Delhi is the second largest city in India, with a population of over 17 million. Located on the banks of the Yamuna River, Delhi was established in 1000 BC, making it one of the oldest cities in the world. Delhi is governed in part by the Municipal Corporation of Delhi (MCD), which has a staff of over 100,000 working in 107 offices across 12 geographic zones. Recently, the MCD has been working to move its staff online, migrating from a paper form-driven system to online automation. Those in charge of the project are learning that changing the work processes of an organization of this size is no small undertaking. One of the MCD's most challenging tasks has been procuring contractors, services, and products for use on city projects. The traditional procedure for procurement involved getting the word out to let the community know that a project was planned and contractors were needed. Businesses that wanted to bid on the contract would then travel to the MCD, sometimes over hundreds of miles, to bid on the project. The process of bidding and negotiation might take months, until one contractor finally won the contract. The time-honored bidding system, referred to as tendering, was far from convenient or fair. In many cases, eligible companies lost contracts because they missed the deadline by minutes due to travel delays. Corruption in the system also treated participants unfairly, with some companies using intimidation techniques to keep competitors from bidding on contracts. It was time to bring the MCD's tendering system into the digital age. Arun Kumar, an executive engineer at the MCD, took on the responsibility of making that transition. Arun has completed the installation of an e-tendering system that automates much of the bidding process and is working to go farther and establish a complete e-procurement system. The new e-tendering system allows contractors to download and upload tender documents online, track the status of tenders, and receive e-mail alerts. The system was developed and deployed in stages. First, the MCD required companies to submit tenders and bids online. Secondly, the MCD set up an online and offline backup system to safeguard the tender information against equipment failure. The MCD also provided a telephone help desk available to contractors 24 hours a day. The MCD leases data center space from the Center for Development of Advanced Computing (C-DAC). The Webbased e-tendering system was developed by information systems company Wipro, which has since installed the system in several other government agencies in India. The new system has eliminated the need for companies to physically send representatives to the MCD headquarters. It has also provided bidders with privacy and the government with transparency. Bidders need no longer fear intimidation from competitors since no one knows who is bidding. Bids are placed in an anonymous fashion, freeing contracting decision makers from outside influences. Now contracts are awarded on a bidder's merit and bid, and not according to who knows whom. The MCD went to great lengths to sell contractors and government staff on the new way of doing business. It contracted Wipro to train hundreds of users and thousands of contractors. At first, only 70 percent of the engineers used the system, with the remaining engineers not willing to touch a computer. After about six months, the advantages of the system won over the holdouts. The new e-tendering system has been a huge success, with over 30,000 tenders placed over the system-the world's highest volume in numbers by any government organization. The MCD increased the number of transactions it handles each week and reduced the time it takes to award a contract from 90 days to 30 days. Still, Arun Kumar sees other areas that need improvement. He and his team are testing an e-procurement system that they hope will streamline approvals. The contract approval cycle currently takes two to three months because it's a manual task that involves a certifying authority auditing the process and paperwork. If Arun can reduce this time by two-thirds, that would really make a big difference.
Discussion Questions
1. What were some of the biggest challenges in implementing the new e-tendering system at the MCD?
2. What benefits does the new system provide for the MCD and its contractors?
Critical Thinking Questions
1. Compared to a business, what considerations might be different for a government agency designing an enterprise system?
2. Why do you think some engineers were hesitant to cooperate with the MCD in using the new system?