March 8, 2006 By Andy Opsahl
Thanks to Terese Butler, California finally is taking advantage of its massive purchasing power. Butler, project director for the state Department of General Services, led California's Strategic Sourcing Initiative, which is expected to generate savings of $170 million over the next three years.
A balance of strength and humility helped Butler convince California's fiercely independent departments to agree on uniform computer hardware configurations. This enabled consolidation of technology purchases into bulk orders from select vendors and manufacturers. The state will use this purchasing strategy to buy commodities at lowest market prices. Previously California departments bought desktops, printers, servers and other assets from any provider they wanted.
In negotiations, Butler staunchly advocated strategic purchasing virtues while making prudent adjustments when various players gave persuasive advice. "You have to be a good listener, because you have to hear what people don't like," she said.
The assignment, the hardest of Butler's career, dropped her in an intense clash of competing agendas. "There was a lot of pushback from the industry, because they didn't want to see their margins decrease as much as they did," Butler said, noting her surprise at how passionately some in government and the private sector defended the status quo.
Many agreed the state's purchasing process wasn't perfect, but as it stood, they all had firm grasps on their own pieces of the pie, said Butler.
She also faced opposition from disabled veterans enterprises fearing large companies would steal their business. Butler said her team specifically arranged the new purchasing process to avoid that, and actually gave more business to disabled veterans enterprises in some areas.
A state famously plagued with budget migraines saved $170 million from changing its procurement.
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