NZDF at BravoConnect – Key to Implementing an Integrated eSourcing Solution: Only Chase One Rabbit

Last week we reported on BravoSolution’s very successful, informative and enjoyable annual user conference (at Oatlands Park Hotel, pictured) and gave an overview of the highlights from days 1 and 2, which you can read here and here. One of the presentations we mentioned came from New Zealand Defence Force, focusing on how the organisation implemented its eSourcing suite -- we thought the benefits it has gained might resonate with, and be interesting for our readers.

Iain Livingstone, from BravoSolution partner n3, gave us an inside look at the journey undertaken by New Zealand Defence Force (NZDF) over the past few years as it implemented BravoSolution, going  from a paper-based, manual procurement process to a fully automated and integrated one. The insights and lessons learned are valuable for any organisation adopting or thinking about adopting a full sourcing solution like BravoSolution, or even just parts of it, in this case eTendering, contract management and supplier relationship management.

Iain, on behalf of NZDF, talked about how NZDF wanted to achieve better procurement outcomes, and to provide visibility and transparency across locations that would support a strategic-level vision of Joint Operational Excellence. It wanted to find the right technology to support its aims. This is how the story goes:

Defence Commercial Services (DCS) within NZDF provides the organisation with professional, commercial expertise, and runs a centralised Procurement function which is embracing a step change away from traditional purchasing methods. Procurement is responsible for all minor capital expenditure (so not actual ships, because that’s the MOD, but uniforms, ammunition, FM services and the like). The organisation is large and geographically widespread by nature, with more than 14,000 full-time service and civilian personnel across its three services, Air Force, Navy and Army. It therefore needed a solution that: would work out of the box; had already been tried and tested by the marketplace; was capable of working across a diverse user base; have fast implementation and come with good support. Quite a tall order!

NZDF chose BravoSolution not just because it ticked all those boxes, but because its extensive use across the UK public sector gave them confidence it could work for them.

n3, as a procurement service provider, has a long-standing working relationship with NZDF and has been involved with its BravoSolution project since inception. NZDF is using three modules, eSourcing, Contract Management, and Vendor Performance Management. BravoSolution and n3 put together a portal, NZDF, SmartProcure, a website to provide suppliers and NZDF personnel with a simple, secure and efficient means of conducting procurement activities, and provided training. Suppliers can log on to download relevant documents and submit electronic tender responses. NZDF put out its first tender in July 2010 (which happened to be for taxis and shuttle services, worth $4.5 million over a four-year contract) and then proceeded to roll out 26 events in the first six months – which is pretty impressive.

Previously the function had been issuing documents in MS Word via email or published them online, they would get hard-copy responses back, which had to be evaluated manually. They did have an electronic contract system in place, but it had out-of-date coding and only a limited number of people could access it and make changes. Employing the eSourcing module meant no more hard copy tenders and no more sending out responses, opening tender responses is just the click of a button, and evaluation could be done in the system too. Creating a comprehensive library of key tendering information saved considerable time and effort during the tendering process, and all documentation relevant to the tender is stored and is easily downloadable. Regardless of geographic dispersion, everyone can see and use the information in the system at the same time. And this goes for suppliers too – from all over the world. They are no longer at the mercy of the postage system to meet closing times, it’s a much more even playing field.

Once they had that module firmly embedded they moved on to contract management, An SQL database had been in limited use, but it offered no bespoke reporting. NZDF identified which data it wanted to capture, and reviewed 1500 suppliers and contracts. n3 and BravoSolution did a bulk upload and a live transition over one weekend. Iain said, “It was great collaboration; we QA’d each item and by Monday the team had immediate access to all their contract info.”  Macros were also set up to consolidate data for industry contract managers – they had been working on their own spreadsheets and calendars and there was plenty of opportunity for missing events. Contract management had been a resource-heavy activity, and disputes could easily arise over who was responsible for what. There is now instant access to expiration dates, changes and renewals and alerts are sent out automatically when actions are due.

Electronic Vendor Performance Management raised some questions in the supplier world at first and there was initial reluctance. But suppliers were encouraged to become actively involved from the start and also went on the training courses. NZDF started with strategic suppliers, not with the traditionally easier ones, on the premise that if they got it right for them, then they’ve got it right for everyone. The mid-tier suppliers were next. 3000 KPIs are now built into the system alongside 4,500 suppliers and 500 staff, and there is one view of how they are performing against their contracts.

Iain explained that they are still on the journey, but it has been one of collaboration between the three parties.

His key takeaways were: you need senior management committed to making it work, and the trick is to implement module by module -- “If you chase two rabbits – both will escape.”

 

 

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