Georgia to launch a statewide e-procurement system
As part of a multimillion-dollar overhaul of purchasing operations in the state government, Georgia purchasing professionals soon will be able to buy products and services using an online shopping catalog.
Beginning in January, the state will begin a rollout to three pilot agencies. After that, officials will be expanding the online catalog to the Peach State’s more than 500 purchasing professionals – representing more than 100 state agencies, 35 state universities, 33 vocational/technical schools and around $3.4 billion in annual addressable spend – who will be able to perform flexible searches, compare prices, build a shopping cart and save items as favorites, just as they would on popular Web sites such as Amazon.com.
Cary, N.C.-based e-procurement vendor SciQuest is providing the online catalog as well as some back-end services for the system, which will be integrated with PeopleSoft enterprise resourcing planning (ERP) technology across the state. Georgia’s Department of Administrative Services selected SciQuest after a competitive bidding process.
“This really is a leapfrog from where we have been to the utilization of modern Web-based technology, and the most efficient and effective solution that we can find in the marketplace,” Tim Gibney, assistant commissioner of procurement for the state of Georgia, told GovPro.com.
State officials believe that automating the state’s procurement system will deliver many benefits, including better spend management, aggregation of spend and a more open government marketplace. SciQuest’s front-end catalog software, Spend Director, keeps track of all purchases, and the system can provide daily, weekly, monthly or annual reports to each department on their purchasing activities.
“We’ll be able to track these expenditures, differentiate and identify what people are buying and improve our contracts as we go along,” Gibney told GovPro.com.
Another benefit, according to Josh Rose, director product marketing for SciQuest, is that the online catalog will enable the state to drive spending to its pre-negotiated statewide contracts.
“This packaged shopping environment not only directs users to products and services that have been negotiated and contracted by the state of Georgia but also allows the state to easily promote preferred suppliers into the search results to make sure that the entire state is making the best purchasing decisions,” Rose told GovPro.com. “Obviously, that works to the advantage of the taxpayers in the state of Georgia.”
Gibney added that cities and counties also will benefit, as they are eligible to purchase from statewide contracts and will be able to “window shop” using the SciQuest online catalog.
According to Rose, the benefits of the online catalog stem from its user-friendliness. Much like Amazon.com and other popular Internet shopping sites, the SciQuest system features familiar functionalities such as keyword searches and favorites for frequent searches.
“The ease of use facilitates a very high level of user adoption, which directs more spend to the system, ultimately increasing spend under management,” Rose told GovPro.com. “That’s what a procurement organization really wants.”
A buying consortium
Since Georgia Gov. Sonny Perdue took office in 2003 and mandated that the state government operate more like a business, the Department of Administrative Services has been focusing on three areas to transform purchasing, according to Gibney: attracting and training talented purchasing professionals; implementing new processes; and using technology to drive down costs and improve efficiency. The SciQuest online catalog, along with PeopleSoft’s e-procurement system, will go a long way toward achieving the third objective, Gibney said.
For example, the catalog consolidates multiple purchases from the same department into one purchase order, saving on shipping costs.
On a larger scale, state officials see the online system as a way to aggregate the purchasing power of state agencies, universities, hospitals and municipalities into one powerful buying consortium.
“It’s well-known that the consolidation of buying power often represents the single greatest opportunity to contain costs,” Gibney said. “Our decision to take a new approach while using proven systems and technologies will enable the state to accomplish more with its revenue and free employees from time-consuming administrative work.”
Rose also sees opportunities for cost savings and efficiencies in SciQuest’s back-end technology, Order Manager, which will aggregate the state’s purchase orders and send them to suppliers on behalf of the state.
“So rather than the entire state being bogged down with paper orders or e-mail orders that tend to slow down the system and add a lot of errors and confusion, anytime a requisition is created in our system … we create an electronic version of that and send it directly out to their suppliers,” Rose told GovPro.com. “So the state is getting efficiency, error reduction and, ultimately, shortening the buying step.”
‘A new era’
According to SciQuest, Georgia’s statewide automation of procurement breaks from traditions that have made it difficult for many state governments to achieve statewide adoption of their procurement systems. According to the company, Georgia’s approach departs from long-standing state practices in two important ways:
- Instead of recruiting thousands of suppliers to join its procurement network in equal fashion regardless of their contract status or level, the state plans to provide a more competitive environment for suppliers to vie for state contracts and a preferential position on its e-procurement network. The strategy will enable the state to negotiate more favorable contracts and provide employees across its agencies and universities with better-priced goods and services – without compromising on choice –and give suppliers the opportunity to grow their transaction volume across the state.
- The state will take advantage of SciQuest’s open and modular architecture that easily integrates with various ERP systems. SciQuest’s e-procurement systems were refined in the higher education, pharmaceutical and health care sectors, where purchasing must be integrated with multiple entities and users. The approach has enabled SciQuest’s customers to bring disparate groups into one seamless procurement supply chain. Because SciQuest doesn’t charge suppliers to participate in its network, suppliers have further incentive to provide the best terms possible.
“The state of Georgia’s innovative approach represents the start of a new era in how state governments manage their spending and approach the purchasing process,” said Stephen Wiehe, president and CEO of SciQuest. “SciQuest’s intuitive online shopping environment, supplier-enablement capabilities and open e-procurement architecture provide the ‘missing link’ needed to bridge numerous statewide entities, while empowering each one to remain wholly independent and still meet the needs of the state, while also meeting their respective agency missions.”