Reader ROI
Learn how federal supply chain automation could save taxpayers money
Find out why the government is falling behind the private sector in e-commerce
Discover what federal CIOs want to do to catch up

MaryAnn Guerra, deputy director for management with the National Cancer Institute (NCI), is in charge of making sure the agency runs smoothly so that its scientists can get on with finding a cancer cure. One of the scientists’ requirements? Getting new microscopes when they need them.

In 1994, Guerra was getting lots of complaints that this basic equipment was taking too long to acquire. At the time, she was cochair of a committee that was looking into ways NCI could improve its efficiency. The scientists on the committee identified procurement as their number-one problem. Not only were they frustrated by how long it took purchasing agents to get them their tools, they thought the old-fashioned, paper-intensive procurement process cost too much. The scientists knew the emerging Internet could be used for purchasing, that it would be faster and that it would save money?money that could be used to fight cancer. They asked Guerra to make it happen.

She did. Guerra’s committee held a competition that led to a partnership with a small private company, Cybersystems Technologies of Towson, Md., to develop an electronic catalog, ordering and accounting system. The IntraMall was born. But after two years of work preparing the site, almost nobody shopped. Only 147 orders were placed through the IntraMall in its first six months of operation. It wasn’t until Guerra made using the site mandatory for the buyers who reported to her that traffic reached critical mass. Last year, with buyers from other groups in the National Institutes of Health (NIH), NCI’s parent agency, also using it, IntraMall logged 12,000 orders and saved more than 90 percent on each transaction.

Online purchasing has already saved taxpayers between $6 million and $8 million, but that’s a drop in the bucket when you consider that last year the IntraMall handled less than half a percent of the $1 billion NIH spends annually on lab equipment. If all such orders were made online, the government could save an estimated $100 million. And Guerra says now that the integration to the NIH financial systems is almost complete, NIH expects to save even more money and cut out more paperwork. Guerra’s e-commerce efforts are being replicated in every federal agency as government CIOs attempt to reap the benefits of supply chain integration. Gartner estimates that the government could save taxpayers a whopping $2 billion annually just by making routine purchases online. That’s at least on par with what leading private companies save on the same types of transactions. (See "Four Strategies," CIO, Oct. 1, 2000.)