We talked to our old-new users, Orsolya Ekárt and Gábor Lévai, senior purchasers of BKM Budapest Public Utilities Nonprofit Zrt., a large state-owned Hungarian company that merged several public utilities in Budapest two years ago, about why they chose for the Fluenta electronic procurement system, what their experiences were, whether the expected results were achieved, and what their biggest successes were using the software.
What was the problem or process you needed a solution for? How did you end up with Fluenta?
We signed our first contract with Fluenta Europe (then known as Electool Hungary) in 2012, as a company called FŐTÁV [an abbreviation for Budapest Heating Services]. Our main goal was to try to achieve savings by streamlining our procurement processes and switching to an online platform. First, we looked at companies that offered solutions in this area and found that there was a wide range of offerings, both in terms of price and functionality. The indicative bids we received were evaluated to establish a list of requirements and a range of acceptable prices, which formed the basis for the complex set of expectations that formed the basis of the tender on this topic. In addition to functional requirements and prices, one of our main criteria was that the system chosen should be user-friendly, as it was not uncommon at that time for our suppliers to have no experience with online platforms, but we didn't want this to be an obstacle to anyone participating in our invitations to tender. Traceability was also important for us; we wanted a way to always see where we are in the procurement process, what the current milestones are, and follow the entire online auction process, the bids submitted and how they have resulted in the final outcome of the procedure. We also expected the system to be implemented to have training materials, preferably available on the interface, to facilitate its everyday use and the training of new colleagues.
Based on the criteria we had developed, we put together a call for proposals to which we invited several potential participants. Electool Hungary finally won the tender with its electronic tendering and auctioning modules, and we started working together in 2012 to implement the system, and soon after a short training, we were able to use it independently. Switching to a digital platform caused some unexpected situations at the beginning: there was a time when we accidentally didn't set a "minimum bid step" and suppliers changed their bids forint by forint – this resulted in a day-long auction, but we learned to handle this very quickly; today, we set the bid increment individually for each type of proposal. We now have so many skilled users of the system in-house that our colleagues can routinely support each other on a new task, in addition to using the online tutorials available on the platform.
What do you think about the work of the CSM team? Are you getting adequate, sufficient information? How do you feel about the communication?
Our cooperation with the CSM team is great. We follow Fluenta's updates and developments and we are regularly informed about them. As key users, we also give feedback or make requests, which are always followed by a satisfactory resolution.
Do you use our customer service? What is your experience?
We have a very good relationship with the customer support representatives; all our queries are answered promptly, clearly and to the point, with accurate answers immediately on the phone or very quickly in writing, depending on the nature of the question.
How were the beginnings, did the change deliver the expected results?
When the Fluenta e-procurement system was first introduced in 2012, all members of the procurement team (managers and staff alike) were excited to see if we could achieve our targets and how much we could save through electronic auctions. We've had very good results right from the beginning!
The suppliers were not too excited about the idea of the change at the beginning, as they weren't used to the online interface: previously, they had to print out their offers and bring them to the office in envelopes, which were then opened and discussed with each bidder in person, with strict protocols, and at the end of this process we received the final bids. With the electronic interface, however, we've saved a lot of time from the very beginning, and we've also been more considerate of the environment by not using so much paper; overall, the bid request and negotiation processes have been significantly simplified. And of course, within a short time, our partners have become accustomed to the platform, accepting the framework and bidding conditions.
Do you still see the benefits of electronic tendering?
Yes, and not just one way. In the current economic environment it is often difficult to make savings on prices, but we also benefit from being able to reduce a commitment period or to extend warranties from 24 to 36 months, for example.
By organizing an online auction, we can always achieve monetary savings, as our CEO Imre Mártha talked about in an interview.
The CEO of BKM stated that our annual natural gas procurement is negotiated every year through a very rigorous tendering process, which is also audited by the Energy Authority along the guidelines it issues. At the end of these annual tenders, after technical discussions, the procurement team conducts an online auction to decide who will be awarded the contract, who has the lowest price in a given year. The process is also fully regulated and transparent, which is a very important aspect for our company.
What was the biggest saving you have made in an online auction?
We've had several outstanding results with Fluenta, whether in the negotiation of annual energy purchases or a simple framework contract for the purchase of materials. We recently had a procedure where we tendered for a framework contract for certain materials, where we achieved a saving of 25% in a procedure worth tens of thousands of euros, allowing us to draw down a much larger volume than expected from the available budget.
Thank you very much to Orsi and Gábor, the two senior purchasers, for the interview; it's always a pleasure to hear about such successes, to which we can feel like we have contributed a little.