eProcurement Electronic Purchasing From the Workstation to the Classroom at the Click of a Mouse…. Rick Gay, CPPO, RSBO Purchasing Manager Baltimore County Public Schools, and 2006/7 President, ASBO MD/DC
Baltimore County Public Schools Office of Purchasing 2005, 2006, 2007, 2008, and 2009 The National Purchasing Institute Achievement of Excellence in Procurement Award Winner!
Baltimore County Public Schools At a Glance 3rd largest school system in Maryland 26th largest school system in the United States 173 schools 104,000 students 17,000 employees, including 8,850 classroom teachers Nearly 15.7 million square feet of building space (600 sq mi) More than 7,400 graduates each year Nearly 63% of high school graduates go on to higher education Recognized by Education Week for having the fourth highest graduation rate among the nation’s largest school districts. 10 of 29 high schools named among the top five percent of high schools in the nation by Newsweek magazine; two of these schools also recognized as among the nation’s best by U.S. News & World Report. 10 schools named National No Child Left Behind Blue Ribbon Schools, by the U.S. Department of Education. 13 schools awarded Maryland Blue Ribbon Schools of Excellence. The Achievement of Excellence in Procurement award from the National Purchasing Institute. The Meritorious Budget Award from the Association of School Business Officials International. Certificate of Excellence in Financial Reporting from the Association of School Business Officials International. The Government Finance Officers Association’s Distinguished Budget Presentation Award The Government Finance Officers Association’s Award of Financial Reporting Achievement
eProcurement adoption The benefits of eProcurement are compelling Up to now, only a few of the largest school districts with professional purchasing staffs, adequate resources and an internal “champion” have implemented systems ASBO MD/DC is now offering its members access to a successful, secure on-line eProcurement network
“There is no longer an infinite amount of money available to education rather there is a finite amount which must be utilized by the most efficient and effective means available. The success of this program will allow ASBO MD & DC to return valuable resources to the classroom. The aim is to provide a one-stop shopping mall or as we like to say, this is an educational Amazon.com® for all of a school district’s needs.” Rick Gay CPPO, RSBO Purchasing Manager Baltimore County Public Schools “This is going to be a tough budget year. Our FY 2010 Budget for School Supplies is $1.8 million. If we save 10% by using this platform that’s $180,000 we return to the classroom to educate the children of Worcester County Public Schools.” Vincent E. Tolbert Chief Financial Officer Worcester County Public Schools
What is Online Procurement? An Online Procurement network uses sophisticated technology providing a secure marketplace, sales platform and transaction tracking system available via the web only to selected buyers and suppliers. An aggregated, “catalog of catalogs” controlled by an administrator and using only pre-negotiated pricing and terms from authorized vendors 6
The benefits are real…. In a recent study of early adopters of eProcurement systems, the Aberdeen Group reported the following key benefits: Improved data gathering and reporting on fiscal year expenditures Tighter control over off-contract or “maverick” buying Lower procurement administration costs Shorter requisition and order fulfillment cycles
A Positive Experience at Baltimore County BCPS Online Curriculum Catalogs a web-based system to order necessary curriculum and instructional materials.
A secure, Online Procurement network for ordering curriculum and instructional materials, including textbooks and other frequently used instructional items.
Access to office/classroom supplies through Office Depot, Corporate Express, and Rudolph’s 450,000+ items
Catalogs may be printed for copying and distributing
Ready access to catalog information on employee’s desktop
eProcurement frees purchasing personnel from:
clerical, order processing activities that are time-consuming and non-strategic
Allows them to focus on strategic activities, such as negotiating contracts with suppliers and analyzing purchasing behavior.
Control over process and approvals, with accurate accounting codes Seamless integration with purchasing card processes and tools Reduced supplier costs to serve Streamlined procure-to-pay, business processes
eProcurement Results Order Submission Delivery of Goods Shipping Costs Vendor Payment Sourcing Consolidation Real-time Notification to Vendors 24-48 hours of Order Placement 10-15% Reduction 24-48 hours from Shipment 33% Reduction of Catalog Surplus
BCPS Catalogs Medications and First Aid Music Periodicals Physical Education Office Supplies Science Supplies Technology Education Textbooks Unique Office Supplies Computers Copiers Art Supplies / Photo Athletic Equipment & Supplies Audio Visual Educational & Classroom Supplies Family Studies Handwriting Materials Library Media Math Supplies Media
Hosted Catalogs US Communities Office Depot Fisher Scientific BSN Sports Home Depot Graybar Gametime National Joint Powers Alliance (NJPA) CDW Frey Scientific Sax Arts & Crafts Abilitations Childcraft National IPA Staples Public Sourcing Solutions – America Saves Office Max Pennsylvania Education Joint Purchasing Council School Specialty Grainger
Number of Purchase Orders Processed Each Fiscal YearFY 2000 – FY 2008
PO eProcurement Process Savings Example Order Audit Order Payment Order Receipt Procurement Mgmt. Product Search & Selection Order Placement Invoice Receipt Approval Invoice Payment Price Product Supplier Transmittal $32.33 $10.28 $13.28 $48.18 $51.92 $11.84 Standard Practices Standard Usage (Print) $168 Per Order Warehouse Paper Check Manual Matching Manual Manual Benchmarking Standard Usage (EDI) Phone Diskette Fax Dock Credit Card Custom Usage (Print) Paper Catalog Small Frequent Orders Customer Purchasing System Automated Download Individual Order / Desktop Delivery By Product Number Product or Service Need Electronic Invoice Raw Data Combined Orders EDI Best Practices By Product Picture Electronic Ordering System $10 Per Order Consolidated Orders / Desktop Delivery Direct GL Interface EFT Automated Benchmarking Blanket PO Custom Usage (EDI) Automated Matching Template Order Real Time Audit on Demand Exceptions and Recomm. Supplier Managed Inventory Supplier Managed Inventory Automated Re-order No PO $1.46 $3.40 $2.29 $0.05 $2.62 $.28
Cost Reduction Per Transaction The average administrative cost of procuring and paying for a good or service via the traditional purchase-order based process is reported by respondents to be about $89, while the average cost associated with their purchasing card transactions is estimated to be about $22 – a net savings attributable to purchasing card use of over $67 per transaction. (Based on the 2005 Palmer Study)
Total Number of BCPS Procurement Card Transactions Per YearFY 97 – FY 09
Total Dollar Amount Spent With BCPS Procurement Cards Per Year FY 97 – FY 09
OrderHouse On-Line Orders Summary ReportNumber of Orders Per YearFY 00 – FY 09
OrderHouse On-Line Orders Summary ReportTotal Dollar Value of Orders Per YearFY 00 – FY 09
MD & DC ASBO Shopping Platform OrderHouse is targeted at large school districts and mid-large size commercial organizations Typical customer has a full procurement staff in-place, and a vision to centralize sourcing/pricing and decentralizing ordering to optimize resources Procurement staff drives vendor selection, contract awards, and acts as system manager Smaller organizations have the same need to optimize, but fewer staff resources to implement and maintain a comprehensive eProcurement program
ASBO MD/DC eProcurement Objectives Create a secure, on-line purchasing network for members Leverage the BCPS technology and experience Leverage pre-negotiated contracts from BCPS, US Communities, and other public sector buying groups We want to bring this latest technology to members and their schools/districts at no additional cost to members Technology vendor on board Major suppliers of both general materials – office, etc. and curriculum supplies have indicated strong interest US Communities strongly supportive Demo system up and running. Pilot planned for January 07, with full production in April/May
Service Features Electronic order creation and delivery Pre-purchase approval Pre and post-purchase allocations Self-service supplier enablement Leverage preferred suppliers Spending and budget thresholds Ghost card support Matching and reconciliation
OrderHouse Integrated eProcurement site Catalog or manual orders and history Review and approval workflow Spending thresholds / budget integration Organizational hierarchies Integrated content management Aggregated catalog End-user policies and FAQs Search and compare across preferred suppliers Proven to make your ordering process more efficient… reduce or re-allocate precious overhead costs
MD & DC ASBO Shopping Platform An ASBO-OrderHouse partnership has potential to fill this need for smaller school districts ASBO could develop and manage an eProcurement platform for its members Large districts such as Baltimore could contribute its awarded contracts Currently open to all schools by vendor agreement Individuals, schools or districts could access these contracts through the ASBO platform Could generate more ASBO membership, as well as another revenue source for ASBO sustainment
Sign-in Access the Internet and go to: http://asbo.org Enter your user name and password at prompt, your username is your fist name initial, your last name, and your four digit member number. Your password is your member number, foe example Bob Smith’s user name would be bsmith1234, and his password would be 1234.
Opening Page Enter the catalog by clicking on the above link.
Catalog Index Select a catalog by category along the left side of the screen.
Search Feature Type a word or set of words that describe the item to be ordered in the Search Phrase field. Note that we have included “All of the Search Phrases.” Default to All Suppliers or select an individual supplier. Increase the results per page to 100. Click on Search Now.
Search Results The results will appear. Note that there are 54 Total Items Found based on our search criteria.