eprocurement the nhs experience scott haldane - director of finance / deputy chief executive nhs...
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eProcurementThe NHS Experience
Scott Haldane - Director of Finance / Deputy Chief Executive NHS National Services Scotland
eProcurement Scotl@nd
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Session Objectives
Overview of eProcurement Scotl@nd
NHS Scotland approach
Local implementation experience
eProcurement Scotl@nd
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What IS eProcurement?
• Electronic tools that support and expedite the transactional purchasing process including:
• The use of on line catalogues
• Placing requisitions
• Routing for approval
• Sending to suppliers
(Essentially it is a buzzword for doing procurement activities via the internet)
eProcurement Scotl@nd
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What is eProcurement Scotl@nd?
Scottish Executive-wide initiative
A nationally negotiated subscription based service
Harness internet-based technologies
A step-change in procurement practice
An environment for more effective SRM
A flexible approach that can be adapted across the Public
Sector
eProcurement Scotl@nd
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‘eProcurement Scotl@nd’ is designed to achieve:
Scottish Executive
PECOSPECOSPECOS
Suppliers
improved process efficiency
improved Financial Control
Government eBusiness Targets
eProcurement Scotl@nd
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PECOS is based on Remote Hosting
PECOS application hosted by Elcom in Boston,
Massachusetts
No new hardware or software required
Only require a web browser
Can be accessed from anywhere within your
organisation
Available 24 hours, 7 days a week
‘Plug and Play’
eProcurement Scotl@nd
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An opportunity for the NHS (and Local Authorities?)
Scottish Executive
PECOSPECOSPECOS Suppliers
NHS Highland
NHS Tayside
Suppliers
Suppliers
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Analysis of the use of the System Showed:
Scottish Executive
PECOSPECOSPECOS Supplier A
NHS Highland
NHS Tayside
Supplier B
Supplier C
…the NHS was using different suppliers for the same things…
eProcurement Scotl@nd
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Analysis of the system also showed:
Scottish Executive
PECOSPECOSPECOS Supplier A
NHS Highland
NHS Tayside
Supplier B
…even when we bought from the same suppliers, we bought
slightly different things…or the same things at different prices…
SE items & pricing
Highland items & pricing
Tayside items & pricing
eProcurement Scotl@nd
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A bright idea - NHS wide items and pricing
NHS NSSPECOSPECOSPECOS Stationery
Supplier
NHS Highland
NHS Tayside
NHS items & pricing
IT Supplier 1
Travel Supplier
NHS items & pricing
NHS items & pricing
IT Supplier 2NHS
items & pricing
But, we need to link it in to other activities…
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The challenge… to improve procurement practice across the NHS
PECOSBETTER BUYING
(STRATEGIC SOURCING)
ePROCUREMENT SCOTLAND
(PECOS)
LOGISTICS
(Bulk Supplies to point of use)
BEST PROCUREMENT IMPLEMENTATION (BPI)
eProcurement Scotl@nd
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Impact of Strategic Sourcing approach:
NHS NSS
NHS Highland
NHS Tayside
NSS items & pricing
Tayside items & pricing
Highland items & pricing
BETTER BUYING
(STRATEGIC SOURCING)
NHS items & pricing
Supplier
Supplier
Supplier
SupplierSupplier
eProcurement Scotl@nd
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Benefits
Process efficiency
eAuctions
eTendering
Greater use of National Contracts
Strategic sourcing
Value for money from suppliers
Improved Financial Control
Government eBusiness Targets
eProcurement Scotl@nd
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What PECOS is:
A system that provides:• content of products • requisitions to be created on-line• approval for spend on-line• automatic transfer of order to supplier• full audit trail• reporting suite• contract compliance• reduction in time taken to process documentation• reduction in overall lead time• reduction in stock required• reduction in paper records and hence stationery costs• improved query process
eProcurement Scotl@nd
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What PECOS does:
Access to Supplier Catalogues electronically
Orders handled on-line
“Punch Out”
CXML
However, this assumes that supplies are eEnabled…..
a major risk for the programme!
eProcurement Scotl@nd
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What PECOS isn’t:
A Finance system…but is capable of integration to FMIS
A Stock system……this is being assessed at a national level
An automatic link to a cost-centre budget……but can be used to effect greater budgetary
control.
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Next Steps:
Full integration to Finance Systems
NHS Shared Services
Purchase to Pay improvements
Link with Ward Product Management Systems
Support NHS Logistics
Inter-Agency Collaboration
Streamlined Public Sector procurement….
eProcurement Scotl@nd
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eProcurement Scotland NHSScotland Blueprint Strategy
Hamish PatersonNHSS ePS Programme
Implementation Manager
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Context….
The need to modernise Procurement and Supplies Management across NHS Scotland (NHSS) is widely recognised.
NHSS needs to adopt a more “corporate approach” to improve service delivery, leverage total spend and significantly reduce costs.
A key enabler for this will be the effective deployment of the right technology - The eProcurement Scotl@nd (ePS) service
The Blueprint Strategy proposes a planned and co-ordinated roll out of ePS which maximises the use of available resources across NHSScotland.
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A standard process for collecting and analysing the data from Health Boards was developed and followed………….
1. Meet with Health Boards and agree the process to be followed
2. Data Collection from Health Boards
3. Data Validation exercise and review meetings with Health Boards
4. Summarise all Health Board data
5. Develop initial roll out/Blueprint strategy
6. Review proposed Blueprint strategy with all Health Boards
7. Sign-off and commitment to Blueprint by all Health Boards
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Data collected from Health Boards was subject to a number of limitations that need to be acknowledged…
Was a department fully implemented?
Were departments placing orders themselves or via Procurement?
Initial data was occasionally miscoded by users
There was some unmapped/obscure data that was difficult to define
Health Board resource availability to validate the data
Departments paying for goods/services did not necessarily instigate the purchase order
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Exclusions were agreed and the validated figures are in line with share of NHSS spend per Health Board….
Agreed exclusions from this phase
In-scope expenditure for Health
Boards based on 2004 data collected
Approx % share of national
spend per Health Board
•Drugs•Income•Recharges•Rent & Rates•Capital Expenditure - New Buildings•Professional Fees and Services (50% of spend)•Telecoms (being reviewed)•Training Expenses•Travel & Subsistence (excluding leased cars)
•Postage & Carriage•Utilities (being reviewed)•Transportation & Portering•Other Admin/Board Expenses•Waste Disposal•Publications•Subscriptions & Information Services
eProcurement Scotl@nd
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Department Roll Out Sequence takes the following Components of the Blueprint Strategy into Account……..
1. Award of Strategic Sourcing Contracts & Contract Renewal and possible savings that can be made
2. Fitting in with NHS Logistics timetable for the implementation of Ward Product Management
3. Current approved HB plans
4. Rolling out to the same departments at the same time (or pilot first then roll out all other departments together) to aid easier central supplier adoption
5. Size of Spend
6. Stock Integration
7. Shared Services
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Agreed Key performance indicators have been set up to measure the success of the implementations by Health Boards……..
Key Performance Indicators Percentage of In-scope spend covered
Value of transactions against target spend with respect to local project plan
Statistics that will also be tracked, although not measured against Volume of transactions
Split between Level 1 & Level 2 catalogues
Number of suppliers adopted vs suppliers identified in local supplier adoption
Users trained vs planned for departments (estimate)
Active vs Registered Suppliers
Active vs Registered Users
Break-down of Supplier Content by catalogue, non-catalogue, punch-out
Break-down of Order Routing by fax, email, cXML
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Agreed Health Board Targets…Heath Board In-scope ePS Start
DateTarget by
31/3/06Target
by 31/3/07
Target by 31/3/08
Argyll & Clyde £35M Nov 04 £6.7M (19%) £18M £35M
Ayrshire & Arran £35M Feb 05 £13M (37%) £21M £35M
Dumfries & Galloway
£18M Apr 05 £5.4M (30%) £10M £18M
Forth Valley £21M May 04 £19M (90%) £20M £21M
Grampian £46M Oct 04 £7.8M (17%) £29M £46M
Highland £21M May 02 £15M (70%) £17M £21M
Lanarkshire £35M Jul 04 £15M (43%) £25M £35M
Lothian (PCT) £20M May 05 £6.7M (33%) TBAWill incl. Acute
TBAWill incl. Acute
Tayside £41M Oct 02 £25M (60%) £33M £41M
NSS £40M Apr 04 £25M (63%) £35M £40M
SAS (included for completeness) £35M May 03
Total £347M
eProcurement Scotl@nd
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What do we have….
An Agreed roll out strategy signed up to by all NHSS Scotland Health Boards
A Roll out plan that co-ordinates the efforts of the national and local resources and effort
Agreed KPI markers that are common to all organisations and are deliverable to the Scottish Executive
A co-ordinated plan that takes into account the needs of local and national initiatives
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Everything you wanted to know about an eProcurement
implementation(but were afraid to ask)
Peter ShintonProject Manager- eProcurementNHS National Services Scotland
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Scottish Executive Initiative- Scott
NHS Initiative- Margaret
NSS Initiative
Scottish Executive Initiative- Scott
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What’s the theory?
Process improvement
Accurate information, produced quicker
Make strategic sourcing decisions
Contract compliance
£
eProcurement Scotl@nd
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Process improvement
Accurate information,
produced quicker
Make strategic sourcing decisions
Contract compliance
Nothing on PECOS that shouldn’t be
“Do I have to raise an
indent…?”
Easy to keep tabs on
progress
Info for this still from Fin
Systems
and the practice?
eProcurement Scotl@nd
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Process improvement
Accurate information,
produced quicker
Make strategic sourcing decisions
Contract compliance
Ensure only contract suppliers and items are adopted
Monitor all transactions through existing methods to ensure non-contract purchasing isn’t continuing
What are you trying to improve?
eProcurement Scotl@nd
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Process improvement
Accurate information,
produced quicker
Make strategic sourcing decisions
Contract compliance
Ensure the commodities are suitable for eProcurement
Don’t add complexity / bureaucracy to the processes
Making today’s processes electronic doesn’t automatically improve them!
What are you trying to improve?
eProcurement Scotl@nd
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Process improvement
Accurate information,
produced quicker
Make strategic sourcing decisions
Contract compliance
Decide what you want the information for
Should you push ALL transactions through the system, or are you targeting particular commodities?
What are you trying to improve?
eProcurement Scotl@nd
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Process improvement
Accurate information,
produced quicker
Make strategic sourcing decisions
Contract compliance
Ensure you obtain the information you want
Ensure you have the opportunity and ability to make use of the information
What are you trying to improve?
eProcurement Scotl@nd
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To snatch defeat from the jaws of victory, you must ensure you have no…
• clear implementation strategy• dedicated resource• defined scope or end point• clear responsibilities
…amongst other things!
An implementation is a projectbut
ongoing system use belongs to the business
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