Government Procurement 2.0

The state of Georgia transforms its procurement function


With regard to training, Douglas notes that the state previously had only two purchasing courses for staff, "Welcome to State Purchasing" and "Purchasing Fundamentals." Today they have more than 30 courses, some of which are instructor-led classroom courses, others that are computer-based. To date, they have had more than 5,000 "course sittings" by buyers and staff both within the state procurement office and also among hundreds of buyers across the different agencies and universities. The office also started its own three-tiered certification program, offering the "Georgia Certified Purchasing Associate" (GCPA), which covers fundamental workflows; "Georgia Certified Purchasing Manager" (GCPM), which includes higher-level negotiating and RFP skills; and "Georgia Certified Purchasing Card Administrator" (GCPCA), for staff who manage P-card programs. The state purchasing office offers access to the courses and certification programs to the other state agencies and universities so that those entities can raise their skill sets to the level of the state purchasing group.

Team Georgia Marketplace™

With new staff in place and new processes outlined, Douglas and his team turned to the technology side of the equation. Douglas emphasizes that focusing on the people and processes before bringing in enabling technology was crucial to the success of the initiative. "You have to start with the people, then work on the processes and then the technology. If you don't go in that order, you're going to automate a bad process and a poor performing staff," he says.

In looking at how to enable the new procurement process in the state government, Douglas said one requirement that emerged was the need to give the state's buyers an "Amazon.com-like" experience — that is, to make it easy for them to find the right product on the right contract. "In the past, our group could have written the best, most highly leveraged state-wide contract you've ever seen, but no one could find it and no one could tell what was on the contract or what the price was or find the specs or an image of the item," Douglas says.

After evaluating its options, the state decided to set up an e-procurement system that it dubbed Team Georgia Marketplace, based on a solution from SciQuest combined with PeopleSoft procurement modules, and integrated with the state's existing backend PeopleSoft financials system. The SciQuest solution allows Team Georgia Marketplace to be populated with products from negotiated state-wide contracts. The technology provides a user-friendly shopping experience on the front end to drive a more efficient procurement process, as well as contract compliance and better spending practices by end users. But it also automatically tracks and reports on spending by, for example, suppliers, products or categories, to assist the strategic sourcing teams.

In addition, the Team Georgia Marketplace will be made accessible to all public entities in Georgia that utilize the required technologies, enabling county and municipal organizations to access the state's contracts even while increasing the buying volume the strategic sourcing managers utilize in their negotiations with suppliers. In effect, Georgia will create the nation's largest group purchasing organization in the public sector.

Results

Georgia is rolling out its procurement transformation in waves, and the initiative currently encompasses a dozen different state agencies, out of a total of 80 agencies plus 30 universities. Yet even at this early stage, the project has yielded impressive results. Prior to undertaking the initiative, the state effectively had just 6 percent of its spend under management, while today that figure has increased to nearly 60 percent, with a goal of reaching 80 percent by fiscal year 2012. Requisition-to-purchase order cycle times have dropped dramatically, from as much as 20 days to just two days, for the agencies using the system. Strategic sourcing efforts have yielded additional discounts of from 5 percent to 20 percent on the goods covered under new contracts, while improved workflows and efficiencies, along with purchasing automation, allow thousands of users to now take advantage of next-day deliveries for a wide range of goods. Meanwhile, the automation has allowed some departments to completely eliminate paper from their procurement processes.

Douglas admits that Georgia's procurement transformation is an ongoing process. "It's a journey, in the sense that we're not really sure where it's going to end," he says, explaining that while the state believes it has addressable spend in the range of $4 billion, the success of the procurement initiative to date has opened up the possibility that the state procurement office could eventually capture significantly greater amounts of spend — and drive much greater efficiencies — as the initiative progresses. "The truth of the matter is, we keep finding more and more [spend to address], and we keep getting smarter every day. It could get to be $5.5 billion — we just don't know. I just know it's high, and its highly 'leverageable.' And now we can start to bring it under management."

  • Enhance Your Experience.

    When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

Already have an account? Click here to Log in.

Enhance Your Experience.

When you register for SDCExec.com you stay connected to the pulse of the industry by signing up for topic-based e-newsletters and information. Registering also allows you to quickly comment on content and request more infomation.

OR

Complete the registration form.

Required
Required
Required
Required
Required
Required
Required
Required
Required
Required
Required