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August 1999
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E-Com Excitement
Government Technology News
Tech Helps Transform University Procurement
May 28, 1999
SAN DIEGO -- Electronic commerce will hit the San Diego State
University campus in a big way by the fall semester, but the
campus' Business Services division has been preparing for a decade.
It's unlikely that, 10 years ago, anyone at the university's
Central Stores was thinking specifically about the new electronic
procurement system that will streamline ordering and move the
department closer to being a full-scale retailer than a supply
service.
But this embrace of electronic commerce is as much a result
of strong focuses on customer service and savings as it is on
the outgrowth of flashy technology developments.
"California's debt crisis in the early 90s ... cut Business
Services' staff by more than 60 percent," said Lawrence
Peralez, the department's director. "We had to look at different
ways to do things."
The department shifted from a funded bureaucracy to a self-supporting
business It surrendered its university funding and implemented
a charge-back model which includes built a small profit to fund
the cost of its services. At the same time, the Central Stores
began using technology to alter its business methods at the most
basic level.
It went from having a 7,500 square-foot warehouse with $500,000
to $750,000 inventory to being a small office area linked to
the online ordering systems of its supplier. The shift from warehouser
to just-in-time ordering has helped the agency pay for its salaries,
equipment and even a $1.5 million building, Peralez said.
"We established long-term master agreements with our
strategic suppliers; we access their ordering systems on a realtime
basis; we retrained and hired our staff as more proactive customer-service
people rather than just stock clerks; and we also purchased and
implemented our own computer accounting system," Peralez
said. "We also established our own internal information
technology department."
While improving the department's services, these moves have
also saved the university money, allowing general-fund dollars
to go elsewhere. "In salaries alone, we've saved about a
million dollars that can be used to support core areas of the
university," Peralez said. "How we got here was through
all these little changes. Where we want to go next, that's where
the technology comes in."
Tim Ameredes, IT manager of the Business Services division,
said in five years the department has moved from fully manual
paper processes toward more automated systems. While there's
still a lot of paper, automated processes have helped handle
a rapidly increasing workload -- the Business Services department
has gone from a $2 million operation to a $4.5 million operation
during his tenure, he said.
An accounting package supported that growth, but now the department
is looking to streamline and expand services. "We still
had a lot of data entry, and we had no way for an end-user to
shop, get current pricing, get current availability and build
a requisition online and basically send it to us."
That's where the new online procurement system comes in, he
said. "We're trying to take this to the next level."
The Intelisys procurement system, and a shift to Oracle financial
software on July 1, will bring together a complete solution.
"It totally enhances our customer service side, while eliminating
about four data-entry points on our side Ameredes said.
The result: lower costs, faster service and fewer errors on
the campus side. Similar savings on the vendor end may come
back to the university, too. "It's also going to allow us
to leverage our suppliers for additional reductions in our pricing,"
Peralez said, noting that time- and cost-cutting electronic payment
also lies ahead.
Peralez and Ameredes also envision opening the service to
students and alumni passing on the competitive pricing they've
been able to negotiate with their suppliers while expanding their
purchasing power and revenue. In addition to office supplies,
office equipment and even furniture -- they have a showroom on
campus -- they foresee offering personal computers, travel and
car rental services and, eventually, linking with other campus
electronic transactions, including registration.
The shift to a tech-oriented, self-supporting service also gives the department the ability to withstand budget deficits and other ill winds that periodically blow through the public sector. The California State University system is eyeing the project, and Peralez expects this sort of service to have a wide reach. "It's really going to change how state agencies do business," he said.