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E-procurement champion fights for action

Carly Chynoweth
The Times, page 62
10 July 2009

Veera Johnson is not a woman who likes sitting around waiting for things to happen. The chief executive of ProcServe, a PA Consulting venture company that runs an online marketplace called Zanzibar, left school at 15, but now, at 43, has a degree, an MBA, a couple of post-graduate finance qualifications and a job that involves her spending one week in every four in North America expanding the business.

The newly crowned Asian Businesswoman of the Year also volunteers with Shelter, mentors for Women’s Aid and, in her spare time, paints and runs marathons.

So it is not surprising that she is becoming frustrated by what she sees as governmental foot-dragging when it comes to e-procurement. After all, using technology to cut paperwork and maximise the public sector’s buying power seems an obvious way to save money when politicians seem to be talking about little else.

In May the Treasury published a report by Martin Jay, the chairman of Invensys, on the collaborative procurement element of the Government’s operational efficiency programme. Miss Johnson said: “Jay identified specific areas of government where savings could be achieved and one of the areas was that . . . the Government could save about £6 billion just by buying from the right contracts and using a tool to do e-procurement.” The report also recommended that, by October, the Office of Government Commerce should form and agree a government-wide e-procurement policy that promotes a standard set of tools, such as Zanzibar, which Miss Johnson describes as something like a business-to-business version of Amazon.

However, Miss Johnson is not confident of the necessary rapid progress. “Government hasn’t got time to waste,” she said. “If it doesn’t start now, it will never get there because of the amount of time it takes to make change happen.” If things do not move soon, there is a risk that political leaders will be so focused on the next general election that the detail of running departments will be left on the back burner. “What I suspect also is the case is that there are competing priorities and the priorities keep changing,” she said.

Getting Zanzibar in place and running is technically straightforward and can be done within days or weeks, and the cost savings can be seen within a couple of months, according to Miss Johnson. “Assuming that they [department heads] all come forward, there’s no reason why we can’t simply get on with it,” she said. “My worry is that they will have to go through internal governance and more decision-making, which will take time. And they will probably do another consultancy review, and it all takes much longer.”

She would like to see someone at the top take charge and make a decision, as happened with a procurement programme led by the Department for Children, Schools and Families under which all 22,000 schools in England buy everything they need through the Zanzibar platform. Although individual schools will still be free to buy from local suppliers — it will take those businesses only “minutes” to sign up to the system, which is being rolled out now, Miss Johnson said — they will also benefit from economies of scale. “Within the next 12 months across the entire school network I would be surprised if we could not make a half a billion of savings,” she said.

Often, however, public sector procurement operates as a number of individual projects. Moreover, most people do not quite understand what e-procurement is and quite what it can offer. Miss Johnson said: “Some people think that they have done e-procurement when they’ve done one online auction . . . they don’t take the next step and do proper transactional procurement, which is what we do.”

She puts it down to lack of ambition. “A lot of what tends to happen, and I see this a lot in government, is that there’s a great project team set up, they go ahead and get great contracts and then the project team gets moved, so there’s no continuity, no drive to continue that journey and grab those savings,” she said. Instead, organisations keep reinventing their e-procurement approach from scratch. “This is why I always say that the change management is the hardest part,” Miss Johnson said. “The [idea] is simple. It’s just shopping online and we all do that already. The hardest part is grasping the level of usability and ambition to create savings.”

Although the three-year-old company started out providing services to the public sector, it has since taken on commercial customers as well. “Every time we connected one of the government’s suppliers to the system . . . [the suppliers] were saying to us, ‘We quite like this system, could we have one for ourselves?’,” Miss Johnson said.

ProcServe is using its success in the UK to win public and private sector customers in Canada and the US. It means that Miss Johnson is spending at least a quarter of her time overseas or in an aircraft — she admits that she has no work-life balance to speak of — but when it means that things keep moving, she sees no reason to complain.

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