Automating Tendering Processes with Web Services A Case

Automating Tendering Processes with Web Services: A Case Study on Building Construction Tendering in Hong Kong Dickson K. W. CHIU NG, Lick Lun Nick Lai Sau Chan Senior Member, IEEE Dickson Computer Systems Hong Kong kwchiu@acm. org, dicksonchiu@ieee. org Dept. of Computer Science Hong Kong University of Science & Technology {nickng, chanlaze}@ust. hk Patrick C. K. HUNG Faculty of Business and Information Technology, University of Ontario Institute of Technology Patrick. Hung@uoit. ca TPM 1

Introduction n n Tendering processes involves lots of business procedures Internal integration: communicate with other systems such as supply, order, purchase, procurement, account, … External integration: need a framework for all stakeholders to follow to enable application-to-application communication over Internet Current manual or only semi-automated n n Involves both humans (esp. decision) and systems Important for n n TPM enterprises and government suppliers 2

Case Study in Building Construction n Problems of tendering done by hand n n n late submission of the tender booklet calculation errors by hand / spreadsheet Benefits of automatic e-tendering n tenderer n n n Client n n easy generation of the tender report after electronic submission Benefits of web-services n n TPM make final decision of the price in almost the last minutes update price of the material from ERP and external sources Different tenderer may have different database and system need to use an open standard for the data exchange 3

Typical e-tendering system TPM 4

Typical tendering process for building construction TPM 5

Tendering Business Processes TPM 6

Request to Participate (RTP) Messages Description Request to participate Sent by a supplier to the CA to request participation. Contains all required information. RTP Response Sent by the CA to a supplier in response to a previous request to participate to acknowledge receipt of RTP. TPM 7

Invitation to Tender (ITT) Messages Description Short-listing Result Notification of rejected suppliers by the CA of the result of the short-listing process. Invitation to tender Sent by the CA to a supplier in order to invite it to submit a tender, after a previous request to participate. TPM 8

Tender Submission (TS) Messages Description Tender Offer sent by the supplier to the CA. A tender may take the form of an electronic catalogue. Reception Response Sent by the CA to a supplier in response to a tender submitted. It acknowledges the receipt of the tender submitted. TPM 9

Tender Award Notification (TAN) Messages Description Award Notice Sent by the CA for official publication using the corresponding standard form. Award Result Notification of the tenders by the CA of the result of the awarding process. TPM 10

System Architecture The pricing system can use e-Negotiation approach or traditional method TPM 11

Data Flow Overview Database Supplier Call quotation Subcontract Tenderer … Subcontractor Tender-in Tenderer Supplier Price information … … TPM Tender-out … Subcontractor Client 12

Data Conceptual Model TPM 13

Web Service Implementation Overview TPM 14

SOAP Message Embedded in HTTP Request POST /Tender HTTP/1. 1 Host: www. tenderserver. com Content-Type: text/xml; charset="utf-8" Content-Length: nnnn <SOAP-ENV: Envelope xmlns: SOAP-ENV="http: //schemas. xmlsoap. org/soap/envelope/" SOAP-ENV: encoding. Style="http: //schemas. xmlsoap. org/soap/encoding/"> <SOAP-ENV: Body> <Send. Message xmlns="http: //www. tender. com/Webservices"> <Invitation. To. Tender> <tender. Reception. Deadline>6 -12 -2005</tender. Reception. Deadline> <tender. Sending. Address>HKUST</tender. Sending. Address> <tender. Languages>English</tender. Languages> <documents. Request. Deadline>6 -10 -2006 </documents. Request. Deadline> <documents. Price>500</documents. Price> <payment. Procedure>Cash</payment. Procedure> </Invitation. To. Tender> </Send. Message> </SOAP-ENV: Body> </SOAP-ENV: Envelope> TPM 15

SOAP Message Embedded in HTTP Response HTTP/1. 1 200 OK Content-Type: text/xml; charset="utf-8" Content-Length: nnnn <SOAP-ENV: Envelope xmlns: SOAPENV="http: //schemas. xmlsoa p. org/soap/envelope/" SOAPENV: encoding. Style="http: //sc hemas. xmlsoap. org/soap/enco ding/"/> <SOAP-ENV: Body> <Send. Message. Response xmlns="http: //www. tender. co m/Webservices"> <Send. Message. Result>true</Sen d. Message. Result> </Send. Message. Response> TPM </SOAP-ENV: Body> 16

Example Decision Metrics Met Score Xi ri c s M Wei g h t W i M 1: X=0: 3 C >=3000 o X=1: st 2000< =M 1<3 000 X=2: 1000< =M 1<2 000 X=3: TPM i 17

Example Weighted Average Score Tenderer Metrics Status Score Si Mi Xi S 1 M 1=2, 500 M 2=INDIA M 3=Enterprise X=1 X=2 X=3 {3(1)+1(2)+2(3)}/6 =1. 83 S 2 M 1=8, 500 M 2=US M 3=Enterprise X=0 X=1 X=3 {3(0)+1(1)+2(3)}/6 =1. 17 S 3 M 1=2, 100 M 2=CHINA M 3=Middle X=1 X=3 X=1 {3(1)+1(3)+2(1)}/6 =1. 33 S 4 M 1=1, 580 M 2=JAPAN M 3=Enterprise X=2 X=0 X=3 {3(2)+1(0)+2(3)}/6 =2 S 5 M 1=2, 900 M 2=UK M 3=Large X=1 X=0 X=2 {3(1)+1(0)+2(2)}/6 =1. 17 TPM Weighted Average Score 18

Example Ranking Rank R Tenderer Si Weighted Average Top-3 Score Decision 1 st S 4 2 Accept 2 nd S 1 1. 83 Accept 3 rd S 3 1. 33 Accept 4 th S 2, S 5 1. 17 Reject TPM 19

Exception Handling Web Services n n n TPM Tender Addendum Consistency of the tender document Bulk discount Additional information provided by tenderer Withdraw of tender 20

Summary n Digitalization of the tender document n n n Process and data integration Timely actions Reduced human effort Web service based architecture with the SOAP messages exchange during tendering processes Typical example application scenario and data model Establish cross-organizational collaboration via existing Internet standards n n TPM supporting both human Web-based and application programmatic interactions smaller business partners with varies degree of automation event passing with the publish-and-subscribe paradigm facilitate exception handling 21

Future Work n Further integration studies n n n n internal integration of tendering processes with ERP / DSS external integration with e-marketplaces and brokers sub-contracting Similar integration work can be done for other related business processes in enterprises Managing the complexity of Web service composition Further development methodologies Monitoring and alerts Further decision models TPM 22

Question and Answer Thank you! Contact: Patrick. Hung@uoit. ca, dicksonchiu@ieee. org TPM 23