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eProcurement >> ONE STOP SHOPPING
5/27/2005
ONE STOP SHOPPING
With budgets slimmer than ever, schools are turning to eProcurement systems as a way to cut costs.
Move over MasterCard; for purchasing officials at the University of Pennsylvania, the convenience of managing all campus purchases through one fluid system has proven to be priceless. In 2003, fresh off the acquisition of a new enterprise resource planning (ERP) system from Oracle, officials were looking for a way to convert product orders made on the school’s Web-based Penn Marketplace into the ERP system—without the reentry of data. In the past, this process had presented problems: Incorrect product SKUs resulted in erroneous orders, and typographical mistakes in delivery addresses left others unfulfilled. After years of snafus, Penn wanted a comprehensive eProcurement system that would collect order information automatically, and manage the purchasing process electronically from requisition to ordering and payment.
Officials found their answer in a software solution from eProcurement vendor SciQuest (www.sciquest.com). Because the process generated purchase orders automatically and immediately after users ordered from contract supplier catalogs online, Penn officials were able to virtually eradicate errors during input, and reassign data entry personnel to other, more pressing jobs. What’s more, because the system proved to be so successful, the school expanded the initiative to direct two-thirds of internal purchases through the Penn Marketplace portal, a move that inspired all 107 participating suppliers to drop prices in favor of rights to that new business. Finally, thanks to the lower product prices, Penn realized $2.3 million in documented cost savings in the first 100 days following implementation, and has experienced an undetermined amount of savings on top of that, since.
“It’s amazing to say, but eProcurement has changed everything about the way we handle purchasing here at Pennsylvania,” says Vira Homick, associate director of e-Business at the Ivy. “By channeling our spending [through eProcurement] and streamlining the system, we’re getting better discounts and saving money.”
The Next Big Thing
Penn isn’t the only school opting for a better way to manage purchases. The recent 2004 eProcurement Benchmark Report from market research firm Aberdeen Group (www.aberdeen.com) indicates that colleges and universities today use eProcurement to manage more requisitions, spend categories, and suppliers than ever before. As universities and colleges operate in the face of continued financial strain, finding new ways to save money has become critical, and one of the most overlooked areas of savings is the purchase of everyday goods. To achieve these savings, more and more institutions are adopting eProcurement technology—systems that put Internet shopping on the desktops of end users and automate the requisition-to-payment process behind the scenes.
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