It's all in the numbers in South Carolina

The SCEIS Materials Management Team and representatives of the Materials Management Office, from both the State Procurement Office and Information Technology Management Office, met to discuss the issues and try to come up with a solution. In August 2008, I was asked to participate in a four-member task force to determine the best course of action going forward.

The Materials Management Office and all team members realized using only a three-digit code would lose too much descriptive information. We also noted that the current system - because of limitations in the description field (60 characters) - did not pull in enough description to help users identify the correct code to use. We also noted that the description within the two-digit category code (precursor for the five-digit code) was also not being pulled into the description. Without this valuable information in the description, we knew that individuals trying to use the system would find it difficult to determine the appropriate code to use. Another part of the problem was that no one in the state had ever had any commodity code search training.

We first decided we would try to eliminate any five-digit codes we would probably never use. We broke the codes out into like commodity areas and assigned a team member to work with agencies with a common need for a particular group of codes. We began meeting with and identifying agencies we would need to consult prior to eliminating any of the five-digit codes. We soon discovered that it would take about six months for us to work through the process due to our current workloads, which did not seem to be a viable solution.

During its research, the task force had determined that more-detailed spend data could be collected with each commodity code used. A primary reason for purchasing the system was to analyze data to allow greater control over state expenditures to ensure that the citizens were getting the very best cost savings. Knowing the volume of spend for each commodity would allow the state to leverage its buying power to implement more statewide term contracts, ultimately resulting in a greater cost savings for the state.

We also determined that the agencies that had been brought on were smaller agencies, and their procurements were limited to a few commodity codes. As more agencies came on board, especially the larger ones, we expected to see an expanded need and use of a wide variety of commodity codes.

The task force then met with the SCEIS team and MMO management to discuss the least-expensive and quickest options to resolve the dilemma. In the meeting, we discovered that there was functionality built into the SAP system to generate a search function using drop-down boxes to give additional descriptive information for the commodity codes. The functionality had been in the system from the beginning but was never implemented. We agreed it would be the quickest and least-expensive solution to implement and maintain.

On May 22, 2009, the SCEIS Material Management team presented the search function system they had developed - providing even greater functionality than the SAP solution. This system was embedded into the Supplier Relationship Management portion of the existing system. The solution was accepted by all stakeholders and has now been implemented into the system. Part of the recommendation for implementation was that adequate training be given to all SCEIS users for the new commodity code search function.

What was interesting in this entire process was the initial recommendation to use the 11-digit NIGP Commodity Code, the acceptance by the consultants to implement the five-digit code and later their recommendation to use only the three-digit code with a final acceptance of using the five-digit code with additional search capabilities at the 11-digit level to allow a more in-depth definition of the codes to be displayed.

On November 2, 2009, 36 agencies are scheduled to go live, with the remaining four largest state agencies coming on board on May 3, 2010. Once all agencies are on board, we will truly be able to utilize the system for spend analysis, allowing us to make the very best buying decisions statewide for all agencies.

About the author

Norma Hall, CPPO, CPPB, CPM, is Procurement Manager, State Budget and Control Board of South Carolina. This article is based on the winner of the 2009 NIGP Code Essay Contest, sponsored by Periscope Holdings, the custodian and marketer of the NIGP Code on behalf of NIGP. As winner in the third year of the NIGP Code essay contest, Hall receives a paid registration to the 2010 NIGP Forum in San Antonio.