Show Them The Money!
Ways to Find Savings In Your
Organization
Marcheta E. Gillespie, CPPO, C.P.M., CPPB, CPM
NIGP 3rd Vice President
Deputy Director of Procurement, City of Tucson
The world we live in today…..
A few numbers to consider:
• $3 Trillion
• $250 Million
• 180,000
• 48 out of 50
A Request from the White House:
Keating Report
Published: June 15, 2010 By Michael Keating
“ For the upcoming two years [fiscal years 2011 and 2012], it
is estimated that states will face shortfalls of about $260
billion even after taking into account aid from the federal
government….Given the balanced budget requirements
enshrined in almost every state constitution, state
policymakers will continue to slash spending, expand
gaming, tap rainy day funds, and raise taxes and fees to
bridge the shortfalls."
Sujit CanagaRetna
Senior fiscal analyst,
Council of State Governments (CSG)
Urban Notebook | More
Muni Threat: Cities Weigh Chapter 9
The economic slump is forcing debtladen municipalities nationwide to
consider filing for bankruptcy.
Todd Newcombe | May 2010
Health & Human Services | More
Poverty Comes to the Suburbs:
“Poverty is encroaching on suburban enclaves –
even the most affluent of them. Many are ill-equipped
to meet the new social-service needs.”
Zach Patton | May 2010
Jul 01, 2010
BP oil spill nears record as Gulf's worst
Thursday, July 1, 2010
Unemployment News: National
Unemployment Rate at 9.7% in May
Now More Than Ever…..
Economic,
Social
and
Economic
Environmental
Uncertainty
Uncertainty
Strain
onon
Strain
Agency
Agency
Resources
Resources
Crucial
Opportunity
for
Procurement
Are We Prepared?

Proactive & Strategic

Seat at the Table; Alignment

Solution Providers

Beyond ‘Thinking Lean’ --- ‘Be Lean’
Are We Prepared?
Bid
Shoppers
Negotiators
ValueAdded
Service
Providers &
Revenue
Generators
Your Opportunity To Demonstrate
Value
Strategic
Orientation
Professional
Targeting Opportunity

Organizational Savings
– Hard Savings
– Soft Savings
– Avoided Costs

Revenue Opportunities
– Procurement
– Organizational
Organizational Savings – Hard Costs

Solicitations
–
–
–
–
–
Specification & scope analysis
Using appropriate processes
Negotiate
Alternative approaches to
meeting a need
Research the market & industry
Organizational Savings – Hard Costs
(cont)

Solicitations (cont.):
–
–
–
–
–
Analyze pricing strategies
Consider revenue opportunities
Evaluate conditions & requirements
(bonds, insurance)
Freight & Delivery Services
Scrutinize & negotiate sole
sources, emergencies
Organizational Savings – Hard Costs

Contract Administration
–
–
–
–
–
Tremendous opportunity to save!
Start on the right foot: CAT, CAP and PAP
Change Orders
Project Management
Invoice Reconciliation
Organizational Savings – Hard Costs

Contract Renewal
–
–
–
–
To renew or not to renew?
Consider market conditions
Re-negotiation
Opportunities to improve
Organizational Savings – Hard Costs

Supplier Contribution
–
–
–
Solicitation and contract
Creative solutions
Sharing tasks, risk and savings
Organizational Savings – Hard Costs
Inventory
 Document Management
 Sourcing Alternatives

–
–
–
–
Appropriate Use of Cooperatives
Inventory and surplus
Lease v. Buy v. Refurbish
Outsourcing
Organizational Savings – Hard Costs

Spend Analysis
–
–
–
–
You’re only as good as your data!
Availability, accuracy, coded
Reporting, benchmarking
NIGP Observatory
Organizational Savings – Soft Costs

Organizational Assessment
–
–
–
–
–
Organizational restructuring
Re-alignment
Re-prioritization
Re-assignment
Identifying efficiencies
Opportunity Savings – Soft Costs

Technology
– eProcurement, website
– Solicitation delivery
– Vendor registration
– On-line contracts
– pCard, EFT, punchouts
Organizational Savings – Soft Costs

Staff
–
–
–
–
–
Communicate/coordinate with clients
Appropriate tasking
Cross-training
Job sharing
Re-assessing roles
Organizational Savings – Cost
Avoidance
Specification and scope reviews
 Mitigation of risk
 IGAs
 “In Sourcing”
 Standardization

Generating Revenue Opportunities
What do you have that’s valuable?
Generating Revenue Opportunities
Cooperative Contracts
 pCard (implement or expand)
 On-Line Surplus
 Outsourcing Procurement Services

Generating Revenue Opportunities





Electronic payment of invoices (“e-pay”/“E-AP”)
Storage services
Debt collection
Invoice audit
Vendor list
October 4, 2010 – Spiegel Online International
Zookeeper Fired for Growing Cannabis in Rhino
Enclosure
An Austrian zookeeper enlisted the help of unwitting rhinos by
growing cannabis in their enclosure. The scheme worked for years
until a stool pigeon betrayed him.
Getting Started
Create your list of ideas!
 Stakeholder input
 Transparency and accessibility
 Communication
 Training and education
 Customer service
 Measure/performance metrics

Share Your Success!
ROI/P&L
 Negotiated Value Data
 Stakeholder Reports
 Focus Groups
 Share success with the media

Go Find Savings In Your
Organization!
Marcheta E. Gillespie, CPPO, C.P.M., CPPB, CPM
NIGP 3rd Vice President
Deputy Director of Procurement
City of Tucson, AZ
[email protected]
Thank you!