State Web-enabling e-procurement

Indiana is planning to upgrade its statewide electronic procurement system to a Web-enabled version that it hopes will reduce costs of goods and services by 5 percent to 10 percent yearly, or roughly $10 million to $20 million.

The upgrade to PeopleSoft Inc.'s Supplier Management Relationship (SRM) product would enable the state to control, among other things, its "sourcing" process, said Bob Shecterle, vice president for the company's SRM strategy division. That means ensuring that the best and correct prices for goods and services on negotiated contracts are being used and consolidating agencies' needs to take advantage of reduced off-contract purchasing.

The Web-enabled Version 8.4 of PeopleSoft's e-procurement solution will be released soon, and Shecterle said Indiana will implement the upgrade sometime later this year. However, he said e-procurement is just part of the solution; SRM encompasses sourcing, procurement, settlement and supplier management.

Indiana, which already uses PeopleSoft's financial and human resources systems, is the fifth state — joining Connecticut, Oklahoma, Vermont and North Dakota — to license the company's SRM product. More than 500 education and other public-sector organizations also use the product.

Shecterle said he's seeing increasing demand for better e-procurement systems as states and municipalities grapple with declining revenues and budget shortfalls in a stagnant economy.

"If they can make a capital investment that ultimately drives down operating costs, that's a big win for them," he said. "There have been very strong, documented cases in the private sector for return on investment. Constituents in the public sector are saying why isn't our local, national and state governments taking advantage of that?"

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