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FSSI: Fundamentals of Strategic Sourcing Presentation for GSA EXPO May 15-17, 2012

FSSI: Fundamentals of Strategic Sourcing Presentation for GSA EXPO May 15-17, 2012. Course Objectives. To provide an overview of Strategic Sourcing To provide an overview of the Federal Strategic Sourcing Initiative (FSSI) To provide and overview of FSSI Solutions. Strategic Sourcing.

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FSSI: Fundamentals of Strategic Sourcing Presentation for GSA EXPO May 15-17, 2012

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  1. FSSI: Fundamentals of Strategic Sourcing Presentation for GSA EXPO May 15-17, 2012

  2. Course Objectives • To provide an overview of Strategic Sourcing • To provide an overview of the Federal Strategic Sourcing Initiative (FSSI) • To provide and overview of FSSI Solutions

  3. Strategic Sourcing • Is an analytical and collaborative process that leverages an organization's historical business intelligence and resources to achieve best value solutions. • Is more than savings; it focuses on the total cost of ownership and yields enhanced business intelligence, management efficiencies, and regulatory compliance. • Is a solution that can be enterprise-wide, government-wide, multi-agency, agency-wide, bureau-wide, or regional/state-wide.

  4. Benefits of Strategic Sourcing 4

  5. Strategic Sourcing utilizes a fact based and analytical process to optimize the supply base while reducing Total Cost of Ownership PHASE 1: STRATEGY DEVELOPMENT PHASE 2: STRATEGY IMPLMENTATION PHASE 3: COMMODITY MANAGEMENT OPPORTUNITY SELECTION Assess and prioritize opportunities based on a thorough organization-wide spend analysis Conduct market analysis to identify supply & demand levers, new suppliers, buyer leverage Develop and issue RFx based on sourcing strategy, conduct negotiations, evaluate proposals, and award contract(s) Develop detailed profile of commodity including spend profile & specifications Develop sourcing strategy based on Commodity Profile & Supply Market Analysis Implement contract and establish process to track and manage performance 5

  6. Strategic Sourcing Process – Opportunity Selection OPPORTUNITY SELECTION OVERVIEW OPPORTUNITY SELECTION OUTPUTS • Broad analysis of quantitative and qualitative factors • Qualitative analysis includes an assessment of spend, market share, and general buying patterns • Qualitative analysis includes stakeholder interviews and an assessment of commercial & supply market trends • Synthesis of findings leads to potential list of opportunities • High level spend profile for commodity group or organization • Filtered and prioritized list of commodities based on • Savings potential • Strategic alignment • Implementation feasibly • Other criteria 6

  7. Strategic Sourcing Process – Phase 1 PHASE 1: STRATEGY DEVELOPMENT OVERVIEW PHASE 1: STRATEGY DEVELOPMENT OUTPUTS • Commodity Profile or a “fact base” derived from a comprehensive spend, usage, cost and requirements analysis • Supply Market Analysis based on primary and secondary research gathered from industry sources • Commodity Strategy and tactics to be implemented and the business case supporting the proposed strategies • Deep analysis of agency spending patterns • Consensus based development of government requirements with cross agency Commodity Teams • Collaborative development of strategy for lowering Total Cost of Ownership by leveraging market capabilities 7

  8. Strategic Sourcing Process – Phase 2 PHASE 2: STRATEGY IMPLMENTATION OVERVIEW PHASE 2: STRATEGY IMPLMENTATION OUTPUTS • Conduct Acquisition • Develop and gain approval of the Implementation Plan for government-wide rollout of the new vehicle(s) • Commodity Team members responsible for gaining active support of respective agency Senior Procurement Executives • Program engagement with agency policy makers and decision makers through governance structure • Explicit support from leadership for driving customer adoption 8

  9. Strategic Sourcing Process – Phase 3 PHASE 3: COMMODITY MANAGEMENT OVERVIEW PHASE 3: COMMODITY MANAGEMENT OUTPUTS • Engagement with community of interest throughout solution life • Collection and analysis of detailed customer usage data • Identification of opportunities for improvement for subsequent solution generations • Commodity Management Plan including detailed Performance Metrics • Performance Measurement Reports, dataconsolidation and review • Communication Plan to market vehicle/solution • Contract Maintenance/Customer Management 9

  10. Federal Strategic Sourcing Initiative (FSSI) • FSSI provides a framework that allows the federal government to aggregate requirements, streamline processes, leverage purchasing power, and empower informed and expert negotiations that ultimately drive down the costs of doing business. • FSSI PMO seeks to: • Strategically source categories of spend that represent the greatest opportunity for savings; • Leverage the buying power of the entire federal government; and • Develop leading business practices for the federal government.

  11. FSSI Operates through an Established Governance Structure FSSI GOVERNANCE STRUCTURE AS ESTABLISHED MAY 2008 11

  12. History of FSSI • Launch of Strategic Sourcing Knowledge Management Portal • Launch SmartBUY Commodity Team • Awarded Print Management, Wireless • Identify and launch additional Solutions • Strategic Sourcing successful in commercial space • Agencies purchasing independently • OMB memo requires agencies to use strategic sourcing • FSSI Program Management Office formed • Launch Commodity Teams: • Launch Office Supplies I Commodity Team • Establish Community of Practice • Write FSSI ConOps • Launch Commodity Teams: • Print Management • Wireless Rate Plans & Devices • Domestic Delivery 2 • Office Supplies 2 • Wireless TEMS • Domestic Delivery 1 12

  13. Coming Soon Professional Services Performance Management/ Continuous Process Improvement FSSI Solution Set Launched Solutions FY12 Launch Next FSSI to be submitted to the SSWG is for Information Sources with Library of Congress as the Executive Agent.

  14. FSSI solutions are developed collaboratively across government agencies and offer customers a number of potential benefits Average Savings from 9%-30% • Realize significant savings with competitive pricing • Decrease administrative redundancy • Improve business intelligence • Achieve socio-economic and sustainability goals Minimizes administrative overhead and duplication of effort All FSSI programs collect detailed “level 3” business intelligence data Strategy developed to maximize socio-economic participation 14

  15. Strategic Sourcing Knowledge Management Portal

  16. FSSI Lessons Learned • Implementing FSSI solutions took an average 18+ months each • Active stakeholder engagement and commitment required • FSSI is management and acquisition • Obtaining business intelligence is laborious • GSA is the logical lead for many of the FSSI categories • FSSI for mission-specific strategic sourcing categories could be led by other agencies • Best-in-class solutions are the result of customer and industry engagement

  17. FSSI and OMBFSSI • OMB and OFPP support FSSI • FSSI apart of AcqStat reviews, OMB Business Case, and Campaign to Cut Waste and included in EO 09-11 • FSSI Briefing at President’s Management Council • OFPP engages CXOs, SPEs, and “front line” about FSSI • FSSI fosters greater collaboration among CXOs • FSSI is viable solution in the budget environment

  18. Contact Information • FSSI Program Management Office Pia Scott, PMP pia.scott@gsa.gov (703) 603-8327FSSI website: www.gsa.gov/fssi FSSI email address: fssi@gsa.gov

  19. APPENDIX Additional Information FSSI Solution Offerings

  20. FSSI Solutions Telecommunication Expense Management Services (TEMS)

  21. FSSI TEMS Overview FSSI TEMS FSSI TEMS Statistics 5 Participating Federal organizations Total Spend $2M Savings Potential 30% “Driving Environmentally Sustainable Solutions” Offering Program Manager: david.peters@gsa.gov (703) 306-6403 • Three IDIQs awarded January 2008 • One large and two small businesses • Optimizing rate plans • Identifying inventory and billing errors • Actively monitoring spending • Eliminating unused lines • Improving management and security controls As of April 2012

  22. FSSI Solutions Domestic Delivery – Second Generation (DDS2)

  23. FSSI DDS2 Overview FSSI DDS2 FSSI DDS2 Statistics 142 Participating Federal organizations Total Spend $59M Savings off Published Rate 73% Program Manager: stevie.graham@gsa.gov (703) 605-5569 • One BPAs awarded August 2009 • Provides best-in-class delivery service • Eliminates fuel surcharges • Streamlines acquisition process • Implements practices for additional cost reductions As of April 2012

  24. FSSI Solutions Office Supplies – Second Generation (OS2)

  25. FSSI OS2 Overview FSSI OS2 BPA Overview FSSI OS2 Statistics 55 Participating Federal organizations Total Spend $319M 76% of spend with Small Businesses Total Savings $40M Program Manager: raymond.lewis@gsa.gov (212) 264-5054 • 15 BPAs awarded June 2010 • 2 large and 13 small businesses • 3 distinct vendor pools • Additional discounts are triggered at $25M, $50M, $75M and $100M tier levels • Point-of-Sale discount As of April 2012

  26. FSSI Solutions Print Management (PM)

  27. FSSI PM Overview FSSI PM FSSI PM Statistics 17 Participating Federal organizations Total Spend $2M Savings Potential 30% “Driving Environmentally Sustainable Solutions” Offering Program Manager: mark.storay@gsa.gov (816) 926-8385 • 11 BPAs awarded September 2011 • 6 large and 5 small businesses • 3 distinct offerings • Purchase, Lease, Rent or Cost-per-copy • Fleet Assessment • Device Plus As of April 2012

  28. FSSI Solutions SmartBUY

  29. The FSSI SmartBUY program will develop strategies to address all large software publishers SOFTWARE VENDOR FY09 REVENUE $60,000M Agency interviews suggest that these publishers account for the majority of the Federal government’s $6.5B of software spend Initial FSSI SmartBUY focus $50,000M $40,000M $30,000M $20,000M $10,000M $0M Microsoft Cisco Oracle IBM Symantec Computer Associates Adobe BMC Red Hat Google Notes: Cisco software revenue reflects “products” revenue only IBM software revenue reflects “software” revenue only Google software revenue reflects “Licensing and Other” revenue only SAP excluded as it has been deemed out of scope for the SmartBUY program Source: Annual reports

  30. FSSI Solutions Wireless Coming soon

  31. Federal Wireless Environment • Total purchases exceeds $1.2 billion annually (plans, devices, etc) • Wireless buys are characterized by: • Individual agency/sub-agency acquisitions (individual contracts, BPAs) • Some use of Federal Supply Schedule ($337 million in 2010) • Small volume purchases with average discounts less than commercial peers; • Discounts vary significantly across government (Prices vary up to 200%) • One Dept has > 4,000 contracts with top 4 carriers • Plans and devices reflect personal preferences and individual knowledge rather than organizational need or other business requirements

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