eProcurement

Electronic Purchasing From the Workstation to the Classroom at

the Click of a Mouse….

Rick Gay, CPPO, RSBOPurchasing 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, RSBOPurchasing ManagerBaltimore 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 Searchable by title, item name, ISBN # 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

Overview of BCPS’s On-Line Program

• Shoppers

• Approvers

• Administrators

• Suppliers

• Contracted Line

Items

• 1202 Teachers• 577 Principals

• 5 Purchasing

Agents

• 225 Vendors

• 450,000

BCPS Catalogs

• Art Supplies / Photo

• Athletic Equipment &

Supplies

• Audio Visual

• Educational &

Classroom Supplies

• Family Studies

• Handwriting Materials

• Library Media

• Math Supplies

• Media

• Medications and First Aid

• Music

• Periodicals

• Physical Education

• Office Supplies

• Science Supplies

• Technology Education

• Textbooks

• Unique Office Supplies

• Computers

• Copiers

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 Year

FY 2000 – FY 2008

31,189

28,228

20,018

16,356

11,502 11,046 10,815

8,564 9,128

0

5000

10000

15000

20000

25000

30000

35000

FY 2000

FY 2001

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

FY 2008

$10Per

Order

$168Per

Order

Credit Card

AutomatedDownload

StandardUsage(EDI)

Supplier Managed Inventory

SmallFrequentOrders

Order Audit

Order Placement Order Receipt

Order Payment

Best Practices

Standard Practices

CombinedOrders

PaperCatalog

Product Search & Selection

PO

By ProductNumber

No PO

BlanketPO

Phone

Fax

CustomerPurchasing

System

ElectronicOrderingSystem

Dock

Warehouse

ConsolidatedOrders /DesktopDelivery

Paper Check

ElectronicInvoice

Direct GLInterface EFT

ManualMatching

AutomatedMatching

Audit onDemand

Manual

Diskette

EDI

Real Time

StandardUsage(Print)

ManualBenchmarking

CustomUsage(Print)

Raw Data

CustomUsage(EDI)

Exceptionsand

Recomm.

AutomatedBenchmarking

Supplier Managed Inventory

Procurement Mgmt.

Price Product Supplier

Product orService Need

Approval Transmittal

IndividualOrder /

DesktopDelivery

$32.33

$1.46

$10.28

$3.40

$13.28

$2.29

$48.18

$0.05

$51.92

$2.62

InvoiceReceipt

InvoicePayment

$11.84

$.28

TemplateOrder

AutomatedRe-order

By ProductPicture

eProcurement Process Savings Example

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

2,159

31,986

41,571

47,657 48,632

52,13854,469

57,977 57,953

62,024

66,914

61,183

70,476

0

10000

20000

30000

40000

50000

60000

70000

80000

FY 97

FY 98

FY 99

FY 00

FY 01

FY 02

FY 03

FY 04

FY 05

FY 06

FY 07

FY 08

FY 09

Total Dollar Amount Spent With BCPS Procurement Cards Per Year

FY 97 – FY 09

$282,672

$3,530,392

$5,334,293

$6,600,288$7,354,187

$8,491,321$8,608,212

$10,127,513$10,518,422

$14,972,617$15,027,509

$13,722,876

$16,544,503

02000000400000060000008000000

1000000012000000140000001600000018000000

FY 97

FY 98

FY 99

FY 00

FY 01

FY 02

FY 03

FY 04

FY 05

FY 06

FY 07

FY 08

FY 09

OrderHouse On-Line Orders Summary ReportNumber of Orders Per Year

FY 00 – FY 09

32

863

1951

2550

4846

71546774

6232 6235

6766

0

1000

2000

3000

4000

5000

6000

7000

8000

# eCommercesuite Orders

OrderHouse On-Line Orders Summary ReportTotal Dollar Value of Orders Per Year

FY 00 – FY 09

$9,089$322,540

$668,173 $831,337

$1,696,329

$2,328,847$2,561,205$2,521,756

$2,812,948

$3,803,951

$0.00

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

$3,500,000.00

$4,000,000.00

eCommerce Suite Purchases

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

ASBO Shopping PlatformAnnual Spend

FY 2008 – FY 2010

Series117619.62

31772.25

34846.53

FY 2010 FY 2009 FY 2008

ASBO Shopping PlatformMonthly Spend

FY 2008 – FY 2010

Jul Aug Sep Oct Dec Jan Feb Mar Apr May Jun

$- $2,000.00 $4,000.00 $6,000.00 $8,000.00

$10,000.00 $12,000.00 $14,000.00 $16,000.00 $18,000.00 $20,000.00

FY 2008 FY 2009 FY 2010

ASBO Shopping PlatformOrders Processed

FY 2008 – FY 2010

FY 2008 FY 2009 FY 20100

50

100

150

200

250

300

67

163

248

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.

Comparison Shop Among Several Contracts

Order Your Items

• Type the quantity in Add to Order field. Click on the plus sign to add this Item to your Order.

View the Specifications

• To view a picture of an item, simply click on the item description. Items can be added from this window also.

Add to your cart

• To view your Cart, click on the Cart icon.

Can See Valuable Buying Information in One Place

Pictures Are Available As Well

Review Your Order

• Choose a Shipping Method for each order.• Complete your credit card information as needed for each order• Click on Submit Order(s).

Review Your Order

• Review the items in your Cart. When you are ready to submit your order, click Prepare My Draft Order(s).

Your Shopping Cart

• If you change your mind about ordering the items in the Cart, you can Return to Cart. At this point, you can also Empty Cart.

Purchase Order Goes Out Electronically

Purchase Order Goes Out Electronically

Order History

• To view your order, click Order History. You can then view and print your individual orders.

Complete Order History

Questions?