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Probing for seller so as to get and contrast supplier and product occasionally can be in reality awfullytime-consuming and expensive. Most Ministries as a way out invite sellers to fulfill orders and create marketplace. Procurement is used to refer to the purchase of goods and services for an organization, (Martin et. al.,2001).

Federal Ministry of Science and Technology (FMST) are among of the important parastatals of the Federal

Government. The major term of off ice is providing access to technology fo r the Majority of NigerianPopulace. The ministry is made up of 8 (eight) departments. The Department of Administration and Supplywithin the Ministry is responsible for:

Planning, management and entirely documenting the procedure to purchase both tangible andintangible merchandise.

use of active Continuing Service Agreement for products to attain program needs;

management, soliciting and contract award procedures is done prudently and unprejudicedmethod that is fair and treat every potential vendor and bidder;

ensures that contract for good, service as well as building is planned to offer the most excellentvalue to government;

ensures that every ministry acquisition and disposal is unswerving with guidelines, appropriatelegislature as well as trade agreement;

Declare products excess as soon as their utilization to the ministry has finished.

The department is therefore responsible for procurement of goods and services in the Ministry.

The Nature and Scope of E-Procurement

According to Nwokak et al, (2009) different methods are employed to procure goods and services bycompanies depending on what and where they buy, the quantities needed, how much money is involved, andmore.

They further mentioned some important procurements method to comprise the listed below:

To buy from an internal buyer's catalogue in which company-approved vendor's catalogues,including agreed upon prices, are aggregated. This approach is used for the implementation ofdesktop purchasing, which allows the requisitions to order directly from vendors, bypassing theprocurement department.

Buy directly from manufacturers, wholesalers, or retailers from their catalogues and possibly bynegotiation. Frequently, a contract implements such a purchase.

Buy from the catalogue of an intermediary (e-distributor) that aggregates seller's catalogues.

Conduct biding or tendering (a reverse auction) in a system in which suppliers compete againsteach other. This method is used for large-ticket items or large quantities.

To buy at private or public auction sites in which the organization participates as one of thebuyers.

Collaborate with suppliers to share information about sales and inventory, as to reduce inventoryand stock -outs and enhance just-in-time delivery (Turban et al 2006).

Join a group-purchasing system that aggregates participants demand, creating a large volume.Then, the group may negotiate prices or initiate a tendering process.

The Procurement Process

Procurement cycle starts from Raising of the requirements for an item or a service and ends only aftersettlement of supplier payments.

By Category of Goods & Services

Goods

Services

Civil Contracts

By Nature of Procurement

Tenders

Rate Contract & Catalogue Buying

Auctions, Reverse Auctions




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Security

E-procurement platform transacts confidential procurement data and is exposed to several security threats.Agencies world over face threats to their online e-procurement and usually desist from sending sensitiveinformation over the Internet for security reasons. The growing number of cyber crimes has added doubtsregarding the reliability of the Internet. Security measures such as authentication and encryption are therefore

employed while passing sensitive information between companies. Another major issue concerninge-procurement is the type of goods that are procured through the online medium. Companies usually prefer tosource smaller, inexpensive goods such as office stationery (Miller, 2006). Larger complex orders that usuallytake weeks or months for negotiation are done in the traditional manner but this can be addressed byemploying a combination of security features and security best practices which result in reduced threat of dataloss, leakage or manipulation.

Security and secrecy of tender data is of paramount importance as the portal handles sensitive procurementtransactions of departments and has foreseen the security concerns.

Security mechanisms provide a secure communication interface, mainly for the exchange of documentsbetween procurement authorities and Economic Operators. Standards constituting adequate and acceptablesecurity need to be provided for the implementation of services during each stage of the procurementprocess.

Importance of Security in e-procurementSecurity is one of the major factors restricting the growth of e-procurement. Without proper security measuresthis could lead to the loss or corruption of sensitive information on e-procurement. Security breach could alsolead to fraud and financial loss, also includes misappropriation of funds and revealing of sensitive information(The Economist, 1995). This project outlines various security issues faced by e-procurement in Nigeria andpossible solutions that can be implemented to reduce such risk. (NATIONAL E-PROCUREMENT PROJECTSUPPLEMENTARY GUIDANCE NOTES, 2004)

The major objectives measured for the creation of a safe environment include the following:

Verification: guarantees that the service is only available to users with a confirmed identity.

Agreement: guarantees that authenticated users can only contact services or data matching theirtask and access rights.

Confidentiality: guarantees that the data exchanged between the person requesting it and theprovider cannot be intercepted or accessed by a third non-authorised party.

honesty: guarantees that data exchanged among the person requesting it and the contributor hasnot been tampered with by a third non-authorised party.

Non repudiation: guarantees that the sender of the message cannot reject, at a shortly point intime, that he/she sent it.

Accordingly, following stringent security measures are already implemented in the system to ensure thattransactions on e-procurement portal happen in the most secured manner:

Physical security of Data Centre. Entry to the Data centre is with Bio metric smart cards, roundthe clock CCTV monitoring and under strict personal supervision of Data Centre personnel.

Web security through 128 bit Secured Socket Layer (SSL) Technology from client end to server

for secured passage of data.Fire walls, intrusion detection system, online virus check, up to date antivirus system, online OSpatches to prevent malicious attacks.

Network monitoring system to monitor the service levels of the site.

Sound back up methods for storing data.

Comprehensive Audit Logs of all events that are taking place on the platform.

Access controls, sharing of functions between system administrator and data base administrator

Third party security audit of e-procurement system. M/s. PWC has conducted security audit inpilot phase (2003) and has expressed that security is uncompromising. APTS is in the processof finalizing security consultant for taking up another third party security audit of the system at theearliest.

Encryption of sensitive data (price bids). Public Key Infrastructure is implemented through DigitalCertificates issued by third party certifying Agency (TCS) in compliance to IT Act.

The sensitive data (Price bids) submitted by the bidder travels from the client machine to theserver through 128 bit Secured socket layer and is encrypted with the Buyer's Digital certificateat the server side using TCS control tools. The data (price bid) is stored in encrypted format in




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These two functional requirements are related to the process for registering users to the e-procurementsystem, as well as for identifying users when they access the e-procurement system. The technicalimplementation followed for these two functional requirements are closely related.

User credentials: when users access the system, they must authenticate themselves using a

combination of email, username, password, and/or other personal information (i.e. PersonalIdentification Number, etc.).

Digital certificate (software): an e-procurement system may require the use of digital certificatesin order for users to be authenticated. Digital certificates are issued by an off icial CertificationAuthority (CA), and may be issued to a person.

PKI infrastructure (hardware): this solution, similar to software digital certificates, also involvesdigital certificates. However, in this instance user digital certificates are stored in smart cards.

Conclusion

Security of e-procurement system is essentially an amalgamated output of Security of Infrastructure,Application and Management. Security is importance because without proper security measures loss orcorruption of sensitive information can occur. Security breach could also lead to fraud and financial loss,misappropriation of funds and revealing of sensitive information Non-repudiation. Security involvesAuthentication, Authorisation, Confidentiality, and Integrity. Security is necessary to ensure safety of the data,users information and minimize issues already highlight above. Security can be implemented in hardware andSoftware, and on individuals using Policies.

Analysis of the data Collected from the Ministry

The data gathering are made up of phases divided into phase actions

(Research design) Research objectives and scope, collected and literature review.

(Data collection) Collected questionnaires from the Ministry staff

(Data analysis) Data were divided and conceptualized

Research design and source for data

The prerequisites for e-procurement in the Ministry are the study of the functions and structures of theindividuals or groups responsible for the procurement in Ministry. A survey was used to map current practicesof procurement and collect data on the antecedents and consequences of e-procurement method. Aquestionnaire was sent to all Staff of the Ministry Science and technology and Suppliers. A total of 30 usablequestionnaires were completed and returned for a response rate of approximately 65.7%. Measuring theimpact of the implementation of the e-procurement solution, various variables such as adaptability, relationshipwith suppliers, change in the range of suppliers, participation of suppliers, impact on small and mediumsuppliers, change in transparency, human interface factor, change in cost-savings to both government andsuppliers, speed of implementation of the projects constituted the basis for data collection. The data wascollected, classified, tabulated and analyzed. The number of transactions completed, value of the transactions

i.e. Estimated Contract Value (ECV), percentage of discount given to the government, average bids pertender, average tender evaluation time, number and value of electronic tenders completed in all thedepartments, and so on, were studied.

Nature of data collected

Data Collection from Primary Sources:

Primary data refers to the information being collected which originated from sources obtained from the authorown analysis. Example of primary data is results collected from the questionnaires, interview, observations,sampling and etc. During the phase 1 and phase 2 of the progress of the research paper, which consists ofliterature review, scope and limitations of the project and project methodology, 30 % of the information is fromprimary data where the data being gathered are from the author own analysis.

This is due to the reason that most of the information gathered in literature review is from the reference books,magazines, journals and newspapers. The author's own perception only occupies a very limited percentage inphase 1 of the project. From the delivery of research methodology and project scope and limitations, 80% ofthe data is primary data because the information obtained is from the author's own experiences throughout theproject. From the analysis of the author, the author observed every problems or limitations she faced anddocuments the findings inside the project.




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said that questionnaires are an inexpensive way to gather data from a potentially large number of respondents.Often they are the only feasible way to reach a number of reviewers large enough to allow statistically analysisof the results. A well-designed questionnaire that is used effectively can gather information on both the overallperformance of the test system as well as information on specific components of the system. If thequestionnaire includes demographic questions on the participants, they can be used to correlate performanceand satisfaction with the test system among different groups of users. Pabedinskaite & Elskyte, (2007)

Data Collection from Secondary Sources

Secondary data refers to the information collected from secondary sources such as books, journals,newspaper, internet sources and etc which is not collected from the research methodology being conducted bythe author. In the literature review chapter, 70% of the information is gained from the secondary data becausethe author needs a lot of information from secondary sources as a reference to produce the delivery. Onanother hand, reference about how to design a good screen design is obtained from the secondary sourcesas well which are from reference books and internet sources.

PROBLEM EXPLORATION

From interviews and multiple discussions done with the staff of the Ministry, it was found that the Ministryfaces multiple problems during procurement. Deficiencies in the manual procurement process were analyzedand are enumerated below.

Delays in issue of tender schedules to sup pliers: There were delays in preparing theschedules of tenders in physical forms because of constraints like lack of stationery items inthe ministry. Because of this, bidders were not in a position to receive the tender documenton the specified dates which results in putting the bidders under pressure.

1.

Formation of cartels hinders competition: Information about all the bidders can be gatheredfrom the ministry by competitors or participating bidders. This information encourages theparticipating bidders to lobby for formation of Syndicates or Cartels and bid for the tenderfor higher quotations to the disadvantage of government departments.

2.

Physical threats to bidders: Sometimes the genuine bidders were physically threatened andprevented from submitting their bids. The bidder or his agent had to risk their physical safetyfor submitting the bids in the tender box placed in the office. These incidents were drawingthe attention of media, affecting the reputation of government's functioning.

3.

Tender Boxes at Multiple locations: To counter the menace of physical threats to bidders bythe Contractor's Cartels, the government departments had resorted to keeping the tenderboxes at multiple locations.

4.

Manual movement of tender files: For the purposes of evaluation, the b id documents aremanually transported across the administrative hierarchy. The transportation of b iddocuments manually and using surface mail is a time consuming activity. Additionally, thepossibility of bid details being tampered or lost, while the documents are physicallytransported across the administrative hierarchy, could not be avoided.

5.

Delays in finalization of tenders: Red tapism, lack of t ransparency, manual movement of filesacross the administrative hierarchies involved in the tender process, were all result ing ininordinate delay in finalization of tenders. Typically, tenders for major projects used to takelonger tender process time ranging from 90 days to 150 days and these delays werecontributing to cost and time overruns for the projects.

6.

Human interface at every stage: The manual system exposed the departmental personnel tothe bidders at every stage of the process beginning with the Sale of tender schedules, Issueclarifications, bid submission, bid evaluation and so on. This continued human interface hasintroduced subjectivity, favouritism and other undesirable elements in tender processes.

7.

Lack of Transparency: Often times, a tender may have two or three bidders. But only one ofthem would be the real bidder the rest two being dummies, leading to forceful acceptance ofthe bid by the government. Lack of transparency is seen in the manual procurementprocess, right from tender publication, sale of tender schedu les, and issue of clarifications tobidders, bid evaluation. Besides, even the departments were unwilling to share theinformation, which became the main cause for the bidders, media, and citizens, to loseconfidence in the system.

8.

Interpretation of Questionnaire

A lot of the staff working in the Ministry find the traditional method of procurement very tedious, as it requiresa lot of filing of papers from various company tenders. The traditional process includes:

Filing of various tender documents

Manual record management




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make their procurement process more transparent, cost effective and efficient.

About 40% of the respondents believe there is no strong policy that translates into regulations, guidelines onProcurement which are made available to the supplier and the buyer. 20% of the respondents believe that thepolicies are not clear and should not be implemented, while another 20% believe that it has totally beenchanged from the previous policies.

70% of the respondents agree that procurement planning to measure the feasibility of risk of proposalsapproved by the ministry. 10% of respondents feel the planning details are not carried out properly. 10%believe the feasibility conducted is not valid, while 10% feel there is no feasibility carried out.

All the respondents are in agreement that there is no strategy implemented to improve the procurementprocess in the Ministry.

70% of respondents believe that a model for developing and supporting E-procurement system should bedeveloped. While 30% are not confident that it will be implemented effectively.

With an online procurement system 80% of the respondents want information like tenders made available tothe public. While 20% don't really care.

All the respondents would like the details e.g. price of contracts awarded to the companies to be madeavailable for public view.

All the respondents would like the information to be available for free

80% of the respondents would like the details of the various registered companies made available to the

public for free, while 20% don't mind paying a fee.All the respondents would like to be able to download electronic documents made available for users

All the respondents agree that the system requires some confidentiality of information. In other words it shouldbe secure.

All the respondents want the system to be connected to other office system like asset management or finance.

80% of the respondents would prefer that no propriety hardware or software be a prerequisite for the suppliersto access the system, except the use of internet, 20% don't care.

Summary

After completing this chapter, the author now has an in depth understanding on procurement problems in theMinistry and is better equipped to apply solutions to problems of the Ministry in the coming chapters.

CHAPTER THREE

LIMITATION

While the use of in depth case studies of e-Procurement in the Ministry would ideally have suited our purpose,time and financial restrictions limited our study to use multiple case studies by literature survey to identifymajor cases in order to allow us to come up with a set of solutions.

Time

The author is limited by the short time constraint where every phase of the project needs to be completed ontime and submitted to the supervisor. Procurement process usually takes a long time between 90 to 150 days

but during the time, the project phase does not grant the author enough time to conduct full observation.

Financial Restrictions

Financial is also another limitation so not enough funds to travel round and conduct research on the prizes ofitems and services outside the Ministry. Also visitation of the Ministry daily for observation of procurement bythe author incurred huge cost and limited the study to specific days where important decision would be taken.

Books

E-procurement is the new technology and not yet being documented in books, which caused the author to findit difficult to find any books regarding to the e-procurement technology. The author also having problems insearching for the criteria to measure suitability because there is no common criterion can be used for the

measurements. Thus, different books have its own criteria to follow to determine the suitability.

Internet Sources

The author gained the information on e-procurement technology. By carrying out this research method, theauthor can collect a lot of useful information that relates to the project topic. Besides that, the author uses




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from the international journal sites.

Besides the research paper, the author also need to complete other projects or assignments from othersubjects within the short time frame, the author need to gather sufficient information from other sources inorder to deliver the quality work for the research paper.

Interview enabled face-to-face and direct interaction between the author and the interviewee so that the fact

from the interview can be jotted down in that time to maintain accuracy of data.

PROJECT SCOPE

By doing this project, the author chooses to limit the project scope to identify whether e-procurement wouldbring about efficiency and transparency in ministry of Science and Technology. In order to gather feedbackfrom public perceptions, the sample sizes of questionnaire are limited to 30 samples because if sample sizeless than 10, the results collected might not be accurate to be documented as findings. However, the authorfound that sample size more than 30 would create difficulty and complexity in analysis part of the researchpaper.

The author would only prefer questionnaires and interview are chosen because identification of users'perceptions are important for determine which technology are appropriate to act as strategic promotionstrategy. The author needs to ensure that all the distributed questionnaires must be collected back. Interview isneeded because opinions from a specific branded company about what are the steps they would take if theywant to adopt the most appropriate technology. The most appropriate technology would be determined byconducting questionnaire. Their opinions enabled the author to produce the intended framework that isapplicable to all Ministries. On the other hand, interview is needed in order to evaluate the framework designedby the author. The author had performed a very simple experimentation in order to determine and compare thetime of connectivity between computer and mobile to Internet. Observation is not the author's choice due tothe reason that observation is not appropriate to be used to measure e-procurement Sometimes, the datacollected from the observation might be wrong without conducting the questionnaires and the author wouldfound that what the author see might not be true for the analysis from just observing the situation or examplesprovided.

SUGGESTIONS TO THE MINISTRY

The scenario e-procurement in Ministry of Science and technology shows that in order to tap the full potential

of e-procurement, an interaction of the different applications is needed, making the presented 'enablingtechnologies' such as bar coding systems and EAI important pieces of the overall architecture. Nevertheless,significant benefits can also be achieved by gradually implementing a respective system. However, from thepoint of view of sustainable cost-savings, it is arguable why a Ministry has to manage all the analyzed tasks onits own (istart, 2009 ). In future, most benefits in supply management will certainly emerge through thecentralization of procurement and logistics by intensification of the collaboration between the Ministry (e.g.buying syndicates) and through outsourcing of certain activities to the supplier (e.g. vendor managedinventories). However, this will cause new problems and will need advanced knowledge of both, managerialand technical nature. Therefore the authoris of the opinion that major organizational changes are needed in thefuture.

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

TOOLS AND TECHNIQUES

The solution that is proposed for Ministry is to develop an electronic procurement web site. However, before




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Server, the application will be deployed on Windows Azure.

Features of Tools to be used

Programming language

Microsoft's dynamic Server Pages is a server-side technology for dynamically-generated web pages that issold as an addition to Internet Information Server and Personal Web Server and captures many functionalitiesnormally required by web developers into objects to give them easy to access. msdn, (2005).

REASONS FOR USING ASP

ASP scripts help developers to ward off from simple delivery problems keeping in mind what the users wantsince it depends on the server instead of the user and all the work done before the HTML is sent to thebrowser. ASP is a sort of interpreted technology. The system is from the web server. If a web page isrequired, the ASP runtime loads the system into the memory, transforming it, and then translates it intomachine language (binary language) enabling the machine to understand. Related links can be loaded byintegrating server-side scripting code (including database access) with HTML and client-side code.Programming ASP websites is made less difficult by a variety of built-in objects, such as a cookie-basedsession object that maintain variables from page to page.

There are two major benefits to ASP, the first is security and the second is its compatibility with mobiledevices such as phones and PDA's.

DATABASE

Microsoft SQL Azure Database is a cloud-based relational database service built on SQL Servertechnologies. It provides a highly available, scalable, multi-tenant database service hosted by Microsoft in thecloud. SQL Azure Database helps to ease provisioning and deployment of multiple databases. Developers donot have to install, setup, and repair or manage any software. High availability and fault tolerance is built-in andno physical administration is required msdn, (2005).

REASONS TO USE SQL AZURE:SQL AZURE CAN BE USED TO:

Build scalable, custom web applications, which is especially a need for small to mid-sizebusinesses, hobbyist, and start-ups

Build packaged line-of-business applications, which is attractive to traditional, SaaS ISVs andcustom developers

Build corporate departmental applications

Consolidate multiple data sources in the Cloud and enable secure access from multiplelocations, desktop and/or devices

ADVANTAGESNo need to install or patch software or other physical administration

Automatic high availability and fault tolerance

Simple provisioning and deployment of multiple databases

Scale databases up or down based on business needs

Multi-tenant

Integration with SQL Server and tooling including Visual Studio

Support for T-SQL based familiar relational database model

VISUAL STUDIO

Visual studio.Net is a programming environment that provides advanced development tools, which include,database functionality, debugging features, and various innovative features creating gutting edge applicationsacross a variety of platforms. Visual studio enables us to use the client-side and server-side frameworks toeasily build client-centric web applications that integrate with the data provider. Visual Studio includes several




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Use .NET Compact Framework to build applications for Windows CE-based devices. The Web page designerin Visual Studio2010 has been enhanced for greater CSS compatibility, includes additional support for HTMLand ASP.NET mark-up snippets, and features a redesigned version of IntelliSense for Java Script. VisualStudio2010 includes technologies let you seamlessly deploy Web applications. One of these technologies isthe IIS Web Deployment Tool. Devon, (2009).Web deployment features in Visual Studio2010 include thefollowing major areas:

Web packaging

Web. Configuration Transformation

Database deployment

One-Click Publish for Web applications

CHAPTER 7

Introduction

The Main principle of the UML is to communicate the Object orientation, where it describes everything interms of objects, and the relationship between these objects, and the way objects respond to events oractivities, we see the graphical representation of how these objects are deployed.

Objects Oriented Design (OOD)

Is mainly used for preparation of a system and interacting objects for the reason of solving problems with yoursoftware. Object Oriented Design contains an item which captures data and procedures grouped togetherindicating an entity. This follows the description of the class based subset of object oriented design, whichexcludes approaches where objects are not obtained by the instance of a class but by the prototype of otherobjects.

Object Modelling Technique (OMT)

Is a process that deals with object oriented development in the analysis and design phase. It illustrates thestatic relationship between classes and objects in a system.

The object model describes the structure of objects in the system their identity, their relationship to otherattributes, objects and their operations. The object model shows the real-time environment and how thesystem interacts or is divided in the overall decomposition of the system. It is the graphical representation ofclass diagrams containing object classes and their relationships.

Unified Modelling Language (UML)

Is a word that can be used to model systems, in order to improve readability. It captures the capability of asystem using notations. UML is an object oriented analysis and design language. The Unified ModellingLanguage is a diagram language for specifying, constructing, and documenting the artefacts of systems. Youcan use UML with all processes, all through the development of a lifecycle, across various performancetechnologies. Throughout the years there have been insignificant modifications made to the language.

Rich Picture Diagram (RPD)

according to V. Ryan 'Rich( 2001-2009) Picture is the first stage in the design process, when you startdesigning the theme is placed in the centre of the page and link words are positioned around it. This can beseen on the example below, a rich picture for the theme Clock Design. These link words should be related tothe centre theme and they will help you think of points that you must consider when trying to solve the designproblem. V. Ryan (2001-2009) The Diagram below shows the activities of the actors of the system, theactivities of the admin and the user is displayed in this picture as it depicts the real life scenario.

Use case Diagram -

Use case are used in analyzing a project in order to identify system functionality that separate the system into

actors and use cases. Actors represent roles that can or are played by users of the system. These users canbe humans or computers. Use case describes the behaviour of the system when one of these actors sends aparticular stimulus. It describes the nature of the stimulus that triggers the use case; the inputs from andoutputs to other actors, and the behaviour that transfer the inputs to outputs. Engineering Notebook, (1998). InE-procurement, the role of the user is to sign in or sign up; if he or she is not signed in they would only haveaccess to public available information. Furthermore he or she is limited to certain functionalities like calling for




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Use case description

A Use case description is a description of a system's behaviour as it responds to a request that originatesfrom outside of that system. In other words, a use case describes "who" can do "what" with the system inquestion. The use case technique is used to capture a system's behavioural requirements by detailingscenario-driven threads through the functional requirements.

Activity diagram

Activity diagram is a UML diagram that is used to model a process. It models the actions or behaviours thatare performed by the system, the situation which coordinate the actions, the order in which they are carried outin a specific fashion. Activity Diagram is the graphical representation of the activities and actions of thevarious actors as they are used to show the overall flow. Activity diagram is dynamic showing the activity andevent as the actor performs a function. Below are the diagrams showing the flow of the proposed system

Ideal Object model

The Ideal model is developed during the investigation phase of the development of a life cycle and itdescribes an ideal system that would complete the entire requirement identified by the use case. It shows thevarious activities of the system and the actors that out the command for the activities to be executed.

Database diagram

The diagram above is a database design depicting E-procurement system. The database design produces adetailed model of the database; it also describes parts of the design of an overall database system. A perfectdatabase design contains attributes for each entity. It is the logical design of the database structure where allthe data or information of the system is stored. However, database design is not just used for designing orstoring data alone, but it can also be used to create forms and queries used as part of the overall databaseapplication.

Class Diagram -

Class diagram depict the classes of the system, the relationship between them, and the operations andattributes in the class. It is a graphical representation used in object oriented design to show the classes ofobjects in the system.

Functional Decomposition Diagram

Storyboard is a graphical representation of how the system interface will be. It gives the user a picture of howthe interface will be designed.

Chapter 8

System Coding and Implementation ReportThis chapter is very important as it shows the different achievements and issues encountered by the author.The author will document how system functions by giving a complete account of all the software installed, andhow the various coding are implemented to make it a functioning system. The author will show various codingthat have been implemented for the functions of the interface. The problems and solutions proffered during thedevelopment of the system will also be discussed.

Software Installation

During the installation of SQL server management studio 2008, the author had some difficulties as she foundthat it was not compatible with Microsoft Visual studio 2008. Visual Studio 2008 could only connect with theSQL server management studio 2005. The author had then had to downgrade the computer operating systemform Windows 7 to Vista Basic in order SQL server 2005 to run.

System Development Activities

The installation of the software used in developing the system is paramount. The author chose MicrosoftVisual studio 2008 and SQL server management studio 2005 to develop the system. In order to deploy a fully




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Operating System Installation

The author had to install the following software: Vista Basic Operating system, Microsoft Visual studio 2008and SQL server management studio 2005. The system development also required the installation of othernecessary software like the System architect used for the drawing of the UML diagrams and the Adobe photoshop used to create the images for the system.

Development Tool Installation

The first software the author installed was the operating system which serves as the platform for which othersoftware will be deployed. The author also installed system architect used in drawing the diagrams. The SQLserver management studio 2005 is the system used to create and store the data information which can beretrieved anytime the admin or user performs a function. Microsoft Visual studio 2008 was also installed thissoftware will be used to create the interface of the system and it is here that the various coding will bedeployed in order for the system to be functional.

Coding Sample

Coding is the process of writing, assembling, and compiling of computer code. The instructions for hardwareand software are known as coding.

Chapter 9: System Testing

Introduction

In this chapter the author will work on testing of the entire system to confirm that the new developed system isfree of errors and other programming bugs. The author needs to test and confirm that the system is runningand functions as estimated and to ensure that the proposed system is capable of solving the difficulties of theexisting system by meeting the user desires and hopes.

System TestingIs the method of executing a variety of tests on a system to discover functionality or to identify problems.System testing is regularly required before and after a system is put in place. A series of methodical trials areraised while testing is being accomplished. These trials tell the tester how the system should achieve andwhere common mistakes may be found. Testers regularly try to "break the system" by putting data that willmake the system to malfunction or reoccurrence of incorrect data. Usually system testing is categorized into 2steps or types, system developers testing and the system user testing. System developer trial is the type oftest carried out by the system developer to see whether the system is ready for invention or not, while systemuser testing is the one being conducted by end the users of the system.

Objective of testing

The main purpose of doing this testing is to make sure the proposed does not have any error that will allow it

to function properly and also to make the system to be dependability and excellence.

Types of Testing

There are many different types or approaches of testing; the author is going to explain some of the types oftesting available in testing system functionalities.

Unit Testing

Unit testing refers to the end users testing of single units of software system. In object-oriented systems,these units characteristically are classes and approaches. (M. K lling, 2009). The main goal of unit testing isto take the minimum piece of testable software in the application, isolate it from the rest of the code, andcontrol whether it works accurately as end user assume. Every unit is tested individually, before mixing them

into components to test the interfaces between modules. Unit testing has confirmed its importance in that ahuge ratio o f defects is recognized throughout its use. (Microsoft Corporation, 2009)

Integration Testing




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more than one unit. In a realistic scenario, numerous units are combined into components, which are in turncollected into even bigger portions of the program. The idea is to test mixtures of parts and ultimately increasethe procedure to test the modules with those of other groups.

Mixing testing classifies problems that happen when units are joint together. Through using a test strategy thatneeds the author to test every unit and confirm the feasibility of every before merging units, in order to knowevery errors revealed when merging units are linked to the interface between units. This method decreases theamount of opportunities to a far simpler level of examination.

User Acceptance Testing

The description of user acceptance testing (UAT) is essentially in its name. Taking each part separatelyexplains what it is about. Coley Consulting, (2001-2007)

User

A user can be defined as the real trade users, that will have to access the system; usually the employee of anorganization, but it could be the providers or clients. They are the only individuals that comprehend accuratelywhat the business is, and how it operates. So they are the only individuals are qualified to check a system tosee if it will bring any benefit to the business or organization. Coley Consulting, (2001-2007)

Acceptance

The acceptance method means that its confident to give benefit to the ministry. It does not mean that it onlymeets the inventive specification as requested. A system might be very well meet of all the conditionsrequested of it, nevertheless when trying to see how it will work in the business it is realized that it will not giveanything positive to the organization, or might even damage the organization. This may be for a number ofreasons such as a change in the business or business environment, such as a takeover. Coley Consulting,(2001-2007)

Testing

Each time individuals are requested what testing is, many of them say it is to prove the system works. This isthe key problem with the way UAT is employed in numerous organizations, as it is incredible to prove anysystem is accurate. In fact a portion of effort is used, and missed, in trying to get correct responses. ColeyConsulting, (2001-2007)

Performance testing

Performance testing is the procedure of defining the rapidity or efficiency of a computer, network, softwareprogram or device. This procedure might involve measurable tests completed in a lab, such as determining theresponse, on which a system works. Qualitative characteristics such as dependability, scalability andinteroperability may also be assessed. Performance testing is regularly completed in aggregation with stresstesting. Tech Target, (2006-2009)

Black-box testing

This test method is to test the system's module functions. This method is performed under the system functionrequirement. It is more importance on the system performance process, like how the system implements thefunction and generates the system invention. The author is applying this method in the proposed systemtesting, by means of this testing approach, the author will test the code of the function obviously and thismethod might help to find the errors quicker by testing the system based on the module purpose fundamentals.Sommerville, (2001)

Usability Testing

Usability test is a method for confirming that the future users of a system might conduct out the planned taskscompetently, successfully and acceptably. Gerry Gaffney, (1999).

Testing ResultsHello, my name is Josephine Ede. I am from the faculty FOCIT, studying business and technology information(BITCU). I am doing system evaluation on my final project a study and development of an E-procurementonline system for the federal ministry of science and technology Nigeria, using asp.net. Please kindly, respondto the questionnaires below as your response is very important for the enhancement of the system




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20 users evaluated this system, 18 of the 20 users, 18 of them are satisfied with the system while 2 areneutral about the system. This shows that the system satisfies the user in terms of user friendliness.

According to the user response evaluated, the system met the user's requirement in terms of systemfriendliness to users. This also shows that the user will love to use the system when implemented.

Are you satisfied with the user interface of the system?2.20 users evaluated this system, 18 of the 20 users, 18 of them are satisfied with the system while 2 areneutral about the system. This shows that the system satisfies the user in terms of interface.

According to the analysed user response on the system, it shows that the user are satisfied with thesystem interface and found the system easy to use because of the system interface.

Are you satisfied with the performance of the system?3.20 users evaluated this system, 18 of the 20 users, 18 of them are satisfied with the system while 2 areneutral about the system. This shows that the system satisfies the user in terms of performance.

According to the response of the users on the performance of the system, it shows that the users aresatisfied with the performance of the system.

Are you satisfied with the system functionality?4.20 users evaluated this system, 18 of the 20 users, 18 of them are satisfied with the system while 2 areneutral about the system. This shows that the system satisfies the user in terms of functionality.

According to the user response analysis, it shows that the users are satisfied with the systemfunctionality and will love to use the system when it is implemented.

PART B

Is the system very informative?1.18 out of the 20 evaluated users ticked yes that the system is very informative while 2 of the remainingrespondent ticked No that the system is not informative.

According to the user response analysis and evaluation, the users are satisfied with the system in termsof information.

Is it easy to use?2.18 out of the 20 respondents ticked yes that the system is easy to use while 2 of the remaining usersticked No that the system is not easy to use.

According to the analysis done on user response, it shows that they are satisfied with the systembecause of its easy to use.

Is the system easy to navigate?3.18 out of the 20 evaluated users ticked yes that the system is very informative while 2 of the remainingrespondent ticked No that the system is not informative. This shows that the system is easy to navigate.

According to the user response evaluation, most of the users are satisfied with the system because ofits ease of use.

Is the system font size visible enough?4.18 out of the 20 evaluated users ticked yes that the system is very informative while 2 of the remainingrespondent ticked No that the system is not informative. This shows that the system text font size isvisible to the users.

According to the user response evaluation, it shows that the system meets the user font requirements.This shows that the users are satisfied with the system text font size because it is easy for systeminformation to be accessed by users.

PART C

Please rate your overall happ iness about System?1.18 out of the 20 users ticked good that as being happy and satisfied with the entire system. This showsthat the users are willing and will love to use the new system when implemented online.

According to the user response analysis, it shows that the users are happy with the entire system. Itshows that the entire system functionality and features meet the user requirement.

Future Enhancement

The future enhancement includes:

Creating an automated way of evaluating the best company to for the job. Language translator may also beincluded in the future enhancement.

The interface can be changed in the future: in the future a lot of designs may be enhanced in the proposedsystem, and the text colour can be change in order to meet the customer/users satisfaction at that time, will be




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This project addresses issues of implementing e-procurement in the ministry of Science and technologyNigeria. Nigeria presently practices the traditional procurement method where tenders are formally submittedand evaluated by the ministry. The Ministry then approves the evaluation based on the authenticity of thecompany, registered under the ministry, this causes a lot of strife as various companies vie for the tendersoften bribing the staff in the ministry in order to be awarded the contract. But with an online E-procurementsystem the procurement process will be made available to the public in order to promote transparency in theGovernment.

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