Goodbye GoProcure

As the government announces the 'shrinkage' of GoProcure, are we witnessing the death throes of grand-scale e-commerce in New Zealand? Pretty much, observers reckon. But that doesn't mean e-commerce isn't working at all.

As the government announces the "shrinkage" of GoProcure (see Going, going ... govt e-procurement tool shrinks further), are we witnessing the death throes of grand-scale e-commerce in New Zealand? Pretty much, observers reckon. But that doesn’t mean e-commerce isn’t working at all; in the hospital supply business, there’s a healthy example of electronic trading in action.

It’s a little hard to make out just what is happening to the government’s e-commerce effort. The State Services Commission (SSC), home to the e-government unit which has driven GoProcure, is not about to admit it’s an out-and-out flop. And, in fairness, it probably can’t be called that. A truer description would be to call it a necessary exercise to have gone through rather than a failed project.

Last week’s milestone seems to have been the abandonment of efforts to get state agencies to commit to doing all their procurement through the system. Since the middle of last year, GoProcure’s sponsors have been trying to get at least 20 agencies to buy supplies through it, to make it a viable proposition. But despite dozens of agencies having been shown how they might stand to benefit, they’ve been staying away in droves. Exactly why is no clearer than what the system’s eventual fate will be.

The SSC is saying it proved too hard to bolt GoProcure on to agencies’ existing financial systems. We don’t know how far it got with its attempts, nor how much was spent in the process. This so-called "full suite" procurement option seems to have largely been sidelined, while agencies are invited to use a "core transaction hub" to look up supplier catalogues and route transactions.

What appears to have been discovered is that it’s preferable for agencies to do their own electronic requisitioning. If that is so then taxpayers can be grateful that a call in this column last September that the government instruct agencies to use GoProcure was ignored. It was made in the belief that if the government took the lead, it might encourage uptake of e-commerce generally.

It’s true that what examples there are of e-commerce in action are few, and low-key. There is one, however, that’s survived its first several months and is now in expansion mode. HealthAlliance, which provides services to Waitemata and Counties Manukau district health boards, has been trading electronically with a handful of suppliers since late last year. Having established that an electronic exchange has all-round benefits, the Medical Industry Association, which is backing the concept, last week was to sell the idea to more suppliers. It hopes to involves up to 30 by the end of the year. Taranaki district health board will apparently shortly swell the modest buyer ranks.

The initial benefit is not financial -- that’s not expected until electronic invoicing is added (so far the system is just handling electronic ordering and order confirmation). The chief attraction of the system to date is in eliminating rekeying of orders, which saves time and reduces errors, and is cost-effective even after a transaction fee is charged.

This sounds somewhat like the SSC’s transaction hub. Maybe that’s a sign that something useful will be salvaged from GoProcure.

Doesburg is Computerworld’s editor. Send letters for publication to Computerworld Letters.

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