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“It was hard to keep up. We wanted to streamline these processes, and we did not want to put so many resources into managing low-risk P.O.s. We decided the best way to deal with this was to create a requisitioning tool that would take all the controls and validations that the requisition personnel were dealing with and push them onto the intranet.”
Clayton Fleming
Director of Technology
Corporate Procurement Microsoft Corporation
aking Sense Out of the Procurement Dilemma
In July 1996, CPG implemented an innovative new application called MS Market. An online ordering system that works on Microsoft's intranet, MS Market provides easy-to-use online forms for ordering office supplies, PCs, business cards, catering, or creating contracts to hire vendors. It also validates information such as pricing and availability, ensures that each order is linked to the appropriate accounting code, and automatically routes orders to managers for notification or approval.
Today, MS Market handles well over 250,000 transactions a year, and more than $1.75 billion a year in orders. Microsoft uses this volume of transactions to negotiate unbeatable prices with select suppliers of office supplies, books, computer equipment, and catering services. In return for a consistent flow of orders, these suppliers offer steep discounts on goods and services.
Within the first year of operation, MS Market reassigned 17 of the 19 headcount that had been responsible for processing P.O.s, allowing them to focus on more important procurement functions, such as analyzing procurement data and negotiating volume discounts with vendors. In less than two years of operation, MS Market has saved the company almost $3 million in headcount costs, improved volume discounts on supplies by streamlining the supplier base, and reduced administrative costs from $60 to just $5 per order. MS Market facilitates efficient billing by linking directly to Microsoft’s corporate SAP R/3 accounting system, so that requisitions are automatically uploaded as purchase orders. Employees can now place orders in under three minutes, and MS Market gives them a quick, easy way to order materials without being burdened by paperwork and bureaucratic processes.
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