A wake-up call for the leaders

The Parliamentary Secretary to the Ministry of Government Administration and Reform, Wenche Lyngholm

We urge the leaders of public authorities and other entities to make the use of e-business and e-procurement their personal and major objective in the weeks and months to come. Recently this message sounded loud and clear from a major strategy conference as well as from the results shown by an e-procurement project in the municipality of Trondheim. A report from the latter shows that if the leaders involve themselves and allocate the necessary resources, introduction of e-procurement can generate substantial savings and a basis for improved control of operations related procurement spending.

The eProcurement Secretariat, which reports directly to the Ministry of Government Administration and Reform, enjoyed huge success with their conference on strategies for better and more efficient procurement in the middle of May this year. The approximately 350 participants attending the conference received two strong messages from the leading speakers. The Parliamentary Secretary to the afore-mentioned ministry, Wenche Lyngholm, left no doubt that the goals for the introduction of e-business and e-procurement in the public sector remains the same, though the progress so far has been rather slow. The second important message from the conference was an appeal to the leaders of the many public entities to engage in the introduction of e-business and e-procurement. If not, the present slow pick-up rate will continue. The leader of the eProcurement Secretariat, mr. André Hoddevik, was very explicit concerning this message and urged the leaders to wake up.

Showing results

Documentation of success stories is important in order to generate necessary awareness among public sector leaders. The above mentioned conference paid particular attention to a recent report from the municipality of Trondheim. Through the use of the Electronic Public Procurement Portal ehandel.no the municipality has more than fulfilled the economic targets given for their four-year long implementation project. In addition, their control of operations related procurement spending has been greatly improved. The report emphasizes that this project was not carried out as an ICT-project, but as a project aimed at the establishment of a more effective and efficient procurement in the municipality. This is one of the keys to the success. The other key was the decision to make the use of ehandel.no imperative, rather than voluntarily. This decision came after a period with massive focus on user training and improvement of eCatalouge quality; but without convincing results in regard to transaction volumes. Leader involvement made the change possible and after mandatory use of e-procurement was effectuated in early 2005 the use of ehandel.no has been soaring. In 2006 the savings generated by the project will be around 12-17 million NOK (around 1.5 - 2.1 million €). This is 7-10 percent of the total amounts purchased by the municipality through ehandel.no, and between 1.8 and 2.5 percent of the total operations related spending in Trondheim. The savings are derived from an increased loyalty to existing framework agreements and a better basis for entering into new agreements.

The leader of the eProcurement Secretariat, mr. André Hoddevik

Full speed ahead

In addition to Trondheim, the third largest municipality in Norway, Oslo and Bergen (the largest and second largest municipalities) have also started to move. E-procurement solutions integrated with ehandel.no are to be fully implemented in the coming months. Although the municipality sector was dominant among the first movers on ehandel.no, other sectors are now catching up. The health sector is an important example. The Norwegian hospitals are owned by the state through five regional enterprises; three have signed up with ehandel.no and implementation is in progress. Another important participant on ehandel.no is Avinor, the Norwegian Civil Aviation Authority. Avinor, owned by the Norwegian State, operates along commercial principles. According to a recently published interview on the Doffin-newssite, the authority has now given its go-ahead to the use of e-procurement. One by one the airport administrations throughout Norway are being made ready for e-procurement and groups of new users are continuously being trained. The goals are to reduce the transactions costs, and to increase the loyalty to the agreements – all through the use of ehandel.no.