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University of Pennsylvania: An Integrated Approach to Software
4/29/2003
The technology that enables this automation is Oracle iProcurement, a software application that provides advanced self-service requisitioning capability.
Purchase Consolidation
BEN and the Penn Marketplace have had a significant impact on Penn's purchasing
efficiencies and costs. With indirect purchases amounting to approximately $500
million annually, an automated "procure-to-pay process" is definitely paying
off for Penn. Not only has the university saved more than $64.8 million in the
purchasing of products and services, it has also dramatically reduced the time
and effort related to purchase-order creation and has streamlined the entire
procurement process.
In addition to the significant cost savings realized by Penn, more than 53 percent of all purchase orders processed during 2002 were issued to the 31 participating Penn Marketplace suppliers. Considering that Penn has more than 25,000 suppliers in its approved supplier database, this type of purchase consolidation is a remarkable accomplishment for Penn's Purchasing Services department, according to Ralph Maier, associate director of Purchasing Services for Penn.
Purchase orders are also created in a fraction of the time it used to take. Now, eight purchase orders can be created in the time it took to create one order with Penn's previous system. Additionally, the cost of processing some invoices has dropped from $1.25 to 2 cents.
Paving the Way
Other cost and efficiency benefits have been experienced in the area of reduced
maverick buying. By driving more spending to established vendor contracts, Penn
is lowering transaction costs while increasing its knowledge of what is being
purchased, helpful information for budget forecasting.
By adopting an inter-disciplinary approach toward applications, Penn is embracing the technology standards used by industry-leading commercial enterprises around the world.
"Most educational institutions still purchase supplies in the traditional manner," says Stines. "We feel we're paving the way and showing others how to use technology to cut costs to potentially free up money for furthering the educational and research missions of the University. That's what BEN is doing for us."
For more information contact Stephen Stines, senior IT director for the University of Pennsylvania, at stines@pobox. upenn.edu.
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