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Innovations in Digitization: Municipality of Dubai

Published October 14, 2022

Written by: Future of Sourcing Awards
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Future of Sourcing Awards

The 2023 Future of Sourcing Awards recognizes organizations and individuals that show innovation, leadership and transformation in categories that are critical to the sourcing industry. The Awards will take place on October 18, 2023, the capstone evening at the SIG Global Executive Summit. Attendees will enjoy dinner, networking and an awards ceremony that brings together some of the brightest minds to create a truly remarkable experience.

 

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Can you outline why your team embarked on this project and the problem that needed to be solved?

Determining  the  Area  of  this  Project  came  from  highlighting  crucial  dilemma  in executing  procurement,  analyzing  bids,  evaluating  bids  and  issue  service  contracts through  transforming  day-to-day  operations  from  manual  works  to  best-adopted technology  and  systems  used  in  procurement  fields.  Furthermore,  the  needs  of  this particular project was abstracted from different business units’ in Dubai Municipality reviews and feedbacks, employees’ suggestions to improve the daily work and make it easier  and  simple  for  them  in  order  to  increase  their  productivities  in  completing contracts on a daily basis as much as they can. Most compelling evidence of the need of this project that the number of service Contracts approved for 2018 is estimated 97  Contracts  completed  out  of  320  contracts  request  received  (including  Expense contracts  Revenue  contracts  and  others  )  for  the  value  of  more  than  +800  million dirhams.  Comparing  the  results  at  the  end  of  the  project,  the  section  received  380 contracts requests with a 100% completion and under process.  Adding to that, the need  of  this  project  was  not  to  increase  the  number  of  tender  officers,  but  to reengineer the procurement processes, eliminate the non-added value processes and transform the procurement  processes into an integrated approach using integrated systems. Therefore, we successfully accelerated the procurement cycle time from 210 days  to  32  days  by  implementing  best  practices  in  the  field  of  procurement  and technology used. 
 
Another key point to highlight was the need to transform the procurement committee from physical meetings to online in order to ensure faster, governed committee and reduce the time spent by suppliers standing at DM corridors.Moreover,  digital  transformation of  contracts  will  result  on  saving and securing  the information and details of tenders in the system rather than saving it manually in files. 
 

How were things done originally and what was the inspiration to innovate the process?

There  was  a  huge  waste  of  time,  efforts  and  costs  in  procurement  process.  Likewise, stakeholders -Suppliers, business units, contract officers, finance departments etc -were not satisfied -overall satisfaction rate was 65%-with the procurement performance-210 days in average   for a single procurement cycle-due  to delays and weak response. This  project  brought    dramatic  improvements to the  procurement process at Dubai municipality, through providing innovative solutions to complex problems and challenges and ensuring best possible outcomes for procurement performances.
 
The  innovation  in  this  project  is  the  size  of  changes  that  occurred  in  the  procurement functions  in  DM,  which  we  believed  to  be  centered  on  providing  solutions  to  complex problems   and   to   ensure   best   possible   outcomes   by   the   effective   procurement performances. The innovation areas the project touched are:
 
Our project innovation was not about services or money. It was about people, ideas, and leadership. Now we have a better understanding of the unmet needs of our customers, and better targeting of those needs by resolving problems, improving value, and capturing enhancing outcomes.
 
A simplified approach  we crafted  was  the trademark of innovative solutions in DM, by implementing more than  33 improvement  practices and 4 best practices to  make  the  use procurement meet business objectives,  with clear timely  and effective processes.
 
The procurement culture in DM changed because of  enabling innovation in procurement. The  culture  that  encourages  innovation  and  technology  solutions  to  happen,  it  heavily relied  on the creation of data warehouse and value technical excellence, technologies and systems we used, and focus and understanding of external customers, and internal client’s needs. We had a better markets behave in different contexts. Therefore, it allowed us a better use the whole  procurement  cycle -from strategic planning to contract management.
 
 

What KPIs did you use to measure success for this project? (For example: performance, customer satisfaction, revenue, sales or relevant financial gains?)

Since  initiating  the  planning  of  this  project  and  preparing  the road  map  for  its implementation. The  management  of  performance  was  one  of  the  most  critical success    factor  of    our  project,  and  managing  these  indicators  according  to  a  appropriated  approach that  helped in achieving the desired goals. The team has carefully defined the scope of the change as well as identified the critical success factors associated with the objectives.There were many of these elements on different dimensions, including:
 
Financial Target:
  • Achieving financial savings and effectiveness in contracting procedures
  • Reducing wastes in operations & processes
  • Reducing procurement budget value
 
Non-Financial Target:
  • Accelerate service contracts processes cycle time
  • Raise satisfaction rate
  • Increase productivity
  • Effectiveness & efficiency in day-to-day operations
  • Ensuring adoption of Governance framework
  • Adopting new procurement culture
  • Improving skills & knowledge of Tender Officers
  • Improve Customer Experience
 

How do you plan to ensure that the new model remains relevant and adapts to the future needs of the market?

Dubai  Municipality  seeks  opportunities  to  address  any  future  gaps  in  procurement effectiveness, operational efficiency or sustainability. It is no longer business as usual for procurement. The scale and speed of transformation requires   a continuous improvement strategy  to  address  market  disruption  and  to  drive  competitiveness  and  growth.    We   gathered  various  ideas  and  best  practices  during benchmarking    phases  so  we  have grouped those remaining ideas and best practices in different projects managed in order to support Dubai Municipality strategic plan. We have learned a many lessons from this practice  and  one  of  the  most  important  lesson  we  learned  is  that  reengineering  and redesigning  processes  is  a  delicate  mission,  not  an  easy  one,  and  it  required  effective actions and participation by stakeholders. Also, conducting in-depth studies helped us to  understand the  problem better and to  formulate successful  solutions  and  remarkable outcomes.
 
Future  improvements  goals  and  plans:  We  have  also  designed  strategic  plan  for procurement department for the coming years based on different levels of impact (little impact, moderate impact, significant impact and game changer) on procurement functions in  order  to  sustain  the  achievement,  competitiveness  and  growth.  Therefore,  our continues improvement  plan was built on different future objectives with specific targets, such  as  :  aligning    procurement  with    core  Dubai  municipality’s      strategies, institutionalizing    the    implemented  practice    ideas,  procedures,  and  policies  ,  Enable training and capacity building, develop solid goals and strategies for driving and delivering improvement and establishing ongoing measurement processes to monitor and measure the  strategic    procurement  performance.  An  overview  of    the  procurement  strategic  & sustainable plan.
 
 

What advice do you have for those who may want to implement this innovative approach in their own organizations?

The revolution of technologies in the world of communication and information constitutes one  of  the  prominent  titles  of the current  historical  stage  of  human  history  due  to  the massive spread of the use of the Internet. This has led to the development of the concept of  electronic  contracting  through  the  use  of  electronic  means  via  the  Internet  and technology. Which calls for chang  the concept of existing traditional  procedures  into  dynamic,  self-access procedures that allow frequent digital interactions and frictional dynamics to build deeper relationships  with  its  internal  and  external  customers than ever before, and to meet customer needs the moment they arise -and sometimes sooner. 

So, the golden advice for everyone who wants to make those changes is  a preparation of  strategic  roadmap  to  improve  procurement    procedures,  in  order  to  achieve  a  broader participation in the procurement and supply operations and work on different dimensions with  the  aim  of  identifying  weaknesses  in  the  current  procedures,  and  suggesting  an operational   strategy   that is feasible and capable of raising efficiency by using transformational technologies.

 
 

With innovations in digitization occurring very quickly in our industry, how do you see this specific project further transforming in the future?

Now, the  procurement  department  can  work  according  to  the  proactive  service strategy goal. The goal can be achieved by presenting an innovative model that reflects the  leadership  and  excellence  of  the  government  work  system  in  the  Dubai  by providing proactive services and enhancing its sustainability, based on the aspirations of  customers,  to  complete  their  transactions  easily  and  quickly.  This  can  be  done through  a  prior  understanding  of  customer  needs,  and  provision  of  the  necessary enablers to achieve this goal and start proactive procurement services phase at Dubai Municipality through block chain technology.

 

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