It was the same old song and dance of duplicate orders and maverick purchasing at Experience Music Project, until the company decided to streamline its processes.
[From Supply & Demand Chain Executive, October/November 2004] Whether they're reading song lyrics handwritten by Nirvana's Kurt Cobain, poring over Jimi Hendrix's signed contract for his 1969 Woodstock performance, making their own music in a futuristic Sound Lab, or enjoying a performance in the intimate 200-seat JBL Theatre, visitors to the Experience Music Project (EMP) get an up-close-and-personal look at the events, artifacts and artists that shape music history.
Open since 2000, the Seattle-based museum's collection includes more than 80,000 artifacts, including musical instruments, an extensive recorded sound archive, fanzines from around the world, handwritten song lyrics and rare song sheets. EMP is unlike most museums in that it refreshes its exhibits throughout the year a monumental task that requires 215 employees and a technology infrastructure that handles the organization's purchasing and accounting functions as carefully as a musician handles his guitar.
Up until 2002, EMP lacked an accurate system for tracking the expenditures related to these projects. "We were hurting," said Paula Reeves, purchasing specialist. "We had no purchasing program, and we had a number of employees who were duplicating orders and making approvals without worrying about who was going to pay for the items."
The fragmented purchasing system was adversely affecting EMP's accounting department, where employees spent much of their time trying to figure out where to route invoices for payment approval and tracking down invoices that were misplaced during the routing process. "We had no formal purchasing program," recalls Reeves. "It was quite a mess."
Determined to clean up that mess, EMP turned to technology to streamline its purchasing processes and place tighter controls on invoicing approvals. EMP sought a purchasing solution that would enable them to obtain and document approval prior to incurring purchase costs, and track and approve expenditures by project. The organization also needed a better way to track the non-catalog items that it purchases on a one-off basis, such as plywood and the small electronic parts used in its many displays.
EMP's project manager sent out a request for proposal (RFP) to several competing software vendors and consultants. The data and feedback were discussed by a group of users and information technology (IT) personnel before being presented to EMP's management team, which selected Irvine, Calif.-based Epicor Procurement because of its workflow capabilities.
Particularly attractive, said Reeves, was the solution's ability to route requisitions for approval by project code as well as by dollar amount or possibly account code. "Epicor Procurement was the only solution we evaluated that could provide this flexibility," said Reeves. "It also gave us the ability to request non-catalog items, which was very important, as most of our spending fits into this category."
Reaping the Rewards of Purchasing Controls
Going from a disorganized, manual purchasing system to an automated and more controlled system was somewhat challenging for EMP employees, who were accustomed to requesting purchases without giving much thought to the budget or cash flow.
"It was a complete turnaround in thinking," said Reeves. "Instead of just getting on the phone and making casual requests, our users had to become more organized. Once they adopted it, they realized that it was easy to use and a tremendous tool for helping them work more efficiently."
EMP created a link between Epicor Procurement and its financials software solution to facilitate the migration of data. Purchase orders, order amounts, vendor identification numbers and other information can be transferred between the two platforms. This saves EMP's accounting department time because it doesn't have to re-key the information into each platform, and it can modify the data when necessary.
Reeves estimates that the new solution saves about 15 man-hours a week, since employees no longer have to send invoices out to departments for coding and approval. Said Reeves, "Requisitioners can route purchase orders to vendors via e-mail. This is just one of many efficiencies enabled by the software."
Epicor Procurement has also helped EMP generate more accurate reports from its financials system. "Previously, expenses were assigned to departments and projects after the purchases were made," said Reeves. "Now, each purchase is coded to a specific project when the requisition is initiated. This provides a clearer view of where our money is going, and the integration between Epicor Procurement and our back-office financials has enabled better financial reporting." EMP produces monthly reports for each department manager from its financials application that detail approved expenses by project.
Constantly striving to increase efficiency, EMP has modified its purchasing approval process and its overall purchasing structure several times over the last four years. "As we change our processes, we can easily adapt the routing rules in Epicor Procurement to meet our requirements," said Reeves.
Since implementing the new software, EMP has realized timesavings from e-mail purchasing routing, both of which were previously handled by fax machine or hand delivery. "Having a technology system where administrative changes can be done quickly has become increasingly important for us. We have more changes planned, but we expect it to be very easy to make these alterations, thanks to the software's flexibility," Reeves said.