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Purchasing
The eProcurement Equation
11/1/2007
9 TIPS TO MAXIMIZE A PURCHASING CARD PROGRAM
A PURCHASING CARD program can be an effective complement to a university’s overall eProcurement strategy. Global financial services firm JPMorgan Chase surveyed its university purchasing card customers to gather and share the following best practices:
- Increase visibility into spending with online payment management tools.
- Use technology to better leverage vendor discounts. Generate reports to track spending, then use the data to negotiate better deals with vendors.
- Partner with a card issuer that takes a consultative approach to ramping up and growing your program.
- Establish controls and business rules to prevent innappropriate card usage and rogue spending.
- Mandate training for all users before a purchasing card is released.
- Build a strong web presence for your card program administration, to help promote your initiative and save time answering participants’ questions.
- Communicate effectively with cardholders, both online and via newsletters or other publications.
- Establish ghost card programs with high-volume vendors. A ghost card is an account number with larger spending limits, assigned to a specific vendor. This allows purchasing card program managers to track and reconcile activity on the account and implement additional controls over spending.
- Network with other purchasing professionals to gain insight into their challenges, successes, and learning experiences.
Source: Adapted from the JPMorgan Chase whitepaper "Purchasing Card Best Practices for University Procurement".
Beyond hard dollars, efficiencies within the purchasing department and across the campus are more difficult to measure. Transactions, for instance, can happen with far less—or even no—involvement of a legitimate university buyer. Instead, the user’s requisition passes through all the necessary checks via the software system, freeing the university buyers for more strategic work such as vendor management and contract negotiation.
That streamlined purchasing process is a key savings that UCF, for one, is looking forward to. With transactions moving through the system more quickly and smoothly, "the time savings throughout the university will be of great value to us," Merck says. He anticipates benefits ranging from time saved per transaction, to users receiving goods and services that much faster.
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- 2008 Campus Technology Innovators: Social Networking for Admissions
