CASE 2: Innovative telecommunication equipment of a municipality to increase service quality and effectiveness FhG-ISI Country / region

Transcription

1 CASE 2: Innovative telecommunication equipment of a municipality to increase service quality and effectiveness Country / region Germany, city of Heidelberg Short description FhG-ISI The city of Heidelberg had to replace telecommunication infrastructure after a fire had destroyed the former installation. The old telecommunication equipment was a collection of various more or less old and traditional systems and a couple of advanced systems. The replacement was new VoIP (voice over IP) telecommunication equipment (Alcatel Omni PCX Enterprise); the aim was a uniform system on that basis which was labelled "most modern" technology. It entails a Call Centre-Device (Alcatel Omnitouch CCD) to optimise the communication with, and service orientation towards, the citizens (the "clients") of the municipality. The benefit of the system is: better service for the citizen (utilise organisational slack in various departments, virtual one-stop shops and virtual departments), more flexibility for the citizen, integration of IT with voice communication, much more effective tele-work (computer-assisted telephone). The innovation was the combination of traditional and new systems, some adaptation had to be developed especially in the voice area and the diffusion of the most advanced technology. Winning company: Alcatel Date of decision: April 2004 Budget (of the first contract, 100 units): EURO Criteria for the decision: Flexibility in meeting the specific needs of combining a traditional and a modern system, follow up maintenance and lowest costs. Procuring agency and policy background There is a specialised city agency responsible for personnel and technological organisation of the municipality. Up to a certain amount this agency can decide independently on procurement, there is no central procurer in the city, only legal advice as needed by the procuring technical experts. Above the monetary threshold, the experts have to obtain permission from the political decision-makers (city council, mayor). In the instance of VoIP, the agency technically responsible also took the purchasing decision, because of the very complicated technological backgrounds (expertise) and because of the time pressure, given that a fire had destroyed parts of the system. The technical experts thus had the mandate from the political decisionmakers to buy an innovative solution in line with the city's general strategy to be 3

2 equipped with innovative technologies in order to deliver effective service and to uphold an innovative image. Thus a political principle ("citizen satisfaction") is the leverage for technical decision-makers while deciding on a new procurement. The success and impact The innovation i.e. voice over IP control in combination with traditional systems enables much more cost-efficient services for the citizens. Especially the decentralised service a trademark of the city of Heidelberg is cheaper and more effective. Furthermore, tele-working in an efficient way is made possible. The costs for the system are far below the regular market price, due to very intensive interactions and due to the city's willingness to act as an official lead user of the company's technology and also the very positive image of the city of Heidelberg as regards administration (innovative, service-oriented). Technically speaking, the system integrates voice and data streams into one system (IP platform). The supplier has invested in innovative aspects such as integration of the new technology into the older technological context without further costs for the city. Thus, new and improved services are possible without writing off old investments. As it turned out, this technologically speaking demanding integration of technologies was only available from one specific supplier, which was the reason for choosing him. For the supplier, this was a possibility to demonstrate his capabilities in an innovative telecommunication device that is still waiting for its breakthrough and diffusion, and to further develop the integration of new and old technologies. The most important impact on the supplier lies in the image building in the market as being able to deliver complicated integration of technologies fast. In addition, the regional contractor of the ICT company that provides the installations and maintenance is also contributing to innovative solutions to be used for other clients as well. One important characteristic of the organisation of this procurement is that the procuring department and staff is neither a specialised procurer nor a prime user of the procured technology, but responsible for the maintenance and functionality of the telecommunication system. Thus, they are fully influenced by the cost-benefit considerations for all potential users in the administration and can anticipate potential reluctance to apply the new system. This implies provision for an in-built change management. Procurement cycle Identifying the requirements The requirements were defined with a strategic commitment of the city to deliver effective service to the citizens through modern ICT solutions. A fire made quick decisions necessary, thus this strategic decision was the major guideline for the internal decision-making process. In addition, there is a policy to enable tele-working and organisational backup via ICT solutions. There was no systematic survey of the needs of all the hundreds of users in the or-

3 ganisation, but a central definition led by strategic decisions and long experience in everyday maintenance of the IT system. Market intelligence Knowledge of the market is given through the functional specialisation within the administration. It is the daily task of the technical personnel responsible for the maintenance and procurement of systems to monitor the market and test new applications. Intensive contacts with potential suppliers existed long before the concrete tendering process. All necessary intelligence could be provided internally. The procuring team was extremely small, given the unity of procurement and technical expertise. Legal expertise was considered necessary, but did not drive the process, an external IT expert was consulted who assisted in drafting the requirements, but who was not responsible for the selection of companies to be contacted. Long before the tender was issued intensive dialogue with all major providers of VoIP-Systems was conducted. The procurement team had organised in addition to permanent monitoring workshops with all the major players in which it signalled the potential future requirements and in which it learned about the competencies and future developments of the companies. For the suppliers, a confidentiality clause was signed to ensure that no sensible market and technology information was disclosed to competitors. Tendering process The tender budget was below the EU threshold to procure European wide. It was dealt with according to a restricted procedure; the tender decision was directly contracted. Intensive dialogue with various producers in order to work towards a specification and to monitor the market for technological possibilities. This period was important for all relevant suppliers to get to know the technological context of the client Heidelberg. The market knowledge and search had led to a couple of potential suppliers who had signalled to be able to supply what was needed. On the basis of the information gathered in the market, a limited call for tender was issued on that basis. The tender implied a two-step approach, i.e. a first pilot installation for 100 offices and a second one for 1500 to 2000 offices in an incremental approach driven by the actual need to modernise step-wise. This means that the explicit call stated a limited volume of 100 units. Out of five tenderers, three survived the knockout criteria ("must"). Negotiations were opened with these selected companies following a clear, uniform and differentiated set of requirements. An external consultant was used for these negotiations who contributed to the market intelligence and 5

4 improved the technological competence and standing of the municipality. The supplier was selected on the basis of the flexibility and the MEAT criteria he provided. Assessing / awarding The assessment was based on the criteria given in the tendering documents. The supplier who demonstrated best flexibility and integration with the traditional system won the contract. Moreover, the first decision on the 100 units also took into account potential the follow-up costs for further installations. As technical solutions for the complex task of combining the traditional with the new system differed between the various suppliers, a simple low cost approach was not possible. Contract award and managing contract delivery The contract was awarded to an international supplier, but with a regional service provider to deliver and take care of the roll out and maintenance. The multiple step-approach (to install 100 units in a first roll out and then consecutively to install up to 2000 units) facilitated testing and lowered the risk. The idea was to initially buy 100 installations and then procure up to 2000 in a step-wise approach, not as one big tender, but as a continuous process (see below). In addition, the city agreed to act as a lead user and reference customer for the producer, who would report on the experiences with the innovative device. This also contributed to a favourable overall agreement. Success factors The greatest success factor seems to be the intensive market knowledge, both of technologies and actors (companies), provided by a permanent market intelligence, in the specialised team and, above all, the direct and structured interaction with all major providers even before a concrete tender process was started. For the suppliers, this was crucial as this enables them to learn much better about the needs and the readiness of the public body to buy high end technology or even demand innovation. Furthermore, the independence of these technical experts who are responsible for procurement and for the maintenance of the system within a clear political mandate to buy innovative equipment is seen as the major asset. If users had been involved too much, they would have hesitated to buy innovative devices, as organisational learning is involved; if procurers had decided, the legal and short-term budgetary aspects would have weighed too strongly. Major impediments overcome The risk of buying a well functioning system with 2,000 units was systematically lowered through the multi-step approach of having a test installation of 100 units within

5 a relatively informal tender process (below threshold). The subsequent installations were not bought in a package, but have been and will be bought as needed by the administrative users, still taking advantage of the technological paradigm change done in the first procurement. If the pilot phase works well and indications are it does the supplier of the first units may get the contracts for all the successive units. However, subsequent units could be bought from other suppliers "off the shelf" as well, there is no technological path making the City dependent from the initial supplier, and the innovation, i.e. the combination of the old with the new technology, was in the first service contract of the 100 units. Thus the City has procured an innovative system without making itself dependent from the innovative supplier, i.e. securing the open market for subsequent units. Major lessons Innovation-friendly culture and clear political mandate (Heidelberg has a prime reputation here). Decision made by the technologically knowledgeable procurers on the basis of a flexible council decision, the political decision-makers did not intervene in the technological and economical considerations of the procuring agency, which, however, had to justify their decisions on the basis of MEAT and functionality. Strong market and technology knowledge and monitoring of the procurers. Structured direct technical dialogue with all major producers in very early phases of the process. In most cases of public procurement, an external consultant organises even the early stage of a procurement, which hampers innovative solutions and tends to lead to standardised products. Confidentiality clauses are helpful for an open discussion on technological competences and future developments. Flexibility of the supplier and strong interaction with procuring agency. In-built change management as the technical staff responsible for the internal maintenance and training for the users was responsible for the procurement. 7