ESPO uses the aggregate buying volumes of its customers to maximise procurement savings for them. ESPO supplies 15,000 product lines to 27,000 customer delivery points and over the course of a year processes 400,000 sales invoices.
In total, customers spend over £400m a year on ESPO products and services, which are provided either directly by ESPO or from approved suppliers using ESPO framework contracts.
Its IT system is based on System21 enterprise resource planning software. These systems are all supplied by Geac and work on the IBM iSeries server.
In 2000, ESPO attempted to get all of its member authorities to form a consortia for electronic commerce (effectively to build an e-marketplace) in order reduce procure to pay costs and improve operational efficiency. However, it became apparent that each authority had different development agendas with diverse requirements and back office enterprise systems. It soon became clear this approach would not work.
Most authorities concluded that they would ask their existing systems suppliers to ‘electronically enable’ their finance and procurement systems to take things forward. Essentially every member authority went in a different direction.
It would have been easy for ESPO to forego the initiative but instead it decided to build some momentum in a few defined areas. Therefore it developed a desktop ordering software solution for its smallest customers. This software enabled them to hold a catalogue of products on their PC and then send orders to ESPO by letter, fax and more recently, by email in XML document format.
Around the same time an E-ordering solution was being developed and deployed for schools by the services group Capita. The application called SIMS (Schools Information Management System) is the de facto standard used by schools to streamline their procurement process. As a result ESPO worked with Geac to build an interface to accept XML orders from SIMS into its ERP system to process and fulfil.
ESPO chose two Geac products – doc.connect and web.connect. Geac’s doc.connect enables the seamless acceptance of electronic orders as XML message attachments to emails. Geac’s web connect is the ordering facility which links a company’s web site to its Geac ERP system to provide real time information prior to customers ordering via the internet.
These are tightly integrated with the core System21 finance and distribution software but because they were developed in accordance with new industry standards from BASDA.
Web.connect went live in October 2002. Now customers can log onto the catalogue ESPO web site and view an online catalogue, build up a shopping basket and once complete they can authorise an order and expect delivery within a matter of days.
Implementation of doc.connect commenced in 2004 to provide the delivery mechanism for those schools using the E-procurement version of SIMS to place orders onto System21. Doc.connect converts the message into a format which can be understood by System21 to automatically accept a sales order.
But, there are varying types of purchasing policies and systems in use at different authorities. Hence Geac has helped develop the system to cater for this complexity.
For instance, some authorities cannot allow staff to purchase goods without suitable authorisation. It is now possible for a customer to log onto web.connect and build a shopping basket which is then returned to the customer’s e-procurement system for authorisation.
This is sent as an XML message which can then populate data in the customer’s purchasing system enabling it to be viewed as a purchase requisition by the authorising manager.
Once accepted, the order is transmitted to ESPO via doc.connect as an electronic sales order for processing and fulfilment within System21.
Another member authority, Warwickshire County Council, allows staff to place orders via web.connect. But in this case, the order is placed on System21 for their next scheduled delivery and an email detailing the order is immediately sent to the customer, giving them an option to ring up ESPO to cancel the order if deemed necessary.
The next stage of development which went live in October 2004 was the creation of an electronic marketplace. Although in early stages of roll out, customers can now access the ESPO web site and gain seamless behind-the-scenes access to a wide variety of products from other service suppliers who have registered.
These are accessed via Vantage – a Lloyd’s TSB owned operation that was formerly known as Best Value Procurement . ESPO envisages bringing its top 100 suppliers onto this system.