Reducing costs with the right software

If public sector bosses are to find ways to adapt to the widely reported budget cuts and increasingly stringent financial legislation they must begin to consider ways in which efficiencies can be optimised through the intelligent application of IT.
    
Public sector bodies have to make significant savings, and many BASDA members are able to provide the complete set of solutions for source-to-pay, substantially reducing procurement and back office costs. Source-to-pay starts with spend analysis, and BASDA members have analysed over £50 billion in spend. One member reports average savings of 2.5 per cent on managed spend and minimum savings of ten per cent on unmanaged spend. The results of spend analysis and benchmarking then feed into tenders, quotes and e-auctions resulting in contracts. A large number of public sector bodies are unable to provide contract information in a timely manner due to the lack of a contract management system, again here many BASDA members can help with appropriate systems. It is important that contract management is at line item level so that the prices can be automatically transferred into finance systems, purchase order systems and marketplaces.
    
Moreover, public sector bodies have a legal obligation to have properly tendered contracts for all spend over the EU limit (around £100K), and again appropriate software can ensure compliance with contracts for the purchase-to-pay cycle that follows on from sourcing.

Electronic marketplace

Many councils now have all contract suppliers on their electronic marketplace. The e-marketplace creates the requisition through an easy shopping process, this is approved on the finance system and the order is routed via the marketplace into the supplier’s back end finance system with invoices coming back in the opposite direction. This provides significant savings through ensuring contract compliance, correct pricing, accurate orders and invoices, with an additional savings in reduced time for both buyer and suppliers.
    
BASDA members and others support BASDA XML¹ for e-orders and e-invoices, and this allows PO systems, finance systems and e-marketplaces to interoperate in a proven and effective manner. Thus customers can be assured of interoperability between different vendor solutions.
    
When aligned with clear operational strategy, IT presents worthwhile opportunities in helping public sector bodies prepare for lean times ahead. For example, implementing a robust asset management software solution can maximise efficiencies within the finance department through improved reporting functionality and increased automation in complex calculations such as asset value depreciation.
    
Promoting an accurate centralised asset register can also improve inter-departmental communication and transparency, maximising business value, streamlining processes and allowing organisations across the public sector to achieve their full business potential through the prudent management of resources. As well as giving an organisation tighter control over operational costs and maintenance programmes, an up-to-date register also provides an accurate value of the asset base instantly. Additionally, a streamlined software system will help staff manage the complex and multitudinous data involved with depreciation reporting and component account detail, whilst provide a clear audit trail.

Peripheral software services
In recent months, BASDA members have seen an increased demand for a range of peripheral software services that sit alongside the core financial/operational software run within public sector organisations. One of these emergent requirements has been for software that improves security of documents transferred electronically both within these organisations and with their external suppliers. A number of councils have become early adopters of this new software and now use it for the secure electronic delivery of a range of business documents such as e-pay slips, invoices, statements, P60s and even business council tax bills. There are a small number of software providers who are able to offer a solution to public sector organisations, and a key feature to look out for is compatibility with your ERP or back office system.
    
Finally, both public and private sector organisations are under increasing government pressure to cut carbon emissions and this pressure will only increase, especially with the Carbon Reduction Commitment Energy Efficiency Scheme, which began in April this year. With 5,000 UK organisations committed to report on their emissions and carry out measures to bring about reductions, now is the time to invest in the necessary software systems to ensure compliance. Software is the foundation for success. It is the duty of software developers to continue to invest in developing suitable carbon management and reduction technologies. It is also vital for the authorities and climate change bodies to acknowledge and promote the key role software systems in effectively bringing about carbon reductions. With software developers, the authorities and environmental bodies all on board, organisations will only then recognise the critical role software plays in tackling climate changes.
    
There is little doubt that budget cuts, job losses and legislative compliance pose major challenges for the public sector. But best practice, improved understanding and control over their resources will enable organisations to make far more informed decisions about capital expenditure, resource allocations and replacement budgeting, expansion or restraint.
    
BASDA is a member-driven organisations where members benefit by sharing knowledge and expertise, and work effectively as one voice to address strategic issues and evolving legal, political and technical influences that affect the business software industry. BASDA offers a free booklet designed for organisations involved in the selection of a business software system and an appropriate supplier – ‘Selecting a Business System’ – please contact info@basda.org for a copy.

About the author
Jairo Rojas was appointed to the new position of director general of BASDA in February 2008, to manage and drive the ongoing growth and focus of the UK-based membership organisation. Jairo joined BASDA after significant experience of working with both large IT corporations, and small start up organisations, and so is well placed to understand the needs of the diverse range of BASDA members.
    
Jairo has wide experience in senior channel management roles and is used to leading, motivating and guiding teams of diverse talents to achieve the required results. Jairo has lived and worked in several countries including the UK, Sweden, South Africa, USA, and his native Colombia. His past roles include International VP and Managing Director for IPIX Corporation, EMEA Channels General Manager for SSA Global, International Sales Director for MicroStrategy Inc, Affiliates Development Manager for JBA Software Limited, plus over eight years with IBM EMEA.
    
Qualified with a business degree and with a Masters in Finance, Jairo’s academic qualifications complement his successful and wide-ranging business experience.

Notes
1. BASDA’s eBIS-XML Standard was developed about ten years ago, and allows orders and invoices to be exchanged electronically using e-mail, so that any attachment to an e-mail message could be rendered in a web browser to show an invoice or order as a document that subsequently could be printed out. It is provided as an upgrade to an existing accounting system, and improves office efficiency and reduction in elapsed time. It also provides a link between website and legacy order processing systems, and is an open standard developed by the software industry.

For more information
Tel: 01494 868030
Web: www.basda.org

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