1. Portfolio/Number/Name:A/C2 - Better Procurement |
2. Programme/Activity: Please
include a short description The Scottish Executive plans to make
savings through improving procurement
practices. There are 4 components to the
procurement savings. These are: - Savings from Purchase to Pay
administrative process cost
reductions
- Reduced exposure to licence
fees
- Price savings through eprocurement
including
- eAuctions/electronic reverse
auctions, eTendering
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3. Planned Savings | | 2005-06 | 2006-07 | 2007-08 |
Cash (m) | 0.6 | 3 | 3 |
Time Releasing (m) | 0 | 0 | 0 |
4. Accountable Officer for
delivery | John Elvidge |
5. Project Manager | Tom Wilson |
6. EGDG account manager | Iain Dewar |
7. Quality Impact | Describe any impact on the quality
of service delivery. Be specific and
explain if the expectation is that the
impact will be positive, negative or
neutral. These efficiency measures are based on
improving the quality of the procurement
service to the Scottish Executive. The
continued roll out of EASEbuy and other
elements of the eProcurement Scotl@nd
service in parallel with Purchase to Pay
process improvements will improve the
overall service by progressively
eliminating manual processing and replacing
it with electronic handling of simplified
processes. A significant additional
business benefit which is not classifiable
as cash or time releasing will be on-time
payment of invoices. |
8. Dependencies | Explain if your savings are
dependant on legislation or other
structural changes. The Purchase to Pay element of the
improvements is dependant on a successful
bid to the Efficient Government Fund and
also on observance of corporate and
financial disciplines. |
9. Description of efficiency and
actions to be taken | 9.1 How will the saving be made? Be
specific about number/size of contracts,
staff, posts dates etc. The savings will be made in a number of
ways. The savings from the Purchase to Pay
may come from the administrative costs
associated from manual processing.
eAuctions secure cash savings through the
bidding process with cost reductions being
secured through the lowest bid. Price
savings through eProcurement occurs through
achieving sustainable cost reductions in
goods and services through making the
procurement process more efficient. |
| 9.2 What action is critically
needed to secure delivery of this saving?
Be specific, and name the key action
managers if they are outwith your immediate
management chain (e.g. in an
NDPB.) Many of the actions required to deliver
these efficiencies have already been
carried out. eAuctions are already
delivering savings and will continue to do
so and EASEbuy (eProcurement) is now
mandatory across the office. If the Scottish Procurement Directorate
is successful in its bid to the Efficient
Government Fund for the Purchase to Pay
project, the project will need to be fully
implemented, and users will have to be
successfully using the new system by
eighteen months from the award of funding
in order to deliver optimum savings,
although quick wins will be available
within that period. |
10. Impact on Staffing to achieve the efficiency
gain | If there are to be any changes in
staff numbers (at activity level) to
achieve the efficiency gain, please
indicate how many full time equivalents and
how far you expect savings to be achieved
by natural wastage (show additions as + and
reductions as -). |
| 2005- 06 | 2006- 07 | 2007- 08 |
+ | | | |
- | | | |
Net | | | |
Explanation | The Purchase to Pay project may result
in a reduction in the number of posts
necessary to process invoices but as yet
the actual impact is unquantified. |
11. Benefits | In general, the benefits of the
Scottish Executive Efficiency Plan are the
enhanced outputs from the resources
Ministers have been able to allocate in
SR04. But if there is a direct connection
between this efficiency saving and the
enhancement of a particular service please
describe it here. N/A |
12. Gross/Net Cash Savings | 12.1 Please set out the gross
recurring saving and any offsetting
recurring expenditure. The net recurring savings from better
procurement are 3m a year by 2007-08. The Purchase to Pay project may
actually result in some time releasing
savings rather than cash releasing savings.
This will depend on future decisions to be
made by local managers. |
12.2 Against what budget does this
expenditure and saving fall? Goods and services are procured on
behalf of all parts of the Scottish
Executive but requisitioned locally.
Therefore, the impact will be across
multiple cost centres within the overall
administration budget. |
12.3 Has this saving been built
into budgets? Yes |
12.4 If so, what is the maximum
allowable expenditure against the published
budget data, in each year, for that saving
to be delivered? The Scottish Executive's administration
operating budget for the years 2005-06 to
2007-08 is 235,285,000. |
12.5 If not, how do you propose to
invest the additional cash back into public
services? N/A |
12.6 What plans do you have to
exceed the required saving? Explain by how
much in each year. It may be possible to exceed the
required saving but this will depend on the
success of eAuctions and eProcurement. This
will be reflected in future reports. |
13. Time - release savings | 13.1 Please explain any
time-releasing savings indicated at
question 3. N/A but see caveat to 12.1 |
13.2 Please describe the method you
plan to use to calculate the cash
equivalent of those time release
savings. N/A |
14. Measurement and
Monitoring | 14.1 How are you proposing to
measure the expected efficiency benefits
(e.g. in terms of costs, level of output or
quality of service)? The efficiency benefits will be
measured by looking at the costs associated
with processing transactions, particularly
invoices; and the cost of goods and
services before the use of eAuction (or as
a result of discounts achieved when
negotiating contracts where eProcurement is
the specified transactional method)
multiplied by actual demand. The time taken
to process an invoice will also be
monitored to ensure that there is no
reduction in the quality of service. |
14.2 What monitoring &
reporting procedures will be put in place
to measure the efficiency savings (How
often will progress towards the target be
monitored? Who will have lead
responsibility for reporting progress and
what procedures will be in place?) Expenditure on procurement services and
on goods and services procured will be
monitored through the monthly returns on
the Executive's financial management
system. This will be reviewed quarterly to
ensure that the Executive is on course to
meet these targets. Progress is reported to
the Procurement Management Board and will
be forwarded at regular intervals to
EG. |
14.3 Monitoring Data: Sources,
validation and risks - What data will be used to measure
progress? Is all the required information
quantifiable and readily available? If not
what action will be taken to rectify
this?
Financial data will be used to
measure progress and this information is
quantifiable and readily available through
the financial management systems.
- What measures will be in place to
validate the accuracy of the data? Who will
take responsibility for this?
Scottish Executive accounts are
audited internally and externally and this
ensures the accuracy of the Executive's
financial data.
- Are there any issues or risks
relating to how you plan to use the data?
(e.g. accuracy, difficulties in
collection)
None, assuming that the financial
data within SEAS is accurate which itself
assumes that corporate financial and
process disciplines are observed by
staff.
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