How
much time does it take to manage IT purchasing for 295 locations?
Too much —way too much —if you have a manual
purchasing process.
Just ask Sandra Gass.
Background
Gass
is the IT Procurement Manager at Allstate Insurance Company
of Canada, a leading property and auto insurance provider.
Allstate Insurance Company of Canada has been serving the
needs of Canadians for over 50 years and is a subsidiary
of the Allstate Corporation, one of the world's largest
insurance organizations with global assets of $104 billion
and revenues exceeding $28 billion. The Information Technology
Department at Allstate Insurance Company of Canada needed
a better way to procure and manage its purchasing processes
for computer hardware and software.
The company's manual purchasing process
incurred high risk of data entry errors, redundant work,
and a long turnaround for the requisitioning and approval
process. They were losing efficiency as more requisitions
and purchase orders were placed. Another big challenge was
the inability to pull a report to analyze historical purchasing
data.
Gass and a team from Allstate Insurance
Company of Canada began searching for an improved method
to manage their IT purchasing. They understood that they
need a centralized tool that would allow users to easily
and quickly locate corporate approved standard items for
computer software, create requisitions, and check the status
of their requests with 24-hour accessibility to this information.
According to Gass, "We had a paper-based process, with
a lengthy turnaround from requisition to invoice
reconciliation. We were using spreadsheets to track
vendor prices, stock availability, vendor performance, as
well as keeping the order status up-to-date for the requestor."
After a 10-month study of their processes
to identify areas for improvement, they began the search
for a solution. They met with several vendors and reviewed
various software packages before selecting Verian Technologies'
ProcureIT. ProcureIT is a web-based spend management software
solution that provides enhanced eprocurement
capabilities. ProcureIT provided most of the flexibility
that Gass and her team needed in order to regain department
efficiency. Since implementation, Allstate Insurance Company
of Canada has seen major improvements gained in time efficiencies
and reduced administrative costs. These savings are primarily
reflected through increased data accuracy on requisitions
(70%), more efficient requisitioning and approval processes
(40%), more efficient and more accurate invoice reconciliation
(35%), and improved internal customer service.
Recovering Lost Time
For Allstate Insurance
Company of Canada, purchasing computer hardware and software
meant a lengthy purchasing process:
- The purchase orders had to be prepared and approved
manually;
- Spreadsheets were used to check vendor pricing and stock
availability;
- Considerable time was spent communicating with the vendor;
- In-house updates had to be done via phone or email so
requestors would know when to expect their items;
- Items were then received and invoices were manually
reconciled against the original purchase order.
All this took a lot of time — time that Gass and her team could use for more strategic
and proactive activities. ProcureIT enabled
Gass to automate this entire purchasing process as well
as provide a web page where requestors and approvers can
check on order status. Within two months of implementing
ProcureIT, Gass and her team were already seeing a 20-25%
reduction in time spent on these administrative processes.
Other immediate benefits of ProcureIT in the administrative
area were the elimination of redundant work and the reduction
in data entry.
The largest recovery of time was
seen as a direct result of improved order accuracy. ProcureIT
provides electronic catalogs that can be updated easily,
which allows the requestors to order exactly what they need.
In fact, order accuracy has improved by 70% — which
has directly impacted the entire requisition process, resulting
in 40% savings in time. Now that the orders are correct,
the IT unit doesn't have to spend time returning items,
tracking down the requestor to find what the exact item
they need, or trying to figure out which vendor sells which
items. This one feature — electronic catalogs — has given Allstate Insurance Company of Canada the biggest
return by recovering time that can now be spent on finding
new vendors, negotiating better prices, budgeting, forecasting,
and continuing to improve their purchasing procedures and
policies.
Getting the Coding Right
One of the biggest
problems Gass and the IT unit faced was in reconciling invoices
within their in-house accounting system. The accounting
system required specific cost element codes for each item,
which meant the user had to know the correct code for every
item purchased. As Gass explained, "Getting users to
remember the codes was time consuming enough, but what made
it worst, was that the majority of the requisitions were
missing the cost element, and their department code. This
meant we had to track down the requestor, check for the
appropriate code, possibly go back through approvals, and
then finally start the reconciliation process with the accounting
system."
With ProcureIT, users create the
request on-line and the correct accounting code is automatically
assigned to each line item, based on the item category and
type. No more remembering the code for the end user, and
for the IT Department, no more tracking down the correct
code. ProcureIT's ability to automatically fill in the accounting
code also eliminated coding errors and greatly reduced the
invoice-to-payment cycle. Overall, Gass's unit has seen
a 35% reduction in invoice reconciliation process time as
well as eliminated several laborious steps from their purchasing
process.
As well, the Administration setup
within ProcureIT provided the IT Procurement Unit the ability
to administer rules that support the IT Department's processes
and to obtain mandatory information before processing a
requisition.
" ProcureIT has enabled
our department to be more proactive, rather than reactive,
to the company's IT needs," states Gass. "With
the time savings, I am able to manage
vendor relationships better and negotiate more beneficial
contracts." Allstate Canada was also able to shrink
operational costs by reducing the IT Procurement department
by one person on contract.
Conclusion
Allstate Insurance Company of Canada has changed
the way they procure computer hardware and software. With ProcureIT, they have found a solution that provides
them with the needed functionality to centralize and automate
purchasing processes as well provide a stable platform
for continued expansion within their organization. Overall,
Allstate Insurance Company of Canada has recovered something
valuable to every organization and person — time.
