April 22, 2010 By Hilton Collins
A government procurement department's job may seem simple in theory - buy the goods and services a jurisdiction needs - but anyone involved in the process knows it's much more complicated. When employees must repeatedly input duplicative information for each purchase, the task becomes laborious and error-prone.
St. Petersburg, Fla., dealt with that challenge in the Purchasing and Materials Management department, the city's office for buying supplies, services and construction. Department employees felt that procurement methods could be made more efficient.
"We had a purchasing system, and it would process your requisitions and create purchase orders. But then to pay for those products, you had to manually enter the same purchase orders into the finance system because the two did not talk to each other," said Christine West, the city's Oracle e-business solutions manager.
That method left the process vulnerable to human error. Someone could accidentally type information into the finance system differently than it had been typed into the purchasing system. "There was no integration to be able to reconcile the two systems," West said.
St. Petersburg wanted to eliminate paper processes and the errors that came with them, improve employees' ability to analyze department activity and streamline the requisition process. In 2005, West and her colleagues achieved these goals by automating purchasing procedures with Oracle Advanced Procurement, an applications suite.
"It allowed purchase requisitions and purchase orders to be directly integrated with the financial side," West said. "It goes through an automated approval path, and essentially, if everyone is sitting at their desk [when] the requisition comes through, we can have a purchase order out the door within 60 seconds."
The system generates an e-mail notification to whomever must approve the purchase, so the approval itself depends on how fast the information is read and decided on.
"It's amazing in terms of the automation that we were able to put in place to streamline that entire process," she said.
With the Oracle software modules employees now use, the purchasing department has reduced the requisition-to-purchase process from six days to about two days and requisitions have increased to about 25,000 per year. Employees have preloaded templates for contract renewals and use nearly 800 contracts annually, which eases the legal department's workload and saves taxpayers $151,000 a year.
"The Oracle software radically improved the way we collect information and enables us to benchmark and do a lot of reporting that we didn't have before. The automated workflow was a huge bonus - where there's no manual signatures for the routine purchase orders that come through," said Barbara Grilli, the city's purchasing manager.
When technology isn't integrated, people don't get the time and money savings they want, said Wayne Bobby, Oracle's vice president of public-sector industry solutions.
"You'll slow the process down - cause it to be paper intensive," he said. "By establishing that ERP [enterprise resource planning] integration up front, that's where you start to see those kinds of efficiencies and savings."
The purchasing changes were part of an ERP deployment that made sweeping changes to the city's enterprisewide business functions. West manages the entire set of Oracle technology the city uses, and procurement and purchasing are just a few of the 26 modules deployed.
"We converted from 50-plus legacy systems into the e-business suite. Purchasing is just one of the several e-business modules I support," West said. "I oversee the developers and business analysts in the IT department, but the purchasing department itself is the true owner of the system."
Bobby also thinks automated tools help the Purchasing and Materials Management department avoid extra costs that would arise when mistakes were made in the paper process.
"The more paper you have, the likelier that you may lose or misprocess paper," he said. "