The Road to E-Commerce

It's the year 2000, and nearly every public school has access to the Internet. Students can unearth obscure data from far-flung websites, chat with new friends on the other side of the world, and bring an unending flow of global resources to their classrooms.

You couldn't fault school administrators if they looked at this technological cornucopia and wondered, "Why do students get all the fun?"

But they won't be saying that for long. The tidal wave of technology that classrooms are surfing into the 21st century is taking school business offices along for the ride. Just as the Internet has shrunk the world for students seeking information, it can bring isolated markets together for administrators who are responsible for buying the supplies and equipment that keep schools and universities running.

Purchasing officials for schools and universities can search the Internet and find a plethora of websites geared specifically to the education market-some are new businesses created online; others are longstanding vendors that have begun to dip their toes into e-commerce.

Because these businesses are web-based, schools need only a computer with Internet access and a browser to make purchases. The services typically are free to schools-the companies make money by charging the vendors.

Most of these online businesses are in their infancy, but if they perform as promised, they can provide great benefits to budget-conscious schools and universities: more options, better prices, speedier delivery and less bureaucracy.

"There are a lot of sites and a lot of stiff competition," says Mike Kovalchik, senior director of business operations for the San Juan Unified School District in Carmichael, Calif.

An inefficient system The campaign in recent years to bring computers and the Internet to schools has focused on student needs. But as technology has become more advanced and cheaper, school business offices are likely to be connected to the Internet as well. So it was inevitable that companies would try to lure schools-and the billions of dollars they spend-to follow the rest of the business world online and explore the feasibility of acquiring goods and services electronically.

Most school officials involved with purchasing concede that the existing process is often riddled with red tape and can be improved.

"It's one of the things we never looked at," says Daniel Corazzi, superintendent of the Valley View School District in Archbald, Pa.

"We're faced with so many other things that are more serious. So we've accepted what's there."

What's there is a haphazard, labor-intensive and time-consuming process involving lots of paper shuffling.

"Teachers who need something grab the first catalog they see," says Corazzi. "It may not be the best price, or exactly what they want. The price may not even be current."

A teacher might fill out a form that goes to the school's secretary, then to the principal, then to one or more people in the purchasing office before the order is processed and sent to the company. At any point along the way the orders might sit on someone's desk for a day or two, or get misplaced.

If the price turns out to be wrong, the teacher might have to start again from scratch.

For more expensive items, schools often require at least three price quotes before making a purchase. Typically, employees would have to call or fax prospective vendors to solicit quotes. The most expensive purchases require competitive bids (the threshold varies from district to district and state to state). That involves even more steps.

At the San Juan district, with about 48,000 students, staff process approximately 17,000 purchase requests a year. About 80 percent of those are for less than $1,000.

"There is a horrendous amount of paperwork," says Kovalchik. The paperwork and the staff needed to process it make the procedureexpensive-and the cost is there whether the purchase order is for a few dollars or several thousand.

Surfing for deals Purchasing online not only can speed up the process, but also removes geographical barriers.

Gerald Witte, technology director for the Winner, S.D., School District, says he makes 90 percent of his purchases online. His rural location doesn't limit him as he browses for products on several sites.

"I can have anything I want in two to three days," says Witte. "I haven't had a bad experience yet with e-commerce." Websites provide schools with more options and often lead to better prices.

"We're out here in South Dakota in a remote area," says Witte. "We don't have an Office Max right across the street. Price is the biggest issue."

That means sometimes bypassing local merchants when a bargain is too tempting. By searching the Internet, he found 100 computer carts for $114 each-the catalog list price was $322.

"I tried to give the local business a chance to meet it, but he said it would cost him more than $150 each just to get them himself," says Witte.

Valley View's Corazzi says it is important to continue purchasing from local vendors, but not at any cost. "If they are not competitive with prices, we will have to go elsewhere," he says.

One-stop shopping In just the last year, several e-commerce websites have been created to take online procurement a step further. These sites allow institutions to manage most or all of the purchasing process over the Internet. And new sites are sprouting up regularly.

"There's definitely a movement going on," says Corazzi. "In the magazines there are a lot of ads you never saw before. Three years, two years, even one year ago, you never saw any of that."

Schools can take advantage of a variety of online services that simplify purchasing. Aggregated catalogs of vendors allow school officials to browse for products without having to go to the websites of individual companies. Institutions can use forms online to solicit quotes or bid proposals.

"The information goes into that central hub, and very quickly you get a quote back," says San Juan's Kovalchik.

If other schools are buying the same products, often they can take advantage of cooperative-buying discounts. In some cases, schools can pay for their purchases by electronic funds transfer and integrate the online purchasing system with their districts' financial software programs.

"The idea is that this will streamline the purchasing process," says Brenda J. Bray, business administrator for the Palisades School District in Kintnersville, Pa., which recently made its first purchase using one of the online school procurement sites. "It costs a lot to produce purchase orders. This should make things cheaper and quicker."

As staff and administrators see that they can acquire supplies and equipment more quickly, education institutions will have less of a need to keep an inventory on hand. In many cases, equipment stored as a backup becomes obsolete as it gathers dust on a shelf.

"It will reduce overhead and the tendency of some staff members to hoard supplies," says Kovalchik.

Taking the leap If you listen to the entrepreneurs touting their web-based procurement systems, the decision to jump online and handle purchases electronically is a no-brainer. But obstacles still stand in the way of schools making a transition to e-commerce.

Bray notes that bidding and purchasing regulations, which vary from state to state, as well as auditing practices, could prevent districts from taking advantage of all the efficiencies web-based procurement can offer.

"Auditors dearly love to look at paper," she says.

And, as in any technological advance, there is always a segment of the workforce anxious about using computers and reluctant to abandon a system they know, even if it is inefficient.

"The big problem is getting everyone comfortable using the technology," says Kovalchik.

That's not always easy in education institutions, which often have a reputation for being resistant to change.

"People have said schools are like a soap opera-you can come back 10 years later and still see pretty much the same thing," says Corazzi.

"But technology is changing that. It is so pervasive that schools can't avoid it."

When Jack Wilson needs to review blueprints or other documents relating to the $24 million renovation of Dartmouth College's Fairchild Science Center, he doesn't have to rummage through a mountain of paperwork teetering atop his desk or rifle through his file cabinets.

Instead, Wilson, assistant director of facilities planning for the college in Hanover, N.H., taps a few keys on his computer and views all the pertinent information about the construction project over the Internet.

Dartmouth is one of several schools and universities that have begun to take advantage of computer technology to manage some of its construction projects. Those with a stake in education construction projects-designers, architects, contractors, sub-contractors, suppliers and school officials-typically have communicated with each other by leaving voice-mail messages, spewing faxes and shipping overnight packages. But for its Fairchild project, Dartmouth uses a web-based program that serves as a repository for all the data relevant to the construction plan.

"It's a good way to organize all the very complex kinds of operations and information that apply to a construction site," says Wilson. "It's a change from the paper-based, Federal Express way of doing things."

Wave of the Future Construction-industry observers believe online management could save billions of dollars. With construction and renovation in the education industry continuing to thrive, using the World Wide Web to manage projects could help schools and universities squeeze more out of their construction budgets.

Many companies offer online construction-management systems. Some provide software that lets a school or university set up a website on its own computers, while other companies host the website on their computers.

Either way, online management lets all those who need access to information about the construction project have immediate and up-to-date information anytime, whether they're in the same office or on the other side of the world. It also creates an ongoing record of what happened and when in the project.

"It's great for organizing and storing everything in one database," says Wilson.

The online management systems typically have security in place that let only authorized people view the site-and only the specific areas they need to see.

Overcoming hurdles So far, says Wilson, using the online system has been a "qualified" success. The main obstacle is persuading all the parties involved in a complicated construction project-including those not comfortable with technology-to place their information online.

"Everyone has to participate," he says. "That kind of transformation can be slow for some organizations. It's a matter of teaching old dogs new tricks."

In some cases, contractors or subcontractors might be willing to learn the new tricks, but their equipment isn't ready. Computer equipment needs to be powerful enough to quickly retrieve data from a project website.

Dartmouth decided not to use online construction management on another major project, says Wilson, because the contractor and other key players were reluctant to use the system.

Despite the reservations of those who want to continue to manage construction projects the traditional way, Wilson believes the benefits of an online system are so great that online management will become the typical way to organize and carry out a construction plan.

"I think it's a really powerful tool with tremendous potential," says Wilson. "These programs will be the future of construction management. It's a matter of getting over the learning curve."

E-commerce sites-both Internet startups and longstanding companies that have established a presence on the World Wide Web-are eager to get a piece of the billions of dollars that schools and universities spend on supplies, equipment and facilities. Among the Internet services targeting education:

-DemandStar.com gives schools and other public agencies the ability to post requests for proposals, invitations to bid and quotes onto a website. Registered vendors are notified of bid opportunities.

-Epylon.com is a business-to-business e-commerce marketplace for education and government institutions that provides one-stop shopping by aggregating thousands of catalog products online. It enables buyers to send quotes and bids electronically to suppliers, and offers industry-related news, event information and product reviews.

-Eschoolmall.com allows schools and vendors the ability to manage the entire procurement process online, "from cataloging and requisitioning to paying and reconciling the budget."

-HigherMarkets.com brings together higher-education institutions and their suppliers, empowering its users to communicate and conduct transactions more effectively with each other, focus on their core businesses, and realize cost savings.

-KawamaCommerce.com is a site where school buyers are able to reach multiple suppliers by generating a single request for quotes or request for proposals.

-SchoolDude.com is a resource center for school facilities professionals to reach vendors and get better prices for equipment and supplies.

-Schooloutfitters.com allows schools to browse an online catalog and purchase school furniture.

-Shop2gether.com provides education institutions the tools and services to automate the procurement process. Utilizing patent-pending group-buying technology, members have the ability to transform fragmented purchases into volume-buying opportunities.

-Simplexis.com helps schools save time and money when they purchase goods and services by connecting institutions with all of their pre-approved suppliers, enabling them to streamline the requisition process, request bids and quotes, and make purchases online.

-Way2bid.com offers a "complete Internet purchasing solution" for schools that is "less expensive than traditional purchasing methods."

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