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E-Business Between Private Enterprises and the County of North Denmark
| Title | E-Business Between Private Enterprises and the County of North Denmark |
| Aidamount | 2.000.000 |
| Organization | The County of North Denmark |
| Conclusion | Ingen side valgt |
| Homepage | No homepage |
| Contact | Anders Boje, Financial Manager ABO@nja.dk |
| Other participants | KMD |
| Theme | Industrial Develop. |
| Keywords | No keywords |
| Project start | 06 February 2001 |
| Project end | 31 December 2003 |
| Description | This project will make the County of North Denmark the first Danish county to establish a full scale E-Business solution. A prerequisite for the county to establish a full scale E-Business solution is the presence of a procurement organisation and a procurement strategy.
The county of North Denmark has established a procurement organisation with a common procurement office, manned with professional procurement officers. The procurement policy of the county is based on concern procurement meaning that tenders are held in all item categories and some categories related to services. The conunty´s finance committee lays down the general procurement strategy of the county.
All the supply agreements of the county are made on a central level, and the hospitals and institutions can make use of all the agreements. Concern procurements give benefits to all institutions of the county by obtaining lower prices and increased discounts. The approach to the competitive situation is Best wins (Best and cheapest).
The county of North Denmark makes procurements for approx. 760 million DKK. annually. 450 framework agreements have been made covering 150-200 product categories, primarily on the hospital area.
The county of North Denmark has split the E-Business solution in 4 independent projects to be implemented over the next 0 - 36 months. The plan is to reinforce two frontiers in procurement. One is the internal improvement of efficiency and an increased use of the made agreements. The other is automating the supplier procedures.
Considering the automation of supplier related processes there will be a Complete E-Business solution and a Partial E-Business Solution respectively.
Complete E-Business solution
This is an E-Business solution that is fully integrated with the administrative IT system of the county and the supplier. This means that data is transferred from the sender's IT system to the receiver's IT system with no re-typing nor manual control or any other human touch. This type of E-Business solution will be the most relevant to the big suppliers with a lot of transactions, as it is relatively expensive to establish this solution. On the other hand, this is where the big savings can be obtained.
Partial E-Business Solution
EDI solutions that are not fully integrated in both ends, i.e. where data cannot be transferred directly from IT system to IT system, but will need to be re-typed and controlled by at least one of the parties are called partial E-Business.
The implementation of a complete E-Business solution is costly in terms of both time and resources to the suppliers, and maybe it is unprofitable if the supplier has only few transactions with the county.
It could also be a problem to a great number of small and medium sized enterprises that they do not have the resources or the IT capacity available to carry out a complete E-Business solution So there is a need to make a partial E-Business solution for these enterprises.
For example, a partial E business solution could be a Web EDI solution or/ and e-giro/e-invoice.
The Web EDI solution calls for the development of a solution to contain the relevant forms to be electronically exchanged. This solution is installed on the Web server of the county and will be accessible to the relevant business partners only. Via a call to the server the supplier will be presented to a blank invoice to be completed and returned to the server. The server will forward the invoice to e.g. the finance system of the county.
Further the county can send and order via the Web server. The supplier can receive the order via the Internet and subsequently convert the order into an invoice.
The other part of the project involves an internal increase of efficiency and a more intensified use of the agreements that have been made. In this area two projects will be initiated: an electronic ordering system and an electronic invoice processing
Electronic Ordering System
This system enables each buyer from the institutions to make their own procurements via the system. This is intended as a tool for the institutions to make searches for the items in the central inventory or from the common procurement agreements. Once the item has been found, an electronic order can be dispatched. The order could for example go to the supplier directly and be recorded in the central procurement system on its way.
It is also intended that in item categories where no common agreements have been made, the system should be able to retrieve items via catalogues on the supplier's own home pages.
Electronic Invoice Processing
The implementation of a voucher/receipts flow system to make sure that an approval and entry of the invoices to the ledgers can be electronically executed. It is intended that the via a browser the system should be used on all the institutions of the county. It should also be operative in the cases where the invoice is not started by a specific order.
Most of the above mentioned projects will be completed in collaboration with Kommunedata.
The benefits of a full-scale e-business solution
The county of North Denmark expects the following long term benefits:
The Institutions will save money on procurement. By making the agreements clear and easily accessed and read on an item level it is expected that several of the decentralised institutions will make use of the procurement agreements and in this way make substantial savings
Savings in administration on the institutions. When procurements are made via the electronic ordering system the institutions avoid spending time to call for quotes from different suppliers to find the most attractive offer
Improved logistics. This means that the costs for storage and handling can be reduced
Financial Benefits to the Supplier. The financial benefits obtained from e-business by the supplier are expected to make a benefit to the county in the way of lower prices
Improved Efficiency in the procedures related to ordering and invoicing. Less staff resources will be spent for the invoice processing. The National Association of Local Authorities has estimated savings in time consumption to be 6 minutes for the part of the process comprising invoicing and payment
Better observance of the procurement policies, e.g. environmentally sustainable procurements
For further information, please call
Anders Boje, Financial Manager, Tel. 96 35 10 60
Procurement coordinator Hans Jakob Jensen, Tel. 96 35 10 85 |
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