Delivering Procurement as a Shared Service

91st Annual Meeting & ExpositionApril 1 – 4, 2012

Anaheim, California

Delivering Procurement as a Shared Service

Presented By: Stephen G. Mack, CPSM, C.P.M.

Cathy Barker, CPPO, CPPB


Anaheim, California

What is Shared Service?“Wikipedia”

Shared services refers to the provision of a service by one part of an organization or group where that service had previously been found in more than one part of the organization or group. Thus the funding and resourcing of the service is shared and the providing department effectively becomes an internal service provider. The key is the idea of 'sharing' within an organization or group.


Anaheim, California

University of Missouri Snapshot

• With more than 28,000 faculty and staff and more than 73,000 students, the University of Missouri is the state’s largest public research university.

• Our 4 campuses are in Columbia, Kansas City, Rolla and St. Louis.

• UM System is located in Columbia.


Anaheim, California

Our Journey from Decentralized to Shared Services

• FY 01 – Procurement is DECENTRALIZED as a System and CENTRALIZED BY CAMPUS

• Why– Campuses came into the University System at different times

– Challenges with this structure• 7 different purchasing modalities• Reduced accountability• Challenges in working collaboratively • Variations in interpretation of policies

– The COST of this model• Loss of a projected ROI of 20% on Transactional costs (staffing and

processes)• Loss of 8-12% on commodities


Anaheim, California

• FY 02 to FY 10– Multi-campus ‘Centralization’ introduced

– 2001 Campuses go from Directors to Managers

– 2007-08 After a consulting engagement

• SciQuest enablement began

• Procurement Support Team is created

• Commodity Specialist positions created

• FY 10,11 – Creation of Shared Services and MOU– Final reorganization of Procurement Services and Procurement Operations

• Procurement Operations• Procurement Services

– Multi-Campus MOU • SLAs, KPIs• Shared Governance• Service Level Metrics Dashboard• Hotline implemented

Our Journey from Decentralized to Shared Services


Anaheim, California

MOU

• Procurement Responsibilities– Process Facilitation– Strategic Contracting– Support

• Campus Responsibilities– Approval of projects– Compliance

• Report on MOU quarterly to Governing Body

Note: During the next Quarter we will analyze the factors that are keeping us from meeting the goal of processing orders under $10,000 and develop a plan for reducing the processing time. This will be reported on in our next quarterly meeting.

2011-01 2011-02 2011-03 2011-04 2011-05 2011-06 2011-07 2011-08 2011-09 2011-10 2011-11 2011-120.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0 PO Average Processing Time

Over $10K Linear (Over $10K) Under $10K Linear (Under $10K)

Goal Under $10K

Note: All campuses continue trending upward except UMSL. Their drop is due to changes in staffing within facilities. We are working directly with the department to identify solutions.

2011-01 2011-02 2011-03 2011-04 2011-05 2011-06 2011-07 2011-08 2011-09 2011-10 2011-11 2011-120.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0% SMS Compliance by Unit (excluding Hospt)

COLUMKCITYROLLASTLOUUMSYSUOEXTUM-AvgLinear (UM-Avg)%

of C

ompl

ianc

e

75% Goal

ROLLA COLUM KCITY STLOU0

20

40

60

80

100

120

140

160

Campus Visits FY12 Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct

Sep

Aug

JulGoal = 120 visits per campus annually

Note: Trends are moving downward. UMSL is working diligently on identifying strategies for reducing the number of confirming orders.

2011-01 2011-02 2011-03 2011-04 2011-05 2011-06 2011-07 2011-08 2011-09 2011-10 2011-11 2011-120%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Confirming Order Counts - Percent of Total

COLUMKCITYROLLASTLOUUMSYSUOEXTUM-AvgLinear (UM-Avg)

Note: An template for conducting quarterly reviews is under final development. This will assure maximum benefit is derived from these important meetings.

FY11 4th Qtr FY12 1st Qtr FY12 2nd Qtr FY12 3rd Qtr0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

% Major Contracts Reviewed

Goal = 85% Reviewed

Note: This chart represents only the savings achieved through RFP/RFB process facilitation and negotiation. The goal for fiscal year 11/12 is $10 M. The amount shown does not reflect the revenue and savings achieved through rebates and utilization of SMS agreements or the estimated future savings of agreements negotiated currently where savings is recorded in future years.

July

August

Septem

ber

October

November

December

January

February

March

April May JuneTo

tal $-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

FY12 Monthly Savings Accumulative Total

Negotiated SavingsProcess Savings

Annual Goal $10,000,000

Note: The straight line average is moving downward. As we refine the process of identifying maverick spend it contributes to moving the line upward.

2010-Q4 2011-Q1 2011-Q2 2011-Q30%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Maverick Spend

COLUMKCITYROLLASTLOUUMSYSUOEXTUM-AvgLinear (UM-Avg)

Note: Assets tagged and entered are 12.18% higher than last year. UMSL needs to tag and enter the greatest % of Assets, UMKC has improved the most, Columbia and System remain with the greatest % and dollar amounts entered. Very few assets are entered at the end of December as many department contacts are not on campus.

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11Jul-1

1

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%% of Identified Assets

% Entered

Goal = 80%

Note: Surplus all 4-campus sales are 25% higher than the first six months of FY 2011. UMSL July – December 2012 sales are up 87%, +$60,000 over 2011. Consistent marketing efforts at all campuses are bringing in new buyers.

July

August

Septem

ber

October

November

December

January

February

March

AprilMay June

$-

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

$800,000.00

$900,000.00

$1,000,000.00

FY12 Total Surplus Revenue

FY11 Total YTDFY12 Total YTDFY11 Rev to DeptFY12 Rev to Dept

Goal = $800,000 annually

Note: A slight decrease in call volume the last three months allowed our Hotline agents to concentrate on outstanding open issues.

Take Away: With staff vacation over the holiday season, our call answered rate varied slightly over the quarter. Our current customer satisfaction rate has still increased. This quarter we had 96.9% compared to last quarter’s 95.3% . Our annual customer satisfaction rate was 95.2%.

July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec86%

88%

90%

92%

94%

96%

98%

100%

0

10

20

30

40

50

60

70

80

90

100

Hotline Calls

Open Remedy Tickets% Answered Calls

Goal = 95% of Calls Answered

% o

f Cal

ls

Ope

n Re

med

y Ti

cket

s

Note: Procurement Operations receives around 4,000 statements per month. Over the last quarter we have seen a increase in late statements on some campuses, but the overall trend line shows a decrease. As we contacted departments, the increase was primarily due to the holiday season and vacations.Take Away: In addition to this graph, the details are included in the spreadsheets sent to the Governing Body electronically. This will help identify repeat offenders and target areas for improvement.

Jan Feb Mar Apr May June July Aug Sept Oct Nov0%

5%

10%

15%

20%

25%

% of Late PCard Stmts by Campus

UMC %UMKC %UMSL %S&T %UMSYS %

Note: Total suspended cards due to no response after late statement notification, decreased over the quarter.

Take Away: The trend line continues to show a decrease.

Jan Feb Mar Apr May June July Aug Sept Oct Nov0%

1%

2%

3%

4%

5%

6%

7%

8%

% of Suspended PCards by Campus

UMC %UMKC %UMSL %S&T %UMSYS %


Anaheim, California

UM Procurement Operations

Elaine BrunoImaging/Procurement

Support Specialist

Krista YoungTraining, Testing,Security, CommProc. Admin II

Melinda RichardsonAdministrative Assistant

Holly OswaldPcard/Procurement Support Specialist

Carolyn CaltonWeb & AssociatedAppl Design/Main.Prog. Analyst-Spec

Kristy CookAccts Payable/Procurement

Support Specialist

Adria AllenProcurement Systems

Principle

Laura LawsonHotline & Reporting

Procurement Admin. II

Marsha DodsonHotline/Procurement

Admin I

Amy HutsonHotline/Procurement

Admin I

Pete KelleyProcurement Value

Analyst

Nichole TurnerPcard/Procurement Support Specialist

Valerie DueverExacTrac/Procurement

Support Specialist

Jennifer AlexanderDirector, Procurement Operations

Brenda ReifschneiderCoordinator, eCommerce


Anaheim, California

Stephen MackDirector, Procurement Services

UM Procurement Services

Stacy JonesManager, Client Relations

(Rolla)

Cathy BarkerManager, Client Relations

(Kansas City)

Tangie BrooksManager, Client Relations

(St. Louis)

Heather ReedStrategic Sourcing Spclst

Jim ShattoStrategic Sourcing Spclst

LaTonyia ClemonsSourcing Specialist

Wade JadwinStrategic Sourcing Spclst

Joetta GrossSourcing Specialist

Lead

Melinda RichardsonAdministrative Assistant

Kevin SummersStrategic Sourcing Spclst

Bo SolomonManager

Surplus & Asset Mgmt

Jonathan YoungSurplus & Asset Mgmt

Kansas City

George BrooksSurplus & Asset Mgmt

St. Louis

Ruby JemisonSourcing Specialist

Greg HookSurplus & Asset Mgmt

Rolla

Angie LairIT

MOU cooperative

Athena NanceStrategic Sourcing Spclst

Laura RothStrategic Sourcing Spclst

Teresa VestManager, Client Relations

(Columbia)

Darla HigginsMoreNet

MOU cooperative

Rochelle DuncanStrategic Sourcing Spclst

Jeanne KelleySourcing Specialist &Sourcing Facilitator

David SilveyStrategic Sourcing Spclst

Lead


Anaheim, California

Why I’m here…….


Anaheim, California

Purpose/Benefits of New Position Client Relations Manager

• Moving from being Re-active to Pro-active• Understanding Clients Needs on a one-to-one

basis• Adding Value to our services through solving

problems


Anaheim, California

Primary Responsibilities

Resources• Services• Operations

Visits• One-on-One• Department Outreach

Meetings

Solutions• Assist w/problems• Activity reporting


Anaheim, California

Division of time spent

Time Spent

Problem SolvingVisitsProviding Resources


Anaheim, California

Resources

• Services– Req/PO processing– RFx needs– Contract Administration– Vendor Management– Surplus/Asset Management

• Operations– Hotline– Purchasing Card – PeopleSoft– eProcurement “Show Me Shop”


Anaheim, California

Visits

• One-on-One– Specific projects/issues– Training– New Employees– Vendor requests

• Department Outreach Meetings– Strategic team meeting, including Dean/Department Head– Understanding goals/objectives– Provide reporting– Action/follow-up


Anaheim, California

Problem Solving

• Primary point of contact• Quick resolution to phone/email inquires• Contract administration assistance• Liaison to supplier services


Anaheim, California

Questions?

Documents

Delivering Procurement as a Shared Service