TXCPA

Texas Turns to the Cloud for Its TxSmartBuy B2B Procurement Marketplace

“It’s like going from a jalopy to a Ferrari. NetSuite has been unbelievably more flexible, intuitive, faster and more responsive than our TxSmartBuy 1.0 system. It’s definitely more efficient not only in time but in hard dollar savings.”

—Michael Telfeyan Division Director, Texas CPA Project Management Office

 

The Texas Comptroller is the chief steward of the state’s finances, acting as tax collector, chief accountant, chief revenue estimator and chief treasurer for all of state government, and oversees the TxSmartBuy procurement marketplace.

Challenge

On-premise legacy systems in place for TxSmartBuy 1.0 caused problems with usability and speed, forced stakeholders into costly workarounds and constrained adoption of the system.

Solution

NetSuite SuiteCommerce Advanced was selected to transform TxSmartBuy into a B2C-like environment and improve efficiency, with implementation by The New Office.

Results

The Texas CPA has dramatically improved efficiency and usage of the system, projecting 33 percent growth and $22 million in net benefits over five years.

 

NetSuite and The New Office team up to launch an ecommerce solution connecting more than 3,700 state and local agencies to vendors of 2.4 million items

 

Cloud business software in the public sector has immense potential to transform the way these organizations operate. Already, forward-thinking government agencies are turning to the cloud to modernize aging legacy environments, promote transparent government and save crucial tax dollars consumed by outdated on-premise systems and IT personnel.

For example, the Texas Comptroller of Public Accounts (CPA) is capitalizing on cloud solutions to spur innovation and e!ciency. The CPA has transformed TxSmartBuy, an underperforming B2B procurement marketplace, with a modern cloud environment that’s scalable, driving new usage and prepared for future growth.

Originally launched in 2008, TxSmartBuy 1.0 suffered issues with usability, search functionality, scalability and speed. Those weaknesses undermined its objective of connecting buyers at 220 state agencies and 3,500 local governments and school districts with nearly 1,000 vendors selling everything from road salt to office supplies—a vast inventory of roughly 2.4 million items.

“There was a lot of glue under the hood to try to make it work,” said Vijay George, CTO at the Texas Comptroller Office. “It was very hard to maintain—if one piece of software had to be upgraded, it would impact the others. The user experience suffered because of lags between all the components.”

The two core technologies behind TxSmartBuy 1.0, Vinimaya software as the marketplace front end and Oracle E-Business Suite on the back end, weren’t fully integrated. That slowed key processes and increased workload for all stakeholders—state IT personnel, vendors and purchasers. Additionally, the high costs to maintain hardware and software in-house, inspired the Texas CPA to turn to the cloud.

‘From a Jalopy to a Ferrari’

The Texas CPA wanted to deliver an enhanced TxSmartBuy 2.0 with an Amazon-like B2C experience and, after a thorough evaluation, it selected NetSuite SuiteCommerce Advanced as its ecommerce front end, with NetSuite ERP handling back-o!ce functions. The Texas CPA engaged The New Office, a NetSuite Solution Provider partner in Austin, Texas, to help implement the project on an accelerated three-month schedule.

“Considering all our specific requirements, I don’t think I’ve ever been involved in an implementation that went this quickly,” said Michael Telfeyan, Division Director at the CPA Project Management Office. “The implementation time was remarkably short, and The New Office did a terrific job adapting to changing requirements and delivering a solution that meets and exceed expectations.”

As something of a trial by fire, the Texas CPA selected the state Department of Transportation for an initial pilot implementation in early 2014, the most complex use case within Texas government given the state’s vast network of roads. The full TxSmartBuy 2.0 rollout followed in June 2014, using the Muv data integration tool from The New Office to streamline data movements between NetSuite and other systems.

By moving TxSmartBuy to the cloud, the state has dramatically improved efficiency and engagement across the system’s diverse user population. The state is delivering the B2C-like experience it envisioned with the pixel-perfect design control and rich interactivity of SuiteCommerce Advanced, winner of the 2014 CODiE Award for Best Commerce Solution from the Software & Information Industry Association (SIIA).

“It’s like going from a jalopy to a Ferrari,” said Telfeyan. “NetSuite has been unbelievably more flexible, intuitive, faster and more responsive than our TxSmartBuy 1.0 system. It’s definitely more efficient not only in time but in hard dollar savings.”

NetSuite ERP handles back office functions including the collection of 1.5 percent of revenue from vendors selling goods on the ecommerce site, which generates about $1.2 million a month in fees. With a new law passed by the Texas State Legislature requiring the comptroller to recover the cost of using the system from state agencies or vendor’s, the CPA can operate TxSmartBuy in an economically self-sustaining model without tax dollars. TheTexas CPA projects cumulative net benefits of nearly $22 million from its NetSuite-based TxSmartBuy system over five years.

Rapid Growth in Usage and Volume

Besides the 220 state agencies mandated by law to use the system, TxSmartBuy offers the cost-effective leverage of state-negotiated contracts to 3,500 cities, counties and other local governments, as well as school districts. Texas officials believe the superior procurement experience made possible in NetSuite as well as the system’s high scalability will drive rapid growth in usage among both buyers and sellers. Between 2014 and 2017, the Texas CPA projects growth of roughly 33 percent in key areas:

  • Catalog items from 2.4 million to 3.2 million
  • Suppliers from 900 to 1,198
  • Purchasers from 5,211 to 6,935
  • Page views per day from 6,600 to 8,785
  • Average number of purchase orders created per day from 252 to 335

 

“TxSmartBuy has raised the awareness of cloud capabilities across the rest of the state,” said Dean Dzurilla, CEO of The New Office. “The state is looking to the cloud because they realize that not only do legacy systems not work, it’s difficult to recruit and retain people with skills and knowledge in older systems. It’s a changing of the guard.”

 

 

With TxSmartBuy 2.0, the state has gained:

One comprehensive system with built-in flexibility.

TxSmartBuy 2.0 leverages SuiteCommerce and NetSuite ERP to provide a central location for statewide contract, supplier and catalog information, with the ability to quickly add new features and fields as contracting and online purchasing needs evolve.

Upgraded search and mobile support.

SuiteCommerce Advanced enables TxSmartBuy to deliver greatly enhanced search performance, results presentation, filtering features and item comparison while responsive web design enables the system to adapt automatically to smartphones and tablets.

An improved change order/reconciliation process.

Purchasers can update purchase orders to make necessary changes or cancellations, with all edits captured in a viewable audit trail.

Enhanced item ordering.

TxSmartBuy 2.0 provides more than two ordering options per item and will accommodate regional pricing, four-decimal pricing, repeat orders, split shipment of orders, easy addition of related services and instructions.

Elimination of cumbersome punchouts.

All awarded contract items are ordered directly through the new SuiteCommerce-based system without requiring buyers to visit an individual vendor’s system to “punchout” a transaction.

Improved visibility and reporting.

Replacing manual processes of the past that limited insights into overall state spend and key marketplace metrics, NetSuite is giving the Texas CPA real-time visibility into critical data with robust reporting and drill-down to detail.

TxSmartBuy

People. Technology. Data. All NetSuite. All the time.