State of California switches $4bn purchasing online

The state of California today announced plans to move more than $4 billion worth of annual purchases of goods and services onto the Web.

The state has signed a deal with Ariba Technologies, a provider of electronic procurement software, to deploy its Operating Resource Management system as the foundation for a state-wide initiative.

California plans to deploy the system on its intranet. It has hired Andersen Consulting to integrate the software with its PeopleSoft purchasing system and Visa International purchasing card payment system, known as CalCard. The project is expected to take 6 months and cost about $6 million to implement.

Chuck Grady, California's chief procurement officer, said the state expects to achieve significant savings in the costs associated with purchasing high-volume, low-cost goods, such as office supplies and maintenance and repair items and services. Information gained from the software also will be used to negotiate better deals with suppliers, although Grady did not say how much the state expects to save.

The application is being set up in such a way that cities, counties and universities will be able to join the so-called California Statewide Procurement Network at a later date if they choose.

Ariba has been on a bit of a roll of late, signing multimillion-dollar deals with Bristol-Myers Squibb, the Canadian Imperial Bank of Commerce, and Transamerica Corp.

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