PNC Bank Corp. is testing an Internet-based system to streamline its internal purchasing.
The $77 billion-asset company expects to achieve "significant savings," said Clyde Hardt, vice president at Pittsburgh-based PNC.
An estimated 26,000 PNC employees make about $1 billion of purchases from 42,000 vendors each year. Mr. Hardt called the number of vendors "entirely too many."
"We'd eventually like to get down to a few hundred prime vendors," he said.
The procurement software from Atlanta-based American Software is expected to be rolled out in a month and eventually would be used by all 26,000 purchasers.
With American Software's Econ/Catalog, PNC can post product catalogs from approved suppliers on the corporate intranet. An on-line search engine will guide buyers to products and vendors; buyers would make choices based on price, photographs and descriptions, and delivery schedules.
They can order by clicking on an item, which moves it into an electronic shopping cart. Requisitions will be automatically routed for executive approval and turned into purchase orders once approved.
The software will let PNC develop a list of preferred providers that give discounts. "We are empowering employees and focusing on long-term contractual relationships with preferred vendors," Mr. Hardt said.
American Software, a 29-year-old company with revenues of $80.4 million for the nine months that ended in January 1999, has worked with PNC since 1986. Econ/Catalog replaces a more limited purchasing system installed by American Software.
Other systems lacked the approval process that American Software offered, Mr. Hardt said. "We really wanted to capitalize on and automate our control structure."
Electronic purchasing can be 70% cheaper than paper-based, said Pam Engleka, vice president of customer service at American Software.
"We're trying to become commodity sourcing specialists rather than purchasing agents by using tools like this," Mr. Hardt said.