eProcurement @Penn Impact on Economic Inclusion Ralph Maier Director of Purchasing Services October 4, 2005

1. eProcurement @PennImpact on Economic Inclusion Ralph Maier Director of Purchasing Services October 4, 2005

2. 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)

3. 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

4. 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

5. 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

6. 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

7. 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%

8. 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

9. 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

10. 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

11. 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

12. Penn Marketplace Demo

13. Penn Marketplace Demo

14. Penn Marketplace Demo

15. Penn Marketplace Demo

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17. Penn Marketplace Demo

18. 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

19. Ralph Maier University of PennsylvaniaDirector of Purchasing ServicesE-Mail:  maierr@pobox.upenn.edu Internet: www.purchasing.upenn.edu