Indian Railways Embrace e-procurement Solutions to

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1 Travel, Transportation & Logistics Indian Railways Embrace e-procurement Solutions to Improve Efficiency and Enhance Performance Client Brief The Indian Railways (IR) is Asia's largest and the world's second largest rail network under a single management. Procurement functions in Indian Railways form major part of the materials management activity and these functions are effectively discharged by adopting well established procedures, policy guidelines and practices. IR caters to an annual procurement over USD 4 Billion through tenders and annually generates revenue over USD 200 Million through disposal / sale of scrap.

2 Client Requirements As a part of the overall reform process and to increase transparency in its dealings, IR decided to adopt and implement an e- Procurement System for mutually benefiting the Railways as well as participating vendors. The objective was to improve transparency and productivity of railways by streamlining the procurement process, minimizing the procurement cycle time, and by reducing the physical interface between government staff and contractors in the tendering process. Solutions Offered HCL Infosystems was shortlisted as a technology partner in this initiative by the Centre for Railway Information Systems (CRIS), an autonomous organization under the Ministry of Railways. After a thorough study of the requirements, HCL Infosystems offered the following solutions - Ÿ Portal for Tendering Process - HCL developed a single portal for the tendering process with a single log-in registration for vendors. The e-procurement System covered the 17 zonal railways and more than 11 production units. The e-procurement application software included features such as e-tendering, e-auction, e-contract Management (i.e. bid evaluation, negotiation, vendor selection, contract award, PO placement, material inspection / receiving / rejection etc.) e-payment,user management / administration, vendor management and so on. A lot of enhancements / functionalities are introduced into the system from time to time as per the requirement of Indian Railways such as: Enhancement for Multiple Evaluation Criteria (i.e. item-wise & consigneewise evaluation criteria, item-wise evaluation criteria etc), where initial evaluation criteria was total value-wise Global Tender e-payments and Lien Account Management of bidders Reverse Auction Forward Auction Contract Tracking Ÿ Digital Security Features - The e- Procurement application was integrated with latest digital security features to demonstrate and ensure highest level of security, confidentiality and trust between the buyer and the seller. It permitted vendors to search, view and download tenders directly from the Railways' secured website and also participate and submit online offers in e-tenders directly from the website in a fair, secured and transparent manner. Further, the site allowed the vendors to interact with the e-procurement portal only if they possessed a valid legal digital certificate from a licensed certifying authority. The advanced security features

3 included digital asymmetric cryptography, Public Key Infrastructure (PKI) enablement for data encryption / decryption, digital signature, 128 bit SSL (Secured Socket Layer) for secured data transmission, digital authentication, role based action / access privileges, audit trail, time synchronization etc. Ÿ Datacenter operations support and Help Desk Support - This included System and Database Administration regular/routine activities, backup, patch installation, system upgrade, and Help Desk support to railway users / bidders / vendors Ÿ Training of railway staff and vendors - HCL conducted training for Railways staff and vendors for the application software to ensure smooth functioning of the new system and helped them overcome the inertia to work with latest technology Challenges faced while implementing the Project and how they were overcome by HCL Infosystems Ÿ D e c e n t r a l i z e d p r o c e s s e s a n d mechanisms -In order to build efficiency in the systems, HCL I offered phased change management of existing process involving re-engineering of Procurement and Auction processes. This was aimed at creating common processes across Railways for procurement & auction, and for codification of goods / items Ÿ Limited information and best practice sharing due to decentralized railway zones The new system created by HCL Infosystems has features, which allow reuse of available data (past tenders of similar nature with the same requirement) across the Railways. The system promoted Procurement Data Sharing across Railways and reused old tender data to reduce procurement cycle time Ÿ Limited Visibility and Long Information Cycle in the Procurement and Auction processes for senior management - To overcome this challenge, HCL I deployed Dashboards and Analysis Reports catering to specific need of the Management and Board. This led to faster and timely access to information and decision making Ÿ Security and Reliability of the Portal - The portal developed by HCL was for use by various stakeholders like Indian Railways, registered & unregistered vendors, inspection agencies etc. Hence, the security of the portal was a prime concern for the Railways. To overcome this challenge, HCL deployed several security mechanism for application security and reliability like: STQC for application security and reliability Use of digital signatures for e-transactions Public key infrastructure (PKI) for data encryption / decryption

4 Time stamp by certifying agency 128 bit SSL (secured socket layer) for secured data transmission to ensure enhanced level of trust for authentication Digital certificate of sender was attached with each bid document Document integrity and protection by hash check using same one way hash function and senders public key authorization (only an authorised person from the Railways could decrypt and open e-tender box) Ÿ Managing seamless functioning of the portal - HCL offered training to Indian Railways staff for the new portal and offered a dedicated Helpdesk team to provide support and resolve queries of vendors / suppliers and railway users. Business Benefits Ÿ More than 3.75 lakh tenders have been processed worth INR Crores and an auction of scrap goods worth INR 500 Crores has happened after successful implementation of e-procurement solutions for Indian Railways by HCL Ÿ Automation of e-tendering (Creation/ Publishing/ Biddin/ Scrutiny/ Tabulation of tenders) led to reduced procurement cycle time of materials from 23 days to instantaneous Ÿ 80% savings on tender advertisement cost, 20% saving on overall procurement cost and 40% saving of time on procurement cycle time Ÿ Streamlining of procurement process across all zonal railways, led to increased transparency, and improved reporting and monitoring of procurement and costs at Railway Board level Ÿ Elimination of aberration and malpractices led to improved transparency and competition through anywhere / anytime participation. Railways is now able to rapidly liquidate scrap material by eliminating high seller carrying cost such as auctioning cost, interest, maintenance / storage costs etc.

5 About HCL Infosystems HCL Infosystems Ltd. with revenue (LTM) of US$ 1.8 billion (Rs. 9,882 crores) is India's Premier Technology Company and offers a wide spectrum of IT Services and Products ranging from Cloud to Learning Solutions. As a complete IT solutions provider the company offers comprehensive offerings in Enterprise Application Services, IT Infrastructure Managed Services, System Integration, Office Automation Products and Services, Distribution and Support Services. The company operates in both the Consumer and the Enterprise space offering the latest mobility products and operating in verticals like BFSI, Telecom, and Healthcare respectively. HCL Care, the support and service division of the company has one of the largest and most extensive service networks across the country and provides end to end support services for various IT, Telecom and Consumer Electronics products.hcl Infosystems has one of the largest distribution network of digital lifestyle global brands and an unparalleled robust service network in the country including Tier 2 and 3 cities. Digilife Distribution and Marketing Services (DDMS), a 100% subsidiary of HCL Infosystems focuses on multi brand distribution and offers value added distribution for its partners including strategic consulting services, last mile connect and support in marketing and promotions. HCL Learning a division of the company covers the entire spectrum of education and training requirements across schools, colleges, individuals and enterprises and offers rich learning solutions across these segments. HCL Infosystems MEA (Middle East and Africa), a fully owned subsidiary of HCL Infosystems is part of the emerging markets outreach of the company and focuses on expanding the business in the Middle East and African geographies and provides comprehensive IT solutions to customers across verticals in the region. The company also has robust operations in Singapore with its subsidiary HCL Insys Pte. Ltd. gaining traction in the region with its Enterprise solutions including a strong offering in Infrastructure Managed Services. For more information please visit us at For more details, please contact us at salesedge@hcl.com or visit us at HCL Infosystems Ltd. All Rights Reserved. Reproduction of this publication in any form without prior permission is prohibited. The names of the actual companies and products mentioned herein may be the trademarks of their respective owners. All content/information present here is the exclusive property of HCL Infosystems Ltd. The content/information contained here is believed to be accurate ate the time of publishing. HCL shall not be liable for damage of any kind use of this information, which is subject to change without notice.