This October, the Future of Sourcing Awards will celebrate organizations and individuals that have shown innovation, leadership and transformation in categories that are critical to the sourcing industry. Interviews with the finalists provide helpful insight about their projects, the problem they sought to solve and the impact to their organizations.
Can you outline why your team embarked on this project and the problem that needed to be solved?
Determining the Area of this Project came from highlighting crucial dilemma in executing procurement, analyzing bids, evaluating bids and issue service contracts through transforming day-to-day operations from manual works to best-adopted technology and systems used in procurement fields. Furthermore, the needs of this particular project was abstracted from different business units’ in Dubai Municipality reviews and feedbacks, employees’ suggestions to improve the daily work and make it easier and simple for them in order to increase their productivities in completing contracts on a daily basis as much as they can. Most compelling evidence of the need of this project that the number of service Contracts approved for 2018 is estimated 97 Contracts completed out of 320 contracts request received (including Expense contracts Revenue contracts and others ) for the value of more than +800 million dirhams. Comparing the results at the end of the project, the section received 380 contracts requests with a 100% completion and under process. Adding to that, the need of this project was not to increase the number of tender officers, but to reengineer the procurement processes, eliminate the non-added value processes and transform the procurement processes into an integrated approach using integrated systems. Therefore, we successfully accelerated the procurement cycle time from 210 days to 32 days by implementing best practices in the field of procurement and technology used.
Another key point to highlight was the need to transform the procurement committee from physical meetings to online in order to ensure faster, governed committee and reduce the time spent by suppliers standing at DM corridors.Moreover, digital transformation of contracts will result on saving and securing the information and details of tenders in the system rather than saving it manually in files.
How were things done originally and what was the inspiration to innovate the process?
There was a huge waste of time, efforts and costs in procurement process. Likewise, stakeholders -Suppliers, business units, contract officers, finance departments etc -were not satisfied -overall satisfaction rate was 65%-with the procurement performance-210 days in average for a single procurement cycle-due to delays and weak response. This project brought dramatic improvements to the procurement process at Dubai municipality, through providing innovative solutions to complex problems and challenges and ensuring best possible outcomes for procurement performances.
The innovation in this project is the size of changes that occurred in the procurement functions in DM, which we believed to be centered on providing solutions to complex problems and to ensure best possible outcomes by the effective procurement performances. The innovation areas the project touched are:
Our project innovation was not about services or money. It was about people, ideas, and leadership. Now we have a better understanding of the unmet needs of our customers, and better targeting of those needs by resolving problems, improving value, and capturing enhancing outcomes.
A simplified approach we crafted was the trademark of innovative solutions in DM, by implementing more than 33 improvement practices and 4 best practices to make the use procurement meet business objectives, with clear timely and effective processes.
The procurement culture in DM changed because of enabling innovation in procurement. The culture that encourages innovation and technology solutions to happen, it heavily relied on the creation of data warehouse and value technical excellence, technologies and systems we used, and focus and understanding of external customers, and internal client’s needs. We had a better markets behave in different contexts. Therefore, it allowed us a better use the whole procurement cycle -from strategic planning to contract management.
What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)
Since initiating the planning of this project and preparing the road map for its implementation. The management of performance was one of the most critical success factor of our project, and managing these indicators according to a appropriated approach that helped in achieving the desired goals. The team has carefully defined the scope of the change as well as identified the critical success factors associated with the objectives.There were many of these elements on different dimensions, including:
Financial Target:
- Achieving financial savings and effectiveness in contracting procedures
- Reducing wastes in operations & processes
- Reducing procurement budget value
Non-Financial Target:
- Accelerate service contracts processes cycle time
- Raise satisfaction rate
- Increase productivity
- Effectiveness & efficiency in day-to-day operations
- Ensuring adoption of Governance framework
- Adopting new procurement culture
- Improving skills & knowledge of Tender Officers
- Improve Customer Experience
How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market?
Dubai Municipality seeks opportunities to address any future gaps in procurement effectiveness, operational efficiency or sustainability. It is no longer business as usual for procurement. The scale and speed of transformation requires a continuous improvement strategy to address market disruption and to drive competitiveness and growth. We gathered various ideas and best practices during benchmarking phases so we have grouped those remaining ideas and best practices in different projects managed in order to support Dubai Municipality strategic plan. We have learned a many lessons from this practice and one of the most important lesson we learned is that reengineering and redesigning processes is a delicate mission, not an easy one, and it required effective actions and participation by stakeholders. Also, conducting in-depth studies helped us to understand the problem better and to formulate successful solutions and remarkable outcomes.
Future improvements goals and plans: We have also designed strategic plan for procurement department for the coming years based on different levels of impact (little impact, moderate impact, significant impact and game changer) on procurement functions in order to sustain the achievement, competitiveness and growth. Therefore, our continues improvement plan was built on different future objectives with specific targets, such as : aligning procurement with core Dubai municipality’s strategies, institutionalizing the implemented practice ideas, procedures, and policies , Enable training and capacity building, develop solid goals and strategies for driving and delivering improvement and establishing ongoing measurement processes to monitor and measure the strategic procurement performance. An overview of the procurement strategic & sustainable plan.
What advice do you have for those who may want to implement this innovative approach in their own organizations?
The revolution of technologies in the world of communication and information constitutes one of the prominent titles of the current historical stage of human history due to the massive spread of the use of the Internet. This has led to the development of the concept of electronic contracting through the use of electronic means via the Internet and technology. Which calls for chang the concept of existing traditional procedures into dynamic, self-access procedures that allow frequent digital interactions and frictional dynamics to build deeper relationships with its internal and external customers than ever before, and to meet customer needs the moment they arise -and sometimes sooner.
So, the golden advice for everyone who wants to make those changes is a preparation of strategic roadmap to improve procurement procedures, in order to achieve a broader participation in the procurement and supply operations and work on different dimensions with the aim of identifying weaknesses in the current procedures, and suggesting an operational strategy that is feasible and capable of raising efficiency by using transformational technologies.
With innovations in digitization occurring very quickly in our industry, how do you see this specific project further transforming in the future?
Now, the procurement department can work according to the proactive service strategy goal. The goal can be achieved by presenting an innovative model that reflects the leadership and excellence of the government work system in the Dubai by providing proactive services and enhancing its sustainability, based on the aspirations of customers, to complete their transactions easily and quickly. This can be done through a prior understanding of customer needs, and provision of the necessary enablers to achieve this goal and start proactive procurement services phase at Dubai Municipality through block chain technology.
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