eskom ispec presentation and workshop

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Eskom iSpec presentation and workshop

A revolution in Tender, Bid and Contract Management Systems

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Company background


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Our solutions

Remy InfoSource

• iSpec (Tender, Bid and Contract Management)

• iTech (Artificial Intelligence Diagnostics)

• ICAM (Equipment Logistics System)


4

Our customers

Remy InfoSource

• Siemens Transportation (MagLev Train)

• Hutchison Port Holdings (largest port operator)

• DP World (3rd largest port operator)

• SABMiller (2nd largest brewer)


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Agenda

e-Sourcing with iSpec

• Thursday• Background

• iSpec - hands-on demo tender

• Implementation

• Q & A

• Friday• SABMiller iSpec PM 2010-11

• Background

• iSpec - hands-on demo tender

• Implementation

• Q & A


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The issues


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Historical background-SABMiller example


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Driving transformational change

Performance Management

• Performance Management

• Translate strategies into goals

• Drive execution at speed

• Organization alignment

• Change the organization to ensure strategic capabilities

• Talent and capacity management

• Get the right skills and talent for today

• Build a pipeline of talent for key positions


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WCM program

World Class Manufacturing

• Efficiency

• Asset care - reducing TCO

• Short interval controls - reduce waste

• Automated systems - improving materials handling

• Organization

• Procurement - upgrading skills, leveraging global supply network

• Technical skills - equipment diagnostics, flexibility

• KPIs - throughout operations teams

• CAPEX

• Increasing investment in equipment, systems


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Global purchasing


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Typical ERP gaps

Typical ERP gaps

• Strategic sourcing design based on category sourcing

• No technical specification design, collaboration and management

• Simplistic sourcing events based on SKUs

• No allowance for alternatives

• Short cycle time for review

• No project management

• Item/event vs project

Tech Spec Manageme

nt

Planning systems

Evaluation

MRP

Inventory Manageme

nt

Quality Manageme

nt

Invoice processing

Goods receiving

Approval

Purchase order

PaymentRequisition

Internal business

requirement

Reporting

Contract implement

ed

Contract draft and

review

NegotiationSourcing RFx

External info

gathering

Transactional Processing

Strategic Sourcing

Trials & Supplier

Accreditation

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ERP gaps filled by iSpec

Tech Spec Manageme

nt

Planning systems

Evaluation

MRP

Inventory Manageme

nt

Quality Manageme

nt

Invoice processing

Goods receiving

Approval

Purchase order

PaymentRequisition

Internal business

requirement

Reporting

Contract implement

ed

Contract draft and

review

Negotiation

Sourcing RFx

External info

gathering


Strategic Sourcing

Trials & Supplier

Accreditation

iSpec

Typical ERP

system


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Negotiate &

award

Negotiate &

awardNegotiate &

award

Negotiate &

award

Performance

testing &

Commissioning

Performance

testing &

CommissioningDesign reviewDesign review

Critical issues

Prepare

tender

documents

Prepare

tender

documents

Publish

tender

Publish

tender

Vendors

correspond and

submit bids

Vendors

correspond and

submit bids

Open bids and

evaluate

Open bids and

evaluate

Prepare &

sign

contract

Prepare &

sign

contractIssue POIssue PO

Guarantees &

bonds

Guarantees &

bonds Design reviewDesign review InspectionsInspections DeliveryDelivery

CertificationsCertifications

ConstructionConstruction

Tendering process

Delivery process

Prepare

tender

documents

Prepare

tender

documents

Open bids and

evaluate

Open bids and

evaluate

InspectionsInspections

Quality of tender documents Multi-disciplinary geographically distributed teams Sequential access to documents

Data mining Evaluation

Negotiations, minutes of meetings, addenda, emails, tedious manual process. Post-It, highlights

Slow inspection and other reporting leads to delays and can cost you money.

Track and manage amendments

Vendors

correspond and

submit bids

Vendors

correspond and

submit bids

Clarifications and correspondence

Publish

tender

Publish

tender

Technical, financial and other approvals

Prepare &

sign

contract

Prepare &

sign

contract

Guarantees &

bonds

Guarantees &

bonds DeliveryDelivery

Compile contract documents from all negotiations, minutes of meetings, addenda, emails, etc.

Track contract deliverables and milestones. Track and manage

deliverables and liquidated damages


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Where is the info?

The problem

• Project information is scattered on computers and in documents throughout multiple organizations

• Missing/outdated documents

• Accountability

• Audit-ability

• Control/authority

• Transparency


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Price padding

Result

• Price padding

• Project delays

• High cost of tender management

• Loss of transparency


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The process


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Key areas

Three key areas

• Tendering

• Bidding

• Contract Management

Historically 3 totally isolated processes


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Electronic age

TenderTenderDocumentsDocuments

BidBidDocumentsDocuments



@

@

@

Evaluation & Evaluation & NegotiationNegotiation

BidBidBidBid BidBid

ContractContract

@

@@

@@@

@ @

@

DeliveryDelivery@

@

@@

@@@

@

@@@

@@

@ @@

@

@@

@

@


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Problem

Electronic age

• Still no proactive coordination and synchronization of parties, activities or information

• No integration of the 3 key areas


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The Solution


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Centralized control, global accessMaster

templatesProject

Management

SupplierSubmissions

Bid Evaluation& Negotiations

Contract AwardingDelivery TrackingQuality Assurance

MROProject planning

Transactional Systems

ERPInterface


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No integration

Structured collaboration in a unified workspace

• Integration of the 3 key areas

• Tendering

• Bidding

• Contract Management (Monitoring of the works)

• Comprehensive audit trail - easy to find data

• Automation - as much as possible


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Create master set

Create a template

• Add template

• Add documents that form part of master set


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Adjust document settings

Create a template

• Add new content

• Add content from library

• Only certain items are editable


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Requirement/response settings

Create a template

• What are requirements?• Delivery dates

• How will responses be scored

• What response is expected?• Deliver dates

• Prices

• Product data


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Audit trail

Audit trail - version tracking

• All changes recorded:• By whom

• When

• Compare

• Roll back


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Add a tender

Create a new tender

• Set basic options• Publication dates

• Type - RFx

• Currency

• Business Unit


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Overview

Prepare tender

• Dates

• Status

• Reports

• Open and completed tasks


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Tender preparation phase

Prepare tender

• Documents copied from master template

• Documents requiring attention have alert icons

• Select project team and roles

• Select vendors to invite


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Document preparation

Prepare tender

• Only items with pencils require editing

• Other headings are pre-approved and cannot be changed

• Less work - less checking


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Preparation

Prepare tender

• Orange pencils turn green as items are completed

• Select options as set up in template - no editing required

• Import BOQ from Excel


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Attachments

Upload attachments/addenda

• Upload multiple documents at a time

• Attach drawings, pictures, documents, spreadsheets, etc.


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Concurrent document access

Team works simultaneously

• Multiple users can access document simultaneously from different geographic locations

• All changes are recorded


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Vendors

Vendor management

• Register

• Assign to Groups• Panels

• Trades


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Approvals

Obtain approval

• Approvals can only start once all pencils are green

• It is impossible to publish an incomplete document


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Vendor online submission

Prepare bid and submit

• Vendor sees same basic overview

• Control panel for submitting/withdrawing bid

• Documents with alerts


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Vendor response


• Red items turn black as they are completed

• Vendor response for each item is specified and simple


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More requirements


• Some items require more detailed response• Delivery dates

• Prices

• Compliance

• Documentation


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Clarifications

Clarifications - Audit trail

• All correspondence is recorded in iSpec automatically linked to the heading it relates to

• Creates comprehensive audit trail


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Addenda/clarifications

Modifications/addenda

• Messages/addenda can be sent to one or all vendors

• Part of audit trail


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Response validation


• Vendor cannot submit bid unless all items have been completed


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Approval status

Open bids

• Track and expedite approvals


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Bid evaluation

Compare pricing

• One click pricing comparison

• No data mining required


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Evaluate


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Evaluate and negotiate

Negotiate

• Enter technical & commercial scores

• Accept or negotiate


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• At any time• Generate up-to-date project

documentation

• View or print

Document generation

Sign the contract


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Resource planning

Project planning

• Generate project plan containing• Deliverables

• Milestones

• Use as basis for project planning


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Vendor delivery performance

Delivery schedule

• Track and compare:• Original request

• Agreed per contract

• Actual delivery dates

• Calculate penalties


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QA

Quality assurance

• Monitoring of status of the works• Checklists of outstanding/faulty

items

• Acceptance tests/inspections

• Performance testing

• Certifications

• Consolidating this information into reports


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Ad-hoc inspections

Inspection items

• Take pictures of issues and faults

• Track correction

• Attach to milestones


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Contract management

• Monitor• Delivery

• Penalties

• Certifications

• Correspondence

Contract management


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Contract revisions

Contract management

• Manage revisions• Create revision

• Accept/negotiate

• Audit trail


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Capture MRO data

MRO spares data

• Enter spares data

• Validate

• Interface to ELS (Equipment logistic systems)


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Key Performance Indicators


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Bottlenecks/lead times

Project timeline

• Identify bottlenecks

• Analyze lead times

• Send reminders


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Analysis


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INSPECTIONS

•Online/offline inspections•Can link to items in documents•Quick reports & Punch lists•Ad-hoc and standard inspections

INSPECTIONS

•Online/offline inspections•Can link to items in documents•Quick reports & Punch lists•Ad-hoc and standard inspections

SUPPLIERSSUPPLIERSSUPPLIERSSUPPLIERSBIDS

•No downloading and uploading of documents•All submissions done online and encrypted securely into the database•Attachments allowed•No information visible to the company until after bids have been opened electronically•Negotiate/correspond online•One-click conflict resolution•Track delivery online•Reminders for deliverable items

BIDS•No downloading and uploading of documents•All submissions done online and encrypted securely into the database•Attachments allowed•No information visible to the company until after bids have been opened electronically•Negotiate/correspond online•One-click conflict resolution•Track delivery online•Reminders for deliverable items

INTERNAL USERS/CONSULTANTSINTERNAL USERS/CONSULTANTSINTERNAL USERS/CONSULTANTSINTERNAL USERS/CONSULTANTSTENDERS/

CONTRACTS•Tender is a copy of the latest approved version of a template or newly created•Customize only editable items•Negotiate/correspond with suppliers online•Full audit trail kept with date and time stamps•Approvals at various stages up to contract signature•Built-in pricing comparator, conformance reports and evaluation system (scoring)•Built-in KPI reports•Custom reports using Crystal reporter

TENDERS/CONTRACTS

•Tender is a copy of the latest approved version of a template or newly created•Customize only editable items•Negotiate/correspond with suppliers online•Full audit trail kept with date and time stamps•Approvals at various stages up to contract signature•Built-in pricing comparator, conformance reports and evaluation system (scoring)•Built-in KPI reports•Custom reports using Crystal reporter

TEMPLATE LIBRARY

•Templates have assigned owners and approvers•Colleagues can correspond regarding changes, etc.•Messages stored with clause as part of the audit trail•Copy and paste a template to create a similar one and just make the changes•Multiple language versions possible•Only fully approved templates can be used to create tenders/contracts

TEMPLATE LIBRARY

•Templates have assigned owners and approvers•Colleagues can correspond regarding changes, etc.•Messages stored with clause as part of the audit trail•Copy and paste a template to create a similar one and just make the changes•Multiple language versions possible•Only fully approved templates can be used to create tenders/contracts

MASTER LIBRARY•Clauses or complete documents•Each with an owner/approver•Changes automatically update any template in which item is used•Comprehensive audit trail•Rollback, compare, approve•Correspondence regarding changes are stored as part of the audit trail•Batch approvals•Multiple language versions•Item can be fixed, fully editable or only have editable fields - giving complete control over change permissions

MASTER LIBRARY•Clauses or complete documents•Each with an owner/approver•Changes automatically update any template in which item is used•Comprehensive audit trail•Rollback, compare, approve•Correspondence regarding changes are stored as part of the audit trail•Batch approvals•Multiple language versions•Item can be fixed, fully editable or only have editable fields - giving complete control over change permissions

Master Master librarylibraryitemitem


TemplateTemplateTemplateTemplate

TenderTenderTenderTender












TemplateTemplateTemplateTemplateTenderTenderTenderTender

Supplier 1Supplier 1Supplier 1Supplier 1



InspectorInspectorInspectorInspectorWorkflow, Communications and Workflow, Communications and

Audit trailAudit trailWorkflow, Communications and Workflow, Communications and

Audit trailAudit trail


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Benefits


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iSpec users


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User observations - $

• “Standardization of contracts and specifications (using iSpec) has lead to lower prices in general (3% on large projects). Business units not using iSpec are paying higher prices. (1 general case > 20%).” Why - Clear unambiguous tenders. Transparency. Better leverage during negotiations.

• “Because of the transparency vendors can no longer get away with charging different business units different prices for the same equipment.” (or different prices for the same item on different projects)


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User observations - effort

• “Transparency, traceability and keeping the communication/negotiations together are a huge benefit for both parties… The only reason that we can manage so many projects so effectively is because the negotiations and communications are recorded against each item/clause for anybody to read and see what has been discussed/negotiated. That is also valid for the Vendor because they pass the documents from Tender team to Engineering/Project management team. We do the same for 3rd party…..”


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Before

TenderTenderDocumentsDocuments




@

@

@

Evaluation & Evaluation & NegotiationNegotiation

BidBidBidBid BidBid

ContractContract

@

@@

@@@

@ @

@

DeliveryDelivery@

@

@@

@@@

@

@@@

@@

@ @@

@

@@

@

@


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After

1_______1_______1.1___1.1___2_______2___________________________3_______3_______3.1 Aircon3.1 Aircon3.2_____3.2_____4___________4___________________________________

CorrespondenceCorrespondence______________________________________________

Bid responseBid response______________________________________________

NegotiationsNegotiations______________________________________________

Final contractFinal contract______________________________________________

AttachmentsAttachments______________________________________________











Customer

Supplier 1 Supplier 2 Supplier 3


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Business requirement

Why iSpec?

• Timing and cost

• Flexibility

• Learn and grow

• Deliver value

• Project Management

• Document Management and Version control


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Tool selection

Why iSpec?

• SAP Toolset• Integrated tool lacking in

functionality and ease of use.

• Adjusted timelines

• Other solutions• Various solutions reviewed

• Internal proposal in progress

• iSpec


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Reasons for iSpec

Why iSpec?

• Out of the box ready

• Almost 100% fit to our business requirement

• Rapid implementation

• Standalone flexibility until back-end ready

• Intuitive interface

• Training and help included

• Industry experience - not theoretical model

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SABMiller

Case study - SABMiller

• Second largest brewer in the world

• Operates in 67 countries

• CAPEX expenditure US$900 million per annum

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ERP/Requirements


• SAP user

• Required efficient Tender Management system

• Trial of iSpec as best-of-breed solution

• Contract/spec contains over 6,000 data items to manage for a new brewery

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Issues


• Internal issues• Speed - LAN issue - issued key

users with 3G cards as interim solution

• Resistance to change (learning curve)

• External issues (vendors)• Data entry slow - new

spreadsheet-like quick entry

• Validation - no incomplete submissions allowed. Vendor education.

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Trial results


• Productivity improvement of 300%

• Contract price reduction +- 3%

• Transparency and audit trail

• Single point auditing

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Global roll-out


• Global roll-out plan• customizations

• roll-out team

• training system

• custom manuals

• global roll out over the next 18 months

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iSpec - ERP


• iSpec was 100% fit for our business requirement

• iSpec is out of the box ready to use whereas ERP CRM integration is very difficult. You have to get e-sourcing to talk to the back end and this is very expensive and time consuming

• Rapid implementation of iSpec allowed us to change our process and behaviour without worrying about the tool

• Running iSpec standalone allows us more flexibility - we are not restricted by the back-end as with ERP

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iSpec - ERP


• iSpec's user interface is intuitive and easy to use

• iSpec comes with training materials which ERP doesn't - we would have to develop that

• iSpec comes with industry experience which makes implementation easier.

• iSpec instantly addressed our business problems

• Remy's commitment to solving our problems and making things work made a difference

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DP World

Case study - DP World

• World’s 3rd largest port operator

• Over 50 ports globally

• CAPEX around US$ 3 billion in current projects

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Requirements


• Wanted to centralize CAPEX procurement

• Needed an automated system

• Global access 24/7

• All documents up-to-the-minute accurate

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Issues


• Internal resistance• DPW bought P&O and they

resented DPW central procurement

• Once they saw benefits they came on board very quickly

• Internet issues• China - ISP blocked

attachments over 5MB - fixed

• Internal LAN bandwidth issues

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Benefits and savings


• Customized system

• 1 project manager now handles up to 30 projects (previously only 4)

• Single point auditing

• Standardization

• Project cost reduction of 3%


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User observations - value

• “iSpec has highlighted weaknesses that existed in our processes as well as our people. Using iSpec now helps us augment tendering and contract management skills in many of our business units.”

• “Project managers are now adding value to the process rather than doing clerical work much of the time”

• “Management reports are available at the click of a button and data contained in them is current - not days or weeks old.”

• “With improved visibility and a bit more time spent on negotiations we have saved in virtually ZERO amendments to contracts after awarding.”


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Summary

• Costs - iSpec avg. savings of 3%-20% on total project cost

• Productivity - iSpec results in 300%+ improvement = $

• Accountability - iSpec’s comprehensive audit trail

• Conflict resolution - iSpec One-Click resolution

• Control - Approved templates and edit/approval control

• Transparency - iSpec audit trail and easy user access


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Thank you


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Technology and security


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Technology

• Microsoft .NET application

• Requires only a browser (IE 6 +)

• Secure access

• Database - MS SQL Server

• Microsoft server 2003

Technical information


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Fin-Link

• Financial links to:

• ORACLE

• SAP

• JDE

• PeopleSoft

• Sun

• Thalia

• Sage

• Scala

• Empriz

• DTS or SSIS

• IAS compliant

• $25,000 each + consulting

ERP interfaces

Tech Spec Manageme

nt

Planning systems

Evaluation

MRP

Inventory Manageme

nt

Quality Manageme

nt

Invoice processing

Goods receiving

Approval

Purchase order

PaymentRequisition

Internal business

requirement

Reporting

Contract implement

ed

Contract draft and

review


External info

gathering


Strategic Sourcing

Trials & Supplier

Accreditation


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Typical Security


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eBidding option


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RemyAgendaIssuesProcessSolutionTemplatesTenderResponseClarificationsApprovalsBid openingEvaluationDeliveryProject planningContract mgtKPIBenefitsWhy iSpec?SABDPWTechnology

ImplementationAlignment of nomenclatureSizingGAP analysis1st Data gatheringTraining1st template1st tenderFeedbackAdjustRoll out planRoll out

InternetLANVendorsInternal resistanceOver-customizationIntegrationERP


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Implementation

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Sizing

• Questionnaire• Tenders per annum

• Time zones

• Duration of publication

• Project duration

• Vendors per tender

• Project team size

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Sizing

• Hardware• Reverse proxy

• Application server

• Database server

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Sizing

• Software• Server 2008

• SQLServer 2008

• Browsers IE 8+, Safari, Firefox, Chrome

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Implementation

• Startup meeting• Resources

• Training

• Project Plan

• 3 sites - production, UAT (test), training

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Typical project plan

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GAP analysis

• Master documents

• Tender process

• Delivery process

• Contract Management

• No customization yet


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Typical ERP gaps

Typical ERP gaps

• Strategic sourcing design based on category sourcing

• No technical specification design, collaboration and management

• Simplistic sourcing events based on SKUs

• No allowance for alternatives

• Short cycle time for review

• No project management

• Item/event vs project

Tech Spec Manageme

nt

Planning systems

Evaluation

MRP

Inventory Manageme

nt

Quality Manageme

nt

Invoice processing

Goods receiving

Approval

Purchase order

PaymentRequisition

Internal business

requirement

Reporting

Contract implement

ed

Contract draft and

review


External info

gathering


Strategic Sourcing

Trials & Supplier

Accreditation

104


ERP gaps

Tech Spec Manageme

nt

Planning systems

Evaluation

MRP

Inventory Manageme

nt

Quality Manageme

nt

Invoice processing

Goods receiving

Approval

Purchase order

PaymentRequisition

Internal business

requirement

Reporting

Contract implement

ed

Contract draft and

review

Negotiation

Sourcing RFx

External info

gathering


Strategic Sourcing

Trials & Supplier

Accreditation

iSpec

Typical ERP

system


105

Vendor buy-in

Nomenclature

• Vendors vs Eskom nomenclature

• No standard

• Mapping or standardize

• Important for evaluation/comparisons

• Medium to long-term goal

106


Data gathering

• Business hierarchy

• Templates

• Roles

• Approvals

• Configuration

107


Data gathering

Typical RFQ structure

RFQ Sections Plant A Plant B Plant C Plant D

Memorandum of Agreement Same conditions

O H & S Same conditions

Commercial Terms and Conditions ($) $$$$$$$ $$$$$$$ $$$$$$$ $$$$$$$

General Conditions Same conditions

Special Conditions Same conditions

Employer’s Requirement (FIDIC) ####### ####### ####### #######

Eskom Standards and Specifications Same conditions

Drawings

Executive Summary

Milestone Schedule

108


Training

• Training plan

• 1st training

• 1st template

109


Training

• Administrator

• Template editors

• Project team

• Vendor introduction

110


Training

• Custom Quick Guides

• Custom training videos

• Implement

111


First tender

• Prepare - smaller tender

• Publish

• Evaluate/negotiate

• Award

• Manage contract

• Feedback

112


Analyse first tender

• Issues identified during each phase (internal messaging)

• Adjustment/customization

• Apply new methods and customizations

113


Roll out plan

• Finalise Data gathering input plan

• Finalise Support plan

• Finalise Hosting plan

• Finalise Training plan

• Roll out plan to divisions and business units

114


Roll out plan

• Centre of Excellence: • Role allocation & Definition of

competency requirements

• Master template management

• Roles definition

• Interface with Remy-IS and GIS

• Help Desk functionality

• Knowledge sharing and capability building

115


Roll out plan

• Hubs: • Role allocation & competency

requirements

• Hub template management

• Roles allocation at project level

• Interface with Remy-IS / COE

• Help Desk requirements


116

Possible issues

117


Internet

• iSpec Attachments

• ISP limits file size for uploading

• Request IPS to increase file size limit

118


LAN

• Slow performance

• 90% LAN bottleneck not internet

• Separate LAN segment with high QOS

119


Vendor issues

• Validation - must submit all requested data• Lazy - will do work if they get

contract

• Want an opportunity to negotiate after bid opening

• Draw back• You can’t evaluate properly

without sufficient data

• Fix• Condition of doing business

• Long term benefit

• Decide which data is important for evaluation purposes

120


Internal resistance

• Resistance to change

• Training

• New system - takes time

• Have to change habits

• Requires discipline initially

• Soon realize benefits of improved productivity and transparency

121


Over-customization

• Enthusiastic users want everything up front

• Won’t work if we don’t have XX

• Customization/re-working is expensive and causes delays and errors

• Try before you customize - see what you REALLY need

122


Integrate/interface with ERP

• Do all divisions/business units have the same back-end?

• Is your back-end mature and fully rolled out?

• How will customizations affect integration?

• Get immediate benefit, customize when sure, then integrate (quicker return, lower cost, less frustration)

eskom ispec presentation and workshop

Documents

wasteautomated systems

issuesa revolution

workshopa revolution

systemswcm programa

largest port operatorsabmiller

right skills

pipeline of talent

bidsopen bids