New European Union information society project aims to build a Europe-wide procurement infrastructure » Local Government » 24dash.com

The European Union has launched a major information society project, Pan European Public Procurement on-line (PEPPOL), to build a procurement infrastructure that covers the public sector in all EU member states.

Purchase to pay solutions provider, Basware is to act as an expert in electronic procurement software for the project, which will make it simpler to exchange electronic invoices and other documents between public and private sector organisations.

The objective of the European Commission is to make public sector procurement more efficient and transparent, and also to improve the Unions competitiveness.

The electronic infrastructure will help European companies to participate on equal terms in EU-wide public sector competitive bidding. Public sector spend in the EU member states amounts annually to some EUR 1,500 billion, equivalent of 16 percent of the gross national product of the entire area.

Jari Tavi, chief technology officer at Basware said: Electronic procurement will generate direct cost savings: this project alone is expected to bring a 5-20 percent saving in public sector procurement. The subsequent environmental effects will also prove significant at the European level. Estimates suggest that companies send 14 billion invoices each year in electronic form these invoices would not only reduce costs but also use less paper.

In Finland, public administration has long been a forerunner in procurement solutions, so it is only natural that these kinds of projects are initiated by the public sector.

Olli-Pekka Rissanen, the special advisor for the project in the Ministry of Finance said: For European competitiveness it is important to improve public sector readiness to operate in an electronic environment. Building an efficient information society is the key to improving competitiveness.

Having private sector organisations onboard is excellent because it ensures that the project will make use of the latest technology. Also, it will help to boost their competitiveness.

The total budget for the four-year project is EUR 20 million, half of which comes from the European Commission and the rest from a consortium supporting the project.

The procurement infrastructure is expected to be in operation by the end of 2010. Based on open standards, the infrastructure will be independent of operators, which ensures open price competition. In addition to the UK, the consortium supporting the project includes Norway, Denmark, Germany, Finland, Austria, Hungary and Italy.