Chicago Public Schools Uses DiUnite to Automate EDI Processes with Oracle E-Business Suite

Organizational Overview:

Chicago Public Schools is the third largest school district in the United States. With a total annual budget of $5.2 billion and 680 schools under management, CPS serves 410,000 students (FY2010-11).

The Challenge:

The need to automate multiple processes within their enterprise with suppliers, banks, and Medicaid led Chicago Public Schools to evaluate multiple technology providers of integrated Electronic Data Interchange (EDI) solutions. The solution had to be easy to use, quick to implement, and allow CPS to map and translate various data sets into and out of their enterprise resource planning software (ERP). The solution had to have a quick ROI and be able to scale with their operational needs.

Large Scale Manual Processes in Healthcare Claims

Before HIPAA mandates came into existence there were no less than 400 different types of electronic formats. Once the HIPAA mandates were implemented in 1996 the promise of automation could start to be realized among the many players in healthcare. The need for CPS to automate a very manual process that could sometimes take 60-90 days to close was the first and most obvious place to receive attention.

Supplier Business Process - Room for Improvement

In the traditional buyer model, an organization issues a purchase order, receives an invoice, and pays for the product by sending a check to the supplier. In an organization as large as CPS this process is susceptible to bottlenecks in processing payments, errors, and shipments that can bog down productivity. Current studies show that proactively managed enterprises like CPS look to technology solutions to cut down on errors and speed the whole process from procurement to payment. Seeing improvements in time and cost in the supply chain approaching 30%-60% is the reason organizations look to automation with integrated EDI data between buyers and suppliers.

Manual Banking for the Large Enterprise - No!

Reconciling payments to suppliers and managing the banking relationships manually had been how CPS did business for years. Management at CPS knew through extensive research that they could achieve a high ROI in this area alone with integrated banking transactions.

The Solution:

DiUnite Provides Automation of Order-to-Cash and Procure-To-Pay Cycles

Sometimes your needs fall into both categories: as an organization you are both a payer and payee. CPS buys from its vendor community and provides healthcare services for which it must be paid or reimbursed. The technology partner must provide tools that deliver on both sides of the buyer and supplier equation. DiCentral's DiUnite platform delivered.

Automation of Healthcare Benefits

Healthcare Eligibility Benefits Inquiries (EDI 270) and Responses (EDI 271) are now integrated into CPS' Oracle E-Business Suite. This automates CPS' process of verifying coverage of employees and students under Medicaid. By leveraging DiCentral and Oracle technology CPS achieves faster decision cycles and fewer errors, which produces a savings in time and money that resonates throughout the entire organization.

Benefits of Choosing the Right Technology Partner for Supply Chain Automation

Securing a technology partner that provides a total solution for Purchase Order, Invoice, and Purchase Order Acknowledgement automation was important for CPS. It made a big difference to us that we select a technology provider with user-friendly integration tools that provide for rapid implementation times, said Prasad Nettem, Director, Enterprise Financial Systems, Chicago Public Schools.

The project called for automating the purchasing process and included EDI Purchase Order (850), Purchase Order Acknowledgement (855), and Invoice (810) information with the majority of suppliers.

CPS has successfully implemented EDI processes with over 50% of their vendor community. Given that the average cost of manual invoicing in a large enterprise is $8.44 per invoice, automation helps save tremendous amounts of time and money at CPS. In addition, cutting down on manual errors has resulted in increased productivity.

Automation of Banking Transactions

Reconciling payments to suppliers and accelerating benefits verification through Medicaid were central to improving business processes across the enterprise at CPS. By integrating the EDI Payment Order/Remittance Advice (820), Account Analysis (822), and Application Advice (824) transactions into CPS' Oracle E-Business Suite, the Procure-to-Pay (P2P) and Order-to-Cash processes were both improved. The P2P process can now be closed out in days rather than weeks, representing a savings in man hours across the whole procurement process. In addition, the corrections returned on the 824 save hours of fact checking and error chasing per week. We can review inbound data reports and manage the vendor payment process more rapidly than before, states Mr. Nettem.

Automated Transaction Processing delivers:
  • Reduced manual labor
  • Minimized errors and inaccuracies
  • Improved exception handling
  • Faster invoice processing
  • Electronic storage of all data
  • Integration with existing enterprise systems
  • Quicker access to related financial information
  • Auditable business processes
  • Proven cost savings and increases in efficiency
  • Improved relationships with vendors and suppliers
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