Learn how Washington Court House City Schools moved from a paper, labor-intensive requisitioning and PO process to a truly virtualized environment that is saving district dollars and time. They will explain their journey that began with the search for a solution to reduce paper and streamline processes yet has come to be much more. Hear how they have realized benefits that exceed the original goals that are serving them well during the COVID-19 crisis. The real virtuality WCHCS has achieved obeys social distancing guidelines and will make it much easier for the district to comply with future policy guidelines likely required.
The Plano Independent School District (PISD) is among the 20 largest districts in Texas. PISD serves a student body of more than 53K, encompasses 72 schools and 20-plus offices, and has an annual budget topping $750M. To put the district’s considerable size into perspective, with over 6000 teachers and staff, PISD has 20 percent more people on payroll than the city’s largest employer, Capital One.
Saving dollars is one thing but being able to use those savings to funnel stellar academic programs for your students is another. So, the question here is, “why wouldn’t you?”
More specifically, “why wouldn’t you embrace modern eProcurement solutions to eliminate process inefficiencies and save your institution some major dollars?”
When you sign on with an advanced eProcurement solution, you have a better opportunity of eliminating any business process inefficiencies. In addition to this, you also help your educators to buy from preferred vendors, creating more opportunities to save dramatically.
A purchase order software solution can manage:
- purchase orders,
- expense reports,
- and contracts.
But by no means is an eProcurement solution the answer to all of your school’s financial distress. But what it can do is provide data on how you can save money going forward. This can allow you to then invest those dollars into better academic programs or the hiring process.
But before you make the switch to a better procurement solution, here are eight questions to consider when evaluating and updating your current procurement solution.
1. What does your current procurement process look like?
Before ditching your already existing procurement process, evaluate your current process, and ask:
- What’s working about the current process we have?
- What’s not working?
- What are some of the roadblocks we need to address immediately?
- What areas can we improve but can address at a later time?
2. Are you ready to roll out something more advance?
At this point, after evaluating your current PO process, you’re probably ready to get a new process up and rolling. Something more advanced of course.
This is where you can put all those much-needed improvements to work!
Business software solutions can automate requisition approval by sending purchase requests to the appropriate approver based on dollar amount, project, purchase type, and/or department.
Also, moving from a manual to an electronic purchasing system helps to ensure that invoice approvals and exceptions are processed on time.
3. Is everything being done electronically?
While many educational institutions would like to do away with paper entirely, according to Levvel Research, only 18 percent of colleges/universities are making use of electronic invoices.
What does that mean for you? It means that your school your vendors need to go electronic.
4. Have you implemented vendor catalogs and punch-out to vendor websites?
If you haven’t done this, you should, as enabling these abilities will allow your staff to access items that are within the correct contract pricing. This will allow your team to purchase what they need without disruption or interference from the procurement team.
5. Are you taking advantage of your newfound visibility into purchase requests, documents, and budgets?
A new and advanced procurement solution will have budgeting capabilities that can make the entire procure-to-pay process much more straightforward.
Your superintendent can use this capability not only to view purchase requests but observe the impact of those requests on the school’s budget, all before giving the final sign-off.
6. Are you strategic about your vendor sourcing?
Here is where you’ll want your procurement team to analyze the current purchasing activity and spend with vendors. This will allow you to decide what vendors should be awarded contracts.
7. Does your solution integrate contract management?
Once you’ve awarded contracts, you’ll want to manage them in your new procurement solution.
With your solution, you should be able to manage contract spend and view all the purchasing activity under that agreement.
8. Are you making use of all the data you have? i.e., analytics and reporting on vendors and contracts
Making use of the information your procurement solution provides is key to saving dollars for your school. You should be able to see how your employees are spending from month-to-month, allowing you to make better decisions when it comes to vendor renewals. You can take note of what vendors your employees prefer and what items they tend to purchase more of.
During an organization’s ordering process there are typically numerous intricate steps, and various factors to consider before an actual order can be placed.
Purchase orders (POs) often involve complex approval workflows, multiple budgets, hundreds if not thousands of suppliers and contracts, endless data, and millions of dollars.
Organizations often struggle with how to manage this process without losing both visibility and control.
This becomes an even bigger issue when considering the widespread nature of the procurement process and its interconnection with multiple other departments. These relationships make it far more challenging to assess and determine where and how improvements can be made.
In a 2018 study conducted by PayStream Advisors, now Levvel Research, over 400 organizations were surveyed to determine the latest trends surrounding procurement management.
The following pain points were uncovered:
- Inadequate technology
- Procedural differences across departments and/or locations
- Frequent off-contract or off-budget spending
- Too much paperwork
- Disjointed systems
- A lack of visibility and/or control overspending
Firms Benefit from Utilizing Email to Send POs
An organization’s control overspending can be significantly impacted by a PO’s format and how it is submitted to suppliers. Fortunately, the majority of organizations surveyed are either using eProcurement software or email to send POs. These methods provide more visibility and greater control for organizations compared with those organizations using manual or uncontrolled methods, such as over the phone or ad-hoc online ordering.
Reduced Cycle Time: Greatest Benefit to Procurement Automation
Most mainstream organizations have some kind of automation in place whether it be a homegrown procurement tool or a built-in tool that is embedded within their ERP system. While these companies have a more efficient way of processing their POs than novice companies, their cost per PO still remains rather high.
Organizations utilizing cloud-based eProcurement tools are required to have little manual involvement in their procurement process and can, therefore, process POs at a much lower cost. In fact, their cost per invoice is almost 200 percent less when compared to that of novice or mainstream companies.
Aside from lowering processing costs, other major improvements and benefits to procurement automation include reduced cycle times, improved visibility and transparency, and enhanced control and security.
Is your firm looking to cut costs per invoice? Contact EqualLevel, a platform bringing sophistication to the procurement space.
In a 2018 study conducted by PayStream Advisors, now formally known as Levvel Research, over 400 organizations were surveyed to determine the latest trends surrounding procurement management.
During this survey, organizations without cloud-based eProcurement software were asked about their top pain points. One-third of firms revealed that their primary problems were inadequate technology and procedural differences across departments.
And when asked, if an eProcurement solution was not in use, just how were their firm’s monitoring purchases made by members outside the procurement department? The results revealed the following:
46% – Purchase requests are submitted to a manager in individual departments.
40% – Purchase requests are filled out and submitted to a manager in procurement.
14% – Any employee can submit a purchase order directly to a supplier.
Typically, when organizations lack a formal process, they request the employee looking to make a purchase, to check their item against their own budget. If not, they are asked to consult with their procurement manager. While this process is not as effective as an eProcurement system, it’s still a process. This process, however, can be very difficult to maintain and lacks complete visibility and/or control over departmental spending.
With too many handoffs in place, the data in the purchase request or PO can be compromised, leaving the overall purchase order lifecycle greatly extended.
In addition to that, when purchase requesters in different departments have the authority to submit POs directly to suppliers, the organization has a much higher risk of maverick spending. That said, when it comes to a proper purchasing approval process, it’s crucial to find a balance between two critical factors: control and simplicity.
Is your firm lacking a formal purchasing workflow? Contact EqualLevel, a platform bringing sophistication to the procurement space.
If you are a corporate procurement leader or a supplier of MRO and indirect materials, there is a good chance you have muttered the words “what were they thinking?” under your breath at least once in the past quarter. Striving to understand what drives B2B buyers to make the choices they do is critical for leaders on both sides of the buy-sell equation as pressures to reduce costs and maximize profitability continue to mount.
Despite the billions of dollars spent annually on MRO/indirect materials, a disproportionate number of businesses still manage their procurement manually or via legacy enterprise resource planning (ERP) systems, according to the 2018 Procurement Insights report from PayStream Advisors. As a result, for most organizations, tracking who bought what, from whom and when is a tediously manual process of reconciling requisitions, invoices and account ledgers. And even then, there is rarely, if ever, any context to the options that were available, the conditions under which the purchase was made and the ultimate need of the buyer.
But there is a better way. Many organizations are turning to cloud-based e-procurement solutions to achieve greater visibility into their organization’s indirect/MRO materials spend, without frustrating buyers with unreasonable compliance features and limited choices. While these solutions are certainly a step up from manual procurement processes, at EqualLevel, we believe that procurement leaders need more than visibility and flexibility, they need intelligence.
Leveraging the power of advanced data analytics and emerging artificial intelligence technologies, the EqualLevel Savings Advisor (ELSA) doesn’t just document what was purchased, when, by whom and for how much, but, most critically, it will capture the user justification for any choice that diverges from established corporate procurement parameters in a structured report that can be analyzed by management. We call this “the power to know.”
The idea here is not to gather ammunition to chastise a buyer for his/her choice but to understand the tradeoffs people are making. A best-in-class e-procurement solution must recognize that there is more to the total cost of a product or service than the base price. There are many factors, including delivery options, return policies, payment terms, etc. that must be considered, and gaining visibility into these variables allows procurement management to adjust policies and procedures to empower users while keeping spending within a budget.
The intelligence garnered from system records like the EqualLevel Savings Advisor Report, which shows items purchased, lower-priced exact match or substitute options, and justification entered by the shopper can also prove to be a valuable resource in strengthening supplier relationships.
Remember, commerce is a two-way street. Both buyer and seller derive value from an e-procurement solution if it is to achieve its optimal potential. With data in hand, procurement leaders can demonstrate to suppliers where they may be falling short of customer requirements and allow them to improve. For example, maybe the supplier was the lowest priced option on X occasions but did not get the order for Y reasons. This insight into what buyers thought as they made their choices can help suppliers make the adjustments necessary to be more competitive. Again, the objective is not to beat up suppliers and force them to lower their prices, but to help guide discussions and structure contracts, catalog, and service offerings to more effectively meet the needs of both buying and selling organizations.
The rising cost of a college education isn’t just a concern for parents and students, it’s an issue that preoccupies college administrators too. To control rising tuition, college administrators focus on managing operating costs to mitigate significant tuition increases while still being able to offer students the educational and social experiences they expect from college in the twenty-first century.
According to Lyen Crews, President of the Coalition for College Cost Savings, college presidents and administrators face no easy solutions. “Colleges are capital- and labor-intensive environments,” he shared in a recent interview. “In order to save money while still delivering a quality educational experience to students, retaining academic staff, offering the amenities expected by today’s students, and meeting government regulations, colleges need to find and reduce spending in those few cost areas where price is negotiable.”
As a former college financial officer and now President of an organization that helps over 900 not-for-profit colleges and universities save money and maximize operational efficiencies, Crews has a unique perspective and has identified some best practices for administrators who are just beginning this journey. One of the first things that colleges should do is to collaborate on purchasing. “Unless you’re a large institution, you have no leverage to negotiate discounts and competitive prices when it comes to buying everything from basic supplies to major technology purchases,” Crews noted.
By using an e-procurement platform or Marketplace, colleges can access a wide range of products and solutions at the best available price. Moreover, as Crews pointed out, a well-designed purchasing platform brings additional advantages like visibility and transparency that enhance governance for the finance office and other administrators. Crews shared that “there’s no more concern that shadow, or unauthorized, purchases are being made, or that unsophisticated buyers who are not procurement professionals are adding to the cost burden of running the institution because a Marketplace platform provides visibility through easy to run reporting.”
As colleges seek to thrive in a competitive and ever-changing educational environment the ability to manage costs will continue to be a top priority for administrators. Putting measures in place like collaborative purchases via a Marketplace platform that can help rein in costs quickly and easily will become a strategic advantage.
Imagine walking into a car dealership and the first question the salesperson asks you is, “How much do you want to overpay?” It’s a ridiculous question, right? No one wants to pay more for a product than they absolutely have to. Yet, this is exactly what too many corporate buyers unwittingly do, every day.
While most procurement managers would likely concede that there was “room for improvement” in their organizations’ MRO spending execution, few have the visibility and analytics capability necessary to accurately measure what their performance level truly is. If they did, my guess is they would be shocked at how often they overpaid for their indirect materials.
For example, when EqualLevel deployed a beta version of our AI-powered EqualLevel Savings AdvisorTM (ELSA) in a small sampling of customer programs last year, one implementation revealed that a whopping 40% of the items checked out by users were not the best price available. ELSA, part of a suite of cloud-based e-procurement solutions available from EqualLevel, uses advanced machine learning algorithms and a growing product information database to create a “digital shopping concierge.” So, whether users are searching in an established marketplace, or returning items from a punch-out site, the in-Cart Optimization technology can identify lower prices for potential purchases and suggest substitute items. The machine learning capability of the ELSA tool also means that the solution becomes increasingly more effective over time, a stark contrast to many high-priced enterprise applications.
In my experience, the results of our test case are far from unique. The majority of organizations today still manage their procurement either manually or via outdated enterprise resource planning (ERP) or accounting software, according to the 2018 Procurement Insights report from PayStream Advisors. As a result, these corporate users often lack the time, tools, and/or information resources to effectively manage their spending.
This is a huge lost opportunity for procurement departments to not only improve efficiency and rein in cost but establish themselves as a valued contributor to their company’s strategy. As competitive demands and economic volatility persist, the pressure to be more agile and efficient is only going to mount.
With a flexible, cost-effective e-procurement platform like the EqualLevel cloud-based solution, procurement managers can optimize the entire shop-to-pay process. The EqualLevel Marketplace consolidates punch-out and web storefront links into one cross-searchable marketplace, allowing users to comparison shop across remote online sites via a single, user-friendly interface. By integrating with suppliers via APIs, the EqualLevel solution can retrieve catalog information and pricing in real-time.
There is little doubt that the future of procurement is digital. Newly-released research from The Hackett Group confirms that digital transformation is making it easier for procurement groups to “do more with less,” and over the next two to three years, broad adoption of e-procurement technologies is expected to double. The time to upgrade your B2B policies and processes is now.