An EPIC Transformation of Purchasing Processes at the University of Manitoba

851
-1

Published on

During this informative session, Paul Dugal shares the journey that the University of Manitoba experienced—from making the business case to implement the end-to-end Ariba solution suite as an essential tool for transforming their new purchasing operating model, to engaging the broad University community in its successful implementation.

Paul Dugal, Manager, Purchasing Services - University of Manitoba

2012 Ariba Commerce Summit in Toronto

Published in: Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
851
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

An EPIC Transformation of Purchasing Processes at the University of Manitoba

  1. 1. ARIBA Commerce Summit November 8, 2012
  2. 2. An EPIC transformation of purchasing processes at the University of ManitobaBy: Paul Dugal, Manager, Purchasing Services
  3. 3. In Summary
  4. 4. Lessons Learned• eProcurement is an essential tool to achieve purchasing excellence. It is not the only tool. An effective Purchasing Operating Model and Strategic Sourcing methodology are equally important• Include all three areas in your business case
  5. 5. Lessons Learned• eProcurement is not just a purchasing system. More importantly, it’s a Finance System• Engage key stakeholders and potential users of the system, right from the beginning – and it begins before you decide to buy an eProcurement system – What’s wrong with the current purchasing processes? – What could make it better?
  6. 6. Lessons Learned• Combine the operational effectiveness of both the Purchasing Services organization with the organization as a whole, to build your business case• Your ROI will be much quicker and gain an easier buy-in from Senior Management
  7. 7. Lessons LearnedInvestment: • New Purchasing Operating Model and Strategic Sourcing (consulting and additional staffing costs) • Current State / Future interviews (consulting) • User Engagement costs (participants) • The eProcurement Service costs • Implementation Resources:15 FTE/yr x 2yrs • Ongoing annual internal maintenance costs
  8. 8. Lessons LearnedBenefits: • Prove the power of Strategic Sourcing Savings. U of M achieved $4.5 million (3% of addressable spend) prior to buying eProcurement • Consider the redeployment of users’ time savings to more productive tasks
  9. 9. The Journey
  10. 10. How did we get here?1. Reorganization of Purchasing Services (2010): • Category Management • Performance Management2. Strategic Sourcing (2010-2011)3. eProcurement implementation (2011-2013)4. EPIC Launch (October 9, 2012)
  11. 11. How did we go about designing an eProcurement system for U of M?• Engaged Faculty and Staff in Current State and Future State workshops• Engaged them in RFP requirements• Engaged them in supplier selection• Engaged them in design stages• Engaged them in testing• Engaged them in Pilots
  12. 12. “Current State” & “Future State” Analysis Workshops• 15 workshops over a 6 week period with 30 participants from a range of faculties and departments• Over 3,300 person-hours of analysis
  13. 13. What did we learn?• Too many ways to make purchases• Too many forms to chose from• Too many steps• Too time consuming of processes• Not enough departmental control• Ordering time too long
  14. 14. What did we learn?• Time consuming approval process• Difficult to track the approval process• Not aware of purchases until expensed• No commitments on low-dollar purchases• Difficult to obtain copies of low-dollar Requisitions and Invoices
  15. 15. What we didn’t hear• We need help to save us money• We need better consulting from Purchasing Services• We need to standardize the variety of products/services we buy• We need to consolidate our supplier base
  16. 16. Conclusions• Need an easy electronic method to request goods/services, financially commit purchases, approve, order, invoice, receive, view and archive related documents• Need a spend analytics tool• Need to manage contracts• Need to automate competitive tendering and evaluation process• Need an eProcurement solution
  17. 17. Search for an eProcurement Service Provider• Built the RFP requirements according to the As Is & To Be workshops and operational needs• Engaged 155 faculty and staff from 79 departments in top 3 supplier demonstrations• 95% in favor, and we selected Ariba Inc.
  18. 18. Implementation• Conducted a 54 week implementation process in Sept. 2011• Implementation team of 15+ FTE• Continued to engage stakeholders in the design work• Did we build what you wanted?• Did we hit the target?
  19. 19. Conference Room Pilots
  20. 20. Not a Bulls-eye, but we made improvements of EPIC proportions• $250 million/annually – 100,000 transactions• Variety of Goods/Services: live animals, scientific apparatus/chemicals, musical instruments, consulting services, IT hardware/ software, construction, office furnishings, transportation services, etc.
  21. 21. EPIC Improvements One electronic procurement process • EPIC (Purchasing Card as a back-up) Fewer ways to buy • one Purchasing process • one Sourcing Request process • one Contract Request process
  22. 22. EPIC ImprovementsSimplified, automated, faster procurement process with less stepsUnder $2,500 ordering time reduced from 8 days to less than 1Departmental control on their purchasesVisibility of entire process
  23. 23. EPIC Improvements More efficient electronic approval process All related information available on-line & reports Upfront commitments on all purchases Paper(less). Some faxing of P.O.’s Requester driven (empowerment of Requestors) Purchasing Services assists when > $2,500/item or $25,000/order
  24. 24. EPIC Improvements Electronic Catalogue ordering (75% of orders) – On-line searching Electronic non-catalogue ordering On-line Receiving of higher valued orders Automated Budget checking On-line invoice variance reconciliations
  25. 25. EPIC Improvements Operationally• eSourcing• eContracts• Enablement of suppliers to transact electronically• Spend Analytics • Enhanced by use of Commodity Codes
  26. 26. EPIC Improvements Operationally• Strategic Sourcing Savings • $4.5 million per year so far • Standardization of goods/services • Consolidation of suppliers• Improved Services by Purchasing Services• Purchasing Services is now being recognized for its strategic value and importance
  27. 27. Spend Analytics Example
  28. 28. Services IT Construction Logistics Research and ScienceTotal Spend by Category
  29. 29. Consolidation of Suppliers
  30. 30. Services Spend By Supplier
  31. 31. Exported Spend of All Services Suppliers
  32. 32. Consolidation of Suppliers
  33. 33. In Summary
  34. 34. Lessons Learned• eProcurement is an essential tool to achieve purchasing excellence. It is not the only tool. An effective Purchasing Operating Model and Strategic Sourcing methodology are equally important• Include all three areas in your business case
  35. 35. Lessons Learned• eProcurement is not just a purchasing system. More importantly, it’s a Finance System• Engage key stakeholders and potential users of the system, right from the beginning – and it begins before you decide to buy an eProcurement system – What’s wrong with the current purchasing processes? – What could make it better?
  36. 36. Lessons Learned• Combine the operational effectiveness of both the Purchasing Services organization with the organization as a whole, to build your business case• Your ROI will be much quicker and gain an easier buy-in from Senior Management
  37. 37. Lessons LearnedInvestment: • New Purchasing Operating Model and Strategic Sourcing (consulting and additional staffing costs) • Current State / Future interviews (consulting) • User Engagement costs (participants) • The eProcurement Solution costs • Implementation Resources:15 FTE/yr x 2yrs • Ongoing annual internal maintenance costs
  38. 38. Lessons LearnedBenefits: • Prove the power of Strategic Sourcing Savings. U of M achieved $4.5 million (3% of addressable spend) prior to buying eProcurement • Consider the redeployment of users’ time savings to more productive tasks
  39. 39. It is EPIC!
  40. 40. It is Live!
  41. 41. NowPlaying
  42. 42. University of Manitoba
  43. 43. EPICquestions

×