Giving It the Old College Buy

e-Procurement yields cost savings for University of Nevada, Reno

Reno, NV  July 24, 2001  The 250 departments, 2,000 faculty and staff and 13,000 students of the University of Nevada, Reno (UNR) generate approximately 103,000 purchase transactions a year, valued at $135 million annually, making the university's purchasing department responsible for procurement levels akin to those of a small city.

But today UNR reported today that it expects to put up to 48,000 transactions, valued at $13 million, annually through its new electronic purchasing marketplace, at a savings of 15 percent to 20 percent in product costs.

Ray Moran, C.P.M., UNR's director of purchasing, recently implemented an e-procurement solution from Las Vegas-based PurchasePro to reduce the university's reliance on paper-based transactions and a mainframe accounting system.

Moran said he sees the PurchasePro solution as a vehicle to handle at least 50 percent of UNR's purchasing transactions under $2,000, which can amount to as much as $13 million annually. He said UNR presently is experiencing "increased user adoption, supplier collaboration and revenue potential from the software network."

The PurchasePro solution provides UNR with a way to communicate its contracted pricing agreements to the hundreds of faculty and staff with buying authority for small-dollar purchases. This gives the university's buying public the assurance that they are getting the best price on their purchases, Moran said.

UNR integrated features of PurchasePro's e-commerce software with the university's own internal credit card payment program, creating an online order-to-payment system.

Moran cited other benefits of moving to an e-procurement system, including better reporting. "The PurchasePro system provides minute detail on each purchasing transaction, enabling the university to examine transaction information that was absent in our paper-based method of handling small-dollar purchases," he said.

In addition, PurchasePro aggregates suppliers into a common database, enabling the university to source products and level the playing field for companies of all sizes. The e-procurement system therefore allows the university to buy from suppliers of varying sizes that have traditionally been difficult to source from, including minority owned and disadvantaged suppliers, meeting institutional objectives and complying with government regulations.

UNR derives a return on investment through the e-procurement system by using the university's buying power to obtain discounts from manufacturers and suppliers and then re-selling products to departments at a slight mark-up. University departments purchase their goods at prices below what they would pay without the program and are able to operate the system without requiring additional financial support.

Looking to the future, Moran said: "The next step will be to take advantage of PurchasePro's requisitioning, purchase order writing and bidding technology to further enhance the university's purchasing processes. This will provide UNR with a complete, Web-based purchasing solution that increases efficiencies while driving down costs."