Delivering Procurement as a
Shared Service
Presented By:
Stephen G. Mack, CPSM, C.P.M.
Cathy Barker, CPPO, CPPB
91st Annual Meeting & Exposition
April 1 – 4, 2012
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.
91st Annual Meeting & Exposition
April 1 – 4, 2012
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.
91st Annual Meeting & Exposition
April 1 – 4, 2012
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
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
Our Journey from Decentralized to Shared
Services
•
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
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
MOU
• Procurement Responsibilities
– Process Facilitation
– Strategic Contracting
– Support
• Campus Responsibilities
– Approval of projects
– Compliance
• Report on MOU quarterly to Governing Body
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
PO Average Processing Time
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
Goal Under
$10K
2.0
0.0
2011-01
2011-02
2011-03
2011-04
Over $10K
2011-05
2011-06
Under $10K
2011-07
2011-08
Linear (Over $10K)
2011-09
2011-10
2011-11
2011-12
Linear (Under $10K)
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.
SMS Compliance by Unit (excluding Hospt)
100.0%
90.0%
80.0%
75% Goal
70.0%
% of Compliance
COLUM
60.0%
KCITY
ROLLA
50.0%
STLOU
UMSYS
40.0%
UOEXT
UM-Avg
30.0%
Linear (UM-Avg)
20.0%
10.0%
0.0%
2011-01
2011-02
2011-03
2011-04
2011-05
2011-06
2011-07
2011-08
2011-09
2011-10
2011-11
2011-12
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.
Campus Visits FY12
Jun
160
May
140
Apr
120
Mar
Feb
100
Jan
80
Dec
60
Nov
40
Oct
20
Sep
0
Aug
ROLLA
COLUM
KCITY
Goal = 120 visits per campus annually
STLOU
Jul
Confirming Order Counts - Percent of Total
100%
90%
80%
70%
COLUM
KCITY
60%
ROLLA
STLOU
50%
UMSYS
40%
UOEXT
UM-Avg
30%
Linear (UM-Avg)
20%
10%
0%
2011-01 2011-02 2011-03 2011-04 2011-05 2011-06 2011-07 2011-08 2011-09 2011-10 2011-11 2011-12
Note: Trends are moving downward. UMSL is working diligently on
identifying strategies for reducing the number of confirming orders.
% Major Contracts Reviewed
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
FY11 4th Qtr
FY12 1st Qtr
FY12 2nd Qtr
FY12 3rd Qtr
Goal = 85% Reviewed
Note: An template for conducting quarterly reviews is under final
development. This will assure maximum benefit is derived from these
important meetings.
FY12 Monthly Savings Accumulative Total
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
Negotiated Savings
$4,000,000
Process Savings
$3,000,000
$2,000,000
$1,000,000
$-
Annual Goal $10,000,000
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.
Maverick Spend
45%
40%
35%
30%
COLUM
KCITY
ROLLA
25%
STLOU
UMSYS
20%
UOEXT
UM-Avg
15%
Linear (UM-Avg)
10%
5%
0%
2010-Q4
2011-Q1
2011-Q2
2011-Q3
Note: The straight line average is moving downward. As we refine the
process of identifying maverick spend it contributes to moving the line
upward.
% of Identified Assets
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
% Entered
30.00%
20.00%
10.00%
0.00%
Goal = 80%
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.
FY12 Total Surplus Revenue
$1,000,000.00
$900,000.00
$800,000.00
$700,000.00
$600,000.00
$500,000.00
FY11 Total YTD
$400,000.00
FY12 Total YTD
FY11 Rev to Dept
$300,000.00
FY12 Rev to Dept
$200,000.00
$100,000.00
$-
Goal = $800,000 annually
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.
Hotline Calls
100%
100
90
98%
80
70
60
94%
50
92%
40
Open Remedy Tickets
% of Calls
96%
Open Remedy Tickets
% Answered Calls
30
90%
20
88%
10
86%
0
July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec
Goal = 95% of Calls Answered
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%.
% of Late PCard Stmts by Campus
25%
20%
UMC %
15%
UMKC %
UMSL %
S&T %
10%
UMSYS %
Linear (UM-Avg)
5%
0%
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
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.
% of Suspended PCards by Campus
8%
7%
6%
UMC %
5%
UMKC %
UMSL %
4%
S&T %
UMSYS %
3%
Linear (UM-Avg)
2%
1%
0%
Jan
Feb
Mar
Apr
May
June
July
Aug
Sept
Oct
Nov
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.
UM Procurement Operations
Melinda Richardson
Administrative Assistant
Jennifer Alexander
Director, Procurement Operations
Brenda Reifschneider
Coordinator, eCommerce
Pete Kelley
Procurement Value
Analyst
Kristy Cook
Accts Payable/Procurement
Support Specialist
Adria Allen
Procurement Systems
Principle
Valerie Duever
ExacTrac/Procurement
Support Specialist
Elaine Bruno
Imaging/Procurement
Support Specialist
Carolyn Calton
Web & Associated
Appl Design/Main.
Prog. Analyst-Spec
Laura Lawson
Hotline & Reporting
Procurement Admin. II
Nichole Turner
Pcard/Procurement
Support Specialist
Holly Oswald
Pcard/Procurement
Support Specialist
Krista Young
Training, Testing,
Security, Comm
Proc. Admin II
Marsha Dodson
Hotline/Procurement
Admin I
Amy Hutson
Hotline/Procurement
Admin I
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
UM Procurement Services
Darla Higgins
MoreNet
MOU cooperative
Angie Lair
IT
MOU cooperative
Teresa Vest
Manager, Client Relations
(Columbia)
Stephen Mack
Director, Procurement Services
Rochelle Duncan
Strategic Sourcing Spclst
David Silvey
Strategic Sourcing Spclst
Lead
Melinda Richardson
Administrative Assistant
Joetta Gross
Sourcing Specialist
Lead
Bo Solomon
Manager
Surplus & Asset Mgmt
Jonathan Young
Surplus & Asset Mgmt
Kansas City
Stacy Jones
Manager, Client Relations
(Rolla)
Laura Roth
Strategic Sourcing Spclst
Athena Nance
Strategic Sourcing Spclst
Jeanne Kelley
Sourcing Specialist &
Sourcing Facilitator
Cathy Barker
Manager, Client Relations
(Kansas City)
Kevin Summers
Strategic Sourcing Spclst
Wade Jadwin
Strategic Sourcing Spclst
LaTonyia Clemons
Sourcing Specialist
Tangie Brooks
Manager, Client Relations
(St. Louis)
Heather Reed
Strategic Sourcing Spclst
Jim Shatto
Strategic Sourcing Spclst
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
Ruby Jemison
Sourcing Specialist
George Brooks
Surplus & Asset Mgmt
St. Louis
Greg Hook
Surplus & Asset Mgmt
Rolla
Why I’m here…….
91st Annual Meeting & Exposition
April 1 – 4, 2012
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
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
Primary Responsibilities
• Services
Resources
• Operations
• One-on-One
Visits• Department Outreach
Meetings
• Assist w/problems
Solutions
• Activity reporting
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
Division of time spent
Time Spent
Problem Solving
Visits
Providing Resources
91st Annual Meeting & Exposition
April 1 – 4, 2012
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”
91st Annual Meeting & Exposition
April 1 – 4, 2012
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
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
Problem Solving
•
•
•
•
Primary point of contact
Quick resolution to phone/email inquires
Contract administration assistance
Liaison to supplier services
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California
Questions?
91st Annual Meeting & Exposition
April 1 – 4, 2012
Anaheim, California