“The ESM products that we use have just become an ingrained portion of the fabric of our lives.”
Small University eProcurement Success Story
How Delaware Valley University is saving big with ESM Purchase
For small higher education institutions, every penny counts these days.
Delaware Valley University in Pennsylvania is no exception. The higher education institution, with an annual budget of $50 million and an endowment of only $34 million, has less than 2,000 students.
They’ve found an effective way to stretch those tight resources - automated procurement with ESM Purchase, a cloud-based solution that increases control and visibility of the organization’s spend.
“We are the definition of a very small school,” said William Lyle, purchasing director at DelVal. “And, with very limited resources, sometimes we have to be creative. ESM has been very helpful in getting us on the right track.”
‘Fabric of our lives’
Like DelVal, higher education institutions across the United States have had to get increasingly creative in recent years to keep their doors open. Softening revenues, higher labor costs, rising pension liabilities, increased competition for students and even proposed federal policies that could limit the number of international students all spell trouble for colleges and universities, according to Moody’s latest report on the U.S. higher education sector.
The budget woes already have been too much for several higher education institutions. Some have closed their doors, including Dowling College, the Long Island alma mater of ESM CEO Anthony Rotoli. Others, to stay afloat, are merging to pool resources and revenue.
And some are finding innovative ways to survive despite tightening budgets. For DelVal, ESM Purchase has helped the university rein in spend, direct dollars to negotiated contracts with less expensive products and even earn rebates.
“The ESM products that we use have just become an ingrained portion of the fabric of our lives,” Lyle said.
‘Fixed every problem’
Delaware Valley University signed on with ESM in 2007. At the time, yellow requisition papers ruled the university’s procurement process. Buyers would fill out the forms, which would then end up in a pile on somebody’s desk. Sometimes the handwriting on those forms was illegible. Sometimes the sheets of paper fell behind the desk and were lost forever.
“That was an average day for us before ESM came along,” Lyle said. “ESM completely fixed all of those problems.”
ESM Purchase’s intuitive e-commerce shopping environment gives users direct access to approved vendors and negotiated contracts. Instead of paying retail from a catalog or at the big box store down the street, the online marketplace makes it easy for shoppers to find what they need with the cheaper prices that an organization’s procurement staff worked hard to secure.
What’s more, ESM Purchase fully integrates with any organization’s ERP or financial system of record. Delaware Valley University, for instance, uses Colleague by Ellucian, which integrates smoothly with ESM Purchase. Thanks to that integration, contract and off-contract spend can be tracked together in ESM’s easy-to-use system.
“It streamlines the entire experience for users,” Lyle said.
“We are the definition of a very small school. And, with very limited resources, sometimes we have to be creative. ESM has been very helpful in getting us on the right track.”
Today, Delaware Valley has cut the processing time for orders by at least 90 percent with ESM Purchase. Buyers are filling their online shopping carts with less expensive products because they are shopping for items from those negotiated contracts.
Lyle said that, in most cases, much of the university’s “wildcat” spend was happening because buyers simply didn’t know that the university had contracts in place for office supplies or laboratory equipment.
“By rolling out ESM Purchase, we were able to focus the spend and put us in position to negotiate better contracts,” Lyle said.
Easy to learn
Another key bonus, said Lyle: Adoption was swift. Users were happy to say, “so long,” to those yellow requisitions sheets.
“Once it was rolled out to the campus and people began using it, they loved it,” Lyle said. “The product is so effective at getting them what they need and so easy to use.”
It’s also convenient. Instead of waiting days or weeks for that box of pens or ream of paper, now, if they order something from the marketplace’s office products supplier by 4 p.m., one day, they’ll have it on their desk the next day.
“People just love that,” he said.
More perks, more savings
Less processing time. Swift adoption. Convenient for users. Those all were big rewards for DelVal when it took the leap to ESM Purchase. The perks came because of an intuitive solution, new capabilities that allow for more savings and plenty of support from ESM, Lyle said.
Here are other ways Delaware Valley University is saving with ESM Purchase.
Punchout catalog creation: DelVal’s spend is tiny when compared to much bigger higher education institutions, who might spend millions on just office supplies. It’s difficult for smaller institutions to negotiate big price reductions.
Lyle, however, was able to convince some of the university’s preferred vendors to spend the money to create punchout catalogs just for Delaware Valley.
“They hesitated,” he said. “They wanted to know how much they were going to get. So we told them, ‘If you do this, you’ll get this much spend.’ So they moved forward and we’ve never looked back. It’s a very good relationship for both parties.”
P-Card future: Lyle sees P-Cards as just another creative way to stretch those budget dollars. Delaware Valley currently is moving to a more P-Card driven system to take advantage of benefits and cut the costs to process purchase orders.
Lyle knows that some are leery of P-Cards, worried that it could open the doors to rogue and even fraudulent spend. But, he said, ESM Purchase offers plenty of safeguards.
“We get a significant rebate for every dollar spent on P-Cards,” Lyle said. “It’s free money, really. ESM has a good system that lets us route the order for approval prior to the purchase so that there is plenty of oversight.”
Amazon enabled: Delaware Valley has added Amazon as a preferred vendor in its eProcurement marketplace, but only after taking a hard look at its current strategic vendors.
“If some of our vendors are consistently higher priced than Amazon, then maybe they shouldn’t be our strategic partner,” Lyle reasoned. “We’re willing to let the marketplace fight that out.”
Adding Amazon, he said, also is convenient for buyers as DelVal’s other vendors don’t carry everything they may need.
“It streamlines ordering for them,” he said.
Plenty of support: A decade into the relationship with ESM, Lyle said the company has been with Delaware Valley University every step of the way, quickly responding to questions and concerns.
When Lyle wanted to add a small local toner services company to its marketplace, ESM came to the rescue, helping the firm, which had little IT support, create a punchout catalog.
“ESM went, in my mind, over and above in helping this small company create a punchout that we could use,” Lyle. “And we’ve been using it ever since. In fact, they are in the process of upgrading it now and ESM is working very closely with them to make sure everything is right.”
eProcurement too expensive? That’s a ‘false argument’
When talking to colleagues at other small institutions, Lyle said he’s always surprised at the number who haven’t signed on for eProcurement, considering all of its advantages.
Time, he said, is one issue. And, it did take some time to transition from those inefficient yellow requisition sheets to a completely automated eProcurement system.
“Once that was done, the upkeep was very easy and very straightforward,” Lyle said.
Money, however, is the biggest stumbling point for institutions focused on saving, not spending. If you’re spending nothing on eProcurement now, then signing a contract with ESM is, in theory, spending more, Lyle said. New spend always gets push back.
“But it’s a false argument,” he said. “The savings that are attainable - both the soft savings and the hard savings - will outweigh whatever you pay to ESM.”