Zanzibar - Strategic Public Sector eProcurement Solution (Zanzibar)

Published on: 11/06/2007

The UK government’s efficiency review concluded that the public sector could save £6 billion through a wholesale transformation of its procurement practices. ProcServe has developed and delivered a world-leading eProcurement transformation system and programme called Zanzibar. Zanzibar has enabled public sector bodies to realise process savings of £41 per procurement transaction and contract compliance savings of up to 50%. By the end of the programme Zanzibar should deliver over £1 billion in procurement savings. ProcServe also created and delivered a change management framework to enable buyers and suppliers to maximise their benefits through changes to procurement practice and behaviours.

Policy Context

Zanzibar operates as part of the fulfilment of the national "Gershon Efficiency Review" as well as on EU level under the i2010 eGovernment Action Plan.

Description of target users and groups

To achieve the target of £6 billion efficiency gains demanded in the review, Zanzibar had to cover the whole of the UK Public Sector. This potentially meant covering a total spend of over £100 billion in England, Wales and Northern Ireland. This entailed engaging with a large, diverse collection of stakeholders and meeting their very different needs. Another key challenge was to understand stakeholders' varied objectives and policy agendas, so that the Zanzibar change programme could be effectively targeted. The stakeholders comprise of thousands of local and national public sector bodies, varying greatly in size, function and management structures, and hundreds of thousands of suppliers, of varying sizes, with a multiplicity of contracts. Moreover, public sector organisations have widely ranging procurement practices. A lot of public sector purchasing is often devolved to front-line services, with many relying on manual processing and staff being resistant to change. Zanzibar needed to give stakeholders a clear vision of its benefits  and the problems of carrying on without it. It needed to be advanced enough to cope with the scale of public sector procurement, but also flexible enough to cater for stakeholders' widely varying needs and processes. All of Zanzibar's IT components proved beyond doubt that they could overcome all of these challenges.

Description of the way to implement the initiative

The following actions were taken as part of the tendering process for the Zanzibar contract: 1) Feasibility. ProcServe determined the viability of the overall programme. 2) Business requirement. ProcServe worked with OGC and prospective buyers and suppliers to refine the business requirement. 3) Assembling the consortium. ProcServe realised that it could use many already tried and tested technological solutions. Therefore the most promising current eProcurement solutions have been evaluated and invited their suppliers to join a Zanzibar consortium. 4) Creating the working prototype. ProcServe integrated all the off-the-peg components into a prototype. As part of the three phased delivery of Zanzibar programme the following actions were taken: 1) Designing change management frameworks. A change management frameworks encouraged buyers and suppliers, and their individual employees, to migrate to Zanzibar. 2) Project management of the Zanzibar system delivery. Once the contract was signed, ProcServe project-managed system development, testing and security accreditation to deliver Zanzibar on time, within budget and meeting the needs of early adopters. 3) Zanzibar Service Management design and delivery to meet the interests of a great variety of customers. 4) Early adopter deployment. ProcServe worked with early adopters to ensure them benefits from Day One of Zanzibar. Multi-channel issues: Zanzibar's unique combination of tools are highlighted below: - Zanzibar eMarketplace contains details of suppliers, their products and prices together with tools that enable them load catalogues of their products and services, receive electronic orders and send electronic invoices - The Zanzibar Management Information data - warehouse provides the UK Public Sector with the ability to target its expenditure on goods and services. The data-warehouse in Zanzibar not only secures lower prices and more efficient procurement, but also makes sure that SMEs are included and that procurement can be targeted to meet the sustainability agenda - The Zanzibar Purchase-to-Pay system is a web enabled buyer purchasing which enables buyers that currently do not have one to raise orders from electronic catalogues and send these to suppliers. - Buyer Purchase-to-Pay systems are existing locally installed purchasing tools to raise orders using catalogues and send these to suppliers. - Supplier systems are back office systems including Sales order processing systems, billing systems, web sites and catalogues. The data-warehouse in Zanzibar not only secures lower prices and more efficient procurement, but also makes sure that SMEs are included and that procurement can be targeted to meet the sustainability agenda.

Main results, benefits and impacts

Benefits to client (e.g. tangible, intangible, capability transfer) Every public sector organisation in England, Wales and Northern Ireland – central government departments, local authorities, healthcare trusts, schools and many more - can now undertake all its purchasing via Zanzibar, harnessing hitherto unrealised purchasing power. Virtually any supplier, of whatever size, can transact via Zanzibar. Benefits for the government and taxpayer Today 45 organisations have signed-up to use Zanzibar. Studies of their initial experience have estimated that over 5 years using Zanzibar will save them over £2 billion – 20 times greater than the original estimate for the early adopters. These savings are derived from two key areas: • Process savings, from improved invoice handling and reduced errors. The National Audit Office calculated these to be worth £41 per transaction. For 18 North West London NHS Trusts using Zanzibar this represents an annual saving of £7.4 million. • Price savings and Contract Compliance: the North West London NHS Trusts found that Zanzibar could give them price savings of up to 50% on individual products. Of course potential savings will vary between organisations. But based on current public spending of £100 billion, it is a reasonable estimate that if every public sector organisation became a subscriber, Zanzibar could deliver the required £6 billion savings over the next five years. Intangible benefits Zanzibar is already providing better management information, better communication and collaboration across the public sector, and a safe environment for electronic procurement and trading, as the UK’s only eMarketplace audited and managed by government. Other intangible benefits include avoidance of system operations costs (such as maintaining catalogues), reduced contract management costs, truly paperless procurement, and avoiding the need for further investment in eProcurement systems. Benefits for the supplier community Zanzibar gives suppliers a free-to-use method of trading with multiple public sector customers. It treats all suppliers equally, whatever their size. It saves them costs for cataloguing and allows them to standardise quotations and avoid price disputes. Innovation: ProcServe established a consortium of partners to respond to the requirements of the Zanzibar programme. As part of the bidding process ProcServe built a working prototype Zanzibar to help refine the requirements for the system and services. In order to maximise take-up and deliver the most benefits, ProcServe proposed that the core system and services be supported by a change management framework to help public sector buyers and their suppliers make the transition to Zanzibar. ProcServe drew on extensive PA Consulting experience from successful change programmes in the UK public sector and other key projects managed for the OGC. ProcServe proposed a three-phase delivery of the programme: • Service Design and Build. Including the development of the system/service that would ensure successful use of Zanzibar once customers and users went live. • Subscriber Implementation and Change: to ensure that the buyers and suppliers could deliver value to each other in the procurement process from day one. • Ongoing Operation and Benefits Delivery: The operational phase of the managed service, designed to ensure that the buyers and suppliers continue to deliver further benefits. • These phases had to be delivered against the backdrop of a unique eProcurement system which enabled all buyers and suppliers to trade fully electronically across the entire procurement life-cycle without ever having to key in data. Zanzibar is unique in the combination of tools it offers to any Public Sector Organisation, all delivered from a Government Security Accredited infrastructure

Return on investment

Return on investment: Not applicable / Not available

Track record of sharing

We have facilitated visits from other governments in the EU, such as Finland and Macedonia, as well as Hong Kong on an international level. ProcServe is also delivering a market place for schools nationwide in the UK.

Lessons learnt

The Office of Government Commerce learned that successful eProcurement requires more than an IT solution. It needs buyers and suppliers to change policies, behaviours and culture and lock the changes into place. Getting them to adopt Zanzibar required a major communication exercise to demonstrate its benefits. For ProcServe, the assignment confirmed the value of bringing vendors together as early as possible in a bidding process to ensure that their solutions can integrate successfully both for themselves and the client.

Scope: National