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efficiency optimization

Consolidating providers helps University optimize procurement cards

University of Massachusetts consolidates its travel and procurement spending and card reporting

The challenge

The University of Massachusetts (UMass) for more than a decade has operated two separate procurement card programs with two different financial institutions for various corporate travel and purchasing needs. Through one vendor, the university issued more than 2,000 travel cards to university staff and faculty members to pay for some $10 million annually in trip-related spending. Through a second vendor it issued another 5,000-plus procurement cards to university staff, including many who also held travel cards, to purchase and pay for approximately $50 million in small-value consumable goods that keep the university running, everything from rock salt to pens and paper.

The procurement cards provide users with a convenient way to pay for travel expenses and to quickly and efficiently purchase supplies without a lot of paperwork. However, UMass's card program administrators and financial staff realized that both operationally and from a cost perspective it was inefficient to maintain separate travel card programs and multiple providers. Instead, the university sought to consolidate its card business with one provider who could optimize and streamline their procurement card process.

The university also wanted to enhance card purchasing controls and reporting through a readily available audit trail and management reports on purchasing activity. To delineate and manage expense activity, the card program had to provide a separate hierarchy and reporting for its five campuses to differentiate between purchase types, plus hard data on its small purchase activity with vendors so that it could negotiate volume discounts and thereby increase savings. Plus, it hoped to generate greater revenue potential through increased volume-based rebates based on combined travel and procurement program expansion efforts.

The solution

After a competitive bidding process that included the two incumbents and several other providers, the university selected Citi as its single commercial card provider using the Citibank's® One Card solution to consolidate its travel and procurement spending and card reporting. Like all Citi Commercial Card solutions, the One Card program features a reporting system that allows UMass to generate customized reports with information derived from more than 650 individual data elements, in addition to standard reporting that includes cardholder and account data, vendor analysis and more.

To ensure a smooth full-scale program conversion, UMass and Citi began the transition by issuing a small number of pilot cards to test integration with UMass' PeopleSoft system, data feeds and reporting.

The result

UMass cardholders are already benefiting from the simplified reporting structure and the convenience of one online system to access all or their transaction activity.

UMass also is working with Citi to identify ways to increase spending volumes, which translates into greater rebate possibilities, and to identify other steps that can be taken to improve purchasing and payment efficiencies. To increase spending volumes, affiliated entities, such as the state and community colleges that are part of Massachusetts's higher education network, could be invited, for example, to participate in the program, enabling all participating institutions to leverage higher rebate tiers.

The university plans to use Citi's Program Audit Tool, which provides automated and manual auditing capabilities of accounts and transactions and dashboard tools to view audit status and action items. The tool makes it easy for program administrators to review their entire portfolio of accounts and to create parameter-driven rules to flag transactions that meet specified criteria.

Last but not least, UMass plans on employing the Citi® Working Capital Analytics tool to identify ways to create greater efficiencies in its end-to-end procure-to-pay processes and to analyze its working capital management. Working Capital Analytics provides in-depth analyses of spending and payment data and identifies ways to optimize procurement card programs, digitize paper processes and modify purchasing and payment processes to improve performance and tap hidden capital.

With access to Citi's entire suite of commercial card solutions, the university is looking at ways that Citi Virtual Card accounts can be used to make secure cardless one-time purchases, procure large-ticket items and complete card-not-present transactions via the Internet or phone.