eProcurement @Penn Impact on Economic Inclusion

Ralph Maier

Director of Purchasing ServicesOctober 4, 2005

Purchasing Business Objectives

Enhance the buying experience for faculty and staff

Increase utilization of approved buying methods Increase adoption of strategic business partners

and preferred contract suppliers Reduce maverick buying and associated risk to

the institution Leverage buying power to produce significant

financial Return-on-Investment (ROI)

eProcurement Business Objectives

Sourcing Leverage the approved supplier base and buying

power to reduce cost of products and services Technology

Leverage Penn's investment in administrative technologies

Enable suppliers for participation in the campus wide electronic purchase-to-pay system

Inclusion Provide business opportunities for local community

based and diversity suppliers

eProcurement Technology Overview

Campus wide electronic purchase-to-pay system Oracle Financials (>1,800 users)

Electronic marketplace for online supplier catalogs The Penn Marketplace hosted by SciQuest

Electronic distribution of purchase orders and supplier invoices Electronic Data Interchange (EDI), auto fax &

document imaging Online competitive bidding (reverse auction) Electronic invoice settlement

Electronic funds transfer and P-Card invoice settlement

Oracle Purchasing System

Provides point-of-demand ordering for authorized faculty and staff

Delegated order creation and final approval for orders <$5,000 to over 1,800 system users Requires suppliers to be in the approved supplier

database All purchase orders are transmitted to suppliers

via auto-fax or electronic data interchange (EDI) At a minimum, suppliers must be able to receive fax

orders Suppliers must plan for a future of electronic

document transition and electronic invoicing

The Penn Marketplace

Penn’s private supplier exchange >5M products available from 134 of Penn’s contract

and preferred suppliers Supplier catalog content hosted by SciQuest

Incorporated, a Penn eBusiness technology

business partner Requires the development and management of

electronic catalog content Punch-out to Penn specific supplier web sites is

preferred for high volume and/or high turnover commodities

Competitive advantage for participating suppliers

Supplier Enablement Goals

Enable high volume commodity suppliers as well as School & Center specific suppliers

Target a wide range of product and service commodities

Enable a combination of hosted and punch-out supplier catalogs

Drive compliance and increase market share to participating suppliers

Rationalize supplier base to promote sole source supplier relationships when appropriate

Achieve a Penn Marketplace supplier utilization rate of 65% (percentage of all PO supplier transactions)

Maintain a diversity supplier inclusion rate of 20%

Supplier Enablement Strategy

Provide maximize value to the buying community by targeting suppliers for all major commodities

Initial focus on Penn’s high transaction volume suppliers

Recruitment activity also targeted “mission critical” suppliers Mission critical suppliers School or Center specific commodity suppliers

Ensure local community and diversity inclusion in the supplier enablement process

Community & Diversity Inclusion

Challenge for most small and diversity suppliers Gap between Penn’s eBusiness technology

requirements and supplier capabilities continued to widen

Required innovative approach to community and diversity supplier enablement

Basis for a partnership between Penn and SciQuest for the Diversity Supplier Manager Project

Diversity Supplier Manager Project

Partnership launched in July 2004 Penn was SciQuest’s 1st DSM customer

SciQuest to provide supplier specific training and content development assistance to targeted suppliers Penn assumed cost for supplier specific training Target of five new suppliers per fiscal year Suppliers to develop skills to assume responsibility

after one year Five Phase I suppliers successfully enabled in FY

2005 Details available at:

www.purchasing.upenn.edu/buytools/div_manager.php

Impact on Diversity Inclusion

26 of the 134 Penn Marketplace suppliers are diversity and/or local community based suppliers Highest diversity supplier inclusion rate of any SciQuest

eProcurement customer in higher education Most of the suppliers have realized a significant

increase in business during the 1st year in the Penn Marketplace

New business opportunity for some suppliers Participating suppliers have been able to leverage

their Penn Marketplace involvement with other SciQuest customers in higher education and the private sector

New partnership with the Pennsylvania Minority Business Development Council (PA MBDC) for additional supplier qualification

Penn Marketplace Demo

Penn Marketplace Demo

Penn Marketplace Demo

Penn Marketplace Demo

Penn Marketplace Demo

Penn Marketplace Demo

Next Steps!

Suppliers interested in establishing a new or expanding an existing business relationship with Penn should visit the following web sites for information on Purchasing at Penn: Penn Purchasing Service Web Site

www.purchasing.upenn.edu Penn Supplier Diversity Program Web Site

www.purchasing.upenn.edu/supplierdiversity Doing Business at Penn

www.purchasing.upenn.edu/for_suppliers Contact Purchasing Services by e-mail for next

steps

purchasing-feedback@pobox.upenn.edu

Ralph MaierUniversity of PennsylvaniaDirector of Purchasing Services

E-Mail:  maierr@pobox.upenn.eduInternet: www.purchasing.upenn.edu