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Epicor Software Corporation

In spite of what you may have read about e-procurement, it is alive and growing at Cox. The Cox Marketplace, powered by Epicor eProcurement, a comprehensive Web-based procurement solution, is gaining traction.

In spite of what you may have read about e-procurement, it is alive and growing at Cox. The Cox Marketplace, powered by Epicor eProcurement, a comprehensive Web-based procurement solution, is gaining traction. The Marketplace, an online virtual mall, is being used to launch the e-procurement initiative at Cox, the idea of Materials Management Vice President Mike Mannheimer and Purchasing Director Gary Robinson.

Cox Enterprises is one of the nation's leading media companies and operators of automobile auctions. Major operating subsidiaries include Cox Communications (cable television distribution, telephone, high-speed Internet access, and other advanced broadband services); Cox Newspapers (newspapers, local and national direct mail advertising, and customized newsletters); Cox Television (television, television sales rep firms, and research); Cox Radio (broadcast radio stations and interactive Web sites); and Manheim Auctions (vehicle auctions, repair and certification services, and Web-based technology products). Cox Enterprises also owns an equity stake in a range of Internet businesses, including AutoTrader.com, the world's largest and most visited source of used vehicle listings for dealers and consumers. More information about Cox Enterprises can be accessed via the Internet at www.coxenterprises.com.

Cox Enterprises does not mandate how its numerous subsidiaries run their business units. That makes it challenging to introduce new technologies and facilities solutions that would help the subsidiaries, and the corporation as a whole, to save money and operate more effectively. "Being decentralized, it is difficult sometimes to move a good idea forward," said Mannheimer. "We have been trying to get the message out that this is a great opportunity for Cox to not only save money but to promote efficiency in the purchasing process. The e-procurement initiative has allowed us to focus on the day-to-day spend on a national scale while at the same time promoting local vendors. I feel one of the biggest opportunities is in the direct spend market."

Bob Pelon, known as the "virtual mall manager," manages the Cox Marketplace and enjoys the program's flexibility as well as the process improvements it offers. Pelon's previous experience with process improvements has benefited the initiative. "Oftentimes when a program is brought into an organization it satisfies only the back-end or financial requirements; it fails to help the individual purchaser or manager. This program supports the total purchasing spectrum. It supports individual users with speed and accuracy, the manager with the potential to establish his or her own purchasing requirements and standards, and it provides the necessary information for the financial requirements. This program allows the manager to drive purchasing from the front end and be proactive instead of reactive."

A variety of enterprise systems (SAP, PeopleSoft, JD Edwards, Lawson), as well as some homegrown solutions, are installed across the various Cox companies, making it impractical to develop and maintain direct integration links to each of these back-end systems. "We operate the eProcurement system as a standalone application using the purchasing card as a payment tool," says Pelon. "These (cards) can be mapped right into our financial systems," making the integration simple and effective.

Realizing the Benefits of Streamlined Purchasing

Since implementing Epicor eProcurement, Cox has experienced many successes, one of which is printing. "We buy a lot of printing - everything from business cards and stationery to brochures and catalogs. We've been able to greatly reduce the number of suppliers and streamline the procedures for getting printing orders in place. Instead of four or five weeks for a simple business card we are looking at less than five days," says Robinson. "When we started looking at the purchasing process there were over 40 steps and at least five different people involved. Now the business cards are ordered right on the computer, with the proof viewed on the screen and sent to printers, saving both time and money. Our error rate is now less than 1 percent for the printing orders we're doing with eProcurement. Compare that to an industry average error rate of something like 18 to 20 percent for print orders."

Using the solution's procurement card as the chief mechanism for payment provides Cox with a clear and distinct audit trail. "It's so much more convenient and flexible," Pelon says of Epicor eProcurement. "We can put up a small vendor catalog in a few minutes to help someone out in Omaha, for example. It was just not possible to provide that type of support in the past."

Epicor eProcurement has provided further benefit through the powerful workflow capabilities built into the system. In most organizations, an order doesn't go out until it's approved. Using a paper-based system, the order approval process is cumbersome and slow, with few gauges for timely follow-through or accountability.

The workflow in Epicor eProcurement manages the routing of the order through whatever approvals are needed and controls the process - making sure it gets the right approvals in the right order based on the characteristics of the request. Furthermore, because Epicor eProcurement can process multiple approvals at the same time and it's not geographically limited, approvers can be literally anywhere on earth as long as they have access to the Internet.

Cox is also benefiting from increased control of the procurement function. "This year, I had year-end summary lists of spending by supplier completed on Jan. 2," Pelon said. "We couldn't do that before eProcurement." Pelon also emphasizes the benefits of increased control and visibility afforded with Epicor eProcurement. "We don't have to play games with invoices trying to trace where the invoice came from, who bought the item, if it was received as ordered and in good condition. We have all the information all in one place."

Next Steps

Cox is in the process of rolling the system out across the enterprise. The Cox divisions that have implemented Epicor eProcurement have seen the benefits, and a growing number of Cox employees are learning first-hand just how much advantage the solution offers in terms of control, visibility, and cost savings.

Corporate is spreading the word through its "Purchasing Update" newsletters distributed to purchasing agents, fleet coordinators, and energy/facilities managers throughout the enterprise. The newsletters point out advantages such as national accounts: "National account status comes with other benefits (besides competitive pricing) - periodic reporting, dedicated account teams, more favorable terms and conditions - all adding up to lower total cost to purchase," as quoted from a 2003 newsletter.

National accounts include Dell, CDW, and Webb Mason. Local vendors include the spectrum from computer hardware to several local caterers. "I am proud of what we have done in bringing this initiative to Cox and the timing of it," says Mannheimer. "We weathered the dot-com inflationary prices and were able to choose a program that had the flexibility that Cox requires. I've seen other corporations spend millions on their e-procurement programs, and they haven't begun to get the project off the ground. We've taken a 'build it and they will come' attitude. We have a quality product that is not costing us an arm and a leg. It provides us a useful tool to purchase goods and promote savings. You can't get much better than that!"