Steve Jobs, Hewlett-Packard, and Google’s Brin and Page all have roots in the city of Palo Alto. Relationships with these tech giants instill the city with the cutting-edge spirit of Silicon Valley. John Montenero, Palo Alto’s Chief Procurement Officer, and his staff at the City’s Purchasing and Contract Administration office are no exception.
Palo Alto’s Purchasing and Contract Administration is charged with providing procurement to all city departments for all commodities and services in the city. No easy task, especially because Palo Alto presents a unique challenge for this office—unlike most cities, Palo Alto has its own utilities. That means managing over 2,000 contracts that includes bulk purchases of electricity, gas, water, supporting equipment, materials, and services on top of the contracts for construction projects, capital, general, and professional services. In short, Palo Alto is a small city with big operational needs, so the demands on procurement are many.
The Challenge: Limited Resources from Unfunded Liability or Cost Balancing
Like most public – and many private – sector organizations, the City of Palo Alto’s Procurement office was mindful of dealing with specific challenges of controlling costs. That often means doing more with the same number of personnel offset by a lot more innovation. Montenero started with a simple question. Where do we start to address our circumstances? The answer is probably sitting on your desk right now.Paper.
“Being a procurement office generating lots of files, we were just up to our eyeballs in paper around here. We were sharing our limited office space with 14 large file cabinets containing some 2,000 files, and then offsite there was an archival storage, just tons of boxed records to deal with,” explained Montenero. “It was very laborious, inefficient, and frustrating to look for the files that we needed.”
To start, we all know that paper files bring struggles, but for the employees of Palo Alto’s procurement office, anecdotes were not enough. Montenero and his team conducted an in-house time and motion study to put some numbers behind the obvious inefficiencies of paper.
They discovered that, on average, each individual consistently spent up to one third of an entire workday on record management efforts—retrieving files, locating documents with files, and putting files back. That’s not even processing the work.
Montenero realized it wasn’t the paper that mattered but the information each page held. So, he turned to technology for a solution that would remove paper from the equation. Legal sanctioned the new direction. The tricky part was deciding which option was best for managing the city’s vast amount of information.
The Solution: A New Way to Manage Information
The Purchasing and Contract Administration sent out a Request for Proposal. After a thorough evaluation process, ARC Archives was selected as the best bid criteria matched solution to centralize, provide workflow, search and access public record information—from almost any device.
“ARC Archives was the more user-friendly, quick, logical and reliable tool we ultimately selected to use in Palo Alto,” said Montenero.
The second reason for choosing this kind of technology solution was its cloud-based status, and that was a key element in the decision-making process.
“We realized that the platform with the optical character recognition, workflow, and other technologies built into the system was a lot more dynamic than using our own network,” said Montenero. “We looked at other company’s cloud-based tools, and we really got a sense of who the players really are out there. And so, we ended up with ARC,” explained Montenero.
The Results: Cost Savings and a Culture Shift
Organizations know that getting everyone onboard with a new technology can be a challenge. Transformation is never easy, but for Palo Alto, Purchasing’s paperless office model demonstrated how an easy-to-use cloud application helped to make onboarding go smoothly and day-to-day operations more efficient. “With ARC Archives, you have an advanced search engine and the OCR environment in the cloud. This worked out well for us. We can target right down to an exact page of the information we’re looking for in the shortest time possible. Since then, I’ve had employees tell me that this new technology saved them lots of time,” said Montenero.
So how much time did the city of Palo Alto’s Purchasing and Contract Administration save? With eight employees losing two hours a day for 240 days (assuming vacation), that equates to 3,840 hours lost. In dollars, the technology saved the office $38,400 each month.
Employees have also noticed their offices are not as cluttered as before, helping to improve the office atmosphere. While these cost savings are immense, the use of ARC Archives resulted in a surprising bonus: morale among the team reached new heights. Even Purchasing’s customers noticed the improved spirits and work, stating, “the energy is so good, and you’ve got this open space now. Your office is not cluttered anymore.”
Montenero’s team has responded with a similar amount of enthusiasm.
“I went into ARC Archives myself. I typed what I needed. I got it, copied it over into the email, and sent it to my customer. What took days before… done in five minutes. Game changer in many ways,” an employee told Montenero.
For Montenero and his team, there is no going back. One employee even factored this technology into their decision to stay with the department:
“Do I want to go back to paper? Not really. Even if another place paid more, without an application like ARC Archives, it’d be more stressful, dirty, germy, heavy, and crowded—all the things that paper represents when it’s allowed to get out of hand.”
When asked about paper in the department, Montenero proudly reported that his office was now paperless, a phenomenon that has generated a 20% reduction in the print activity of outside departments. Even we were astonished. His team had so effectively adopted the technology and managed their info that paper was no longer required. We clarified whether some small amount of paper was used somewhere in the department.
Montenero replied, “We haven’t purchased paper in close to six months now.”