Demystify Public Sector Procurement –A PeopleSoft Journey

Puneet Sharma, Deloitte

Tracie Byrne, Niagara Region

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Agenda

Introductions

Objectives

Procurement Challenges and Opportunities

Contracts Process – Corporate v/s Dept

Approval Processes – Setting the right Accountability

Lights out Purchase Orders

Questions & Answers

Introductions

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Tracie ByrneManager - Strategic Sourcing, Niagara Region

Worked in public sector procurement for over 15 years (UK and Canada) as a Procurement Officer and Procurement Manager. Implemented large scale ERPs in the UK and Canada.

Puneet SharmaSenior Consultant - Oracle, Deloitte

Senior Consultant at Deloitte in the Technology practice. Over 11 years of experience in the world of PeopleSoft ERP. Led procurement stream in many large scale implementation projects across 3 countries and multiple sectors.

• Share our experience of PeopleSoft implementation at Niagara Region

• Discuss the Challenges and Opportunities of Procurement Process @NR

• Discuss Contracts Process – Corporate v/s Dept• Discuss Approval Processes – Setting the right Accountability • Discuss Auto PO Creation and Dispatch

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Objectives

Procurement Implementation – Scope, Challenges and Opportunities

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PeopleSoft Procurement Stream @NR

Procurement ContractseProcurement

Purchasing Inventory Management

Process scope

PeopleSoft 9.2

Enhance integration with PeopleSoft (HR) and non-PeopleSoft platforms

Technology scope

PS and Non-PS Integrations

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Challenges

• Complex Procurement By-law with multiple levels of authorities based on transaction type and amount

• Decentralized procurement process up to a $ limit, after which Central purchasing department takes over.

• End User departments do not fully understand their accountability

• Paper based process – data not readily available for analysis

• Low corporate visibility

• Different Procedures/Contract T&Cs

• Multiplicity of ‘Duplicate’ Contracts

Opportunities

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• Opportunity to modify the Procurement Bylaw’s Purchasing and Execution Authority to align with modern ERP systems

• Draft common policies, procedures and guidelines for corporate and end user departments

• Implementation of a leading ERP system, utilizing industry’s best practices

• Utilize the PeopleSoft Approval Framework to configure based on the Bylaw approvals

• Supplier Rationalization – Clean up the supplier list and opportunity to get more suppliers on EFT

• Provide Report and Inquiry Dashboard to management

• Implement the policy of ‘No PO/Contract, No Pay’

Contract Process- Corporate v/s Department Contracts

Corporate Contract Department Contract

Managed by Central Purchasing Managed by Departments

Applies to all purchases within the Region

Applies to purchase(s) by the specific Department only

Initiated by Central Purchasing as advised by strategic sourcing group

Initiated by Departments based on their operational requirements

Promotes Standardized company policies and practices

Provides focused, specialized expertise for the contract

Multiple requisitions Single and multiple requisitions

Vis-à-vis

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Procurement Contracts Process

Department completes and submits Contract Request

Form

PeopleSoft Manual

• Department creates requisition• Budget check (creates pre-

encumbrance)• Approvals

Strategic Sourcing initiative

Corporate Contract:

• Procurement creates purchase order

• Budget check (creates encumbrance)

• Approvals• Purchase Order dispatched to

supplier

• Department creates requisition• Budget check (creates pre-encumbrance)• Approvals• Purchase Order Auto-dispatched to Supplier (budget check,

creates encumbrance)

Procurement creates PeopleSoft contract

Procurement conducts formal procurement process

Initi

atio

nPu

rcha

se

Ord

er

Department Contract:

Multiple Requisitions/Purchase Orders against a contract

One Requisition/Purchase Order against a contract

Department receives spend thresholds and expiration notificationsProcurement receives spend thresholds and expiration

notificationsCon

trac

t M

anag

emen

t

Approval Process – Setting the right Accountability

Procurement Bylaw

• Existing Bylaw contains multiple levels of approval authorities

• Separate levels for Purchasing and Document Execution Authority based on type and amount of purchase

• Sample excerpt-

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Procurement Bylaw – Interpretation for PeopleSoft

• Bylaw was interpreted in a tabular form to align with PeopleSoft’s approval framework approach

• Levels were defined for each transaction type (Req/ PO/ Voucher etc), type of purchase (Low Value, Informal or Formal sourcing etc) and amounts of purchase.

• Some of the levels were merged to standardize the process across transactions

• Utilized PeopleSoft’s checks and balances to remove some of the approvals, e.g. Matching removed PO-voucher approvals

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Sample Approval Matrix – Non formal Requisitions

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Thresholds of Approval

Up to $10,000 Level 1 Manager> $10,000 to $25,000 Level 1 Manager

> $25,000 to $100,000 Level 1 Manager

> $100,000 to $250,000 Level 2 Manager -> Director

> $250,000 to $1 million Level 3a Manager -> Director -> Commissioner

> $1 million to $5 million Level 3bManager -> Director -> Commissioner -> Commissioner Corporate Service/CAO

> $5 million Level 4Manager -> Director -> Commissioner -> Commissioner Corporate Service/Treasurer -> CAO

NON-FORMAL SOURCING EVENTSUsed on purchase requisitions & change requisitions

Never any PO approvals(Only time this should be above $25k is if we are drawing on an existing corporate

contract or Schedule A exceptions)

Approval Process – Key Drivers

Driver Sample Values Usage

PO Origins ONL – OnlineFRM – FormalSPE – Special Circumstances

Selected by the requestor as the ‘type’, based on Procurement process to be followed

Department ID Range

10000-39999 – Region Corporate40000-49999 – Regional Police71000-71999 – Regional Housing

Department ranges were defined to distinguish the three arms of NR having distinct approval flows

Category Code Cat X – IT ApplicationsCat Y – IT Infrastructure

Category code based special approvals

Total Transactionamount

> $25,000> $250,000> $1 million

Based on the bylaw, total Req/ PO Amounts were used to trigger approvals

Department Tree Winter tree of departments based on dept managers’ hierarchy

Used to find out the appropriate level of approver based on dept ID(s) used in transaction

Security Roles Director Strategic ProcurementManager Procurement

For central procurement group, Security roles were used to get approvers

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Requisition Types

Requisition Type Procurement process (Procurement By-law):

Online Entry• Low Dollar Value (<$10K)• Informal Quotations ($10K to $25K)• Request against a contract

Single Source • Single source or specific-supplier

Special Circumstance • Special Circumstance

Schedule A • Exceptions to formal procurement process

Negotiation • Negotiation

Co-operative Purchasing • Co-operative Purchasing

Non-Compliance • Not compliant with the Procurement By-law

Emergency • Region declares emergency

RFQ/RFP/RFT• Request for Quotation• Request for Proposal• Request for Tender

Non

-For

mal

Form

al

Examples:

Level 3 Approval Required (Commissioner)

Skipping first 3 Approval Levels for CAO

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Approval Process – Accomplishments • Paper-less approval process. All approvals are captured in the system

• Decentralization of Purchasing Authority up to max amount as dictated by the by-law

• Checks and balances in form of usage of Origins like Special Circumstances, Emergency etc

• Central Purchasing only gets involved with decentralized purchase when user selects type as ‘Online- low value purchase’, but exceeds limits

• Results in setting the accountability at the right level of authority, in both centralized and decentralized processes

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Auto PO Creation and Dispatch

Purchase Orders – Lights out!• Requisitions under 25K – Auto PO Creation and Dispatch

• PO layout and process standardized across the Region, Region Housing, EMS services and Region Police.

• Batch Process designed to achieve lights out PO.

• PO is dispatched via email within the hour of Req Approval

• Change Req > PO process to enable departments manage non-formal POs

• Procurement involved only for centralized purchases

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Process: Requisitions (Non-Formal Procurement)

Requester

Approver(s)

Creates and Submits

Requisition

Reviews Requisition

Budget Check

Create Purchase Order

Automated TaskTask

Approves

Dispatch Purchase Order

Deny

Dispatch Purchase OrderCentral

Procurement

Supplier PO email exists

No supplier PO email

Auto Process

Procurement and/or IT may be included in the requisition

approval workflow

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Process: Requisitions (Formal Procurement)

Requester

Approver(s)

Creates and Submits

Requisition

Reviews Requisition

Budget Check

Automated TaskTask

ApprovesDeny

Dispatch Purchase Order

CentralProcurement Create Contract and/or

Purchase Order

Manages the formal procurement

process

Approves

Auto PO Process - Accomplishments

• Departments manage own purchases without the need to have access to Purchase Order components

• Increases efficiency of procurement staff

• Low dollar value POs dispatched to supplier within 1 hour

• Encourages more suppliers to switch to email communications

• Procurement By-law compliance from requester and approved accountability

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To sum it up…

Contract processCorporate v/s Department

Approval Process

Auto PO Dispatch

• All Contracts in one system, with Central Procurement having oversight on all

• Complete Visibility to central purchasing• Enables Strategic Sourcing group to rationalize

‘duplicate’ contracts

• Ensure compliance to Procurement Bylaw• Enables departments to carry out decentralized

purchases within authorized $ limits• Sets accountability with the right authority for centralized

and department purchases

• Batch Processes designed to achieve optimal frequency and efficiency

• Lights out POs – no manual intervention required to create and dispatch POs

• Encourages suppliers to enroll on Email dispatch method

Questions and Answers

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