Minnesota State Colleges & Universities ITS Portfolio Management Office Initiative Summary The purpose of this document is to communicate a preliminary idea for a project that may utilize information technology or impact ITS operations. An Initiative Summary is the first step in the EIC process. It provides an overview of the business need. Only those Initiative Summaries that are approved by the Channel lead and receive endorsement from the EIC will be required to develop a full business case. Enhanced Collaborative Sourcing through eProcurement replacing PCS Prepared by: Steve Gednalske, System Director - Tax & Financial Services and David Lund, ITS Business Analyst Presented to: Laura King, Vice Chancellor-CFO A. Finance & Administration Business Need / Objective (describe the business need, issue or problem that needs resolution) Pg. 1/2 Channel: MnSCU generates over 110,000 purchase orders annually with approximately 500 million dollars spent on goods and services. Over 60,000 PO lines in FY2010 included Supplies purchases, which in theory are all candidates to be processed via online catalog and purchasing card, greatly reducing the number of POs needed. The existing PCS (purchasing control system) module of ISRS is over 15 years old, has become inefficient, and is becoming increasingly difficult to maintain and properly tie to newer system architecture. This, along with the lack of several features now considered basic functions in a purchasing system, have made this the number one requested upgrade by the campuses through the Finance User Group (FUG) for the past several years. The system has no capability for electronic communication outside of ISRS. Although PCS does share much data across ISRS modules, it was not written as a fully integrated module, sometimes resulting in PCS data being “out of sync” with transaction data in the rest of ISRS. Currently there are work arounds in addition to an investment of human resources required to reconcile the data. The system also does not contain a function for matching invoices and POs. The updated or replacement system will need to automate match of Purchase Order/Receiver/Invoice (three-way match) to meet Audit Best Practices. PCS was not designed to effectively support Campus Service Cooperative arrangements between institutions. The Collaborative Sourcing Team (CST) investigates and evaluates opportunities to achieve significant value through use of best practices and leveraging purchasing power. Part of the group’s mission is to consolidate purchasing and leverage the System's buying power resulting in lower unit costs and improved quality to participating institutions and the system office. Awareness and use of contracts established or identified by the CST and/or its strategic partners would be increased through integration with the System’s purchasing system. This group has also unanimously voiced the need for upgrading the purchasing processes. PCS lacks any capability to take advantage of the eProcurement (online catalog shopping) processes now available. These systems can provide significant advantages in purchasing efficiency, contract utilization, campus spend control, and utilization of purchasing cards with the related controls and cost rebates available both from card contracts and vendors. Board policy and system procedure identify dollar thresholds for pre-approval of contract and commodity transactions. Currently the approval process is managed manually and compliance with Board policy and system procedures would be improved using automation. Leadership has voiced continued to support increasing the volume of contracts and commodity purchases directed towards Targeted Group Businesses (TGB's). The TGB initiative would be enhanced if identification of TGB’s was added to the system’s purchasing system. PCS is currently on a list of ISRS modules to be converted to the web (J2EE), which provides an opportunity for redesign and further integration of system purchasing functionality and initiatives. Conversion of this functionality to the web would increase efficiency on all campuses by simplifying access for departments to make their best purchasing decisions, and through lessening the number of client/server access points for each campus IT department to manage. Form revised 01/31/12 Minnesota State Colleges & Universities ITS Portfolio Management Office Initiative Summary B. C. Proposed Initiative Description (describe a possible solution to what was outlined in section A) This project starts with analysis of the range of options to: o Update and expand the existing purchasing functionality of the PCS (Purchasing Control System) module of ISRS and convert this functionality to the web (J2EE). o Purchase a full software/web application from a third party and to design and implement a J2EE interface with ISRS to maintain budget and accounting requirements. o Or the best mix of internal development with purchase and integration of external products. A cost/benefit analysis will be provided for evaluation and determination of final project scope. Implementation of a new PCS system would be expected to include a number of functional improvements not feasible with the current system including: o Support Campus Service Cooperative initiatives. o Use an eProcurement online catalog ordering system. o Payment by purchasing card within defined limits. o Management of authorizations by defined dollar levels, both on campus and at system level. o Support RFP/RFB/RFI efforts, as well as online bids and reverse auctions, etc. o Support the Collaborative Sourcing Team’s mission (stated above). o Track purchases in support of volume discounts and/or contract pricing negotiation leverage. o Assist in the management of Professional/Technical contracts. o Provide automated support for identification and use of TGBs (target group businesses). o Provide three-way match to meet Audit Best Practices. Individuals/User Groups/Committees Providing Input to this Initiative Summary Name Department Name Colin Dougherty David Lund Associate VC, Finance ITS Business Analyst Multiple institutions and the system office Steve Gednalske Mike Nordby Collaborative Sourcing Team Finance User Group Pg. 2/2 Form revised 01/31/12 Department Finance – Tax & CST leader Finance – FUG Multiple institutions and the system office