Changing for ExcellenceLeveraging Enterprise

TechnologyProcurement of Hardware &

SoftwareMay 20, 2014

Changing for Excellence – Effective Strategies for Leveraging Enterprise Procurement of Hardware and SoftwareSpeakersRick Beattie, Director of Procurement ServicesPaul Geisler, IT Contract SpecialistChris Howe, Procurement Commodity Specialist – Technology

DescriptionThis program will detail the work performed as part of the on-going Changing for Excellence Project at the University of Kansas to effectively develop and implement strategic change in the areas of software and hardware procurement. Topics will include organizational structures, roles and responsibilities, use of enterprise systems to deliver content and increase compliance, governance, communication and reporting.

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AgendaHistory of Procurement at The University of KansasChanging for ExcellenceChange ManagementChanging for Excellence & ProcurementTimelines & TrainingPolicy & Procedure UpdatesCommodity Advisory CommitteeTechnical Advisory Committee

Procurement “Revolution”1953 – All State Procurement Functions were centralized

Inability to customize contracts to specific university needs2007 – Independent Procurement Pilot for KU / FHSU2009 – Autonomy achieved for all state universities2009 – Introduction of SciQuest (KUPPS) to KU Campus2011 – Changing for Excellence 2012 – Upgrade KUPPS and Expand Use

Wave 1 – Fall 2012 - New Punchouts Low Impact to day-to-day procurement, Allowed users to get

familiar with the system. Wave 2 – Crimson & Blue Groups Roll-out

Use of the system became mandatory with a Gradual ramp-up to full deployment

Impact to end-of-fiscal year activities

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KU “Changing For Excellence” ProjectTransforming How KU Operates KU is dedicated to being recognized among the top-tier public international

research universities. To meet the expectations we have for ourselves, the aspirations we have for our state, and the hopes we have for our world we must all participate in making our organizational structure more effective and efficient.

Comprehensive Review A review of KU's administrative practices and procedures began in April, 2011.

For six months, the entire university worked to identify areas of opportunity and then to develop business cases and implementation plans.

Tracking Our Progress For each of the business cases selected, we will track progress by developing a

timeline for implementation, tracking individual projects, and totaling our savings

http://cfe.ku.edu/index.php

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Change ManagementUnderstand where you are – Establish a BaselineDefine where you want to go and how that impacts others

Why this change? Why Now? Defining what a successful outcome will look like How will you know that you are done…

Executive Buy-InOrganizational Buy-In (Town Halls, etc.)Team-based implementationTeam-based operations and follow-upRoll-out and sustainFeedback and MetricsRepeat

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Changing for Excellence – Procurement & SourcingProcurement & Sourcing (The Plan)Reorganized central procurement processes to ensure better overall purchasing management.

Improve technology and automate operations to increase efficiencies in procurement payment processes.

Increase collaboration among central procurement, KUMC and campus departments.

Eliminate shadow systems to improve the quality of data used in making purchasing decisions.

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Moving From Theory to ApplicationChanging for Excellence - Procurement & SourcingStrategic Sourcing Initiative

Within the KU Campus – Historical Spend Data (all means) In cooperation with University of Kansas Medical Center

Organizational Changes Create a Procurement Team

Combine Purchasing & Payables - Procure-to-Pay (P2P) Commodity/Category Specialists, Data Analyst – New Roles

Standardize & promote procurement processes using best practices

Utilize systems and technology to streamline the Procure-to-Pay processes

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Collaboration and organizational changes Established End User Advisory GroupRevised policies & procedures with end user feedbackEstablished commodity-specific procurement advisory

groups to discuss current & future purchasing needsScientific Supplies, IT HW/SW, MRO – JANSAN (maintenance),

Construction, P2P Processes

Created a Purchasing Matrix to target the best tools to purchase & pay for goods and services

Established a new Procurement Services organization Single point of alignment & leadership across Purchasing & Payables Centralized the invoice data entry process within Payables Most of the New Procurement team were existing staff

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Communications and preparationsTown halls were conducted in February 2013

Recommended for anyone involved in the procurement process for goods & services

Shoppers, Requestors, Approvers; plus Administrators and Faculty

We engaged with Campus Financial Officers (CFOs) and Budgeteers over a several month timeframe to raise awareness and knowledge of the solution

CFOs recommended developing ‘power users’ to help units & departments prepare for KUPPS go live

Training (of all types) was made available for all rolesProcurement was available to support and address

feedback as the new KUPPS solution was rolled out

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Why we improved the procurement processEconomic conditions have reduced budgets for goods / services Procurement strategies need to mature and support the need to

stretch funds While doing this, our focus remained on “Service over Bureaucracy” We saw a need to transition from heavy P-Card usage Move to preferred vendors with pre-negotiated discounts & increased

service based on common KU and KUCR purchases

Solution improvements were targeted to: Leverage spend across the KU Enterprise to maximize savings Balance speed of purchase / payment process with the need for good

internal controls Gain process efficiencies and data visibility across the full procurement

(P2P) life cycle Improvements need to support the Shared Service Center (SSC) initiative

(another major CFE project)

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Transaction Type VocabularyCatalog Order: Order comprised of items from either:

Hosted or Punchout CatalogsNon-Catalog Order: Order comprised of items from Non-

Catalog forms; may or may not reference a contractContract Order: Order where a KU contract is referencedCheck Request: Replacement process for direct voucher

entry; creates a requisition, subject to requisition approval workflow, which when approved exports to PeopleSoft, creates a fully approved Voucher and is exported and indexed in ImageNow

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Project Timelines, Next Steps and CommunicationsNotify the Campus when changes were comingWhat those changes were & how it impacted the departmentsGather departmental data (who and how)

Role assignments and department approvals Testing: UAT, End to End, Production Qualification & Live OrderDept. specific meetings – Two (2) WavesTraining was offer for all roles prior to Go Live

Lecture style Web recordings Reference documents – Prior to go live Hands on classroom – Department Specific if needed Post Go Live – Labs for Drop-Ins

Developed Power Users across the Campus

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New Policies and Procedures Summary Option to assign ‘self approval limits’

to appropriate users (Requestors) $500 $2,000 $5,000 Applicable to Non-Projects

transactions only No voucher logs for KUPPS orders

Invoices for catalog orders automatically paid if less than $5K

PO Invoices for non catalog orders will be keyed by Centralized AP and approved by departments via ImageNow

Matching tolerances of 10% / $100

Central Procurement Formal bids limit raised from $5,000

to $50,000 Requisitions less than $50,000 will

be acted upon within 1 day Will review new vendor requests

Audit Sampling methodology replaces

100% audit Pre-Audit steps if greater than $5K

or Equipment

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SciQuest / KUPPS Optimization Eliminated Paper voucher logs Enabled eMail approval in SQ (including from mobile devices) Check Requests ensure automated approvals for Non PO invoice transactions

and syncs with ImageNow (KU Electronic Invoice Document/Data Software) 12 Prior Authorization forms and procedures were simplified into 2 more

intuitive forms (Non-Catalog Goods or Non-Catalog Services) Prohibited items reduced to 8 issues

(e.g. artwork, decorations, discount club memberships etc.)

Special approvals systematically driven for: EH&S IT Hardware IT Software Prior Authorizations

Established IT workflow based on Suppliers and Account Codes

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Purchasing Approval Matrix

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The detailed approval requirements for the various purchase types and dollar amounts are summarized in the Purchasing Approval Matrix.

Procurement Matrix Guiding Principles Use KUPPS Catalogs for commodities with Catalog Vendors established

Office Related Products (Staples), IT Hardware / Software (Dell / CDW-G / SHI), Scientific Supplies (Fisher, VWR, Invitrogen, Sigma), MRO - JANSAN (Grainger / Regal / Stanion)

Use KUPPS NonCatalog Forms for goods / services that can be ordered / provided ahead of payment (payment provided upon processing of the Invoice)

Scientific & Capital Equipment not available from catalog suppliers, Professional Services, Construction, Contract Services

Use P-Card for emergencies, onsite retail purchases, automatic billings set up, and when PO’s will not be accepted (travel card has specific rules)

Some vehicle supplies, Postage / Copy Services, Food, Shredding Service Use KUPPS Check Requests when neither a PO nor P-Card will be accepted

OR as a settlement mechanism for when an invoice presented and no PO created ahead of time

Honoraria, Advertising, Payments between KUCR and KU, or After the fact invoices Some items remained status quo or centrally processed

Direct Endowment Payments, Insurance, Legal, some Interdepartmental Transactions

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Take AwaysAutomated approval workflow and no more voucher logs

PO-related invoice data entry process will move from campus to Payables

Email approval including from mobile devicesCheck Requests ensure automated approvals for “direct

invoice” transactions and sync with ImageNow12 PA forms and procedures reduced to two (2) forms

Non-Catalog Goods or Non-Catalog Services Special approvals systematically driven for: IT HW / SW and Prior

ApprovalsProcurement Matrix was provided to end users to guide

them to the preferred method of procurement by account code and commodity

New purchasing commodity advisory groups We formed purchasing commodity advisory groups to help us

understand campus needs around: Scientific IT Hardware / Software Facilities / MRO Construction P2P Process

The focus was on: Who are the right suppliers? (Ongoing) What are the right processes for purchasing and paying for goods

and services Strategies – Present KU as a Unified Team Campus-wide deployment

Enables campus representatives to provide key input into supplier strategies

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Changing for Excellence – IT Perspective

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* CFE as a campus-wide initiative - http://cfe.ku.edu/index.php

* KU IT Initiatives• Server Centralization• Reorganize and Redefine IT staff and organization• Increase Usage of Multi-Function Devices (MFDs) for

desktop printing• Implement a Single Identity Management System

across all campuses• Network Optimization• Leverage Software Purchasing

CFE – IT and Procurement

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• Procurement: “Iron Fisted Enforcer” vs. Facilitator

• Maximizing Buy-in / Recognizing Hierarchy

• Chief Procurement Officer / Chief Information Officer

• Technical Advisory Committee (Deans, specifically)

• Hardware Advisory Committee (HWAC)

• Software Advisory Committee (SWAC)

Technical Advisory Committee (TAC) • TAC Team Members:

Dean of Liberal Arts & SciencesDean of Business SchoolDean of EngineeringDean of Pharmacy Dean of EducationDirector, Information Technology, Projects ManagerDirector, Information Technology, Business ManagerDirector of Procurement Services IT Commodity Procurement Specialist

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TAC – Hardware SubcommitteeHardware Sub Committee MembersProcurement / Commodity SpecialistKU IT – Functional Lead Technical contact delegated from key Departments

Liberal Arts and SciencesEngineeringEducationBusinessPharmacy

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TAC – Software SubcommitteeSoftware Sub Committee Team MembersProcurement / Commodity SpecialistKU IT – Software Licensing Specialist Technical contact delegated from key Departments

Liberal Arts and SciencesEngineeringEducationBusinessPharmacy

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Combined Forces: HWAC/SWACSingle Team / SubcommitteeTeam CharterProcurement Commodity Specialist

Facilitator of MeetingsResearch ResourceLiaison between HWAC/SWAC and TAC

Software Licensing Specialist

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First Effort…Getting the TAC on-boardMeeting with College DeansMajor Selling Points

Individual College IT CIOs would participate Proposed changes would be justified and subject to review / approval by TAC

Decisions would be made by IT subject matter experts, with an assist from procurement

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Nose to the Grindstone…HWAC meets bi-monthly

60 to 90 minute meetingsMeetings held at Campus Computer Center

Major InitiativesDell Desktop and Laptop StandardsTablet StandardsSoftware

MatLabQualtrics

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CommunicationsPromoting Success through Communications

HWAC/SWAC to TAC and beyond

Technical Liaison List-Serv

Prominent Placement of Standards on Ordering Websites

Dealing Directly with Procurement Exceptions

Monthly IT / Procurement Coordination Meeting

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Questions

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Rick Beattie, Director of Procurement Servicesrbeattie@ku.edu

Paul Geisler, IT Contract Specialistpgeisler@ku.edu

Chris Howe, Procurement Commodity Specialist – Technologychowe@ku.edu