State of North Carolina
Office of Information Technology Services
Michael F. Easley, Governor Ronald P. Hawley, State Chief Information Officer
■ E-procurement is an online purchasing system, which uses a statewide enterprise approach resulting in cost
and timesavings for state taxpayers.
■ In a collaborative effort, the Department of Administration, the Office of State Controller, and the Office of
Information Technology Services have negotiated to exercise an option in an existing contract to bring e-
procurement to the state.
■ Saves money through reduced processing costs and allows you to reassign personnel at a higher level.
■ While North Carolina estimates that its savings will be on the conservative side, industry averages typically
reap a price savings of 5-10% annually, and the state anticipates a reduction in purchase order (PO)
processing costs of 67%. The state estimates that more than 572,000 POs are processed annually across the
North Carolina enterprise. Therefore, reductions in the cost of processing a PO can have a significant impact.
■ Given current budget constraints, e-procurement is an effective way to bring cost-effective e-government to
citizens and businesses.
■ State agencies, local governments, and education institutions can participate, thus providing tremendous
opportunities for small entities to obtain savings through participating with larger entities. In addition,
transaction fees over costs can be shared with participants for e-government initiatives.
■ The state is exercising the option from its initial portal contract with Accenture, formerly known as Andersen
Consulting.
■ Moving toward with this funding approach, which ties risks and rewards, represents a unique public/private
partnership based on an innovative funding model that requires no up-front investment on the part of the state.
■ Accenture and North Carolina have developed a self-funded e-procurement business model requiring no cash
outlay.
■ Accenture will provide the infrastructure investment, and there is cost recovery over the life of the contract.
■ The state has agreed to a planned level of annual spend, revenue, and costs. There is a shared risk (between
Accenture and the state) of shortfall below targeted revenue. This innovative funding model is necessary to
succeed in e-government in tight budget times. It was made possible from a provision in the portal/e-
govemment project office contract obtained through a competitive bid process.
■ In the first year, N.C. will spend $338,000,000 and by the third year, the State will spend S 1, 187,000 through e-
procurement.
■ Several leading edge states, such as Virginia and Michigan, are in the process of adopting e-procurement
solutions.
P.O. Box 17209 • Raleigh. North Carolina 27619-7209
Tel: 919.981.5555 • Fax: 919.981.2548 • State Courier 51-01-1 1
An Equal Opportunity/Affmnative Action Employer
