Case Study: How ProcurementExpress.com Helped the Sefaradi School Take Control of their PO Process
Schools might not be the first thing you think of when you think of procurement departments, but schools both on the individual and district level do a lot of ordering—and generally speaking, must adhere to a strict budget.
In actuality, schools are the perfect candidate for an automated procurement solution. Teachers and department heads need to order classroom supplies, textbooks, and equipment. There are also the basic necessities, cleaning supplies, food, first aid kits, and paper products.
In short, a school’s budget needs to account for everything from basic needs to the materials required for a top-notch educational experience. There’s no room for missing orders and lack of controls.
Here, we look at the case of the Sefaradi School in Mexico. The school had been dealing with some issues stemming from a disorganized order management system and few staff members understood the budget.
We spoke with Alejandro Abruch, of SAP, charged with helping the school get a handle on their procurement processes.
Since the school started using ProcurementExpress.com to manage POs, a lot has changed.
What was the Initial Problem?
In the case of the Sefaradi School, the main issue was disorganization.
Yes, there was a budget in place, but it wasn’t being used as a purchasing guideline.
Abruch says the goal was to work with the school’s finance oversight committee to get the budget back on track and install some procurement best practices.
Before adopting our software, the school wasn’t using any procurement automation practices. They also didn’t have a concrete process for manually placing orders, which meant there was little visibility into where funds were going.
Abruch knew that incorporating purchase controls was important — incorporating purchasing controls into the school system and a central hub for recordkeeping could help them better stick to a budget.
Below, we ask Abruch a few questions about how the Sefaradi School processed orders before and after implementing our solution.
Were You Using Paper POs or No System at All?
Honestly, it wasn’t even paper-based POs. Instead, we were using spreadsheets that didn’t follow any specific structure.
Our budgeting issues had a lot to do with things that fell outside of the procurement umbrella. Transportation costs and payroll, for example.
But, POs were affecting our ability to stick to the budget altogether. People didn’t know which expenses were recurring and orders would be placed and no one would know who paid for them.
The breaking point was, suppliers would come to us and say, I’m sorry, you owe me $30,000 for this and that didn’t get paid and a vendor couldn’t process the next order.
Handling those surprises were the main issue.
So, one of the first changes we made was establishing a budget. When we began implementing changes, there was a shift in how people viewed their spending. They were curious, who was paying for what, and who should be accountable for maintaining the budget.
In the beginning, we had to pause the cycle and pay for invoices from the past twelve months. We also had to account for the fact that we don’t receive tuition payments during the summer months and needed to save money for those down times.
There was also this struggled between staff and the administration. We were often frustrated by this lack of transparency. People would bring orders to the administration, and the administration would go crazy dealing with all of the paperwork.
There was no system for organizing paper POs, which led to chaos and frustration.
Teachers often didn’t know when their orders arrived. So, something could sit in the office for weeks, instead of being used in the classroom.
Another issue is, I’d often go to pay for an order, and see that several previous orders hadn’t been marked as paid. Thus, requiring a bit of backtracking on my end. Other times, a staff member would mention that they had an order that needed to arrive ASAP.
But, we’d go to place the order, and we’d have an outstanding balance. And, either we’d have to send payment or put new orders on hold due to lack of funds.
When looking closely at our old process, we found that the person approving payment didn’t have authority over the accounts. Also, the approver would pick and choose which accounts we would pay for, and which we would put on hold.
The thing is, our budget was so mismanaged that we didn’t always have the cash on hand to pay vendors, so it was still a matter of telling them we’d pay next week.
What Kind of System Do You Have Set Up These Days?
We’re still using the same accounting backend we’ve been using all along—it’s a legacy system that handles accounting tasks only.
We also have an administrative system that handles tuition and classroom systems, and we use Google’s G-Suite tools, like spreadsheets and docs.
We use Macs in combination with a lot of Google’s tools, which have helped us keep track of our budget and share key details across departments and locations.
So, far everyone has been especially pleased with the fact that we can approve purchase orders quickly with the iPhone. Most POs are captured by the secretary, though in some of our elementary schools, purchases are made by department.
We have another user who approves orders, which allows us to stay within the budget. Sometimes, he wants to go into the system and see how much of our budget is left, but we all send him our reports regardless.
ProcurementExpress.com has helped us gain more visibility into our purchasing process—anyone can view the status of orders, so there’s no longer this question of whether orders have been received.
Are Teachers Using the Platform or Just Department Heads?
Teachers might use the tool to place an order for a special use or if something comes up that they need for a class. The secretary typically uses the system to create a PO, and she’ll add those items to the budget.
Still, the system allows teachers to get what they need. We now have a dedicated list of vendors, making it easy to stock and refill items without any hold up.
Is Anyone Unhappy with Any Part of the PO Process?
Before we implemented ProcurementExpress.com, no one knew how much money we were spending. And, I can’t say most of us gave the budget much thought. For example, last year, we spent $10,000 on billboards, then decided we didn’t want to advertise that way anymore.
There were some challenges adjusting to the new procedures. We had to change some principles and do an audit of the budget. Looking at past spending made some people feel as though they were put on the spot. But, now, we’ve added a lot more accountability to the process and people are adjusting.
Abruch talked a lot about how a lack of structure in the Sefaradi School’s PO process and budget caused a number of issues in their organization. Without a clear system in place, staff were unaware of unpaid orders, budgeting issues, and relationships with vendors suffered.In the end, if your educators and admin staff frequently submit orders and expenses, you need something better than paper POs and verbal order confirmations. Click To Tweet
While every organization operates differently, it’s clear that establishing even a few changes–approval trees, automation, and so on–can pave the way for a more transparent, efficient system.
In the end, if your educators and admin staff frequently submit orders and expenses, you need something better than paper POs and verbal order confirmations.
Schools may even be held to a higher standard than manufacturing or retail companies—they have a responsibility to deliver a certain standard of excellence to their students—and a disorganized procurement process means students stand to go without supplies or other basic needs.