GePS Special / Narajangteo GePS of the PPS wins Global IT Excellence Award 1 Overview: Background to PPS's Winning of the Global IT Excellence Award The Korean Government e- Procurement System (GePS) of the Public Procurement Service (PPS), called the Narajangteo in Korean, has again attracted keen attention worldwide. The reason for this is that PPS won the Global IT Excellence Award in the public sector at the 15th World Congress on Information Technology (WCIT) held in Austin, Texas, on May 4 for its innovation in service for citizens making the most out of the IT field. The World Information Technology and Services Alliance (WITSA), an international consortium of IT institutions from 67 countries, grants the Global IT Excellence Award in the three sectors -- public, private and solution of digital gap. In the public sector, the award is given considering the effective offering of services to consumers, saving of expenses and time in the government's operation and improvement in access to information. In particular, the competition was fierce this year as 10 countries, including IT powers such as the United States, Japan, Finland and Australia, recommended 16 institutions. However, the customer-oriented functions and services of GePS, including e-payment system, making public all procurement information in real time, onestop service linked with 67 external systems and annual saving of $4.5 billion in trade costs, were outstanding among competitors, according to a screening committee member. About 2,000 dignitaries and IT-related guests on hand at the WCIT, which has been held every two years, were Microsoft Chairman Bill Gates, former U.S. President Bill Clinton, Microsoft CEO Steve Ballmer and former U.S. Secretary of State Colin Powell. Participants at the WCIT discussed about major issues and the future of the ICT industry. 2 GePS, the World's Biggest e-Marketplace GePS is an electronic procurement system that systemizes all procurement businesses into one, effectively providing public institutions with materials, facilities and services they need in a timely manner. GePS carries out all procurement businesses online between some 30,000 public institutions and about 150,000 supplying companies. It is the world's largest cyber market with an annual trade volume of about $43 billion. GePS is the nation's comprehensive eprocurement system being implemented by the government to realize e-government. By making all government procurement administrative procedures online, it offers a one-stop procurement service to both public institutions and supplying companies. It is aimed at carrying out the procurement business effectively and rapidly, enhancing transparency of the nation's procurement administration, and saving expenses through removal of ineffective administrative businesses. One of the most outstanding characteristics of GePS is the integration of all public institutions, including the central government, the local governments and the state-owned corporations, into a single network. In addition, all procurement procedures have been simplified and standardized through procedures of GePS, doubling transparency and effectiveness. For instance, if registered on GePS, enterprises trading with public institutions can participate in all public biddings and confirm information on orders at once. In case of the past procurement administration, purchasers and sellers had to exchange a number of documents from order decision to payment for goods and hold many visits and consultations, resulting in duplication and ineffective business processes. With the debut of GePS, such ineffective business processes, including a number of unnecessary documents, visits and consultations, have been eliminated, showing noticeable effects in transparency of administration, cost-savings and business efficiency. At the same time, there is no need for suppliers to directly visit relevant institutions to submit procurement-related accompanying documents under the GePS because it offers about 200,000 cases of those documents through its one-stop service. Not satisfied with the successful construction of GePS, the Public Procurement Service (PPS) built the Backup Center and has been successfully operating the center since its establishment at the end of 2003. The center ensures the continuity of procurement administration even if the main computer control room is damaged owing to such emergency events like wars or natural disasters. In 2004, it also introduced Customer Relationship Management (CRM) to reinforce customer service and reflect customers' various needs. Under the CRM, it provides customers with differentiated contents useful for procurement administration, including price, commodities and companies. Along with this, PPS has built the Web Call Center for the first time among public institutions, increasing the service quality by one notch from the past simple telephone response to video consultation and guidance on screen sharing. At the same time, it constructed an intellectual commodity information system, called the Ontology, enabling users to find out commodity information easily through automatic search of catalogues and standardization, greatly contributing to boosting e-commerce. In 2005, PPS realized the ubiquitous electronics procurement through the mobile service with which users can confirm bidding information or participate in bidding through PDA while moving. Under the system, businesses can participate in electronic bidding and confirm the status of goods' movement or management in real time while on a moving bus or train. 3 GePS, the textbook of e-procurement that is more famous abroad than at home GePS received various reform-related awards for its superior excellence and has been recognized as the most developed eprocurement system in the world. In November 2003, PPS received the ecommerce grand prize in the public sector in recognition of its contribution to the development of e-commerce. It also won the excellent DB award from the Korea Database Promotion Center in recognition of its contribution to improving domestic DB quality through systematic DB quality management in April 2004. The Office of Government Policy Coordination selected PPS as an excellent institution for foreign benchmarking by in November 2005 in recognition of its contribution to enhancing the international status of Korea by heralding its excellent e-procurement system to foreign governments and organizations. In March 2006, the Society for e- Business Studies awarded the "technology prize" to the Public Procurement Service (PPS), saying that PPS has greatly contributed to the development of ecommerce both at home and abroad, including e-certification, encryption, Web service, wireless e-bidding, e-payment and intellectual commodity information system. In the meantime, PPS won the U.N. Public Service Award in June 2003 in recognition of its contribution to improving public service, becoming the first institutional winner in the public service sector in the Asia- Pacific region. In May 2004, the OECD also said in its report on the consideration of Korea's corporate informatization policy that GePS has been taking the lead in spreading ecommerce in the private sector and reached the level of 'no further action required.' In April 2004, the U.N. appraised GePS of PPS as one of the world's best 23 best practice models in the one-stop integrated service field in its U.N. global egovernment readiness report 2004. At the 6th forum of the UN/CEFACT, a conference for international standardization in the field of trade and ecommerce, a standard that reflected the eprocurement procedure of PPS was passed in March 2005. According to the enactment of the standardization procedure, all countries building an ebidding system will have to design programs in keeping with the procedure in the future. Accordingly, Korea's leading position in the international e-procurement sector will be consolidated further and Korean enterprises could strengthen their competitiveness in exports of eprocurement. Despite such favorable global appraisals, PPS has persistently participated in the UN/CEFACT meetings to enhance international competitiveness of GePS. Thanks to its global reputation and efforts, GePS has been becoming the target of benchmarking for many countries. Since 2003, PPS has publicized the excellence of Korea's e-procurement system to other countries over 70 times at various international seminars and conferences, including the World Bank seminar and the World's Anti-Corruption International Conference, at the request of sponsors of the meetings. Meanwhile, more than 30 countries, including Japan, China, Hong Kong, Taiwan, Vietnam, Pakistan, Sri Lanka, Laos, Turkey, Costa Rica, Brazil, Ukraine, Russia and Romania, dispatched a benchmarking team to Korea to learn the know-how of Korea's e-procurement system. Among the countries, in particular, Pakistan and Vietnam dispatched officials of their public procurement administrations directly to Korea and PPS conducted a feasibility study of the e-procurement business. Multilateral development banks (MDB), including the World Bank, Asian Development Bank (ADB) and Inter- American Development Bank (IDB), also paid keen attention to GePS, so the banks held policy explanatory meetings at the end of 2005. PPS has been engaging in various cooperative projects with MDBs that have a thorough knowledge of developing countries and have keen interest in reform of the procurement system. 4 PPS, leader of reform of global procurement administration The superiority of GePS was already confirmed by winning the Public Service Award from the U.N. in 2003. Furthermore, GePS has consolidated its position as the world's leading eprocurement brand by receiving the Global IT Excellence Award from the WITSA this time. This conference attended by dignitaries in the global IT industry and high-ranking government officials, provided PPS with good chances to publicize GePS to many foreign countries. During the conference PPS held an explanatory meeting for GePS and explained functions and characteristics of GePS as well as transparent and effective appearance of the government procurement system after GePS was established. GePS has gained a firm foothold as a brand representing the global eprocurement administration, enhancing the international status of Korea. The UN/CEFACT also reflected the procedure of GePS to its standard draft for e-biddings. PPS also obtained the BS15000 from the British Standardization Institution (BSI) for the first time among public institutions in the world, making Korea a world leader in terms of eprocurement administration. By making the best use of the high degree of global recognition of GePS and its wide networks with international financial institutions, PPS plans to concentrate its administrative efforts on international cooperative projects for exports of e-procurement policy. If such international cooperative projects for e-procurement are carried out systematically and lead to policy exports, Korea will be able to herald its electronics government to the world and contribute to capacity building of each country in the world. Despite the best appraisal of its GePS by the international organizations, PPS introduced the ITSM and ITA to maximize customers' satisfaction and keep and develop the world's best system. Through such in-house efforts and various international cooperative projects, PPS has continuously spread its know-how on efficiency and transparency of procurement administration its GePS has attained to foreign countries, leading the reform of the procurement administration of each country. 5 Results and effects of the GePS Since its launch of service in October 2002, the Government e-Procurement System (GePS) of the Public Procurement Service (PPS), called the Narajangteo in Korean, has been developed rapidly as a single window for public procurement thanks to PPS's strenuous efforts for improvement of system function, development of various contents, education on public institutions and enterprises, public relations, and revamp of relevant laws and regulations. As of the end of 2005, about 30,000 public institutions and 150,000 enterprises registered and utilized the GePS with the volume of procurement transactions reaching $43 billion a year. It is a giant trade volume through a single window, compared with the $300 billion recorded in the B2B made between private companies in 2004 and the $8 billion in the private online shopping mall trade (B2C). About 140,000 cases or 93 percent of the total biddings in the public sector were executed through the e-bidding at GePS and 18 million people participated in the biddings. PPS supplied a total of 500,000 cases of materials and office supplies worth $7 billion to public institutions through GePS shopping mall. It also dealt with such businesses as enterprises' bidding and contract-related guarantees, application for confirmation of delivery of goods and application for the payment for products through the electronic system. It also shortened the period required for the payment of goods to suppliers from two weeks in the past to four hours after application through e-payment. The characteristic of e-procurement is to deal with business through online shopping malls, resulting in a sharp reduction in major documents. In the past, for instance, enterprises had to visit public institutions directly and make a registration to participate in biddings with their business license registration certificate. Now, however, PPS automatically confirms the business license registration certificate necessary for registration as a bidder in close cooperation with the e-government (Government for Citizen). Accordingly, enterprises no longer visit many public institutions to submit many documents to attend the biddings. PPS possesses all information necessary for e-procurement in close cooperation with seven facility workrelated associations, six official certification institutions and 11 guaranty companies. The e-procurement through GePS has greatly improved productivity and transparency of procurement administration, resulting in annual saving of $4.5 billion in trading costs. Of the total, $4 billion or 90 percent was a cut in expenses for acquiring information and visits to public institutions by private enterprises. GePS has also greatly contributed to promoting transparency of procurement administration and accelerating ecommerce in the private sector, making the national economy low-cost and highefficient one. 6 Current status and characteristics of u-procurement infrastructure construction Enterprises can reduce total costs by 20 percent through effective use of procurement function. Likewise, the effective use of procurement function in the public sector is directly linked to national competitiveness. Accordingly, PPS has reduced procurement cost through electronic procurement process and improved transparency and fairness of procedures. However, as the environment surrounding procurement administration has changed at a rapid pace, PPS built infrastructure for various ubiquitous procurement services. - Ubiquitous wireless electronics bidding service through PDA In keeping with the participatory government's u-Korea policy, PPS established a ubiquitous electronics procurement strategy that enables users to use the service at any time and anywhere and introduced the mobile e- bidding service by making use of PDA. As an initial step, PPS offered the "PDA bidding information inquiry service" from March 2004 to help suppliers make easy access to the GePS and acquire necessary information at any time and anywhere. From December 2004, PPS operated the mobile electronic bidding service using PDA on an experimental basis, carefully verifying security, the most important thing in e-bidding. PPS applied the mobile electronic service to all biddings from March 2005, opening the era of ubiquitous e-procurement in earnest. Security and confidence are the most important things in e-bidding. As a result, PPS adopted online transactions based on official certificate for mobile electronics bidding. The mobile e-bidding using PDA is designed for users who cannot make connection to PC. Nevertheless, a total of 3,000 people participated in biddings through PDA in 2005, proving that ubiquitous e-procurement system has been settling down. - Development of the government goods management system using RFID As of the end of 2005, the government possessed 12 million kinds of goods worth $7 billion won. In the past, government officials had to record quantities and product names on a paper register and input them into the National Finance Information System (NAFIS), spending a lot of manpower and time for management of the government goods, but resulting in a decline in transparency and correctness. PPS, which is in charge of asset management of the government goods, felt the necessity to introduce a real time asset management system for these goods, and carried out a model project for the goods management system using RFID in cooperation with the National Computerization Agency in June 2005. By using the new RFID goods management system, PPS enhanced productivity of goods management by about four times over the existing good management method and promoted correctness of its survey of goods. - Customer Relationship Management (CRM) Although private enterprises seeking profits already adopted the Customer Relationship Management (CRM), it was rare for the public sector to introduce the CRM. PPS operated with corporate special accounting is a public institution, but conducts business in a similar way to that of private enterprises. Accordingly, it introduced the CRM for the first time among government agencies to consider both public interest and profitability. With the construction of the CRM system, PPS was able to offer differentiated procurement information to customers at a time when they wanted, away from the past method of offering the same procurement information to all customers. Meanwhile, suppliers are able to receive the interested bidding information by business line, supply good, region and amount. Users in the past had to spend much time and efforts to find out information they wanted among about 14,000 pieces of information in GePS. Now, however, users can find selected and personalized information they want rapidly and conveniently once they create the necessary conditions. In the past, to get the necessary information, customers had to make a call or visit homepage directly to confirm. However, currently they can get necessary information through e-mail or SMS on mobile phones. - Offering of fresh information through Web call center In April 2004, PPS added the Web call service to the government procurement call center, which had been operated as a communication connection channel with customers, as part of its efforts to develop the existing "simple call center consultation business for civil affairs" into a "customer satisfaction center." GePS users can engage in direct consultations with a consultant in real time through letters, voice or video while seeing the consultant's face, resulting in significant improvement of quality and confidence of consultation. GePS also offers the call-back service by responding to a customer's question by phone at a time when the customer wants later in case his or her question was made after office hours. Along with the improvement of the call center system, PPS also improved its operational methods. In the past, consultations about professional procurement business were made between a customer and an official of relevant department who was connected by a consultant at the call center. From April 2006, however, PPS introduced a three-way call method under which a customer, a consultant at a call center and a professional official of PPS call each other simultaneously and instantly. It reflects PPS's firm will to make its call center the best call center within the government with zero of customer dissatisfaction and a 100 percent response rate. 7 Procuring IT major projects GePS has become an important key facility of the country in public procurement activities. It goes without saying that if GePS is destroyed or an obstacle occurs, confusion or calamity could result. PPS will make GePS the next-generation GePS providing users with more convenient procurement activities through persistent improvement of functions. Firstly, it will create the best e-business environment to help customers procure top-level goods and services. To this end, it will diversify services, strengthen consulting function through offering of contents with high value added, including information on price, enterprises, products, business appraisal and laws and regulations, as well as enhance effectiveness of public procurement. Secondly, it will offer a differentiated tailor-made e-procurement service to public institutions and suppliers by using the Customer Relationship Management (CRM) system. Along with this, it will operate its procurement call center in such a way as to gather feedback from all customers and play a role as a Customer Integration Center (CIC) by treating customers actively and positively. Thirdly, PPS will improve the functioning of the intellectual product information system, the Ontology, for effective search and classifications of various product information by private and government sectors. It will seek to realize the collaborative e-government through integration of systems and offering of seamless administrative service. Fourth, it will expand the service offering mobile information and apply RFID technology, creating a ubiquitous e-procurement environment, where users can utilize the system at any time and anywhere. Finally, it will make joint efforts with international organizations, including the World Bank, the ADB and the UNESCAP, to herald GePS to global society, while playing a leading role for standardization of e-procurement in the international community. Through such persistent service reforms, PPS will continue playing a key role in leading the e-procurement both at home and abroad, while exerting best efforts for spreading e-commerce between countries, between public and private sectors, and between private enterprises. 8 Activities and expected benefits of PPS in WCIT 2006 The excellence of GePS was already recognized for its winning of the Public Service Award from the U.N. in 2003. In addition, GePS won the Global IT Excellence Award from the WITSA this time, cementing its position as a leader of the world's e-procurement. About 2,000 dignitaries and guests from 80 countries attended the WCIT 2006; therefore, it was a good chance to publicize GePS to the world. During the event period, PPS held GePS reform example forum and introduced the process of building GePS, functions and characteristics of GePS, as well as transparent and effective appearances of the government procurement system to global IT leaders. In addition, PPS announced the successful case of GePS at the e-government forum organized by the Texas state government. At a press conference for winners, Chin Dong-soo, CEO of PPS said, "PPS plans to share know-how of GePS with global society as a leader in e-procurement and actively cooperate with international organizations to spread transparent and effective eprocurement systems to foreign countries." By winning the Global IT Excellence Award this time, PPS reaffirmed the reputation of GePS leading the world's e-procurement and enhanced the status of Korea as an advanced IT country in the global society.