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McKinsey Recommends SLED Digitize Procurement, Payables to Optimize Public Sector Savings

Every year the state, local and education (SLED) procurement market spends a staggering $1.5 trillion dollars annually on goods and services. In 2018, after analyzing more than 700 procurement efforts, management consulting firm McKinsey & Company concluded that at 28 percent, the public sector has the potential for more savings than that of any other sector. In round dollars, this amounts to $400 billion in public sector savings by optimizing procurement. 

Online Tools Reduce Administrative Burdens

The public sector has long been plagued by the inefficiencies and costs associated with manual requisitioning, ordering, invoice reconciliation, and payment processing. According to McKinsey, online tools can reduce these administrative burdens. Procure-to-pay automation improves the efficiency and effectiveness of the procurement and payables processes by digitizing manual tasks and leveraging transparency to improve decision-making. 

Innovating with a best-of-breed eProcurement and eInvoicing platform optimizes execution across all processes associated with the rec-order-pay transaction. A well-designed solution helps procurement and finance to streamline operations. 

The benefits of eProcurement and eInvoicing are numerous:

Efficiency: Automating leads to faster cycle times and improved productivity. The elimination of paper and manual steps frees up time for employees to focus on more critical initiatives.

Cost Savings: With all approved vendors housed in one centralized location, best value products can be easily identified.

Compliance: By automating the three-bid process and showing only contracted vendors, an eProcurement marketplace helps organizations comply with state and federal regulations.

Transparency: Robust reporting capabilities help ensure purchases conform to established policies. Real-time visibility into purchasing activities discourages maverick spending and provides leadership with valuable insights.

There is no doubt “the use of modern technology can take a big chunk off of public-sector bills” and the time to automate procure-to-pay is now. By improving efficiencies, the SLED market has the opportunity to generate savings that can help to offset the budget pressures they are facing. 

By Orville Bailey, CEO, EqualLevel.

Click here to learn more about EqualLevel’s eProcurement solution.

Click here to learn more about EqualLevel’s payables solution.

Case Study

School District Procurement Department Uses Technology Streamline Process

School district procurement departments often struggle with processes that are inefficient and not user-friendly. El Paso Independent School District (ISD) was no exception. When Ron Gatlin (now retired) was appointed Executive Director of Procurement and School Resources at El Paso ISD, he quickly realized the district’s need to transform procurement. Gatlin had heard about emerging technology that could help simplify and control spend, and expedite shopping, while also complying with Education Department General Administrative Regulations (EDGAR) and other state purchasing requirements. 

Gatlin’s required features for the new platform were:

■ Easy implementation
■ Punchout capabilities
■ Multiple catalogs for EDGAR compliance
■ A one-stop-shop
■ The ability to identify local suppliers 

Solution

Gatlin and colleague Leticia Rivera (Assistant Purchasing Director of Procurement and School Resources), took the lead in innovating El Paso ISD’s outdated procurement process. Their first step was to implement an electronic bidding system along with a K-12 enterprise resource planning (ERP) software, “TEAMS by Frontline,” for organizational management. Their next step was to integrate EqualLevel’s procure-to-pay solution to further extend their ERP system.

“This eliminates several steps and immensely speeds up the process.”

With the help of EqualLevel, Gatlin and Rivera created a procure-to-pay marketplace that offers a single, seamless platform to facilitate all processes associated with the shop-order-pay transaction. By eliminating any maverick spending and ensuring that staff is only purchasing through approved contracts, the district can demonstrate that they are being fiscally responsible with public funds. “Our staff can now go in and shop for what they want, push a button and it automatically turns into a requisition. They no longer have to type in the description, specs, or pricing, and can be ensured that all of those details are accurate and compliant,” Gatlin said after implementation. “This eliminates several steps and immensely speeds up the process.”

Savings

El Paso ISD also utilizes the EqualLevel Savings Advisor (ELSA) in their marketplace. ELSA is powered by artificial intelligence to automatically optimize spending and comparison shop punchout items to identify the best savings. In the first six months that ELSA was in use, the district saved $44,000.

Additional Benefits

Accounts Payable
Fewer purchase order changes and less invoice reconciliation.

Local Suppliers
EqualLevel’s marketplace was able to integrate more local suppliers, enabling El Paso ISD to support the community in which they work and live.

Morale
“The purchasing department was viewed as slowing down the process. Now campus staff is happy to have a more streamlined and efficient procurement process in place,” said Gatlin after implementation.

COVID-19 Ready
When the need arose to work remotely, procurement staff were able to continue their operations without interruption.

“The campus staff love it. They can go into the marketplace and shop for whatever they want in the online store and know that they are getting the best savings on products that are EDGAR compliant,” said Rivera after implementation. “We went from horse and buggy to the Starship Enterprise.”

Conclusion

Digitizing the procure-to-pay process has put El Paso ISD at the forefront of public procurement. Not only has it improved its complete purchasing process and the support provided to their campuses and classrooms immensely, it is allowing El Paso ISD to deliver efficient and effective management of its funding.

Click below for a printable version of this case study:

Case Study

Chicago Public Schools Utilizes AI to Uncover a Quarter Million Dollars in Savings

Facing significant financial shortages and possible budget cuts, Chicago Public Schools (CPS) has contracted with EqualLevel to utilize their e-Procurement Marketplace, featuring an AI-powered technology to unearth massive savings opportunities. With EqualLevel’s ELSA software in place, CPS has uncovered a staggering $250,000 in savings in just 180 days. These funds will be redirected toward the purchase of vital resources needed to ensure students and staff are supported.

ELSA was designed specifically to achieve these types of returns, explained Orville Bailey, CEO, and co-founder of EqualLevel. We are proud to partner with CPS in their quest to support students and provide the highest quality education possible. CPS has faced significant financial shortages in 2020 and announced the possibility of major budget cuts as recently as August. With AI-powered ELSA, CPS procurement has taken a major step towards ensuring that budget dollars for goods and services are spent wisely.

EqualLevel is a Rockville, Maryland-based technology company with over ten years of experience in e-procurement software development. EqualLevel’s ELSA (an acronym for EqualLevel Savings Advisor) allows CPS and other school districts to leverage the power of advanced data analytics and AI to achieve greater visibility into spending, unearthing critical areas where savings can be captured as employees shop. But most importantly, ELSA captures the shopper’s justification for choices that don’t fall in line with established procurement protocols, Eddie Potocko, EqualLevel CTO, explained. It delivers that information in a structured report that provides just-in-time knowledge to managers. The patent-pending, groundbreaking AI also learns and grows with the organization, offering additional insights and intelligence the more it is used.

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