E-marketplace Introduction

In 2007/08 the Council processed over 100,000 invoices. The vast majority were paper invoices which were manually input to the Council's SAP system by departmental payments teams.

As part of the upgrade of SAP and the implementation of SAP Relationship Manager in 2006 the Council had the intention of procuring an e-marketplace to enable electronic trading (purchasing and invoicing) with many suppliers without needing to build point to point links between the Council and individual suppliers. For several reasons the e-marketplace was not procured at that time.

During the last quarter of 2007/08 the Council put in place a centralised payments team which is responsible for the payment of most invoices. Centralisation has realised annual staff savings of c£100,000 and is enabling improvements in compliance and performance.

In early 2008/09 the Director of Finance and Corporate Resources requested that options for increasing the level of automation in the procure to pay (P2P) be explored. As a consequence the following were initiated:

• A low value strategy which addresses those one off purchases of under £500. The principal recommendation was to seek to use Purchase Cards for many of these rather than setting up suppliers on SRM and to also seek to replace many of the imprest accounts. As a result the number of P cards in use has quadrupled in less than a year
• Suppliers which provided non-purchase order related services such as telecoms, water, electricity and gas were contacted to ascertain their ability or willingness to move to consolidated billing ie providing a single monthly or quarterly invoice with a supporting schedule which could be supplied in a format that could be uploaded to SAP. A significant (over 20,000 pa) reduction in invoice volumes has been achieved to date from consolidation
• For other suppliers which have reasonable volume and values it was decided to look again at the e-marketplace option. The business objectives and benefits include:
  • Reduced process effort in purchasing as more online catalogues are used and the processes of selecting goods or services are simplified. Minor stationery and postage savings from replacement of paper orders by electronic orders
  • Reduced process effort in invoice payment as electronic invoices are matched to e-orders.
  • Improved management information as all marketplace spending is against a recognised coding structure which supports spend analysis
  • Improved contract compliance as spend can be more clearly directed to contracted suppliers
  • Improved contract pricing.

The Council has contracted with EGS to provide the IdeA marketplace. Going live in 2009 the Council is contacting all its commercial suppliers to seek to adopt them to the marketplace. Wherever possible orders for goods and services will be sent to marketplace registered suppliers and we will be encouraging suppliers to invoice electronically.

(extract from Marketplace PID document)

• e-marketplace - Letter to Suppliers  
• e-marketplace - Frequently Asked Questions
• PO (Purchase Order) Flip Guide
• Activating PO (Purchase Order) Flip
• More information about UNSPSC (external link)