MSD well ahead in e-buying

The Ministry of Social Development, or the part of it that was the Department of Work and Income, has been operating a "part-electronic" environment in procurement of supplies since 1996.

The Ministry of Social Development, or the part of it that was the Department of Work and Income, has been operating a “part-electronic” environment in procurement of supplies since 1996.

The DWI was used last year as the base for an e-procurement pilot for a whole-of-government implementation, but this did not use the department’s existing system, based in Rotorua, instead commissioning implementations from two rival consortia. The contract for the final system has yet to be awarded.

Meanwhile, the original MSD e-procurement system, centred in its Rotorua office, continues to run the department’s buying smoothly, but has not yet added online payment, says manager Ted Dean. Orders, receipts and invoices are all sent electronically, and some procurements made by different MSD offices from the same supplier are put together into a single consolidated account. But payment is made separately off-line.

One significant reason for not introducing online payment is that many suppliers are not themselves equipped to handle the medium, Dean says. He expects a channel for online payment will be made available as part of the whole-of-government e-procurement exercise, so the ministry will not advance alone any further on this front.

The software for basic e-procurement came as part of the financial management information system (FMIS) included in QSB’s financials adopted by the department in 1996. That had a purchasing module which used an item file — effectively a catalogue — or items typically ordered. This file is updated by the staff at Rotorua, but as a cooperative exercise with the suppliers, which send them updates. The current system operates in 170 MSD sites all over the country.

The ministry is participating in the general e-government deliberations on e-procurement and electronic payment by being part of the steering committee on e-procurement, says Dean.

Challenges relating to the introduction of the original system were enmeshed in the challenges of putting up the FMIS as a whole, he says; it would be difficult to identify problems specifically concerned with e-procurement. The challenges that did exist in FMIS implementation, moreover, are not solely or even predominantly technological challenges.

“A lot of the lessons we learned revolve around people, around changing their culture and environment” , he says.

For example, national purchasing arrangements were being set up for the first time, to replace separate ordering by the various offices. This drastically changed the way the staff concerned worked, Dean says.

It is this kind of lesson that is being passed on to the e-government unit and the steering-committee personnel from various departments as they approach a whole-of-government e-procurement system, he says.

The long awaited selection of the supplier for the whole-of-government e-procurement system will take place this month, says e-government unit head Brendan Boyle. A large amount of effort went in before the Christmas break examining the features of the offered solutions, so as to be sure of getting an “apples-to-apples” comparison, Boyle says. “We broke the offerings down into their component parts, so we could decide in detail what we wanted to pay for.”

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