Union Bank cuts costs, red tape with intranet e-procurement

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Michelle Ghourdjian had a Golden Gate Bridge-sized task. Last year, the Union Bank of California VP-intranet solutions was charged by an executive committee to help cut costs.

She was also told to figure out how to use the San Francisco-based company's intranet-which at that point was basically an online phone book-to help get and keep employees. Her solution: Achieve both with an intranet-based e-procurement function.

Earlier this month, UBOC introduced MyStore, an e-procurement section on the bank's intranet that allows its 9,500 employees to buy everything from business cards to software online. Within the next year, the bank will introduce more complex and expensive indirect items, such as temporary services, furniture and cell phones, over the section.

The idea, Ghourdjian said, is to cut costs by removing a layer of bureaucracy from the procurement process. "We want it to be a tool for employees' day-to-day jobs. You don't have to fill out forms any longer. Before, if you needed a stapler, you had to go to administration,'' she said. It also makes it easier for UBOC to aggregate purchases, thus getting lower costs from vendors. (All intranet orders are routed to a central location.)

For a bank with employees scattered throughout 240 branches across California, Oregon and Washington, the time and money savings are significant. "This was our big bang killer app,'' Ghourdjian said. She could not give estimated cost savings, citing the recent launch.

While e-procurement is sweeping all manner of companies, locating it on a company intranet is still rare. At least one consultant expects UBOC's concept to gain popularity.

"It's a natural evolution and a very persuasive trend. There is no need for all employees to go through bureaucracy to get at procurement,'' said Frank Britt, VP of eStrategy at Mainspring Communications Inc., Cambridge, Mass.

Empowerment factor

UBOC introduced MyStore as part of a broader bank project to integrate the Internet throughout its entire employee base. Today, all workers have Web access, up from about one-third of employees a year ago, Ghourdjian said. The company intranet was also juiced up with information that would keep employees coming back at a regular clip, offering, for example, 401(k) information and breaking UBOC news.

Executives of the bank, California's third-largest, are also considering adding lifestyle-centric options on MyStore, Ghourdjian said. These might include allowing employees to purchase, for example, movie tickets. It will also begin allowing employees to set up personal home pages on the intranet. "It gives people a real sense of empowerment,'' she said.

In a less competitive hiring environment, or in a less dot-com oriented city, Ghourdjian's assertion might sound overstated. But UBOC is competing with the Bay area's hordes of Internet companies for employees. In such an environment, a company with a backward Web policy is at a real disadvantage.

"Being in California, we are in competition with lots of companies to get talent. No one wants to work for a company that is stuck in the past,'' Ghourdjian said. "So this is expected to recruit and retain people. Our employees are our customers. If we don't do it, we'll be left behind.''

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