Bringing state government procurement into the future.
When Chris Hughes, Chief Procurement Officer for the State of Utah, noticed that state employees were using Amazon for off-contract spending, he realized he needed tools to gain control and visibility of these purchases to ensure compliance with their procedures. That’s what initially brought the State of Utah to Amazon Business. But over time, the relationship has evolved to one of partnership in continuous innovation. After experiencing the core benefits of Amazon Business’ selection, pricing, and convenient and efficient buying methods, Utah became the first state government to issue an RFP to an online store for an entire category, office and school supplies, which resulted in a contract award to Amazon Business. With this cooperative contract, Chris and his colleagues have discovered that Amazon Business helps solve more than just tail spend challenges. With increased visibility, reporting capabilities, and fast, Two-Day Delivery throughout the state with Business Prime, it’s opened the door to transforming how state governments can save time on managing suppliers and complicated price lists, while providing their users with the easy and familiar shopping experience they expect.
As the Chief Procurement Officer for the State of Utah, Chris oversees all of the state’s procurement operations, including all cooperative contracts for its public entities. In total, he’s responsible for the oversight of 1,800 supply requisitions and over 1,000 cooperative contracts that amount to $600 million of total spend every year.
As is the case with many large-scale procurement organizations, the State of Utah was focusing on strategic contracts for certain categories, creating approved lists of items, and emphasizing volume discounts to extract the most value from purchases prior to leveraging Amazon Business. With a focus on getting goods and services more quickly, Chris noticed that state employees were using their personal Amazon accounts to purchase off-contract supplies – the odds and ends – known as tail spend.
“It may seem like these purchases translate to a small dollar amount, but when you add it all up, it can equate to millions of dollars that we don’t have clear visibility on, and we need to be sure that there’s no opportunity for fraud,” he said. Lack of tail spend control presented a problem.
Chris believes many in state governments are quick to dismiss purchasing on Amazon, as there’s a misconception that buyers with P-cards can purchase without oversight. Understanding this, when Amazon Business responded to his department’s RFP to take on office supplies for the state, public sector-ready solutions were highlighted such as Guided Buying that enables administrators to block specific products or categories, the ability to lock down delivery addresses, set purchasing limits, enroll in tax-exempt purchasing, and more. Upon evaluation, Chris and his team determined that Amazon Business met all of their selection criteria.
The selection offered by Amazon Business is especially relevant when you consider the number of departments Chris oversees—and the diversity of each of their needs. While companies consider things like paper, pens, and computer monitors to be office supplies, state agencies view their office supplies differently on a case-by-case basis, varying widely across agencies. The park service has unique needs, as do state educators, and corrections officers. Leveraging Approval Workflows, end users across the state can order what they need to fulfill their needs, while allowing the central procurement office the ability to track and approve all expenditures.
Even for broad categories like office and school supplies, Chris uses Business Prime features to exclude non-approved items from buyers. “Using the functionality of Guided Buying and UNSPSC codes, we can implement certain limitations and input procurement code policies so those who use Amazon Business can buy with confidence knowing they aren’t breaking any rules.”
“We can look at one of our Spend Visibility dashboards that we get with Business Prime, and almost immediately know whether or not somebody is going outside of the procurement code,” Chris says. “And that’s different from our contracts with other vendors where we have to wait for an audit to verify whether or not an issue has occurred.” With real-time insight from Amazon Business, he is able to identify issues before an order is even processed.
“We can look at one of our Spend Visibility dashboards that we get with Business Prime, and almost immediately know whether or not somebody is going outside of the procurement code."
— Chris Hughes, Director, State of Utah Division of Purchasing & General Services
Chris oversees an expansive geographic scope. While most offices are located within 100 miles of Salt Lake City, many are located in remote parts of the state. Amazon Business can deliver quickly to locations where some vendors won’t operate, with shipping costs covered as part of the Business Prime membership benefits.
“With Business Prime, we’re able to take advantage of their [Amazon Business’] delivery schedule—getting our remote agencies the office and classroom supplies they need in a timely manner for the same price our agencies in Salt Lake City get,” Chris says. “The people in those offices really look forward to that. The contract has been a great benefit to them, specifically.”
With offices spread across such a large geographic region, Chris faces the ever-present challenge of maintaining compliance, and quickly identifying cases of fraud, while ensuring every agency still gets the supplies they need. The answer, as he sees it, lies in innovative tools.
“We’re working on building a customized dashboard right now using the data we get from Amazon Business to immediately tell us whether or not a shipping address is state-approved...So, for example, if an item is delivered to a state office building, the dashboard will immediately tell us that it’s an approved location. But if an item is delivered to an unknown address somewhere remote, we can quickly investigate and update our records,” says Chris.
Chris is now looking at ways to keep the momentum going to further modernize procurement for his state. Looking ahead, he’s considering a test using Alexa as a voice-operated purchasing tool, and creating a digital warehouse so his offices’ needs are met quickly and cost-effectively. As Amazon Business continues to develop new and better ways to work for the public sector, Chris says he’s likewise focused on improving the way his own organization operates, and ensuring that how state government works is appealing to the next generation of state employees who expect a progressive work environment.
“There are a lot of benefits we still expect to gain from Amazon Business, given that it’s an ever-growing company that innovates with intention on the behalf of public sector organizations,” Chris says. “I’m looking forward to seeing what else comes from Amazon Business and being able to share those benefits with the state.”
“We love sharing the successes we’ve had using Amazon Business with other states and departments,” Chris says. To other states that look to him for perspective on Amazon Business, he offers an example: “Think about the big-picture costs that go into sending an employee to the store to do a job they weren’t hired for—and one that puts them at risk of an accident for which the state could be held liable. Or, consider the fact that they may use the time to run personal errands—or worse, use state funds to buy personal items. The savings on Amazon Business aren’t always in the form of dollar amounts, but also by way of employees doing the work that they were hired to do, more effectively and more efficiently.”
And that’s the sort of success he knows others in state government will understand and appreciate.
“There are a lot of benefits we still expect to gain from Amazon Business, given that it’s an ever-growing company that innovates with intention on the behalf of public sector organizations. I’m looking forward to seeing what else comes from Amazon Business and being able to share those benefits with the state.”
— Chris Hughes, Director, State of Utah Division of Purchasing & General Services
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