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eProcurement >> ONE STOP SHOPPING

5/27/2005

Indiana University, officials rolled out a brand-new system from SciQuest. The technology directly connected the university’s online requisition system with its major strategic suppliers, putting purchasing decisions in the hands of end users. Because the system contained only those items under contracts the school had pre-negotiated, compliance with the contracts skyrocketed, and savings increased accordingly. In one case, when school officials negotiated an unprecedented 15 percent discount with a particular computer supplier, end users were purchasing equipment at the new prices the next day.

Then, of course, there’s the University of New Mexico, which in 2002 rolled out yet another SciQuest eProcurement solution, as part of an ERP implementation from SunGard SCT. Like Penn, UNM officials had had enough of the problems caused by manually inputting paperbased purchase orders into the ERP system. It wasn’t long before the school’s eProcurement push became the cornerstone of an effort to improve customer service across the board. Director of Purchasing Bruce Cherrin remembers that the new technology paid huge dividends almost overnight, eliminating errors by transferring data automatically, and by freeing up secretaries and staffers who input data, to perform other tasks.

“We’ve come a long way since the days when requisitions went through the paper approval process from one department to another,” says Cherrin, who notes that the implementation of ERP combined with eProcurement and other systems, cost about $10 million. “The way we have it now, everything is integrated, which makes the whole process more efficient.”

Taking the Plunge, or…

With eProcurement in its infancy, other schools find themselves testing the water. At the University of Washington, officials at the University Stores division recently combined technology from ERP vendor JD Edwards (now part of People- Soft/Oracle) and Ariba, to put together a portal containing thousands of office and laboratory products. The effort, still in beta, also offers a full set of account management tools that provides up-to-date information about supplies ordered and overall expenditures. Another effort at the Massachusetts Institute of Technology boasts similar synergies, pairing SciQuest with ERP from SAP, and similar management features to yield supplier consolidation, reduced transaction cost, and shorter order fulfillment cycles.

They’re still using training wheels at the University of St. Thomas (MN), however. There, Melanie Weiss, director of Purchasing Services, says the school has been “looking at” eProcurement technology for years. Currently, the private Catholic college handles ordering and payment online through ERP from SunGard SCT, but inputs requisitions manually into the ERP system. Weiss says that though she’s looking for a dynamic eProcurement system that can handle orders in real time, she still fears that such a system will cost too much for her tiny budget and that changing the buying behavior of end users could take months. Still, she acknowledges, something must be done. “Maverick buying runs rampant” at St. Thomas, she admits, and she has received a mandate to cut costs. Weiss may be pondering the best course of action, but one thing is certain, she concedes: eProcurement is the way.



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