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How a globally dispersed organization better controls spending on supplies

Published: 08 Dec 2014 19:18:18 PST

New procurement software helps the Salt Lake City-based Church of Jesus Christ of Latter-day Saints improve its control over spending across some 50 countries.

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When the recession of 2008 hit the global economy, the Church of Jesus Christ of Latter-day Saints and its globally dispersed operations faced many of the same financial challenges of other worldwide organizations. With close to 30,000 congregations spread across the globe with facilities to maintain, the church organization had a spending challenge on the level of the largest multinational corporations.

But when the recession lifted and the Church was ready to pick up spending on the many thousands of products it needs to operate its church and mission facilities, ranging from paper supplies to furniture to heating systems, it benefitted from new procurement marketplace software it had started to deploy just prior the recession in 2007, says Blake Anderson, manager of business processes and systems at the organization’s headquarters in Salt Lake City.

Following the backlog in purchasing that had built up during the recession, the Church was able to quickly ramp up online purchasing under a new organization-driven procurement system, even though it had fewer people to place orders, Anderson says. “When our budgets came back and the orders returned, we were at a lower headcount,” he says. “Amazingly and surprisingly, the number of orders per buyer doubled. With Vinimaya in place, we were able to handle the increase in orders without getting more headcount.”

The Church is using vMarketplace e-procurement software from Vinimaya Inc., which replaced the procurement software that was built into the Church’s PeopleSoft suite of business operations software. It still uses PeopleSoft for such purposes as loading product catalogs from suppliers into the Vinimaya software and to generate purchase orders and update financial records. One major advantage of the system is its ease of use, with the Church able to quickly train users and get their cooperation in buying through vMarketplace, Anderson says.

By getting more people purchasing from authorized suppliers through the Vinimaya procurement software, he adds, the Church is able to better control spending by ensuring that buyers purchase from approved suppliers at negotiated contract prices. In addition to saving its buyers more time in finding and purchasing approved products, the system also enables the Church to reach a goal of maintaining consistency in interior supplies throughout its network of facilities. “We can go from a meeting house in Kansas to a meeting house in Florida to a meeting house in California, and it should all be the same building atmosphere,” he says. “And our total cost of ownership decreases.”

After rolling out the vMarketplace software in the United States, where many buyers quickly took to using it, the Church began deploying it in many of its international operations in 2011, Anderson says. By 2012, the volume of purchases processed through vMarketplace increased by more than 50%. “At the beginning of 2012, it appeared that every area-office was operational and using the system,” he says.

Usage of the system has continued to grow since then, and the Church is close to having 100% of supplies that can be ordered via purchase orders up on the new procurement software. While there are still several spending areas not usually suited for the software, such as landscaping and other services not typically paid through electronic purchase orders, the Church may consider adding such ordering to the procurement system to exert further control over spending, Anderson says.

Anderson says the return on investment of using the Vinimaya software has been “good and fast.”

“Our goal was to have a standard ordering platform that was easy to use,” he adds. “This is an easy-to-use tool, and we’ve been able to gain more standardization.”

Vinimaya, a privately held company, declines to say publicly what it costs to use its software, which connects with suppliers in 80 countries and handles 37 currencies and 15 languages. The company’s CEO, John Hutchinson, says clients pay a subscription fee based on their number of suppliers and the number of software applications, such as accounts payable software for generating purchase orders and inventory management applications, that they connect to the Vinimaya software. Vinimaya does not charge fees to suppliers, which avoids having suppliers tack on extra fees to buyers, he adds.

Hutchinson notes that it generally takes from 45 to 60 days to get new clients set up with a network of suppliers. Other clients of Vinimaya include the City of Columbus, OH, and the state of Tennessee’s Department of Energy.

Duncan Jones, a vice president and analyst covering sourcing technology at Forrester Research Inc., says Vinimaya’s type of e-procurement software can provide an attractive alternative to suppliers who can’t afford to invest in their own sell-side B2B e-commerce technology that effectively reaches buyers and differentiates them as suppliers.

Jones adds, however, that Vinimaya faces competition from some industry-specific procurement systems, including E2Open, MFG.com and SciQuest. E2Open provides various types of supply chain software for industries including aerospace and defense, consumer electronics, industrial manufacturing, telecommunications and oil and gas. MFG.com provides marketplace software that connect buyers with suppliers in made-to-order industrial goods and the textiles and apparel industries. SciQuest provides various spend-management software applications for public institutions like universities and government agencies, as well as companies in private industry.

For a free subscription to B2BecNews, a weekly newsletter that covers technology and business trends in the growing B2B e-commerce industryclick here. B2BecNews is published by Vertical Web Media LLC, which also publishes the monthly trade magazine Internet Retailer.

October 6, 2014, 1:29 PM
By Paul Demery Managing Editor, B2B E-commerce

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