PNL spinoff will save companies millions in procurement costs
October 16, 1995
RICHLAND, Wash. –
Software developed to administer a credit card program that is saving the Department of Energy's Pacific Northwest Laboratory more than $2 million in procurement costs this year is the basis for a new company that may help hundreds of government contractors, agencies and private companies achieve similar savings.
The company, Credit Card Solutions Inc., will design, sell and install software products for the business credit card industry. Initially composed of three former PNL staff members, CCSI has the potential to grow to 20 workers by 1998, say company founders. The new company has offices in the Technology and Enterprise Center, which is housed in the Horn Rapids Business Center in Richland.
CCSI and its three employees are the first to take advantage of PNL's new Entrepreneurial Leave of Absence, or EntLOA, program (see attached backgrounder for more information on EntLOA).
The company's initial product will help businesses administer corporate purchasing card programs and is based on software developed at PNL to implement and operate an on-going program at the national laboratory. Purchase cards, or p-cards, look and work like a regular credit card, but also capture data which can help companies with proper cost distribution, product tracking and auditing. PNL staff have used p-cards the past several months to buy millions of dollars in goods and services from Mid-Columbia vendors that accept the card.
Use of the cards, coupled with the PNL-developed software that helps reconcile the purchases, have created significant savings at the laboratory by eliminating the cumbersome and expensive purchase requisition and payment process for most purchases under $5,000. The p-cards also allow the laboratory to take delivery on purchases faster, and area businesses are reimbursed in as few as three business days.
About 1,200 U.S. companies, including half of those on the Fortune 1000 list, are using or soon will be using p-cards to make small purchases. With savings ranging from $60 to $125 a purchase, thousands of additional businesses are expected to add p-card programs in the next few years. American Express is the largest p-card provider with over 300 customers, including PNL, and several major banks are offering p-cards utilizing MasterCard and Visa credit cards.
"It's the administrative software as much as the p-card idea itself that allows a company to improve upon traditional procurement methods and create such large savings," explains Roy Wiprud, former manager of the purchasing card program at PNL and chief executive officer of the new company. "Right now, each company that uses a corporate p-card has to set up its own method of accounting for card charges. Many firms perform the task manually, some develop their own computerized system and there are several basic software tools offered by card providers, but the PNL-developed software goes far beyond what's available now."
CCSI tentatively plans to call the new software product "The P-Card Solution."
"The P-Card Solution is faster, provides more information and requires less paperwork and people to operate than other business credit card software reconciliation systems," says Jim Carroll of the new company. "It's an easy-to-use, automated, client/server-based software that lets cardholders reconcile their accounts monthly, ensuring that costs are properly distributed. It allows for management approval of purchases, properly accounts for tax information and provides easy access to a great deal of information about products and purchases, including item description and categorization.
"Unlike other programs on the market, it runs on both PC and Macintosh systems and can be adapted for use with any of the p-card programs offered by American Express or various major bank cards," he adds. CCSI has established an agreement to market the software to American Express' existing and new corporate purchasing card clients.
"We are particularly pleased with CCSI's product, as it adds another level of functionality to the American Express corporate purchasing card," said Jim Van Tighem, regional director, American Express Corporate Purchasing Services. "The software is the ultimate control tool when applied in conjunction with the card. This functionality further distinguishes the American Express product and demonstrates our commitment to bringing value- added services desired by our customers."
According to Wiprud, the company also has signed an agreement to provide The P-Card Solution software to Bechtel Hanford Inc. in Richland. CCSI is expected to soon sign an agreement to install an upgrade for a program that already is installed at Westinghouse Hanford Company, also in Richland.
"With the explosive growth in the business credit card industry and the success we've had here at PNL, we believe we can capture a prominent market position within the relatively infant business credit card software and consulting industry," says Wiprud. "There is an urgent need by companies to more adequately track, cost and approve their p-card transactions."
In addition to marketing and supporting The P-Card Solution, Wiprud and Carroll say CCSI will offer consulting services to customers who are implementing p-card systems. They also plan on developing products and services for use in the travel card industry, where administrative software does not yet exist. "Such a product would be useful especially to those who want to automate and keep better track of their travel expenses," says Wiprud.
For more information on The P-Card Solution or CCSI's corporate purchasing card services, contact the company at 2000 Logston Blvd., Suite 126, Richland, Wash. 99352; phone (509) 375-3268, ext. 314; or via e-mail at firstname.lastname@example.org.
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