e-procurement Presentation by

An overview of the process and Solution

Presentation tour E-Commerce E-Business , Evolution of Internet Business Models E-Procurement : Concepts and Scope

Electronic Tendering Reverse Auction Life Cycle of a tender & Security Issues Definition Benefits

E-Commerce Markets and Applications

Education Electronic Auctions E-Shopping

E-Banking

Internet

E-News Papers

E-Marketing E-Searching Games E-Health Care

Ticketing Movies

What is E-Commerce
E-Commerce
can be defined as business activities conducted using electronic data transmission via the Internet and WWW.

Why E-Commerce

Age of Competition Business Strategy to cut down costs, while improving quality and increasing speed of delivery of goods / services Globalization of Economy Ability to sell goods and services all over the world Proximity to Consumers, collection of Consumer data Solution for Office Automation and Quick Business Transactions More and More people having access to Internet Infrastructure, are turning to Internet as a one stop Platform for Virtual Trading Capability to do MORE . Key business strategy to sell more at reduces expenses

Classification of E-Commerce
B2B Business to Business B2C Business to Consumer C2B Consumer to Business C2C Consumer to Consumer

Classification of E-Commerce

C2C Consumer to Consumer

orkut, shadi.com,click jobs.com etc.

C2B Consumer to Business

Intermediatory .. shopping malls, online-tickets

B2C Business to Consumer

Buyer Centric ..Maruti, Hyundai Motors Ltd, Dell

B2B Business to Business

Supplier Centric .. SAIL , NTPC , BHEL

Classification of E-Commerce
B2B Business to Business
Facilitates Inter-Organization interactions and transactions Requires 2 or more business entities interacting directly or through intermediatories

Supplier Centric : SAIL Buyer Centric: Maruti, Hyundai Motors Ltd, Dell Intermediatory: IndiaMart

Classification of E-Commerce
B2C Business to Consumer
Offers Consumers the Capability to Browse, Select and Buy Merchandise ONLINE from a variety of sellers and at better prices Amazon.com and Fabmart.com are E-Commerce Business portals

Classification of E-Commerce

C2B Consumer to Business

Form of Electronic Commerce where a consumer has a set of requirement specifications and specific price for a commodity, service or item.

It is a responsibility of the Business Entity to match requirements to the best possible extent
Reduces Bargain time, increases flexibility and creates ease at point of sale for both merchant and the consumer Viz, .. Dell computers, ..

Classification of E-Commerce
C2C Consumer to Consumer
Is a activity that provides opportunity for trading of products and / or services amongst consumers who are connected to the internet

Classified Advertisements and auction of personal possessions form the basis for the category
Viz, orkut, shadi.com, face book, linkedIN

Benefits of E-Commerce

Reduced Manual Processing Reduced Overheads Expanded Markets

Faster Processing

Available 24 hours Wide Geographical Reach

Reduces Cost of Physical Storefront

Faster inter Organization Communication Quick Placement of Orders

Reduced Over-Heads Showroom Costs Expensive Capital Investments Reduced Manpower Costs Inexpensive Location Options

Then, What is E-Business

E-Business
E-Business is not just about is a super-set of e_Commerce
E-Commerce transactions, it is about redefining business models, with the aid of technology, to maximize customer Value Continuous Optimization of a firms business through digital technology

Financial Modules

SCM
EProcure ment Electronic Payment Financial EDI Data Warehousing Data Mining

Customer Service & Support

Suppliers

Data Reporting & Analysis

Tech.Enabled Selling E-Bill Presentn. & Pmt.

Customers

Employee Applications

E-Business Capabilities

E-Business Mathematical Equation

EB = EC + BI + CM+ SCM + ERP

Where

EC=E-Commerce BI=Business Intelligence CRM=Customer Relationship Management SCM=Supply Chain Management ERP=Enterprise Resource PLanning

The Building Blocks

High Availability

Merchant Account Web Site Or Hosting Account

Transaction Security

Shopping Cart

Payment Gateway

Search Engine Optimization

E-Procurement: What is it

Strategic Use of Internet Technology

Evolution of Business Applications Portals Xges E-MarketPlaces SCM/APS Visibility And Complex-ity

Global

Enterprise
MRP-II MRP Transactional

ERP

40s-70s

80s

90s

2000->

What Is e-Procurement?
e-Procurement is based on the use of Internet Technology
is conducting the traditional tendering process in an electronic form, using the internet.
Electronic Tendering

E-Procurement
The Process of Connecting Employees and Suppliers Via the Internet Making it possible to streamline and automate purchasing Across Departments; Business Units / Business Divisions

What Is e-Procurement? According to experiences , it is established that , using an e-Procurement solution to automate the acquisition of the goods and services required to run the enterprise can lead to dramatic economic benefits, such as:

5 to 15 percent drop in product costs 30 to 40 percent decrease in process costs 40 to 50 percent reduction in time required to complete a purchase requisition cycle.

Procurement Challenges and Implications

Purchasing Process is complex -> High Administrative costs Multiple Authorization Levels -> Long turnaround times Long Lead Times >Excess inventories; spoilage; off-contract buying Multiple Divisions with similar spending patterns -> Redundant Admin. Costs Large Number of Suppliers -> Low supplier leverage; large supplier management costs

E-procurement : What & How

Business Users
Search Catalog

Create Internal Source Track ReAudit Request Approval And Requestceive & Goods Order Pay

Intranet
Electronic Catalog

Requisition Process

Workflow

AutoSourcing

MatOnline Desktop Tracking Recei- ching & Pmt ving

Extranet
Update Catalog Confirm Avail Confirm Ack. Extranet Credit Order Ship Gen. Post Notice Invoice Pmt. Trn

Suppliers

e-Procurement comprises five functionalities that have different degree of implementation complexity on account of specific features they offer
Enquiry Generation Technical Bidding/Approval Price Bids Closed/Auction Finance Approvals & PO Generation Price Analyzer Spend Analyzer Supplier Compliance Analysis Purchase Planning/Savings Tracking

1 e-Requisition

2 e-Tendering e-Catalog 3
Supplier Rate List

4 e-Tracking

5 e-Category Management

Payments Materials Receipt/ Invoice

Online Indenting Online Approvals e-Requisition e-Tendering e-Catalog e-Tracking e-Category Management

Order & Approvals Supplier Data Integration

Order Tracking

Online indenting of items complete with online request approval according to a pre-defined workflow Automated tendering process with facilities for both closed bidding and reverse auction Buyers select and order from an online database of approved suppliers with pre-agreed terms of purchase Automated post-award order tracking system including provisions for online billing and payment A collaborative analytical tool to track procurement data & support planning activities

comes from
Process Improvement Org. Restruct

.
E-Procurement. value

Policy Changes

Strategic Sourcing

Tools/ Technology Expenditure . Analysis Of Items procured

Definition : E-Procurement
E-Procurement is using the Internet to operate the transactional aspects Of requisitioning, authorizing, ordering, receipting and payment processes for the required services or products.

E-Procurement Services

All related purchase processes is done electronically such as

eTendering ( Submit Collect Evaluate tenders ) eCataloguing ( Upload Search ) eOrdering ( Orders- Invoices) eAuctioning ( eMarketplace- Negotiations )

Why Use e-Procurement?

Cost Reduction

Every rupee saved in procurement goes directly to profit margin On-line sourcing eliminates the middle mess, allowing suppliers to bid more competitively Average purchase and fulfillment cycle times are reduced

Price Reduction

Time Reduction

Pain Reduction

By leveraging Internet technology, organizations can reduce e-Business implementation costs, time and standardization

Approach to E-Procurement
Pilot

project / Test Runs

ETS-Dynamic Pricing (Reverse auction) solution.

Combining

Application Service Provider Model

Service provider does the day to day operations on a

Per tender basis Contract for a No of tenders in a fixed period Volume of transaction basis

Buy Out Model

Buyer hosts, runs and operates the system

Key Requirements of the Solution

Confidentiality
Role and/or time based access to data held within the system

Authentication & Non Repudiation

The system should be capable of identifying and authenticating user entities to negate activity denials.

Integrity
Ability to maintain the state of data flowing through the system from source to destination, and record exceptions.

Security
Should be able to restrict unauthorised access to data and functions held
within the system during all stages of the tender lifecycle.

Advantages to Buyer

Track annual purchase by Product, Division, Branch, etc. Single contractor/bidder database across Offices Sell document online - save on production cost and courier cost. Save time, energy, efforts and money - Eprocurement

Benefits to Sellers

Never Miss a Tender - Anywhere/Anytime Access No need to subscribe dozens of paper

All they need is to log on yourwebsite.com

Easy Search - Saves Time and Money One time registration - for all departments Complete Information - Tender Notice, Project Details, Documents Online Support/Assistance

Prompt handling of Clarifications

Past Tender Results E-procurement will promote IT among PSUs

E-Procurement Benefits (#1/3)

Greater simplification and transparency of procedures Reduced duplication of procurement functions and offices. Greater transparency and accountability of decision making Benefits of scale due to consolidated purchasing Unified and user-friendly procurement system Efficient, time and cost saving . Information that is readily available by all parties involved, ensures any person making a decision, is also accountable for any action taken.

E-Procurement Benefits (#2/3)

Detailed specification has helped reduce purchase disputes. Analyze data more accurately. Consolidate all our common purchase towards a centralized contract approach. Accumulative orders strengthen bargaining power. Great business opportunities for suppliers. Strategic Entry Barrier for the Industry

E-Procurement Benefits (#3/3)

Strategic Benefits
Faster trading cycle Ability to adopt new business processes such as Just-in-Time manufacturing techniques. Ability to win new business or retain existing customers leading to improvements in business efficiency. Operational benefits include Reduced costs - paper and postage bills cut - reduction in money tied up in stock - manual processing costs (e.g. associated with verification, keying and re-keying of documents and the cost of manual filing systems). Improved cash flow Opportunity benefits include Enhanced image Competitive edge Improved corporate trading relationships

Tasks under taken during the pilot project stage

Defining Work Flow. Appointment of Service Provider. Defining Tendering Procedures. Defining Tender Documents Defining Auction Rules. Defining Tender Schedule. Apply & Issue of Digital Certificates. Generating of Pass Words. Defining SERVER Timing & Clock. Hoisting of Tender Documents. Training to NTPC personnels Training to Vendors. Allowing Downloads to Bidders. Submission of EMD (Off line) Verifying of EMD Details.

Tasks under taken during the pilot project stage

Submission of BIDs (On line) Opening of Bids (On Line) by TC, using Individual Digital Certificates & Pass Words. Online Opening of Technical Bids Online Evaluation of tech Bids. Online Technical Clarifications. Arriving at Technical Loading (Off Line). Incorporation of Loading Logic Defining BOD for Price Bids Online Opening of Price Bids. Using Individual Digital Certificates & Pass Words. Defining Lowest Price & Rank Options Defining Alias Names for Reverse Auction. Setting of REVERSE AUCTION Date. Conducting REVERSE AUCTION. Providing of item wise Break up by L1 Bidder Signing of Contract Agreement.

e-Requisition, e-Tendering & e-Tracking together automate the end to end procurement processes
PR PO Invoice

Procurement Process

Request

Tender

Receive

Payment

e-Procurement Functionality e-Requisition

Indenting Clarifications Approvals Budget tracking Request tracking Reminders

e-Tendering
Generation of Enquiries Receiving of Bids Technical Technical clarifications Technical approval Commercial bidding Closed Bidding Reverse Auction Price bid opening (for closed bidding only) Finance approval with predefined workflow Letter of intent through the e-route Generation of PO PO consolidation Electronic send to vendors Acceptance of PO

e-Tracking
Materials in on the basis of PO
Invoice QC Rejections Make payments based on PO, Invoice, Goods Receipt Credit Authorization

Automated Transaction Steps

e-Tendering: end to end procurement processes flow

EXISTING - TENDERING PROCESS SIMPLIFICATION IN REVERSE AUCTION
Reciept of Indent Reciept of Indent Verification of Indent wrt Check List

Registration Of Indent

Registration Of Indent

Finance Concurrence for ST or LT > 15 lacs

Check for value/ type of tender.

Check for value/ type of tender.

Indentor & Finance to nominate TC member at the time of Administrative approval

Proposal for Floating of Tender Enquiry SELECTION OF VENDORS

Seek Internal approvals within materials SELECTION OF VENDORS in case of LT

Nomination Of TC from Indentor & Finance

Float Tender Enquiry single or two part

Float Tender Enquiry

TECHNICAL Bid Opening

Indentor to Seek Technical Clarification from Bidder

Techinal Bid Opening

Technical Evaluation by Indentor

Querries from INDENTOR & Technical Clarification to and from Bidder

Technical Evaluation by Indentor Querries from INDENTOR & Technical Clarification to and from Bidder

Processes covered In Electronic Tendering

COMMERCIAL Bid Opening Reverse Auction on the Internet for discovering of L1 Vendor ( Only Techinically qualified vendors to participate)

Selection of L1 Vendor Calling Of Vendor

Final TC Recommendation

Approval Of TC Recommendation

Preparation Of Draft Purchase Order/ LOA Vetting Of Draft PO/ LOA Control / Registration Of Purchased Orders

Preparation Of Draft Purchase Order/ LOA Vetting Of Draft PO/ LOA Control / Registration Of Purchased Orders

Finance Concurrence

Release of PO to Supplier

Release of PO to Supplier

is A process technique which allows prospective buyers to list any item(s) they wish to buy, and the sellers bid to provide the best price , Suppliers Competing, can be from anywhere in the worldjust need to have Internet access.. Reverse in natureBecause prospective sellers bid the price DOWN as they compete for the work and the Prices Spiral Down, the process is More Consumer Oriented and is Most effective after Technical evaluation.

Reverse Auction

Registration Of Indent
No mination of QR Committee and Preparation of QR
Approval for QR Committee Preparation of QR

Check for Value / type of Tender

in case OT

Proposal for Floating ON_LINE Tender thro e-procurement Portal TC No mination Indentor & Finance Release Tender through e-procurement Portal
OFF LINE EMD Submissions Online Bid Submissions

Approval for QR -

On line - PRE-BID Technical Clarification to & from Vendors

Clarifications by E-mail, message chat boards

ON-Line Technical Bid Opening On-line Queries from Indentor, Technical Clarification to & From Vendors by e-mails , chat boards

Technical Evaluation using online Technical Bid Comparator

TER off-line

TC meeting , note , proposal for technical approval, short listing of party for Price Bid Opening Auto opening of Price Bid & auto Generation of CS reports On-LINE Price bidding ( Dynamic) Using appropriate, rules defined In tender document. REVERSE AUCTION.

Reverse Auction
Final TC Recommendation Approval Of TC Recommendation Preparation of draft Purchase order / LOA and Vetting of the same t Control / Registration Of Purchase Order
Release of PO to Supplier

To release EMD for Unsuccessful bidders. Security Deposit from Successful bidders

activity process-revisit

Process improvisations based on pilot experiences

TIME LINE FOR COMPLETION OF A TENDERING PROCESS Laps e Time (days ) 0

Stage (days)

1 0

1 1

1 2

2 1

2 2

2 3

2 4

2 5

2 6

2 7

2 8

2 9

3 0

3 1

3 2

3 3

3 4

3 5

Receipt of Tender Awareness Program Identification of Item Document for DC Issue of DC (NTPC) Tender Preparation Tender Release Vendor Training

NTPC Service Provider

1 3 3 1

Supplier

Document for DC Issue of DC (Vendor) Tender Download Bid Preparation Close for Bidding Submission of Bid Technical Opening 2 18 11th day to 21st day

Technical clarifications
Commercial Opening Reverse Auction Break-up Sheet

2
1 1 1

Process Completion

35

e-Tendering: end to end procurement processes flow

e- Procurement - Simplication of Process Pilot-Project - Off line Activity
Generation of Indent at User's End

Internal Approvals of the Indent

Registration Of Indent
Check for value/ type of tender.

Indentor & Finance to nominate TC member at the time of Administrative approval

Seek Internal approvals within materials SELECTION OF VENDORS & Procurement Process

Pilot-Project - Online Activity

e-procurement Pre-requisites 1. 2. 3. Set up Software for Electronic Tendering. Train Suppliers for On-line Bidding Process. Train NTPC Officials for On-line Process.

Pre-Event 1. 2. Provide information on Electronic Tendering. Freeze Specification-a. Techinical b. Quality. c. Commercial. Create Tender Document. Pre-Bid Clarifications- ON- Line. Obtaining Technical cum Process Compliance statements from Suppliers for Tech, Evaluation. Decide Online Bidding Strategy.

Off Line Activity Collection of EMD. Collection of Tender Fees.

ON-LINE e-Procurement Process

3. 4. 5. 6.

Event

1. Conduct the Online Bidding Event 2. Generate and Submit the post Event reports.

Post - Event

1.Contract Sign Off with Identified Supplier as per Tender Document.

Pilot-Project - Off line Activity

Finance Concurrence

Award Approval as per DOP

Release of PO to Supplier

Action to be initiated.
Approval for Reverse Auction Approval for Pilot Project thru Service Provider Clearance from CVC Clearance from CVO Appointment of Service Provider for pilot Deployment of Processes/Work Flow Educating And training users

Launching of Pilot Project

Revisiting the learning of PILOT Project Planning for Roll Out.

Using the e-Tendering ?

the PURCHASE DEPARTMENT can

Raise Indents as per the requirement Approve indents online Create and publish NIT Sell Tenders Receive Bids Evaluate Tenders Award Contract / PO

Using the e-Tendering ?

the SUPPLIERS can

Receive notification of the relevant tenders Purchase tenders document Submit Bids Online Track the status of their bids

Payment Status

BUILDING BLOCKS OF E-PROCUREMENT

Progress Status Document Status

Order acceptance Purchase Order Tech-Comm Evaluation Offer Tender Notification

The e-Tendering workflow

Step 2
Alerts Clarifications Clarificatio Encryption ns 16 digit key Status Counter Encryption
Raise Tender

Purchase Requisition

Step 1

Alerts

Step 3

Publish Tender

Evaluation And Awarding

Step 5

16 digit key

Step 4

Bidding

Tender Requisitioning

Tender Requisitioning (Role Requisitioner) Specifying the Item Selection of Category Item Intended Use Quantity Setting Date and Time

Step 2

Step 1

Item Approval Date

Alerts Clarifications Encryption 16 digit key Status Counter

Step 3

Item Required Date

Upload Relevant documents Status Counter

Step 5

Step 4

Raising the Tender

Tender Raising (Role Approver) Approve / Reject Requisition Raise Tender Project Details Contact Details Timelines Tender Format
Step 1
Alerts Clarifications Encryption 16 digit key Status Counter

Step 2

Step 3

Pre-Bid Meeting Details

Upload Relevant documents Status Counter
Step 5

Step 4

Tender Publishing

Publish Tender (Role Dept. Head) Approve / Reject Tender Raised Publish Tender Step 2

Choose persons to be notified on publish

Choose persons to open the Tender Choose the suppliers who will bid Step 1
Alerts Clarifications Encryption 16 digit key Status Counter

Step 3

Upload documents
Status Counter Step 5

Step 4

Bidding for the Tendering

Bidding
Search for tenders invited Clarifications Bid EMD Technical Bid Commercial Bid
Step 5 Step 1

Step 2

Alerts Clarifications Encryption 16 digit key Status Counter

Step 3

Step 4

Bid Evaluation and Ranking

Step 2

Evaluation and Set Rank Persons invited to Open tender can view bids 16 digit key at time of opening. View and Evaluate Bids Set Rank for each Supplier Choose Winner Step 5 Step 1

Alerts Clarifications Encryption 16 digit key Status Counter

Step 3

Step 4

Tasks required to be under taken

Defining Work Flow. Appointment of Service Provider. Defining Tendering Procedures. Defining Tender Documents Defining Auction Rules. Defining Tender Schedule. Apply & Issue of Digital Certificates. Generating of Pass Words. Defining SERVER Timing & Clock. Hoisting of Tender Documents. Training to NTPC personnels Training to Vendors. Allowing Downloads to Bidders. Submission of EMD (Off line) Verifying of EMD Details.

Tasks required to be under taken

Submission of BIDs (On line) Opening of Bids (On Line) by TC, using Individual Digital Certificates & Pass Words. Online Opening of Technical Bids Online Evaluation of tech Bids. Online Technical Clarifications. Arriving at Technical Loading (Off Line). Incorporation of Loading Logic Defining BOD for Price Bids Online Opening of Price Bids. Using Individual Digital Certificates & Pass Words. Defining Lowest Price & Rank Options Defining Alias Names for Reverse Auction. Setting of REVERSE AUCTION Date. Conducting REVERSE AUCTION. Providing of item wise Break up by L1 Bidder Signing of Contract Agreement.

Screen shot of activity based Date and Server Timing Electronic Tender cum Reverse Auction : PC & Peripherals
Seq No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 NTPC Stage Vendor Stage Start Date & Time Expiry Date & Time Release Tender Close For Technical And Commercial Bid Close For Price Bid Technical Bid Opening Technical Bid Clarification Price Bid Opening Reverse Auction View Item Rate Form Tender Award Tender Purchase Tender Download Bid Preparation Bid Submission Item Rate Form 19-10-2004 10:00 19-10-2004 19:16 19-10-2004 19:16 19-10-2004 19:16 09-11-2004 12:10 09-11-2004 12:10 09-11-2004 15:10 10-11-2004 14:30 02-12-2004 11:31 02-12-2004 14:00 06-12-2004 11:00 07-12-2004 10:41 08-12-2004 16:01 09-12-2004 10:00 19-10-2004 19:15 08-11-2004 11:00 08-11-2004 11:00 09-11-2004 12:00 09-11-2004 15:00 09-11-2004 15:00 10-11-2004 14:00 02-12-2004 11:30 02-12-2004 12:30 03-12-2004 17:30 06-12-2004 12:00 08-12-2004 16:00 08-12-2004 18:00 17-12-2004 17:00

BACK

Pilot Project: The sealed bid stage mirrored NTPCs current tendering process carried out online,
Time planned for the process 62 days
Tender issue
Electronic tender document was prepared by NTPC Vendors were allowed to download the tenders

Bid submission
Technical and price bids were submitted online
HCL, Acer, HP and IBM submitted the bids

Actual process took 109 calendar days instead of the planned 62 days because of the cautious approach adopted during the pilot

Technical bid opening

Comparative Excel reports were generated for the technical bids Technical clarifications were obtained in an online conference

Price bid opening

HCL, HP and IBM qualified for this stage Price bids were opened for these vendors

Digital encryption and certification were used to ensure data security

REVERSE AUCTION
Auction as we new it till recent times Was the one of the methods of selling goods and services.

Subsequent to introduction of e-procurement

AUCTION are now classified as

FORWARD AUCTION

&
REVERSE AUCTION
FORWARD Auction for selling of Goods Reverse Auction is one of the methods of buying Goods and Services.

BID TREND

RESULTS OF REVERSE AUCTION

Total number of bids received: No of auto extensions applied: Time of the first bid: Time of the last bid: 129 67 11:05:17 14:57:16

No of vendors qualified to participate in RA :

Opening Price: (Lowest price received from commercial bid opening stage) R1 Price rcvd after the RA: Savings (in Rs / in %):

3
27509000 20669000 6840000 / 25%

Pilot Online Electronic Tender cum Reverse Auction : PC & Peripherals Tender Reference number: 01/CMM/CMPG/R-4092_23
Seq No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 NTPC Stage Vendor Stage Start Date & Time Expiry Date & Time

Release Tender Close For Technical And Commercial Bid Close For Price Bid Technical Bid Opening Technical Bid Clarification Price Bid Opening Reverse Auction View Item Rate Form Tender Award

Tender Purchase Tender Download Bid Preparation Bid Submission Item Rate Form -

19-10-2004 10:00 19-10-2004 19:16 19-10-2004 19:16 19-10-2004 19:16 09-11-2004 12:10 09-11-2004 12:10 09-11-2004 15:10 10-11-2004 14:30 02-12-2004 11:31 02-12-2004 14:00 06-12-2004 11:00 07-12-2004 10:41 08-12-2004 16:01 09-12-2004 10:00

19-10-2004 19:15 08-11-2004 11:00 08-11-2004 11:00 09-11-2004 12:00 09-11-2004 15:00 09-11-2004 15:00 10-11-2004 14:00 02-12-2004 11:30 02-12-2004 12:30 03-12-2004 17:30 06-12-2004 12:00 08-12-2004 16:00 08-12-2004 18:00 17-12-2004 17:00

No of bids No of extensions Time of the first bid Time of the last bid

129 67 11:05:17 14:57:16 3 27509000 20669000

No of vendors qualified to participate in Reverse Auction Opening Price (lowest price through commercial bid opening) R1 Price rcvd after the RA Saving (in Rs / in %) 6840000/25%

BACK

Key Requirements of the Solution

Confidentiality
Role and/or time based access to data held within the system

Authentication & Non Repudiation

The system should be capable of identifying and authenticating user entities to negate activity denials.

Integrity
Ability to maintain the state of data flowing through the system from source to destination, and record exceptions.

Security
Should be able to restrict unauthorised access to data and functions held within
the system during all stages of the tender lifecycle.

Benefits to Buyer

Track annual purchase by Product, Division, Branch, etc. Single contractor/bidder database across Offices Black listed contractor database

No frauds

Sell document online - save on production cost and courier cost. Save time, energy, efforts and money - E-procurement

Benefits to Customers

Never Miss a Tender - Anywhere/Anytime Access No need to subscribe dozens of paper

All they need is to log on yourwebsite.com

Easy Search - Saves Time and Money One time registration - for all departments Complete Information - Tender Notice, Project Details, Documents Online Support/Assistance

Prompt handling of Clarifications

Past Tender Results E-procurement will promote IT among PSUs

LONG TERM STRATEGY -.Contd.

Vendor Training as a Continuous process. Vendor readiness to be ascertained before roll-out

Focussed approach for vendor training

Vendor capability and willingness to respond to E-Procurement System. Digital Certificates to be applied in advance by the Vendors

Alternate methods for EMD Handling

Integration with OLIMFAS

integration with e-Payment to be explored.

Infrastructure readiness at each location

To ensure smooth roll out of e-procurement, full time implementation teams should be formed at corporate and regional levels
ED (CC&M), ED (Regions) Corporate Team (7) Monitoring
Team Leader GM - CM Functional Members Corporate Materials (4) Corporate IT (1) Corporate Finance (1)

Implementation Champions

Implementation Team Regional Teams (6)

Team Leader Head (C&M) Functional Members C&M (4) Regional IT (1) Site 1 Site 2 Team Leader Station Head Functional Team HoD - C&M HoD - IT Team Leader Station Head Functional Team HoD - C&M HoD - IT Site n Team Leader Station Head Functional Team HoD - C&M HoD - IT

Coordination Monitoring

Site Teams

Life Cycle of a Tender

Step1: Preparation & Approval Step6: Step4: Bidding Step5: Analysis Evaluation & Awarding

Step2: Announcement

Step3:
Clarifications

Specification State

Announcement State

Clarification State

Response State

Analysis state

Evaluation State

Online / Electronic process

Electronic cum Manual process

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Life Cycle of a Tender in ERP/SAP

Step1: Create Requisition ME 51 Step2: Release of Requisition ME 54 Step2: Create RFQ ME 54 Step4: Release RFQ ME 45 Step5: Maintain RFQ ME 47 Step6: Price Analysis ME 49 Step7: Create PO ME 21 Step8: Release PO ME 28

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Integration of Tender for ERP

Step1: T Code Step2: ME 51N Step3: ME 41 Step4: ME 47 Step5: ME49 Step6: ME21N Step7:

Specification State

Purchase
Requisition

RFP/ST/OT/LT

Quotation
Maintenance

Price
Comparison

PO

Receipts

Electronic Tendering Process

Document states in the life cycle of the tender

Life Cycle of a Tender in ERP/SAP

Step1: Create Requisition ME 51 Step2: Release of Requisition ME 54 Step2: Create RFQ ME 54 Step4: Release RFQ ME 45 Step5: Maintain RFQ ME 47 Step6: Price Analysis ME 49 Step7: Create PO ME 21 Step8: Release PO ME 28

eTendering Cum Reverse Auction

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Life Cycle of a Tender in ERP/SAP

Step1: Create Requisition ME 51 Step2: Release of Requisition ME 54 Step2: Create RFQ ME 54 Step4: Release RFQ ME 45 Step5: Maintain RFQ ME 47 Step6: Price Analysis ME 49 Step7: Create PO ME 21 Step8: Release PO ME 28

eTendering Cum Reverse Auction

Technology for pulling the data from ME-51 and pushing to ME-21 to be detailed out.
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Role of the Service Provider

Provide information on Electronic tendering

Setup software for Electronic Tendering.

Create & Float RFP for online bidding: Technical, Quality & Commercial specifications.

Collaborate in
deciding online bidding strategy

Conduct the online bidding event

Train all qualified suppliers for online bidding process

Obtain process cum technical Compliance statements from Suppliers

Generate and submit post event report

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Scope of Procurement Services

Fulfillment Services

RFQ Design Opportunity Analysis

Supplier Discovery

Supplier Validation

Training Support

Dynamic Trade Engine

Comprehensive offline/online process Benefits Complete enablement services Post auction validation/fulfillment support

Key Concepts in E-Procurement

Internet Extranet Portal VPN Security and Encryption Firewalls Electronic Payment Systems VAN EDI Service Providers Rosetta net Webs Services and XML

What is industry looking for?

Trust No over-promise Lower cost of doing business Inter-operability and standardisation Speed of payment Increase in turnover Real business development opportunities Cheap maintenance Be a stakeholder Simplicity

Building an E-Commerce Infrastructure

You need a web site to host your goods and services online. Your Business must be strongly reachable by search engines. You need a shopping cart so that your customer are able pick products across various pages on the website, helps you to calculate your totals as well The ability to collect payments online from your customers There must be strong security on your web transactions, so that your customers do not label your site un-safe Your web site must be available to your customer for the promised QoS (E.g. 99.9%)

Architectural Framework
Catalog based retailing, Marketing and Advertising, Banking and Investment, Auctions, Home Shopping, Procurement
Information Distribution and Messaging Technologies (HTTP, SMTP, IMAP etc) N/w Multimedia Content publishing technologies (HTML, XML, JAVA, Graphics, Video Tools etc) Legal and Public Policy Framework Public Key, Identification and Authentication Infrastructure Business Service Infrastructure Directories, Search Engines etc Secure Payment Protocols Online Payment Infrastructure

E-Commerce Applications

Security and Encryption Technology

Network Protocol Standards Network Infrastructure (Internet)

Business challenges and Implications addressed

Challenges
More Paper Work Non Centralized Data

Implications
Process Slow, Time consuming Access to information not available Loss of Trust

Addressed
Electronic Tendering Centralized database

Insecure Data

Encryption and Digital Certificates Streamlined Process

Complex, Non-Standard Processes

High Business Costs

e-procurement @ NTPC

your
questions

please

e-procurement @ NTPC thank you

Security Aspect
Security Challenges Detecting whether document is Tampered or not Identifying a person in the faceless world of Internet Non Repudiation Document Secrecy Bidding should not be allowed after due date and time Bids cannot be opened before due date and time Bids can only be opened by authorized officers

Security Aspect
Digital Certificate

Digital Signature
Secure Socket Layer (SSL) Hash Algorithm / MD5 (Data Encryption)

Digital Encryption
Role Base Access Time Based Access

Time Stamping
Biometrics Security Audit

Digital Certificates
Confidentiality Integrity Authentication Non-repudiation
Vendor Request for Digital Certificates By Providing Details Certifying Authority (CA) TCS/ Safe Script/NIC etc..

Authenticates and Notifies

Sub CA/RA

Digital Certificate
Digital Certificate is your Internet Passport Digital Certificate come with 1 / 2 Years validity Can be procured easily, in less than 8 Hours List of licensed Certifying Agency (CA) TCS N Code (GNFC) Safescrypt MTNL NIC

Digital Signature
apple1 Sign

MIIFbQYJKoZIhvcNAQcCoIIFXjCCBVoCAQExCzAJBgUrDgMCGgUAMAsGCSqGSIb3 DQEHAaCCBG4wggRqMIIDUqADAgECAgoRC14bAAAAAAAQMA0GCSqGSIb3DQEBBQUA MBUxEzARBgNVBAMTCkJyYWluYmVuY2gwHhcNMDUwMjA4MDgzNTAzWhcNMDYwMjA4 MDg0NTAzWjCBmTELMAkGA1UEBhMCSU4xEDAOBgNVBAgTB0d1amFyYXQxEjAQBgNV BAcTCUFobWVkYWJhZDEMMAoGA1UEChMDRTEwMREwDwYDVQQLEwhTb2Z0d2FyZTEf MB0GA1UEAxMWU29mdHdhcmUgQWRtaW5pc3RyYXRvcjEiMCAGCSqGSIb3DQEJARYT dGVzdEB0ZW5kZXJjaXR5LmNvbTCBnzANBgkqhkiG9w0BAQEFAAOBjQAwgYkCgYEA Subject Issuer Thumbprint Valid From Valid To : : : : : Software Administrator <test@tendercity.com> Brainbench <> F17002737EEA8920F212E4095125524EA37B85CA 2/8/2005 2:05:03 PM 2/8/2006 2:15:03 PM

Verify

apple1

Hash Algorithm / MD5

Recommended in Information Technology ACT 2000

Hash Algorithm is irreversible i.e. from MD5 one cannot know the
original text Detects even the slightest change in the document

128-bit hash can have 3.4 x 1038 possible values

340,282,366,920,938,463,463,374,607,431,768,211,456 possible hashes

Tamper Detection
Text Box
Apple1

Calculate MD5 Hash

MD5 Hash
31BD0BB0406E2CAAA88CC37A95C9668A

Digital Encryption

apple1

Sign

MIIDjQYJKoZIhvcNAQcCoIIDfjCCA3oCAQExCzAJBgUrDgMCGgUAMBkGCSqGSIb3 DQEHAaAMBAphAHAAcABsAGUAoIICPTCCAjkwggGmoAMCAQICEB6jnyB/EKmER8G0 uTheLwQwCQYFKw4DAh0FADBQMRYwFAYDVQQDEw1BZG1pbmlzdHJhdG9yMQwwCgYD VQQHEwNFRlMxKDAmBgNVBAsTH0VGUyBGaWxlIEVuY3J5cHRpb24gQ2VydGlmaWNh

Encrypt

MIILJQYJKoZIhvcNAQcDoIILFjCCCxICAQAxgf4wgfsCAQAwZDBQMRYwFAYDVQQD Ew1BZG1pbmlzdHJhdG9yMQwwCgYDVQQHEwNFRlMxKDAmBgNVBAsTH0VGUyBGaWxl IEVuY3J5cHRpb24gQ2VydGlmaWNhdGUCEB6jnyB/EKmER8G0uTheLwQwDQYJKoZI hvcNAQEBBQAEgYCsiBMu6ImSpjUZj+dkVmhhuB6WCnaE2cVEESl3Q4XRlBMb3v/d Dp1kzDZIyaW5G+lsrCJbHLwUa4Rv3QZ+xcZJfK/CjbT1cqoB5lk9rsraddttnr9F

MIIDjQYJKoZIhvcNAQcCoIIDfjCCA3oCAQExCzAJBgUrDgMCGgUAMBkGCSqGSIb3 DQEHAaAMBAphAHAAcABsAGUAoIICPTCCAjkwggGmoAMCAQICEB6jnyB/EKmER8G0 uTheLwQwCQYFKw4DAh0FADBQMRYwFAYDVQQDEw1BZG1pbmlzdHJhdG9yMQwwCgYD VQQHEwNFRlMxKDAmBgNVBAsTH0VGUyBGaWxlIEVuY3J5cHRpb24gQ2VydGlmaWNh

Decrypt

Verify

apple1

Sourcing
Streamline quote- based buying Capture everything that catalog based- procurement cannot Improve sourcing cycle time Reduce process efforts and costs Negotiate best prices

RFQ Builder

Supplier SmartMatch

Sourcing
Supplier Selection On-line Bidding event Pre-Bid Collab

B-to-B Exchange

At its most basic, a B2B exchange (also called a marketplace or hub) is a website where many companies can buy from and sell to each other using a common technology platform. Many exchanges also offer additional services, such as payment or logistics services that help members complete a transaction. Exchanges may also support community activities, like distributing industry news, sponsoring online discussions and providing research on customer demand or industry forecasts for components and raw materials.

E-Marketplace
An Online Trading Hub Where Buyers and sellers Exchange Goods, Services And information
Streamlines commerce processes of buyer and seller Provides Internet-based procurement System to Buyer Creates Shared network of Commerce services Enables Aggregated purchasing Enables new methods of sourcing and trade

Types of On-line Exchanges

Independent Trading Exchanges (ITX) Third-party, industry players have minority holdings (e g e-steel) Software-vendor-managed Trading Exchanges Subset of ITX, owned by software vendors (e g i2 operates FreightMatrix Logistics PlanningServices) Consortium Trading Exchanges Owned and operated by Industry buyers / sellers eg Elemica; Covisint) Private Trading Exchanges Set up by a company for links to its business partners

Example from utilities Sector

Rapidpartsmart.com : On-line Parts Search Engine for Electric Utilities Visitors can search for engineered parts within their own plants; or In affiliated plants; In vendor / supplier catalogs At other dotcom sites; Parts that are preferred, alternate, or no longer manufactured Subscribing partners can locate, buy or sell parts 24 hrs a day, 7 days a week Utilizes plug-ins that integrate search functions with CMMS, ERP systems

Choices of On-line Exchanges

Independent Trading Exchanges (ITX) For Commodity; non-strategic direct and indirect Consortium /Private Trading Exchanges For non-commodity, low volume direct and indirect goods and services Consortium /Private Trading Exchanges with traditional EDI For strategic, high-volume direct and indirect purchases

Trends in e-Procurement
Private Exchanges will increase (SAP is pushing technology, AMR)

Extranets will stay

Consolidation in Consortium and Independent exchanges Web-based Collaborative Logistics Web-based Collaboration in product / component design

Savings through e-procurement - Improve Business Practices

reduce the number of suppliers, select preferred suppliers and enforce on- contract buying with them; gather data about total spending by purchase commodity type and supplier and use the information to negotiate price reductions; improve process efficiency by eliminating multiple buying centers, systems and staff; improve turnaround time by clear procurement structure, policies, roles & responsibilities; and transit smoothly into the redesigned Procurement function and implement according to plan.

Savings From e-procurement

Total indirect spending is typically 30% of revenue Approx 30% of indirect spending is suitable for contract buying Contract compliance savings achievable (5% of eligible indirect) Supplier consolidation savings achievable (50% of compliance) Process Savings (10% of consolidation savings) Total savings (approx 8% of eligible indirect / 2.5% total indirect spend) *Source - Gartner Research & AA eProc ROI studies &
Implementations