Technology as a Key Tool to Advance Mission and...
Transcript of Technology as a Key Tool to Advance Mission and...
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Leveraging e-Procurement
Technology as a Key Tool to Advance Mission and Goals
Nathan Andridge, The Ohio State UniversityJill Schunk, Indiana UniversityMaggie Witt, University of Nebraska
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First, why are we here?
Objective: We want to generate dialogue for procurement to facilitate positive incremental change. The evolution and value of Procurement and e-Procurement tools How this technology can:
empower your procurement and strategic sourcing teams, aid in better decision-making, and support effective supplier management strategies
Getting the most out of YOUR e-Procurement investment September 2019 | e-Commerce Technology © Copyright 2019. Authors’ permission required for reprint.
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Does Procurement technology look the same everywhere?
NebraskaOhio StateIndiana
A/P Jaggaer PeopleSoft SAP, JaggaerContract Management Jaggaer Ariba ionWave
E-Procurement Jaggaer Prodigo Jaggaer
E-Sourcing Jaggaer Ariba ionWave
P-Card US Bank/Chrome River PNC/PeopleSoft US Bank/
SAP/Concur
Spend Analysis Spend Radar (Jaggaer) Oracle Hyperion SAP/Tableau
Supplier Management Jaggaer PeopleSoft None
Travel & Expense Management Chrome River Concur Concur
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Procurement Trends in Higher Education 1
Transformation and benchmarking Enhancement of Procurement office / CPO role Customer/stakeholder engagement Procurement advisory boards, focus groups, etc. Supplier Relationship Management (SRM) Sustainability, Diversity and inclusion programs E-Procurement, E-Supplier Management and E-Settlement modules help buyers
strengthen supplier relationships, resulting in: 2
process efficiencies consistently competitive pricing dynamic, discount-based payment terms
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Manual Process• Carbon copy forms• Mail quotes and PO’s• Transaction Oriented• Manual change order• Depended on Phone and
US Post Office
1st Electronic Systems• Initial B2B / EDI systems• Still transaction based• Reactive vs Proactive
Analytics Development• Introduction to analytics• Electronic Order and
invoice transmissions • More Compliance
Drivers
Strategic Sourcing Introduced• Analytics and KPI’s • P2P or S2P introduced• Addressable Spend Focus
Strategic Sourcing on Steroids• Focus on identifying
relationships across the institution (CRM Use)
• Leverage existing and build new relationships
• Focus on areas of addressable and non addressable spend
1980’s 1990’s 2000 2010 2020
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Procurement Evolution
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What does Value mean? Different things to different people…..
All aspects of SERVICE are critical to everyone for success
Most customers care about
speed and cost
Finance cares about cost,
revenue, risk and compliance
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Faculty care about impact to research
and student engagement
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Finding Value in Procurement5…
Marrying Upstream and Downstream processes enables procurement teams to capture the value that has been created
Sourcing = Planning Buying = Executing
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E-Procurement…it’s NOT just about better pricing…
Eliminate paperwork, rework and errors Reduce costs – leverage every
taxpayer and tuition dollar expended, and is accountable
Mitigate risk with existing and established contracts
Visibility of spend – centralized tracking of all transactions enables KNOWING what you buy, and therefor better supplier contracts.
Leverage spend and structure supplier relationships
Unleash productivity – stakeholders self-service low-value transactions while Procurement staff focuses on strategic sourcing and improving supplier relationships
Ensure compliance and control –standardized approvals and workflow ensure appropriate authorization and spend is directed to draw off existing contracts
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Procurement can be true VALUE CREATION
Harness technology to:
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Process & Technology Curve – where are YOU?
Paper Purchase Order
Punch‐Out Catalog
ERP Procurement Module
Contract Consolidation
Electronic Invoicing and Payments
Dashboards and Performance Metrics
Standardization and Functionally Equivalent Mandates
P‐Cards
Consortia Contracts
Category Managers
E‐Procurement
Price Benchmarking
Involvement in Non‐commodity SpendData
Analytics & Reporting
Supplier Relationship Management
Automating Processes and Consolidating
Contracts
Maximizing Data Analysis and Strategic Sourcing
Level of Soph
istication
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Organization Transformation: Nebraska
Past – 2010-15 Procurement Task Force
Executive sponsor
Implement E-Procurement technology
Committee evaluation
Present - 2019 Supply Chain Council
Strategic Procurement
SRM (supplier management)
Expanding technology use to more integrated modules
Evaluating to support P2P
Evolving Big data spend analysis
Category strategy development
Collaborative procurement and stakeholder engagement
Digital process optimization
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Innovative Outcome — Beyond Traditional Purchasing
2016 Imminent price increase of 10-15%,
potential impact of $150-225K Data analysis identified delivery issues,
patterns Highly inefficient, redundant, recurring
issues, safety concerns Benchmarked best practices, similar
customers High cost to serve for prime supplier
2018 Extracted order history and delivery
location patterns from e-SHOP system Data analysis led to recommendation for
new delivery model Pilot – 8 months New model (1 year) Schedule deliveries – consolidate by
location and building Order by 11:00 am previous workday Lowered cost to serve, no price increase
Case Study: Industrial Gases Est. Annual Spend: $1.5 million
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Supplier Relationship Management Spend analysis
Segmentation
Category management
Team review and Stakeholder engagement
GOALS:
Focus energy on Top Tier (Strategic and Core) suppliers
Find most efficient methods to procure from Basic suppliers
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Strategic Supplier Contracts
Why University-Wide Contracts? Better leverage ~$1.1 Bils. annual spend for supplies and services Buying together brings down prices (product/service standardization) Quality and service standards determined and implemented by university experts
Objectives Develop contracts that leverage spend across all units Provide highest quality/lowest cost goods and services to our customers Standardize products/services across campus
Process Include experts from across campus to develop contract specifications and requirements Work with suppliers to develop long-term strategic partnerships
(improved efficiencies/technology) Increase use of eProcurement and online supplier catalogs
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Supply Base Consolidation
Why Supplier Consolidation? Fewer suppliers -- allows you to manage each one more actively Better management of quality and service standards
Cost Consistency/Optimization Couldn’t leverage spend with >29,000 suppliers Different prices paid to same supplier for same service (Plumbing Services) Departments were paying different prices to different suppliers for same product (Janitorial Products) Allows suppliers to provide “best pricing”; long-term contracts with “more predictable spend”
Administrative Streamlining Opportunity for improved technology and ordering efficiencies
Improved procurement tools, training programs, and customer service Reduces the time it takes to procure goods and services
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eProcurement Optimization
Why use eProcurement? Online catalogs allow for “defined” measurement of products/services It helps answer the questions - “What did I buy? What size? How many? At what price?
Administrative Streamlining Reduce time it takes to procure goods and services
eProcurement transactions can be ordered and delivered within 24 hours Traditional purchase orders may take up to one week (or longer depending on approval levels)
Timely and accurate management of supplier catalogs (availability, offerings, price)
Data Analysis Improve efficiency and accuracy of tracking costs Better understanding of goods and services being procured Manage the supply chain to ensure best value pricing
Future Strategic Contracts eProcurement data help determine where and how to better develop content for future contracts
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Organization Transformation
Procurement Strategic Plan
Vision: To be recognized as a “Best in Class” Procurement Organization
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Technology Transformation
Travel and Expense System Implemented Chrome River – July 1, 2018
Big Bang Go Live Travel Reimbursements Pcard Reconciliation Updated Policy
New Procure 2 Pay solution implemented Jaggaer – July 1, 2019
Big Bang Go Live 8 full modules with entirely new tool sets Reduced policies from 35 to 17
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You don’t know what you don’t know until you don’t know it!
Supplier Self Service Portals are the right path, but can be difficult
Total Automation in Accounts Payable sounds easier than it is!
Analytic tools are very robust but, it’s hard to understand the analytics capabilities when there’s no real data in the system!
Some toolsets sound extremely beneficial (and are) but, don’t short sell the implementation needs.
Cloud Systems –the Good, the Bad and the Ugly
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Developing opportunitiesBEYOND COST SAVINGS ALONE
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Innovative Outcome—Revenue Initiatives? Beyond Traditional Purchasing
Revenue Growth
Brand Alignment
Collaboration
Relationship Development
Value-added Benefits for the IU Community
Advisory CommitteeChair, VP & Chief Financial Officer
Office of the President, Chief of Staff Executive VP for University Academic Affairs VP For Research Chief Executive Officer, IUAA VP & Director of Intercollegiate Athletics VP For Capital Planning & Facilities VP & General Counsel VP for Engagement VP For Information Technology & Chief Information Officer, and
VP for Communications & Marketing Associate Vice President for Procurement Services Executive Director of Corporate Relations for the VP of Research Director of Sponsorships, Licensing, & Trademarks
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Innovative Outcome—Revenue Initiatives? Beyond Traditional Purchasing
Identifying Priorities and Objectives:
Establishing a Statement of Work that includes objectives for:1. Procurement Outcomes2. Engagement with Academic
Programs, Alumni Relations, Athletics and Events
3. Innovative Research Programs
4. Philanthropy5. Creating a Talent Pipeline6. Community Engagement
Implementation: • Provide infrastructure to identify
and capitalize on areas where opportunities might exist
• Identify all touch points• Create a market basket• Understanding objectives and
expectations• RFP Proposal development• Stakeholder engagement• Be transparent on the costs to
execute• Time savings and ease of
transacting business
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Indiana University’s Official Cap & Gown Regalia PartnerProviding a world class graduation experience
• Exclusive Cap & Gown Regalia partner
• Discounts and fixed rates for students
• Coordinated Commencement campaigns across all campuses
• Support for Alumni, Athletics, Events, International Services, and Orientation
• Unique platforms to promote graduation and grad products
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Bringing it all together…BENCHMARKING BEST PRACTICES
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Common themes…how did WE do it?
We had/have a seat at the table Our network—NAEP, BTAA, ISM, other professional associations
People Whitepapers
CBO awareness / support Business case development Technology investments Incremental change
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“”
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The essence of strategy is choosing what NOT to do.
~ Michael E. Porter, Harvard Business School
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What questions do you have?
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