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City of Denver Implements Major Technology Reforms for Improved Cost and Operations Efficiency

By Justin O'Brien
March 6, 2000


The City of Denver has introduced several technological reforms to its communications and procurement systems which will transform the way that the City has traditionally done its public buying. While the City will benefit greatly from improved communication between the city’s many departments and agencies and financial management processes, these reforms will also directly benefit from changes in its purchasing operations. The city anticipates dividends through savings gained by improving efficiency in its purchasing processes and lower-cost of product. Ultimately this will directly impact several areas critical to improving and maintaining fiscal discipline and cost-efficiency, including the auditing, measurement and projection of expenditures city-wide.

New System Integrates Financial and Human Resources Management

In August 1999, the City of Denver introduced the PeopleSoft software application to the City’s inter-office and inter-departmental communication system replacing its twenty year old legacy ‘look-up’ system.  The establishment of PeopleSoft as the core interface medium for the City will serve to improve inter-agency and inter-office communications and operations and provide an integrated financial and human resources suite of modules.  The new system will bring real-time data entry, reporting and other electronic transaction capabilities to all agencies in the city.  It will also dramatically affect the way that Denver conducts its procurement operations. George Seaton, Denver’s Deputy Manager of General Services for Purchasing explained that “the functionality gained from the implementation of PeopleSoft will include general ledger, accounts payable, time and labor, inventory, and payroll and benefits.  It will also eventually provide a platform for e-commerce transactions”.

Importantly, in anticipation of the PeopleSoft system implementation and the potential of Y2K-related problems, Denver undertook a comprehensive program early in 1999 to upgrade its desktop computers.  As a consequence of that program over 1500 computers were replaced throughout the City’s agencies in the run up to 2000.

“Significant Savings to the City”

On February 9th this year, the City announced that it was implementing Internet-ordering capabilities for the purchases of office supplies. After evaluating the USCM office supplies contract Seaton and the City’s Purchasing Division determined that using the contract is in the best interests of the city.  The contract’s immediate availability ensures continuity of product supply while a state contract expires.  Furthermore Seaton adds “The Office Depot contract will provide significant savings to the City.  Almost 4,000 standard catalog items are discounted 61%.  The most-frequently-used items are discounted at 70% off”.

Web-Based Ordering an Important Factor

Also among the many reasons cited by Seaton for utilizing the USCM contract was the growing dominance of e-commerce as a factor in rationalizing purchasing decisions and transactions and critically, the capabilities of USCM’s purchasing program supplier for Office Supplies, Office Depot to respond to the e-commerce and internet-ordering needs of the city’s government. While Denver has taken significant steps towards this Seaton anticipates that “the full functionality of e-commerce is something in the City’s future”.

Later in the month on Tuesday the 22nd, the City held a day-long workshop at the conference center located at Denver’s Public Library on using the new system’s Internet ordering capability for purchasing office supplies.  Over 105 of the city’s purchasing representatives and agency purchasing contacts attended the workshop which focused on interactive training for web-based purchasing and the use of the company’s on-line catalog.  The workshop also hosted many vendor exhibits and supplier displays who provided product samples to attendees.

Industry Leadership in Internet Ordering

In addition to providing traditional Electronic Data Interface (EDI) capabilities used in public procurement, Office Depot is widely considered the industry leader in providing internet and e-commerce solutions to local governments in the Office Supplies industry.  Additionally, Vice-President for Contract Marketing at Office Depot, Monica Luechtenfeld also serves as President of the national forum, the Open Buying on the Internet (OBI) Consortium.  Office Depot’s Sales Director for the Denver area, Monte Bambraugh, explained some of the benefits that Denver will accrue from the new system. “Using Internet-ordering will speed the order and delivery process.  The Office Depot system will also enable the capture of purchase and procurement information such as individual item and purchases volumes and this will mean greater auditing capabilities.  In turn this will permit more effective monitoring of departmental budgeting for the city’s agencies”.

USCM Program and Volume Incentives Provide Added Value

The City estimates that for the first year of the new Office Supplies contract that about 40% of its transactions will be conducted via the Internet. Carmen Ellison, Denver’s Assistant Director of Purchasing notes “Using the Internet for 40% will mean a 0.5% reimbursement of the sales volume from the supplier, Office Depot and that’s always welcome”.  Ellison adds “These changes will improve our capabilities in our purchasing operations, from speed in ordering, delivery and reducing the need to maintain inventories to the monitoring of expenditures. The key is that the system and information provided is timely, concise and user friendly.”

Cities interested in learning more about the USCM Office Supplies Contract and other USCM procurement program offerings should contact Justin O’Brien at 1-888-828-8763. E-mail: jobrien@usmayors.org

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