Governments using BPM for optimizing acquisition processes

Last week, Matt Langan of Appian had an excellent post on the emerging use of Business Process Management (BPM) software in the government acquisition process. He stated that, “we are seeing government embrace Business Process Management (BPM) acquisition solutions (versus COTS) in order to gain process transparency, react quickly to change and improve process efficiency; thereby allowing federal purchasing organizations to successfully enhance the entire procurement lifecycle.”

BPM software can guide government acquisition officers through the complex rules of government procurement — saving time and reducing administrative overhead and paperwork.  Each agency develops unique workflow and business-rule requirements, which in turn, are addressed by the application software.

With over 15 years of industry experience, Partnet understands the complexity of the business rules surrounding government acquisition, but also recognizes problems associated with implementing standard BPM applications.

Partnet’s BPM solution is a flexible and easy-to-use business-rules framework and workflow engine that directly addresses problems found in other BPM solutions.  Quartz BPM uses simple, UI-based wizards that allow any end user to design and optimize business rules and workflow for approvals, registrations, permissions, and more. These wizards help non-developers easily identify application trigger points, data entities, users, and other critical process elements. The Quartz BPM interface also generates graphical workflow representations that allow users to see their processes as they’re defined.

In other words, Quartz BPM helps align and continuously improve government and commercial  business processes.

Partnet supports DOD EMALL sales halfway around the world

Last fall, Ronald Inman of Naval Facilities Engineering Command (NAVFAC) Public Affairs reports that the NAVFAC Far East command generated a total of 3,367 orders and approximately $13.8 million in sales on DOD EMALL in fiscal year 2009 — more than any other NAVFAC command.

The DOD EMALL is a web-based Government eCommerce site enabling authorized military and government customers to search for and order products and services from a global community of government and commercial vendors. Operated on behalf of the Defense Logistics Agency, the DOD EMALL contains over 2,000 commercial catalogs offering nearly 70 million items.

NAVFAC Far East is based in Yokosuka, Japan — nearly halfway around the globe from the DOD EMALL’s home in Ogden, UT.  Partnet keeps the DOD EMALL applications running smoothly — 24 X 7, 365 days a year. Over the last year, Partnet maintained system uptime at 99.75%.    Without high system availability, NAVFAC would have been relegated to slower, less efficient forms of procurement.

Naming Conventions and Standardization: Improving Findability on the DOD EMALL

“What’s in a name? That which we call a rose by any other name would smell as sweet.”

Shakespeare’s famous quote may be true of flowers and lovers, but what about hardware and repair parts?

Name standardization and good data quality are important aspects of eCommerce,  but they are especially imperative in a Government eCommerce site, where the Federal Catalog System has required item identification and naming standards  since World War II.

Unfortunately, some manufacturers label items using cryptic part numbers that confuse customers.   Vendors frequently shrug this off, saying, “My customers know what my products are and how to find them.”  Vendors making this case, however, are simply cutting themselves off from a much larger customer base.

Naming conventions are one way to solve this, but even then, the conventions themselves must be standardized.  Lack of standardized naming conventions is a frequent problem within Government eCommerce sites.  A single item may have one name in the private sector, and an entirely different name in the government space.

Names may even change from region to region.  Take gypsum board, sheet rock, and wallboard, for instance.  Many customers might be surprised to find that these names all refer to the same item.  Allowing for the use of colloquial names makes it easier for the customer to find items in a Government eCommerce site.

Partnet continues to search for new ways to make products easier to find on the DOD EMALL.  Using standard naming conventions across suppliers and enabling colloquial search criteria are two ways we’re simplifying the process for EMALL customers.

In doing so, perhaps we afford them a chance to take time to  smell the roses.

Does Data Quality Influence Government eCommerce Sales?

The simple answer is, “absolutely.”

eCommerce data quality relates to both invalid data and incomplete data.  Potential customers may find its difficult to recognize what they’re buying without an image or thorough description. Data analysis on the DOD EMALL shows that vendors providing robust data descriptions and product images sell much higher volumes then vendors providing minimal data.  Not surprisingly, the absence of a product image is often the most common catalog characteristic affecting sales.

Partnet engineers are working to improve master data verification and ensure the most complete, accurate data is available to DOD EMALL customers.  In addition, Partnet’s distributed architecture and vendor management system allows vendors to maintain and update their own product data through real-time connections, which has proven to be a faster, more efficient model than caching data with a third-party host.

Good data is also portable–that is, standardized in a way that makes it consumable to external applications and systems. Toward this end, Partnet is working to improve the quality and portability of data on the DOD EMALL, in accordance with Electronic Commerce Code Management Association (ECCMA) guidelines and ISO 8000-110:2009.

Robust data can’t be achieved overnight–it requires a sustained process and thorough commitment to data integrity. Enterprises willing to make that commitment, however, will find it translates into increased sales and satisfied customers.

Market Forces in Government eCommerce

Last week I wrote about the success the Department of Defense is having in leveraging Government eCommerce for the strategic sourcing of its office supplies.  What I didn’t mention was the side effect its having on the pricing structures of  office supply vendors on the DOD EMALL.

In 2004, when the Army was establishing their strategic sourcing policy, they did a market-basket analysis of office supply prices on GSA Federal Supply Schedule Contracts.  In establishing their blanket purchase agreements with 20 office supply holders, they negotiated a 15% GSA  price reduction and mandated the use of those contracts.

Each of the Armed Services followed suit — negotiating their own office supply contracts and mandatory online purchase policies.  As a result,  DOD EMALL quickly became a magnet for office supply vendors, large and small. The number of office supplies vendors on DOD EMALL skyrocketed to over 500.  So when the Army redid their initial market basket analysis two years later, their 15% pricing advantage had vanished.

What happened?

Market forces brought down the prices of the competing catalogs.  By mandating the use of Government eCommerce for office supplies, the Army had saved millions of dollars on their own office supplies and created a savings environment for the whole Department of Defense.

Defense Acquisition Reform: Closer Than You May Think

The Department of Defense recently got an earful from the Defense Acquisition Reform Panel (DARP) over its “outdated” acquisition and contracting policies.  The panel’s criticisms centered largely on ill-suited “cultural issues” preventing the DOD from moving towards more IT-focused procurement methods.  Amber Corrin’s Inside DOD blog from Federal Computer Week gives a nice, high-level overview of this argument.

Recommendations made by the panel included:

Improved process for developing contract requirements
Performance-incentives for DOD’s acquisition workforce
Getting more value from the industrial base.

I can’t imagine the recommendations are anything the DOD hasn’t already realized.  As one of many DOD-contracted IT-providers, Partnet recognizes the changes DOD is implementing towards modernizing their IT-capabilities, particularly around acquisition.  The potential cost savings to taxpayers in finding smarter, faster ways to supply and equip our Warfighters is enormous.  And few know that better than the DOD.

However, the DARP report seems to imply that the DOD is sitting on its hands, meanwhile, letting old-fashioned acquisition protocol dictate the Department’s future.

Again, I’m pretty sure the DOD knows exactly what needs to done, and in many instance, is taking strong initiative to correct so-called “cultural issues”.  Government eCommerce, for instance, is one area where the DOD is making tremendous strides.

Debra Fryar has written a number of excellent posts on this blog illustrating exactly how the DOD is leveraging information technology towards streamlined acquisition and purchasing.  And DOD EMALL (which Partnet proudly built and operates, I might add) is a concrete example of the Department’s success so far.

Not to mention the DOD is also looking to technology for OCONUS souring and contracting solutions–specifically, the potential for web applications to optimize contingency contracts and purchasing from global vendors and local markets.

None of this is to say the DOD should […]

Strategic Sourcing on the DOD EMALL

In 2006, the Office of the Secretary of Defense added Strategic Sourcing to the Defense Procurement and Acquisition Policy’s (DPAP) list of standing initiatives.  According to DPAP, strategic sourcing is defined as:
. . . a proven best practice [representing] how the DoD will acquire goods and services moving forward. It is the collaborative and structured process of analyzing an organization’s spend and using the information to make business decisions about acquiring commodities and services more effectively and efficiently.”
Though the government continues to struggle with strategic sourcing as a practical matter, there are success stories that can help inform guidelines for a future, government-wide strategic sourcing policy.

Take Government eCommerce, for instance.

In 2004, the US Army established 20 blanket purchase agreements for office supplies on DOD EMALL, and subsequently issued a Service-wide policy that all office supplies were to be purchased online through these established contracts.  By negotiating their own strategic contracts, the Army saved 15% on office supplies, while ensuring that all online purchases were compliant with Ability One, the Buy American Act, and other procurement regulations.  In addition, the DOD EMALL provided Level 3 processing data on all of its office supply purchases.

Over the next two years, the Navy, Air Force, and Department of Homeland Security implemented similar strategic sourcing contracts for online office supply purchases.

The potential for strategic sourcing through online applications, like the DOD EMALL, is virtually limitless.  If the DOD was able to save 15% on the cost of buying office supplies, consider the savings of implementing similar measures for all commodities  throughout the Federal government . . .

The Practical Value of Government eCommerce? -Ask NAVFAC.

A few years ago, a Naval Commander arrived in port at Norfolk, VA needing some repair work done on his ship.  It took the Naval Facilities Command (NAVFAC) 14 days to arrange for the required services.  The Commander thought this was completely unsatisfactory — why would it take so long to make arrangements for something that takes place on base all the time?

The Commander had a point.  Why did it take so long?  NAVFAC turned to Government eCommerce for a solution.

NAVFAC needed a way to support collaborative eCommerce between the facility manager, vendor, and base financial office. And so,  NAVFAC attempted a pilot buy using DOD EMALL .  Pre-negotiated service contacts were placed on DOD EMALL, so that when the facilities manager needed a repair done, he went online and ordered it.

The vendor received the request, provided the service, and notified the facilities manager.  Then, after inspecting the provided service, the facilities manager went back to DOD EMALL and notified the financial office to pay the vendor.

The result?

Regular services were arranged within 3 days (11 days fewer than the previous standard).  Consequently, NAVFAC has instituted use of DOD EMALL for services in 110 naval bases worldwide.

Another instance where Government eCommerce (specifically, DOD EMALL) has helped save time and taxpayer money.

Why Government eCommerce Over Traditional Procurement?

There are several good reasons.

It has long been known that traditional procurement processes, whether public or private, are often arduous and time consuming. By establishing long-term purchasing contracts with strategic companies and letting junior buyers place delivery orders against those contacts from an online marketplace, senior acquisition professionals are freed to work on major acquisitions. Government eCommerce is also much more economical because online ordering is quick and easy once those contracts are enabled, and establishing multiple contracts for a given commodity also ensures competition and price competitiveness.

Government eCommerce also provides potential visibility into vendor inventories. Using a distributed architecture, online marketplaces can communicate directly with vendors using application integration tools. This allows secure, reliable messaging and data transmission; including elements like order status, back-order information, stock-on-hand, and stock-out data.

The DOD EMALL is an example of Government eCommerce in action. The Defense Logistics Agency’s (DLA) distributed architecture system allows Department of Defense and other Federal Agencies to house long-term contracts and leverage the government’s buying power. DOD EMALL currently maintains over 2000 individual contracts to support more that 60 million items—helping DOD EMALL to exceed $800 million in FY09.

As the world becomes more integrated online, its only logical that governments take proactive measures to keep pace with the private sector. Government eCommerce ensures that Federal, state, and local purchasing stays ahead of the curve.

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