Delivering Procurement as a Shared Service

1. Delivering Procurement as a Shared Service Presented By: Stephen G. Mack, CPSM, C.P.M. Cathy Barker, CPPO, CPPB

2. 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.

3. 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.

4. 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

5. 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

6. MOU • Procurement Responsibilities • Process Facilitation • Strategic Contracting • Support • Campus Responsibilities • Approval of projects • Compliance • Report on MOU quarterly to Governing Body

7. 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.

8. 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.

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

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

12. 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.

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

14. 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.

15. 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.

16. 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%.

17. 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.

18. 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.

19. UM Procurement Operations Jennifer Alexander Director, Procurement Operations Melinda Richardson Administrative Assistant Kristy Cook Accts Payable/Procurement Support Specialist Brenda Reifschneider Coordinator, eCommerce Adria Allen Procurement Systems Principle Pete Kelley Procurement Value Analyst Valerie Duever ExacTrac/Procurement Support Specialist Elaine Bruno Imaging/Procurement Support Specialist Laura Lawson Hotline & Reporting Procurement Admin. II Carolyn Calton Web & Associated Appl Design/Main. Prog. Analyst-Spec 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

20. UM Procurement Services Stephen Mack Director, Procurement Services Darla Higgins MoreNet MOU cooperative Angie Lair IT MOU cooperative Melinda Richardson Administrative Assistant Teresa Vest Manager, Client Relations (Columbia) Rochelle Duncan Strategic Sourcing Spclst Joetta Gross Sourcing Specialist Lead Bo Solomon Manager Surplus & Asset Mgmt David Silvey Strategic Sourcing Spclst Lead Athena Nance Strategic Sourcing Spclst Stacy Jones Manager, Client Relations (Rolla) Laura Roth Strategic Sourcing Spclst Jonathan Young Surplus & Asset Mgmt Kansas City 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 George Brooks Surplus & Asset Mgmt St. Louis Heather Reed Strategic Sourcing Spclst Jim Shatto Strategic Sourcing Spclst Ruby Jemison Sourcing Specialist Greg Hook Surplus & Asset Mgmt Rolla Tangie Brooks Manager, Client Relations (St. Louis)

21. Why I’m here…….

22. 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

23. Primary Responsibilities

24. Division of time spent

25. Resources • Services • Req/PO processing • RFx needs • Contract Administration • Vendor Management • Surplus/Asset Management • Operations • Hotline • Purchasing Card • PeopleSoft • eProcurement “Show Me Shop”

26. 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

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

28. Questions?