DTI case study

Department of Trade and Industry

Initial implementation - 26th January 2004
Commodity adoption transfer to business as usual support - 31st March 2004
Complete users base roll out - November 2004

In September 2003 the DTI upgraded their financial system to Oracle 11i. They are in the process of developing an e-Purchasing facility based on the i-Procurement module within Oracle 11i.

The DTI wants to encourage catalogue purchasing to reduce off-contract spending and replace the raising of spreadsheet requisitions by raising them directly into the system at source. They also wish to automate the approval process.

The project is split into two phases. The first phase, which started on 1st April 2003, went live, as planned, on the 26th January 2004. This consisted of an initial 120 users, purchasing 4 commodities. The initial commodities are:

Mobile Phones
Stationery
Training
IT
Currently the DTI are documenting any lessons learnt and conducting a high-level commodity and community requirements analysis for the remaining users and commodities. This will inform the next phase of the rollout.

Features of the initial implementation will be:

Introduction of a "Gatekeeper" role to provide technical buying advice and policing
Self Approval processes to by-pass purchase order authorisations when the purchase order value is less than £100
Purchase Orders e-mailed to Suppliers
Future phases will:

Roll out the system to the remaining 4000 users

Adopt further commodities and transition commodity adoption to the Procurement team
Scope and implement the use of Punch Out for commodities such as hotel accommodation and travel
Develop management and operational reporting
Potential Benefits
The project aims are to realise the benefits as determined in the Business Case. The benefits are:

Improved buying

Reduced order/payment processing costs
Improved management information on purchasing profiles
The benefits realisation plan has identified the tasks required to gain maximum benefit.The DTI estimates the potential benefits to be £2 million per year when the system is rolled out to all 4000 users and all commodity framework agreements are represented by catalogues on the system. A further annual saving of £750,000 is anticipated from the use of punch out.

Lessons Learnt

The main issue the DTI has to face is change within each Management Unit. Not all Management Units are structured in the same way and there are differing methods of procurement.The challenge is the implementation of a single structure for all procurement.

There is also a cultural change in that the procurement process will become more proactive in gaining value for money. You will need to challenge partner suppliers as experience of the tools is gained and utilise the new management information that will be gathered.

Finally, it is important to keep the design of business processes within the capabilities of the package selected.However the DTI have some complex contracts and these have been fitted-in with the business system by the addition of some manual processes. In the future they intend to look at amending contracts where possible.