Several Western Australian councils are the latest to seek to achieve vastly improved economies of scale by harnessing their collective purchasing power.
In a first for Western Australia, the Bayswater, Bunbury, Gosnells and Cambridge Councils are working together to collectively purchase new business systems. The Council Core Business Systems Group Procurement Project seeks to bring a new level of collaboration to IT purchases. Assisted by the peak body for Local Government, the Western Australian Local Government Association (WALGA), the Councils — recognizing their current business systems were failing to meet their ongoing needs and would all need to be upgraded or replaced within the next two years — have joined forces to select a new corporate IT system.
The initiative is being managed under WALGA’s Linking Councils and Communities Program, which is providing a natural point of contact, centralized administration and technical expertise for the project.
WALGA, like the other States’ Local Government Associations, received $6 million under the Commonwealth’s Networking the Nation (NTN) program, much of which is going to aggregated services. For instance in NSW five councils, including Hornsby Council, have had a major aggregation project underway for almost two years while NSW LGA is implementing an e-procurement system for all Councils. Its Commercial Services Unit (CSU) is working to achieve economies of scale for all NSW councils and county councils by harnessing some $2 billion of collective purchasing power per annum. CSU claims to have already achieved major cost savings, improved terms and conditions and ease of access as well as reduced procurement costs to councils. It also works with councils to promote the benefits of procuring strategically and to facilitate the introduction of enabling technology to improve business processes and practices.
The WA group procurement project is designed to encourage better buying practices. Western Australian Local Government Association President, Councillor Clive Robartson has commended the participating councils on their initiative, which has attracted interest from both the Local Government sector and industry.
“There are broader benefits for the Local Government sector through the potential engagement of a preferred supplier for Local Government, and the development of best practices specification and models,” Robartson says. “On the basis of the sources of the implementation, the successful vendor will be well positioned to offer a best practice Local Government specific product across the sector.”
The Association’s Linking Councils and Communities Program has scoped and costed a four phase project involving project initiation, systems/requirements definition, systems selection, and supplier appointment. The first phrase will embrace development of a technical specification to define the system needs (requirements and definitions) for each Local Government’s administration, designed to meet the broader needs of all activity areas including finance, records, and communications. The project will then advance to public tender, where a vendor will be selected through a rigorous evaluation process.
The Councils expect to achieve scaled benefits of volume based licensing and service support through the procurement.
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