Know-How: e-commerce

A few years ago, companies were sprouting up across the country, hoping to persuade schools to do away with their bureaucratic paper trails and duplicate forms and join the online business world.

E-commerce held out a tempting promise to school administrators: buy your equipment, products and services over the Internet, and your goods will arrive more quickly and at a lower cost. Your staff will be freed from the tedious steps of shepherding a purchase order from school to central office to vendor and back.

In 2001, many of the pure online companies hoping to get a piece of the lucrative school market have gone bust or are struggling to survive. School administrators, already a cautious breed about embracing sweeping changes, may be scared off.

But the benefits that made online purchasing seem so attractive are still there. Many of those who handle purchasing for educational institutions believe that most schools will join the move online eventually, but at a slower pace than enthusiasts predicted at the height of the dot-com boom.

“We're taking the slow approach,” says Ron Roe, manager of purchasing services for the Shawnee Mission School District in Overland Park, Kan. “A year from now, what's out there could look a whole lot different.”

In reviewing what software systems are available for e-procurement, administrators say one feature is critical: a way to integrate the online purchasing process with the institution's existing financial software system. Some of the earlier software solutions allowed schools to seek vendors, get price quotes and make purchases online, but those transactions had to be entered separately into a school's financial system.

“To truly capture the effectiveness of e-procurement, you have to make sure that the system is integrated with your financial system,” says David Louis, director of purchasing for Modesto (Calif.) City Schools.

Modesto has just begun a test of a system that does just that. The Minneapolis School District is about to begin using a similar test system. Purchasing director Gregory Mead says that using the Internet for soliciting informal bids has helped Minneapolis drop the cost of processing a purchase from $354 to $218. Mead estimates that having software integrated with the district's financial system could drop that cost to $100 or less.

QUOTABLE

Ron Roe
Manager of Purchasing Services, Shawnee Mission School District, Overland Park, Kan.

“The whole goal is to simplify the process and reduce human error. We want our people to do more than just push paper from place to place. We want to move day-to-day operations to a higher level of thinking.”

Gregory Mead
Director of Purchasing, Minneapolis Public Schools

“You have to make sure your regular vendors get on board. You have to have your marketplace work for you. We held a vendor summit to tell them what we are doing and why and how it would be of value to them and us.”

David Louis
Director of Purchasing, Modesto (Calif.) City Schools

“The benefits of getting involved in online procurement far outweigh the risks. Even if companies go by the way-side, if you have begun the process and know the issues and have used the tools, you've covered that much, and it will be that much easier to move to another contract.”

Ken Carter
Director of Purchasing, Kyrene (Ariz.) School District

“We haven't done a lot of online purchasing. We're not sure what the legal ramifications are and how it's going to work with our procurement rules.”

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