The program has reduced the number of paper invoices that the district's purchasing department has to process by about 85 percent, from 13,000 annually to 2,000. "Now we're working on getting good pricing contracts, actually being more contract administrators than PO-pushers," says Swain of the change in the purchasing staff's work since the p-card program came online.
The department also has been able to reduce its staff size by attrition over the years, although it has not laid anyone off. The additional granularity of the transaction data has been beneficial as well, and the purchasing department is using the data available through the solution both to analyze the district's spend and to negotiate better contracts, as well as to monitor compliance with contracts.
Winning Over the Naysayers
The district took a phased approach to implementing the card, intentionally selecting the roughly 50 percent of the schools' employees who were in favor of the program from the outset. "With the other 50 percent that were vocal in saying it was the worst thing in the world, we said, 'You're probably right, we're probably wrong, so show us where we're wrong.' And they found that we were actually right, that the program was great and it saved them a ton of time. So they really did the change management for us, because they were so vocal against it before and now they were praising it. That really sold it, and it just spread like wildfire in our organization."
Swain says that the district is now looking for ways to expand the p-card program to capture increasing numbers of transactions. For example, a few years ago the district decided to use the card to make all its fixtures, furnishings and equipment (FF&E) purchases — basically anything in a new school that isn't provided by a building contractor.
That effort was successful, capturing nearly 100 percent of the district's FF&E spend, which led Swain to believe that the district might be able to put the construction — and not just the equipping — of an entire new school on the card. The district is currently in negotiations with building contractors to do just that, whether for a high school presently under construction or for the one to three schools that the growing district anticipates building in years ahead. Swain says that suppliers have put up some resistance because of the transaction fee that they incur, but she believes that, in the end, the program can provide for payments to the suppliers in a short enough timeframe that the vendors will see value in accepting payment through the card.
e-Payables at Countrywide
Besides implementing purchasing cards, a variety of companies have been exploring other methods of automating more of their purchase-to-pay process, including by implementing solutions specifically targeting the incoming wave of paper invoices. One such pioneer in enabling the financial supply chain is, perhaps not surprisingly, Countrywide Financial Corp., a diversified financial services provider — and e-procurement early adopter — headquartered in Calabasas, Calif.
Countrywide made its first move toward an e-financial supply chain in 1999, when it implemented an electronic procurement solution, dubbed PNet eProcurement, from Red Bank, N.J.-based PurchasingNet Inc., along with the solution provider's invoice-matching module. Countrywide did a phased implementation that was first rolled out to some 25,000 employees, with about 98 percent of the company's annual spending on indirect goods and services going through the e-procurement solution. However, according to Brennan Powe, a senior systems analyst with Countrywide, by 2003 the company had begun to experience difficulties from the sheer number of paper invoices coming into the accounts payable department. "We had a team of 12 people that just worked on purchase order invoices, and that's all they did all day," says Powe, adding that this team was processing between 12,000 and 16,000 invoices on a monthly basis.