IBM, Nonprofit, Procurement, Supply Chain, Outsourcing

[SharedXpertise Commentary] IBM helps nonprofit with procurement outsourcing

01 Mar 2006 | (News) | SharedXpertise Editor Commentary

For SharedXpertise Commentary, please see below.

The Georgia Center for Nonprofits (GCN), an all-in-one resource for Georgia's nonprofit sector, announced that it has been working with IBM Business Consulting Services to build a procurement shared services platform for collaborative sourcing to improve procurement operations across 1,400 local nonprofit groups. Under the contract, IBM Business Consulting Services will use its Express Spend Management Solution to manage the day-to-day procurement and compliance operations, including spot buys and technical support for more than $19 billion in spending power.

Launched this week, IBM's Express Spend Management Solution will leverage GCN's member spending to generate, on average, 10 percent in material cost savings across key indirect spending categories, ranging from office supplies to shipping services. GCN will leverage IBM's strategic sourcing and procurement outsourcing capabilities, and a shared on demand requisition-to-pay platform from Perfect Commerce, an IBM Business Partner. Member companies will have access to self-service requisitioning, approval routing, payment, and compliance reporting capabilities, which will be vital to monitoring and ensuring compliance with supply contracts.

"IBM's internal procurement team manages $40 billion in spend annually, and I knew if they could do it for themselves, they could also help us," commented Karen Beavor, CEO, Georgia Center for Nonprofits. "The outsourced model provided the affordability we needed along with the scalability for both our small and large members."

The Woodruff Arts Center in Atlanta was part of the pilot program and expects to save $1 million by the time the program is fully implemented. "The cost savings that this model generates can be used to fund programs such as performances, exhibitions, and Pre-K through 12 educational programs," said Shelton g. Stanfill, President and CEO of the Woodruff Arts Center.

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The IBM Express Spend Management Solution was designed specifically for mid market companies and is appropriate for companies in any industry -- nonprofit or for profit.

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SharedXpertise Commentary:

Nonprofit organizations have begun to embrace outsourcing for many of the same reasons as their for-profit counterparts. Nonprofits are often constrained by limited time and/or talent, thus outsourcing makes sense because it allows them to focus on core competencies and their mission.

Recently, the Smithsonian engaged in multisourcing, awarding 10-year contracts to five vendors. Smaller and more regional nonprofits will also gain from outsourcing. With all the reporting requirements to the government and funders, most nonprofits are often overburdened with bureaucracy. The vast majority of employees join nonprofits at a greatly reduced pay compared to similar jobs in the for-profit sector because they feel a need to serve a well-meaning mission. Freeing teams up to focus on the mission not only saves costs, but energizes their intentions.

Author: Commentary, SharedXpertise Editor
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