EProcurement The NHS Experience Scott Haldane - Director of Finance / Deputy Chief Executive NHS...

eProcurementThe NHS Experience

Scott Haldane - Director of Finance / Deputy Chief Executive NHS National Services Scotland

eProcurement Scotl@nd

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Session Objectives

Overview of eProcurement Scotl@nd

NHS Scotland approach

Local implementation experience


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What IS eProcurement?

• Electronic tools that support and expedite the transactional purchasing process including:

• The use of on line catalogues

• Placing requisitions

• Routing for approval

• Sending to suppliers

(Essentially it is a buzzword for doing procurement activities via the internet)


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What is eProcurement Scotl@nd?

Scottish Executive-wide initiative

A nationally negotiated subscription based service

Harness internet-based technologies

A step-change in procurement practice

An environment for more effective SRM

A flexible approach that can be adapted across the Public

Sector


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‘eProcurement Scotl@nd’ is designed to achieve:

Scottish Executive

PECOSPECOSPECOS

Suppliers

improved process efficiency

improved Financial Control

Government eBusiness Targets


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PECOS is based on Remote Hosting

PECOS application hosted by Elcom in Boston,

Massachusetts

No new hardware or software required

Only require a web browser

Can be accessed from anywhere within your

organisation

Available 24 hours, 7 days a week

‘Plug and Play’


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An opportunity for the NHS (and Local Authorities?)

Scottish Executive

PECOSPECOSPECOS Suppliers

NHS Highland

NHS Tayside

Suppliers

Suppliers


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Analysis of the use of the System Showed:

Scottish Executive

PECOSPECOSPECOS Supplier A

NHS Highland

NHS Tayside

Supplier B

Supplier C

…the NHS was using different suppliers for the same things…


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Analysis of the system also showed:

Scottish Executive

PECOSPECOSPECOS Supplier A

NHS Highland

NHS Tayside

Supplier B

…even when we bought from the same suppliers, we bought

slightly different things…or the same things at different prices…

SE items & pricing

Highland items & pricing

Tayside items & pricing


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A bright idea - NHS wide items and pricing

NHS NSSPECOSPECOSPECOS Stationery

Supplier

NHS Highland

NHS Tayside

NHS items & pricing

IT Supplier 1

Travel Supplier

NHS items & pricing

NHS items & pricing

IT Supplier 2NHS

items & pricing

But, we need to link it in to other activities…


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The challenge… to improve procurement practice across the NHS

PECOSBETTER BUYING

(STRATEGIC SOURCING)

ePROCUREMENT SCOTLAND

(PECOS)

LOGISTICS

(Bulk Supplies to point of use)

BEST PROCUREMENT IMPLEMENTATION (BPI)


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Impact of Strategic Sourcing approach:

NHS NSS

NHS Highland

NHS Tayside

NSS items & pricing

Tayside items & pricing

Highland items & pricing

BETTER BUYING

(STRATEGIC SOURCING)

NHS items & pricing

Supplier

Supplier

Supplier

SupplierSupplier


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Benefits

Process efficiency

eAuctions

eTendering

Greater use of National Contracts

Strategic sourcing

Value for money from suppliers

Improved Financial Control

Government eBusiness Targets


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What PECOS is:

A system that provides:• content of products • requisitions to be created on-line• approval for spend on-line• automatic transfer of order to supplier• full audit trail• reporting suite• contract compliance• reduction in time taken to process documentation• reduction in overall lead time• reduction in stock required• reduction in paper records and hence stationery costs• improved query process


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What PECOS does:

Access to Supplier Catalogues electronically

Orders handled on-line

eMail

“Punch Out”

CXML

However, this assumes that supplies are eEnabled…..

a major risk for the programme!


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What PECOS isn’t:

A Finance system…but is capable of integration to FMIS

A Stock system……this is being assessed at a national level

An automatic link to a cost-centre budget……but can be used to effect greater budgetary

control.


17

Next Steps:

Full integration to Finance Systems

NHS Shared Services

Purchase to Pay improvements

Link with Ward Product Management Systems

Support NHS Logistics

Inter-Agency Collaboration

Streamlined Public Sector procurement….


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eProcurement Scotland NHSScotland Blueprint Strategy

Hamish PatersonNHSS ePS Programme

Implementation Manager


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Context….

The need to modernise Procurement and Supplies Management across NHS Scotland (NHSS) is widely recognised.

NHSS needs to adopt a more “corporate approach” to improve service delivery, leverage total spend and significantly reduce costs.

A key enabler for this will be the effective deployment of the right technology - The eProcurement Scotl@nd (ePS) service

The Blueprint Strategy proposes a planned and co-ordinated roll out of ePS which maximises the use of available resources across NHSScotland.


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A standard process for collecting and analysing the data from Health Boards was developed and followed………….

1. Meet with Health Boards and agree the process to be followed

2. Data Collection from Health Boards

3. Data Validation exercise and review meetings with Health Boards

4. Summarise all Health Board data

5. Develop initial roll out/Blueprint strategy

6. Review proposed Blueprint strategy with all Health Boards

7. Sign-off and commitment to Blueprint by all Health Boards


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Data collected from Health Boards was subject to a number of limitations that need to be acknowledged…

Was a department fully implemented?

Were departments placing orders themselves or via Procurement?

Initial data was occasionally miscoded by users

There was some unmapped/obscure data that was difficult to define

Health Board resource availability to validate the data

Departments paying for goods/services did not necessarily instigate the purchase order


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Exclusions were agreed and the validated figures are in line with share of NHSS spend per Health Board….

Agreed exclusions from this phase

In-scope expenditure for Health

Boards based on 2004 data collected

Approx % share of national

spend per Health Board

•Drugs•Income•Recharges•Rent & Rates•Capital Expenditure - New Buildings•Professional Fees and Services (50% of spend)•Telecoms (being reviewed)•Training Expenses•Travel & Subsistence (excluding leased cars)

•Postage & Carriage•Utilities (being reviewed)•Transportation & Portering•Other Admin/Board Expenses•Waste Disposal•Publications•Subscriptions & Information Services


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Department Roll Out Sequence takes the following Components of the Blueprint Strategy into Account……..

1. Award of Strategic Sourcing Contracts & Contract Renewal and possible savings that can be made

2. Fitting in with NHS Logistics timetable for the implementation of Ward Product Management

3. Current approved HB plans

4. Rolling out to the same departments at the same time (or pilot first then roll out all other departments together) to aid easier central supplier adoption

5. Size of Spend

6. Stock Integration

7. Shared Services


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Blueprint Department Order for continued eProcurement rollout…


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Agreed Key performance indicators have been set up to measure the success of the implementations by Health Boards……..

Key Performance Indicators Percentage of In-scope spend covered

Value of transactions against target spend with respect to local project plan

Statistics that will also be tracked, although not measured against Volume of transactions

Split between Level 1 & Level 2 catalogues

Number of suppliers adopted vs suppliers identified in local supplier adoption

Users trained vs planned for departments (estimate)

Active vs Registered Suppliers

Active vs Registered Users

Break-down of Supplier Content by catalogue, non-catalogue, punch-out

Break-down of Order Routing by fax, email, cXML


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Agreed Health Board Targets…Heath Board In-scope ePS Start

DateTarget by

31/3/06Target

by 31/3/07

Target by 31/3/08

Argyll & Clyde £35M Nov 04 £6.7M (19%) £18M £35M

Ayrshire & Arran £35M Feb 05 £13M (37%) £21M £35M

Dumfries & Galloway

£18M Apr 05 £5.4M (30%) £10M £18M

Forth Valley £21M May 04 £19M (90%) £20M £21M

Grampian £46M Oct 04 £7.8M (17%) £29M £46M

Highland £21M May 02 £15M (70%) £17M £21M

Lanarkshire £35M Jul 04 £15M (43%) £25M £35M

Lothian (PCT) £20M May 05 £6.7M (33%) TBAWill incl. Acute

TBAWill incl. Acute

Tayside £41M Oct 02 £25M (60%) £33M £41M

NSS £40M Apr 04 £25M (63%) £35M £40M

SAS (included for completeness) £35M May 03

Total £347M


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What do we have….

An Agreed roll out strategy signed up to by all NHSS Scotland Health Boards

A Roll out plan that co-ordinates the efforts of the national and local resources and effort

Agreed KPI markers that are common to all organisations and are deliverable to the Scottish Executive

A co-ordinated plan that takes into account the needs of local and national initiatives


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Everything you wanted to know about an eProcurement

implementation(but were afraid to ask)

Peter ShintonProject Manager- eProcurementNHS National Services Scotland


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Scottish Executive Initiative- Scott

NHS Initiative- Margaret

NSS Initiative

Scottish Executive Initiative- Scott


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What’s the theory?

Process improvement

Accurate information, produced quicker

Make strategic sourcing decisions

Contract compliance

£


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Process improvement

Accurate information,

produced quicker


Contract compliance

Nothing on PECOS that shouldn’t be

“Do I have to raise an

indent…?”

Easy to keep tabs on

progress

Info for this still from Fin

Systems

and the practice?


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Process improvement


produced quicker


Contract compliance

Ensure only contract suppliers and items are adopted

Monitor all transactions through existing methods to ensure non-contract purchasing isn’t continuing

What are you trying to improve?


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Process improvement


produced quicker


Contract compliance

Ensure the commodities are suitable for eProcurement

Don’t add complexity / bureaucracy to the processes

Making today’s processes electronic doesn’t automatically improve them!



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Process improvement


produced quicker


Contract compliance

Decide what you want the information for

Should you push ALL transactions through the system, or are you targeting particular commodities?



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Process improvement


produced quicker


Contract compliance

Ensure you obtain the information you want

Ensure you have the opportunity and ability to make use of the information



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To snatch defeat from the jaws of victory, you must ensure you have no…

• clear implementation strategy• dedicated resource• defined scope or end point• clear responsibilities

…amongst other things!

An implementation is a projectbut

ongoing system use belongs to the business


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Thank you for listening

Any questions?

Peter ShintonProject Manager- eProcurement

Corporate Programme Office Tel: 0131 275 6769 (Internal No 6769)

Email: [email protected] National Services Scotland, Gyle Square, 1

South Gyle Crescent, Edinburgh, EH12 9EB

EProcurement The NHS Experience Scott Haldane - Director of Finance / Deputy Chief Executive NHS...

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