To eliminate redundant processes, retain knowledge, and save costs, the Illinois Department of Central Management Services created a knowledge management (KM) system that consolidates procurement resources from all agencies and other states into one central location. The system is based on Microsoft® Office SharePoint® Portal Server 2003 and taps into the Microsoft Solutions Sharing Network (SSN) initiative to enable public sector organizations to share their IT solutions, best practices, and research with other governments. Developed in partnership with Microsoft and Kanalytics, the Illinois KM system facilitates collaboration among the Illinois State procurement community and information sharing across state borders. This is leading to more intelligent public procurement, saving millions of dollars for taxpayers.

Situation

The Illinois Department of Central Management Services (CMS) is the state’s lead procurement organization, responsible for all aspects of the purchasing process—preparing bids, researching products, screening contractors, negotiating contracts, assessing performance, and so on.

Traditionally, information on these procurement tasks existed in random filing cabinets, on disparate databases, or simply in the minds of individual procurement staff. A purchasing officer might have dug up some financial details about a potential supplier, or obtained information from another state, but the information would have been held by the individual officer and never seen by his or her colleagues.

“There was no system in place for sharing and obtaining information,” says Shelly Martin, Chief Knowledge Officer of CMS. “They might have asked informally amongst themselves, but communication between procurement officers was sporadic and they only ever reached out to another state if they had a contact there.”

As procurement professionals retired or left the government workforce, valuable institutional knowledge left the building with them. With no uniform or consistent way to capture and maintain procurement information, and make it easily accessible to staff, the result was often redundant research, negotiation, and administration for almost all planned procurements.

“Reinventing the wheel is costly enough for business, and it’s even a bigger problem for public agencies, given the decentralized nature of state government,” says Martin. “We thought if we could enable agencies to share samples of RFPs, contracts, market data, and so forth, there would be less duplication of work.”

Solution

With a mandate to revamp public procurement, CMS created a knowledge management (KM) system that consolidates procurement resources into one central location. It creates a community where, through a Web-based portal, procurement staff from all Illinois State agencies can access information and communicate with their peers. Staff can also submit research requests to a CMS KM research team, which assembles and returns benchmarking and industry data, product information, and best practices and analysis on particular purchasing issues.

“The portal is like a one-stop shop for procurement staff,” explains Martin. “It offers all the research, policies, procedures and information on contract proposals, negotiating strategies, industry trends, and procurement business cases. All that knowledge held by procurement staff from all agencies and even from other states has been pulled together and put in one place.”

Launched in January 2006, the KM system was developed in partnership with Microsoft and Kanalytics, a leading provider of knowledge management and business intelligence solutions and a Microsoft® Gold Certified Partner. Through the project, CMS implemented the Kanalytics Knowledge Center and joined the Microsoft-based Solutions Sharing Network (SSN) program, a global initiative to provide an online, community-based capability to promote increased communication, deeper information exchange, and collaboration between public sector organizations. The SSN program was developed jointly by Microsoft and Kanalytics and works on top of Microsoft Windows Server™ 2003 and Microsoft Office SharePoint® Portal Server 2003.

“The State of Illinois is moving more towards the Microsoft platform,” says Martin. “A couple of agencies were already using SharePoint and we wanted to maintain a consistent approach across the state.”

She adds, “Kanalytics was great doing the customization for us to make the system do what we needed it to do.”

Benefits

Tool for Lowering Costs

The Illinois KM system has helped to eliminate redundant processes and improve efficiency across State agencies. Procurement officers in all agencies save time planning and preparing procurements by pulling up invitations to tender or RFPs issued previously by other agencies, or by other states. And they work smarter and accomplish more on the job as they harvest new sources of information to make purchasing decisions.

Besides historical bid data, purchasers can access the KM system to obtain years’ worth of financial data, price comparisons, performance analysis, and even court documents about a potential supplier. Armed with this kind of information, they are better prepared to enter negotiations with potential suppliers.

“In the past there really wasn’t a lot of vendor negotiations; procurement staff just went through the evaluation process and awarded the contract,” says Martin. “Now they have the benchmarking data and can go in and demand lower rates. On a few occasions we have found that a contractor had given lower prices to other states and that enabled us to renegotiate and get a better deal on our contract.”

CMS has also been able to gather research on the same vendors charging different rates to various Illinois agencies, and use the information to negotiate a single best-value master contract for all of government. The ability to negotiate has helped save millions for Illinois taxpayers, including a $3 million cost saving on one contract alone.

Knowledge Becomes an Asset

Procurement staff not only go to the KM portal to take out information but they also put their own knowledge back into the system, promoting the development of best practices. All procurement research reports are filed within the KM system for future reference, and the online library now contains a variety of content, including external benchmarking resources, bureau policies and procedures, and training resources, as well as the procurement calendar and cycle. The State is further adding an expert list of procurement professionals from other states and codifying procurement best practices nationwide.

The build-up of a catalogued repository of knowledge has led to significant cultural change within the State procurement community, with collaboration between procurement staff now the norm rather than the exception.

“Knowledge is no longer lost but has become an important asset,” says Martin. “We have introduced a learning culture that isn’t always prevalent in government, and that ability to manage and preserve the  intellectual assets of the government workforce more than covers the technology investment.”

Crossing State Borders

The KM system facilitates the sharing of knowledge across state borders and ultimately CMS wants to see the creation of a nationwide procurement site to help all government procurement officials achieve greater savings, improve processes, and diminish the time and cost involved with reinventing the wheel.

“We have not found the same KM practices in other state governments’ procurement area, but other states have been very helpful providing us with information,” says Martin. “And we are able to show a state the benefits of sharing information by passing on the research that we have received from dozens of more states.”

She concludes, “If every state agency in every state in the country had access to a nationwide library and KM system for contracts, negotiating strategies, industry benchmarking, and real-time pricing information on everything state agencies need to buy, then there would be a revolution in pricing and delivery that would benefit taxpayers everywhere.”

Microsoft Windows Server System
Microsoft Windows Server System™ is a comprehensive, integrated, and interoperable server infrastructure that helps reduce the complexity and costs of building, deploying, connecting, and operating agile business solutions. Windows Server System helps customers create new value for their business through the strategic use of their IT assets. With the Windows Server™ operating system as its foundation, Windows Server System delivers dependable infrastructure for data management and analysis; enterprise integration; customer, partner, and employee portals; business process automation; communications and collaboration; and core IT operations including security, deployment, and systems management.

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