Operational example of e-procurement system Korea Contents

Operational example of e-procurement system (Korea)

Contents I. Background of KONEPS II. Services of KONEPS Agenda III. Interface services of KONEPS IV. Contributions to Public Procurement IV. KONEPS in the world

Objectives of KONEPS Issues before KONEPS Manual process based on paper

Objectives of KONEPS Transparency Via the real time information release Corruption-Free Via reduced direct contact between officials and suppliers

Development of KONEPS Preparation Period (1997 -2001) Gov’t-wide Expansion (2002 -2004) Electronic Document Exchange System (1997) Online Shopping Mall System (1998) e-Tendering System (2000) e-Guarantee and e-Payment System (2001) As one of 11 e-government projects, KONEPS was developed for the use of the whole public organizations (2002), Disaster Recover System(2003), Data Warehouse, CRM(2004)

KONEPS Structure The on-line procurement system which integrated whole processes are processed automatically. And this system is composed of 4 major modules – e-bidding, e-contracting, e-purchasing and e-payment.

KONEPS System Architecture e-Procurement Process System KONEPS Portal Public Organizations. Procurement Request • KONEPS info • MY KONEPS • Survey Certificate ID/PW Suppliers External Systems Korea ON-line e-Procurement System External User Web Service Awarding • Bidding/Negotiation • Quotation Comparison • Prequalification • Cost Calculation • Contract Method Decision • Delivery Request • Procurement request Contract Management Contracting • Contract Writing • Contract reviewing • Contract Making • Delivery management • Contract Modification • Payment Request • Payment Integrated Notice MOSF Business Info Support Service System • Registration • Bid Notice • Opening Result • Search User Management e-Surety • User Registration • Unfair Businesses • Receipt of Guarantee • Guarantee Report Classification • Search • Classification • Identifier • Contract Info. MOEST Internet Integrated Notice • Individual user management Management e-Payment Supplier Performance • Payment List • Monetary Transfer • Transfer Result • Bill Management Closed Network • Past Performance • Technician Info. • PQ, Eligibility Test Result Search • Statistics Management KFTC Catalog Government Network Document distribution / External Linkage • Document • e-Document Form circulation/Security Management • Circulation System Management MOPAS Business Performance • Info Linkage KAMCO Price Info Management CA Disk Internal User Info Analyst Intranet Internal Linkage PPS contracting officials Info Linkage PPS Integrated System Stockpiling Construction Office Domestic Procurement Supplies Foreign Procurement Q&A Intranet General Administration System EDMS Homepage Info Linkage Government Product Management Portal Decision Support Product Info Search Product Management Info Linkage e-Shopping Mall E-Catalog Unit Price Contract Classification Product Search Management Best Product MAS Data Linkage Surety supplier Association

Qualifying Evaluation System On-line Biding Opening Notification to candidates Eligible Test Preparing Materials Missing the Adverse Material Submission KONEPS Association Supplier Credit rating agencies Buyer Product Certification Authority Patent office

Shopping Mall System

Past Contract Performance I/f system Financial System Other e-procurement system (20) Payment Data 국가 재정 지방 재정 교육 재정 우정사업 본부 Contract Data 한국 한국 가스공사 마사회 한국 한국철도 한국국제 인천공항 한국 한국 국제공사 전력공사 도로공사 시설공단 협력단 석유공사 KONEPS Total Contract Information DB 방위 한국지역 한국수력 한국전기 대한 한국 한국 대한 연구원 주택공사 산업청 철도공사 지적공사 난방공사 원자력 수자원공사 Contract Performance Issue System Request Search the contract Information Approve supplier Contract performance Issue Buyer

On-Line Proposal Evaluation System KONEPS Proposal Upload ü Convenience for Supplier ü Convenience for Examiner ü Reduce of examiner’s fee Supplier Buyer Apply DRM Video conference Supplier examiner DB Allow access ü submit proposal directly ? Access Certification ü examiner’s off-line assessment ? ü Overcharge of examiner’s fee ? Result On-Line Evaluation examiner

Smart phone service ü Ubiquitous e-government implementation ü Increased Convenience ü Customer satisfaction increased Bluetooth Security token KONEPS Supplier Gateway server Smart Phone Bidding Service Result of Bid Opening Access Authentication 3 G Wi-Fi PKI S/W KONEPS System Web web XML Conversion Interface Certificates Mobile Bidding System DB Server WAS

Electronic Illegal Bids Analysis System Provide objective indicator to catch illegal symptom by public certification Data Analysis Illegal Electronic Bids Analysis System Detect symptom User authority management operator Access control Illegal state indicator search with Various method Additional analysis create data for illegal state expert Request investigation statistics and enterprise data KONEPS audit Linkage Judicial authorities User connect record Individual information IP, certification Fair trade Conform result Mac Address Bidding/opening info. Illegal e-bidding through rental certificates Cyber investigate unit

Development Background Customer-Oriented Web services improvement of relative business and efficiency Different environment Sharing process and information Following international standard § Connect with organization & enterprise which have different environment § Sharing information and process through web service based connectivity § apply eb. XML, Web Service, XML and international standard relative to security

Standard API Web Service Standard API Client System SOAP XML KONEPS SOAP Related association A SOAP Standard API Client System XML KONEPS Standard API Server System Related association B WEB Standard API Client System SOAP XML Related association C Standard API Web Service • Provides linkage client API thru the most efficient method for the linkage of KONEPS to the institute which has different operation environment and platform. • Enables sharing KONEPS process and information via web-based linkage. • Provide the communication and security architecture which complies with the international standard.

Standards of KONEPS API ü Different Standards Used in KONEPS Security Standards e-Document Standards XMLDSIG XMLENC PKCS XML 1. 0 XSLT 1. 0 XPATH 1. 0 XML Schema 1. 0 CC Messaging Structure Standards Information Provision Service Standards eb. XML TRP 2. O SOAP 1. 1 SOAP with Attachment Registry & Repository WSDL 2. O UDDI 3. 0. 1 Protocol Standard (HTTP)

Interface Services üConnected with 100 external organizations Classification Other e-Procurement System KONEPS Organization Association Warranty Insurance Bank Supplier Information v supplier, unfair trade, bid, contract, bidder Information v Intermediate warranty, Intermediate credit grade v Contract, Catalog, business license, certification of corporate v payment of tax, stamp tax, closed or shutdown info v Business management, evaluated price of construction capacity, result price v SW business declare, SW business experience, contract info v Bid info, contract info v contract/bid/deposit/defect/payment/insurance v bond for national housing, network loan, regional development public bond v Catalog information, contract, result of inspect Credit rating agencies v Grade of credit Certification Authority v Product, technique certification

Interface Service – Finance System

Transparent Public Procurement Accomplished

Promotion of Private e-Commerce Developmen

Enhancing Procurement Capabilities

E-procurement in the world

KONEPS Exported Overseas System implementation and Feasibility analysis underway Mongolia Russia Armenia Iran Tunisia Senegal Uzbekistan Jamaica Vietnam Indonesia Costa Rica Peru

KONEPS Exported Overseas Vietnam • e-GP Pilot System • Operated since Jul. 2010 Costa Rica • MER-LINK • Commenced Full Service in Dec. 2010 Mongolia • Mongolian e-GP System • Implementation by Aug. 2011

THANK YOU!

Coping with Obstacles in Establishing KONEPS

Coping with Obstacles in Establishing KONEPS

Coping with Obstacles in Establishing KONEPS

Lessons learned • Government leadership and commitment • Integrate and share all information about government procurement • Make a single e-procurement system for all public organizations • Standardize procurement process and electronic document (XML) with digital signature • Take the step-by-step approach from integrated bid information and e-bidding • Need to make clear rules and regulations according to the reforming the process

Contract Performance Issue System Financial System Other e-procurement system (20) Payment Data 국가 재정 지방 재정 교육 재정 우정사업 본부 Contract Data 한국 한국 가스공사 마사회 한국 한국철도 한국국제 인천공항 한국 한국 국제공사 전력공사 도로공사 시설공단 협력단 석유공사 KONEPS Total Contract Information DB 방위 한국지역 한국수력 한국전기 대한 한국 한국 대한 연구원 주택공사 산업청 철도공사 지적공사 난방공사 원자력 수자원공사 Contract Performance Issue System Request Search the contract Information supplier Approve Buyer Contract performance Issue

Attempted introduction of banner ads ü Revenue by Banner advertising on KONEPS Portal supplier Advertising Portal KONEPS Connect a standard ad screen Product sales screen on KONEPS Considering no website supplier, connect the standard ad screen Advertising costs apply differential depending by Banner ads location Negative views about Profitable business of Government

ITSM System Request handle procedure of the ITSM Call Center § Information Request AP Management and Development Service Desk • Entrusted System Development Group (Samsung SDS) Development Request Report § Update Request • Manage DB history and log Request of examination and approval Result Verification • Internal Agent (Development Division) - Inspection and approval of modification request - Test deployed result • Entrusted System Operation Group (Sun Micro Systems) • System Deployment present solution • Request for deployment after development Request of examination and approval • Internal Agent (Service Division) - Examines and approves requests - Verify final results Modification Request • Analyze request and • Handles user request • Database management § Inquiries § Irregularity • Entrusted System Development Group (Samsung SDS) System Management and Inspection Result Report • Internal Agent (System Division) - Check result after modification - Inspection of DB history and log § Mutual check between internal/external and functional organization § Constant monitoring using real-time log update (Log-Saver, Read-only CD) and inspection program

Call Center System Proportion Private Area : 660㎡, Agent seats : 54 Superintendent, Meeting Room, staff lounge etc. Operation Direct Operating by PPS Headcount Administrators: Customer Manager(1), Workgroup Leaders(5), Agents : 46

Call Center System Key Performance Indicator Customer Response Percentage of Customer Response 96. 2% ↑ Service Level Response 80% of calls under 20 sec of wait Call Solving At First Customer Satisfaction Average 70% ↑ 2 times per Year ↑

Call Center System Major Equipment IP-PBX Call Center Switchboard 콜센터 교환기 CTI Call Center Middleware 콜센터 미들웨어 IVR Auto-answer Service 자동응답 C-Rec Voice Real time recording System 녹취시스템 Any. Support Remote Assistance System 원격지원시스템 Consultation APP. 상담운영관리 Agent Convenient Features receipt and question history management

Contributions to Development of SMEs 2010 31 191, 258 98. 8% 193, 663 32 97. 2 311, 896 97. 2 321, 059 4, 384 4, 467

Let’s Think! ▶ Convenient ways to use KONEPS ? ▶ How to operate KONEPS ? ▶ Problems during KONEPS operation ?

KONEPS Management ü Efficient Operation ? ü Stable Operation ? ü High level Operation ? ü Outsourcing by Professional IT supplier ü 3 -Years Long-term contract ü SLA ü ITSM

Outsourcing Function Implement and Additional Development New Service • Impact Analysis by Legal, policies change • Application Function Improvements, Test Service Optimization Support Services Version Control Application Operation • Error Correction, Simple Function Change etc. Maintenance activities • Application Optimization activities • Application Environmental Modification Education Support and Project Management • Quality Management / SLA Management • Contract Management • Education Support for KONEPS • Workforce Management / Partner Management Application version Control etc. • • Business consultation and Administrative processing support performance management Product Management Call Center team support ü Efficient operation ü Core business focus ü Cost savings ü quality service

Long-term Contract ü Stable Operation ü Phased improvement of service quality • Short-term Contract (1 year) - Frequent replacement of the operating personnel - Can not utilize the accumulated know-how • Long-term Contract (3 Year) - Stability of the operating personnel ※ Generalized trend of long-term contract in the private (3~5 years) ※ Since 2005, long-term contract ( KONEPS) - Annual Service Improvement

SLA (Service Level Agreement) ü High Level Operation ü Minimize disability and Identify obstacles in advance SLA (Service Level Agreement) SLM(Service Level Management) Key Application Utilization Rate Planning Level Mgt Plan Initial Run SLA create Catalogue SPI, SLA Draft Negotia Level review Conclusion tion Sustainable management Review/Improvement SLA review SLM Process review SPI (example) Monitoring Report Review SR Error Rate The average processing time Compliance of the processing time Key personnel issuance SR The number of aborted

ITSM System ü Standardized Multilevel Approval Procedure 1) Adoption of the ITIL 2. 0 procedure (’ 05) ü ITIL (Information Technology Infrastructure Library) v Collection of international standards used by the leading IT service companies ü Successful implementation of the ITIL v First public institution to receive ISO 20000, an international certificate for ITIL implementation (Oct. 2005) 2) Establishment of Automatic ITSM (’ 06) ü Development of Automatic IT Service Management System in accordance with ITIL standards v Increased speed and stability of system updates

Problems ü After the initial development, occurs doubts about security of bid and Transparency of System ▶ Held the Presentation to suppliers and media etc. ü Decrypting error occurs when bid opened, Attachments are not opened ▶ specify processing method When user's PC error occurred ü Server down due to user congestion ▶ Establish disorder treatment guidelines ▶ Auto-delay announcement processed ü Bid Submission time Error ▶ Apply Certified Accredited hours ü Collusion with a certificate Rentals ▶ Personal certificate identification, Report & Awards , Fingerprint Recognition

Certificate issuance costs ü Certificate-issuing authority can impose the costs KONEPS 1. Request for User registration 2. Approval PPS Approver User 3. Request for Certificate issuance 4. Payment ex) 110 dollars/1 Certification Authority 5. Approval application information(Face to face) 6. Certificates issued

Contract Agency Fee ü PPS receives a fee for the contract KONEPS 2. Receipt of the request 1. Contract Request Organization 3. Notice 5. Product Delivery 4. Contract 6. Inspection 7. Payment Supplier 8. Fee Payment ex) Fee rate is determined by the amount of the contract (0. 5%~1. 0%) PPS

KONEPS Service fees ü PPS receives a fee for KONEPS Service KONEPS 1. Tender Notice Organization 2. Bidding Supplier 3. Bid Opening 4. Fee Payment ex) Fee rate is determined by the amount of the tender 5 ~ 20 dollars PPS Fee Payment ? ? ex) Consider changing payer by the benefit principle

Revenue of Bidding link ü Bidding Information for Sale KONEPS 2. Apply Web Security Solutions 1. System Failure thru Crawling Information Bid Information supplier 3. Impossible to extract data 5. Payment ex) real time : 7000 dollars per year batch service : 3000 dollars 4. Provide Information By linkage Bid Information supplier

PPS Education Center ü Revenue through user education 1. Training Courses Information 2. Training Request Organization Education Center 3. Training costs Paid Different Training costs depending on the course ex) 100 dollar for 5 days 4. Education Completed