Introduction to the Governmental Program for Electronic Commerce in the

Norwegian Public Sector and the Marketplace Project

André HoddevikProgramme Manager

Abstract

• Introduction of the Governmental Program for Electronic Commerce in the Norwegian Public Sector

• Pilot project: Electronic marketplace for public procurement– Rationale– Functionality– Implementation plan

Background for the Norwegian E-commerce

initiative• Program initiative supported by the Cabinet and

proposals from two ministries:– Ministry of Labour and Government Administration:

Budget proposal 2001 – Programme for renewal of government administration

– Program proposal approved in Cabinet June 1999– Ministry of Trade and Industry: eNorge (Norwegian

equivalent to EU’s eEurope)– Ministry of Trade and Industry: White paper 41 (1998-

99) – “About electronic commerce and business”– Ministry of Labour and Government Administration:

“Action plan for IT-development in government administration 1998-2001”

– Ministry of Labour and Government Administration is responsible for government purchasing strategies

– Ministry of Trade and Industry is responsible for public procurement regulations

Program participants

• Program ownership: Ministry of Labour and Government Administration

• Steering group with representatives from 5 ministries, the Norwegian Association of Local and Regional Authorities and the Office of the Auditor General (observer)

• Program management: Government administration services, Public procurements department

• Program participation open for central government entities and local/regional authorities

Program goals

The use of electronic commerce in public procurement shall contribute to a lowering of the procurement related costs and increase the quality of the public procurement processes. Released resources shall contribute to an increased service production in the public organisations and an increased focus on their core activities.

Qualitative goals• Increase time for vital person-

nel to perform core activities• Increase over all procurement

competence in public sector• Be a demanding customer in

order to achieve better terms and conditions

• Reduce obsolete stock and errors in the procurement process

• Increase financial control

Quantitative goals• 50% of purchasing

transactions shall be done via electronic commerce by the end of 2003

• 20% of procurement expenditures shall be handled via electronic commerce by the end of 2003

Electronic marketplace rationale (I)

• Method and practical tool for the different public organisations to implement their over all procurement strategy – I.e: Norwegian public procurement are highly

decentralised, but with central services on establishment of framework agreements in selected product categories and advice-giving (with focus on legal questions)

• Method and practical tool to achieve savings related to:– Reduced prices on purchased goods caused by higher

use of existing framework agreements– Reduced transaction costs by a complete or partial

integration with internal systems in the procuring and selling organisations

– Simple access to key information on suppliers and their products in the qualification process

Establishment of the marketplace – reasons for a central initiative

• Co-ordination– Implementation of common demands towards the suppliers

from the public procurement entities• Sharing of workload with the public procurement entities

– The procurement entities can focus on their own organisational structure, and on their internal procedures and IT systems

• Control– Establish a business model that gives ownership to

information created on the marketplace to the originator• Functionality

– Make sure that public sector functional and formal needs are met

• Cost– Reduced investments and minimal operations cost

• Time to market– Single focus on creating a marketplace solution that meet

public sector needs

Electronic marketplace – pilot participants

Intention agreement on pilot participation signed with the

following public sector entities:• Norges Landbrukshøgskole• Fredrikstad kommune• Tromsø kommune• Skedsmo kommune• Oslo kommune• Bergen kommune• Trondheim kommune• Statens vegvesen• Rogaland fylkeskommune, Randaberg, Stavanger,

Sandnes og Sola kommune (ARNE-samarbeidet)• Forsvarets overkommando – ARGUS• Sør-Trøndelag fylkeskommune• Hamar kommune• Skien kommune• Steinkjer kommune• Bærum kommune• Larvik kommune• Norges teknisk- naturvitenskaplige universitet (NTNU)

Focus for the Electronic marketplace

Reporting Account- ing

Payment Invoice

Opp- følging

Tildelingog

distribusjon

mottak og

evaluering

Kun-gjøring

Kontrakts- grunnlag

Behov

Contract establishment process (Example)

Follow up Award

and distribute

Receive and

evaluate Announce Specify Identify need

Goods receipt

and control

Order con- firmed

Place order

Browsecatalogue

Order and payment process (Example)

• The marketplace will support information exchange and transactions in both types of processes

Electronic marketplace rationale (II)

• The marketplace will be…– Available on the internet– Financed from user fees

• Areas of use– Initial phase: Place orders according to central and

entity specific framework agreements, retrieve information from vendor database

– Forthcoming phases: Integration with back end systems, catalogue buying (outside existing agreements), contract establishment etc.

– Development after the initial phase to be decided from user feedback and their identified needs

• Technology– The procurement organisations and the suppliers

should be able to choose their way of electronic communication and their level of integration between the marketplace and their internal systems regardless of the choice made by their trading partners

Electronic marketplace - functionality outline

InternetInternet

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www.ehandel.dep.no

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Supplier

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EDIFACTXMLwww

E-mailTelefax

Public procuremententity

Fin

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ys

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ODBCFlat filesEDIFACT

XMLwww

E-mailTelefax

Vendor database

Product catalogues

Order and payment

Statistics/spending

Third party services

Third party services Calls for tender

Tender delivery

Order and payment

Maintenance of info

Marketplace main components:

• E-procurement solution: Ordering functionality, third party services and integration services

• E-commerce platform: Transaction tier, information tier, vendor registry and hosted services

• Infrastructure for operations, third party services, openness and security

The E-commerce Platform and its

surroundings

I n f r a s t r u c t u r e

S e r v i c e P r o v i d e r s

H o s t e d b u y s i d e

H o s t e d s e l l s i d e

T r a n s a c t i o n T i e r

I n f o r m a t i o n T i e r

S u b s c r i b e r s E - c o m m e r c e P l a t f o r m

1 … n W e b c l i e n t

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

1 B a c k o f f i c ei n t e g r a t i o n

1 … n W e b c l i e n t

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

S e l l e r s

1 … n W e b c l i e n t1 … n W e b c l i e n t1 … n W e b c l i e n t1 … n W e b c l i e n t

1 … 3

E-p

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ent

Sol

utio

ns

1 … n

3rd party sell sides I n f r a s t r u c t u r e

S e r v i c e P r o v i d e r s

H o s t e d b u y s i d e

H o s t e d s e l l s i d e

T r a n s a c t i o n T i e r

I n f o r m a t i o n T i e r

S u b s c r i b e r s E - c o m m e r c e P l a t f o r m

1 … n W e b c l i e n t1 … n W e b c l i e n t

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

1 B a c k o f f i c ei n t e g r a t i o n

1 … n W e b c l i e n t

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

n B a c k o f f i c ei n t e g r a t i o n2 B a c k o f f i c e

i n t e g r a t i o n1 B a c k o f f i c ei n t e g r a t i o n

S e l l e r s

1 … n W e b c l i e n t1 … n W e b c l i e n t1 … n W e b c l i e n t1 … n W e b c l i e n t

1 … 3

E-p

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rem

ent

Sol

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ns

1 … 3

E-p

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rem

ent

Sol

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ns

1 … n

3rd party sell sides

Electronic marketplace – access and usage

Framework agreement on access to the marketplace (e-commerce platform + e-procurement solution) available for

entities in the public sector and in the utilities sector

Public sector/utility entity signs subscription agreement

Framework agreement supplier enters catalogue content

Tasks:• Definition of users and

implemen-tation of authorisation rules

• Definition of availability to framework agreements

• Adjustment of internal routines and systems

• Adjustment of internal routines and systems, training etc.

Tasks:• Establish electronic product

catalogue• Establish catalogues with

agreement specific prices and conditions

• Adjustment of internal routines and systems, training etc.

Marketplace functionality available for requisitioner/end user in public sector entity

Functionality:• Access to relevant catalogues

(as defined in own organisation)

• Possibility to create order or requisition (dependent of authorisation level

• Intuitive and easy to understand user interface

Electronic marketplace – implementation plan

Tentative planMay ‘01: Qualification of suppliers of e-commerce

platform and e-procurement solutionsJune ‘01: Deadline for qualification admissionJuly ‘01: Request for tenders to qualified suppliers Sept. ‘01:Deadline for submission of bidsNov. ‘01: Decision on selection of suppliers of e-

commerce platform and e-procurement solution: IBX AS chosen as supplier of both

Feb. ‘02: Commence pilot testing of marketplace (e-commerce platform + e-procurement solution)

June ‘02: Marketplace in to operations phase

Questions?

• Further enquiries can be directed to:André Hoddevikandre.hoddevik@ft.dep.noPhone: +47 22 24 96 67Telefax: +47 22 24 95 96Visit our homepage: www.ehandel.dep.no

Thank you for your attention!