Ontario University Purchasing Managers Association May 28, 2008

We’ve been busy…

… Communicating

Achieving buy-in; leveraging success SCU Executives (CAO, CIO, CFO) Ministry of Education Ministry of Training, Colleges and Universities Existing purchasing consortia

SCU Executives (CAO, CIO, CFO)

Ministry of Education

Ministry of Training, Colleges and Universities

Existing purchasing consortia

… Recruiting a new Board

OECM Board Nominees Independents: Georgina Steinsky-Schwartz (President & CEO, Imagine Canada) Lawrence Loop (VP Global Sourcing, Manulife Financial) Ministries: Nancy Naylor (ADM MEdu) Janet Mason (ADM MTCU) Dan Wright (ADM OntarioBuys Secretariat MFin) Universities: Gary Brewer (VP Finance & Administration, York U) Victor Simon (VP Resources, uOttawa) School Boards John Sabo (Associate Director Corporate Services and Treasurer, York Catholic DSB) Carol McAulay (Superintendent of Business Services & IT, Simcoe County DSB) Colleges: Rani Dhaliwal (VP Finance and Administrative Services, Humber College) Brandon Lander (VP Administration, Georgian College)

Independents:

Georgina Steinsky-Schwartz (President & CEO, Imagine Canada)

Lawrence Loop (VP Global Sourcing, Manulife Financial)

Ministries:

Nancy Naylor (ADM MEdu)

Janet Mason (ADM MTCU)

Dan Wright (ADM OntarioBuys Secretariat MFin)

Universities:

Gary Brewer (VP Finance & Administration, York U)

Victor Simon (VP Resources, uOttawa)

School Boards

John Sabo (Associate Director Corporate Services and Treasurer, York Catholic DSB)

Carol McAulay (Superintendent of Business Services & IT, Simcoe County DSB)

Colleges:

Rani Dhaliwal (VP Finance and Administrative Services, Humber College)

Brandon Lander (VP Administration, Georgian College)

… Refining OECM's Service Lines

Service Lines Compelling Value Propositions Access to previously unavailable , traceable, fact-based purchasing business intelligence …for participating Institutions as a whole, a sub-sector, a group of Institutions and individual Institutions… to support business management decisions and vendor negotiations; our scale and leverage will let us afford analytical services no Institution will want to afford on their own A no annual fee, no usage fee, no maintenance fee offering providing unparalleled access to suppliers, best-of-breed capabilities, purchasing / receiving / payment efficiencies, and lower prices (from improved supplier efficiencies and increased competition) An in-sector, sector-designed, sector-governed, sector-sensitive set of service offerings putting Institution & sector interests unquestionably first April 18, 2008 Confidential Draft - Version 2.3

Service Lines Rollout OECM Service Lines Rollout Strategy

… Consulting with other eMarketplaces

eVA eVA supports purchasing activities of 171 state agencies and 490 local government agencies eVA charges suppliers AND agencies for usage. Since 2001, over $218 million in cumulative savings on over $16 billion in orders. 88% of Virginia’s spend is going through the system. On an annual basis, more than $4 billion last year (40% increase year-over year). Results: 50% reduction in the cost to process a purchase order. Up to a 70% reduction in processing time from Solicitation to Award. Up to a 25% reduction in delivery time. Over 300 statewide contracts, which are available on eVA. Ariba’s Quick Quote feature enables buyers to get quick pricing from a variety of vendors for orders between $5,000 and $50,000. It has been used to help support small businesses in the state. 32,000 vendors on eVA. 20% get 80% of the orders. 67% increase in publicly posted business opportunities eVA fees are generally not passed on to agencies a) due to acceptance that the fee is a cost of doing business, and b) due to competition.

eVA supports purchasing activities of 171 state agencies and 490 local government agencies

eVA charges suppliers AND agencies for usage.

Since 2001, over $218 million in cumulative savings on over $16 billion in orders.

88% of Virginia’s spend is going through the system. On an annual basis, more than $4 billion last year (40% increase year-over year).

Results:

50% reduction in the cost to process a purchase order.

Up to a 70% reduction in processing time from Solicitation to Award.

Up to a 25% reduction in delivery time.

Over 300 statewide contracts, which are available on eVA.

Ariba’s Quick Quote feature enables buyers to get quick pricing from a variety of vendors for orders between $5,000 and $50,000. It has been used to help support small businesses in the state.

32,000 vendors on eVA. 20% get 80% of the orders.

67% increase in publicly posted business opportunities

eVA fees are generally not passed on to agencies a) due to acceptance that the fee is a cost of doing business, and b) due to competition.

… Finalizing stakeholder agreements

Agreements in play Transfer Payment Agreement (TPA) Outsourcing Services Agreement (OSA) Institution Services Agreement (ISA) Supplier Services Agreement (SSA)

Transfer Payment Agreement (TPA)

Outsourcing Services Agreement (OSA)

Institution Services Agreement (ISA)

Supplier Services Agreement (SSA)

Supplier Deployment OECM’s Supplier Advisory Council has indicated strong support for OECM; to meet TPA requirements, 8 letters of endorsement have been received There are several benefits to suppliers: Ability to transact (sell) electronically Single point of access to a $4.4 billion annual sector spend Favorable payment terms Access to a B2B e-commerce network, using one consistent set of tools Low cost of participation Suppliers will pay fees to OECM on the basis of 1.9% of net invoice value of purchase made through the eMarketplace Suppliers will also pay fees to Ariba for using the Ariba Supplier Network (0.1% of invoice value) We anticipate 50 suppliers on the eMarketplace when the OECM Model Office goes live (January, 2009) ramping up to 1000 by mid 2009; more than 10,000 suppliers are expected to be added during the following few years April 18, 2008 Confidential Draft - Version 2.3

OECM’s Supplier Advisory Council has indicated strong support for OECM; to meet TPA requirements, 8 letters of endorsement have been received

There are several benefits to suppliers:

Ability to transact (sell) electronically

Single point of access to a $4.4 billion annual sector spend

Favorable payment terms

Access to a B2B e-commerce network, using one consistent set of tools

Low cost of participation

Suppliers will pay fees to OECM on the basis of 1.9% of net invoice value of purchase made through the eMarketplace

Suppliers will also pay fees to Ariba for using the Ariba Supplier Network (0.1% of invoice value)

We anticipate 50 suppliers on the eMarketplace when the OECM Model Office goes live (January, 2009) ramping up to 1000 by mid 2009; more than 10,000 suppliers are expected to be added during the following few years

Ariba Survey of Benefits to Suppliers Speed of Transaction Access to More Information Enhanced Customer Relationships Partner/Customer Approval Ability to Reach New Customers Improved Branding/Awareness Lower Process Costs Increased Visibility in the Supply Chain Improved Supply Chain Efficiencies Increased Revenues Improved Planning Reduced Inventories Increase Amount of Contract Buying Growth in Order Size Benefits of Participation as a Supplier to Digital Marketplaces/E-Procurement (Percent Stating a High Degree of Benefit Experienced) 34% 20% 37% 10% 20% 18% 27% 12% 17% 16% 3% 3% 1% 6% 3 Greatest Benefits

Speed of Transaction

Access to More Information

Enhanced Customer Relationships

Partner/Customer Approval

Ability to Reach New Customers

Improved Branding/Awareness

Lower Process Costs

Increased Visibility in the Supply Chain

Improved Supply Chain Efficiencies

Increased Revenues

Improved Planning

Reduced Inventories

Increase Amount of Contract Buying

Growth in Order Size

… Planning and Executing

The First Year: OECM Model Office OECM’s most visible milestone in the first year of funding will be the OECM Model Office, targeted for go live in January 2009 Its first iteration will be at the Bronze level, with Silver and Gold functionality to follow later in 2009 It will serve multiple purposes: OECM will use it for its own procurement It will be used for demonstration purposes It will be the eMarketplace used by “Shopping Cart” Institutions Institutions wishing to use Silver and Gold functionality will be provided access via the Model Office, in advance of local implementation April 18, 2008 Confidential Draft - Version 2.3

OECM’s most visible milestone in the first year of funding will be the OECM Model Office, targeted for go live in January 2009

Its first iteration will be at the Bronze level, with Silver and Gold functionality to follow later in 2009

It will serve multiple purposes:

OECM will use it for its own procurement

It will be used for demonstration purposes

It will be the eMarketplace used by “Shopping Cart” Institutions

Institutions wishing to use Silver and Gold functionality will be provided access via the Model Office, in advance of local implementation

Strategic Sourcing Deployment Staring in May 2008, OECM’s strategic sourcing team will create shared contracts for the eMarketplace and coordinate sector-wide or multi-Institutional sourcing projects Two service types are contemplated: OECM led sourcing events and Institution-led (and OECM supported) events A collaborative decision-making process will be used to achieve supplier selection in order to maintain or improve the quality of goods and services Over the first five years of operation, the strategic sourcing team will work with sector procurement professionals to develop over 100 shared contracts for the eMarketplace, including those arising from 35 complex strategic sourcing initiatives Institutions and OECM will share savings gained from strategic sourcing; Institutions will reap 75% of the savings and 25% will return to OECM Suppliers will capture OECM’s portion of the savings by applying a premium on the Institutions’ pricing OECM will collect the premium from suppliers via a monthly charge to their p-card Based on discussions within the sector, early candidates for strategic sourcing events include textbooks, green janitorial supplies, solar energy panels, and fixed assets system (for school boards). Subject to validation June 2008. Invitation to participate on SS Committees forthcoming in June April 18, 2008 Confidential Draft - Version 2.3

Staring in May 2008, OECM’s strategic sourcing team will create shared contracts for the eMarketplace and coordinate sector-wide or multi-Institutional sourcing projects

Two service types are contemplated: OECM led sourcing events and Institution-led (and OECM supported) events

A collaborative decision-making process will be used to achieve supplier selection in order to maintain or improve the quality of goods and services

Over the first five years of operation, the strategic sourcing team will work with sector procurement professionals to develop over 100 shared contracts for the eMarketplace, including those arising from 35 complex strategic sourcing initiatives

Institutions and OECM will share savings gained from strategic sourcing; Institutions will reap 75% of the savings and 25% will return to OECM

Suppliers will capture OECM’s portion of the savings by applying a premium on the Institutions’ pricing

OECM will collect the premium from suppliers via a monthly charge to their p-card

Based on discussions within the sector, early candidates for strategic sourcing events include textbooks, green janitorial supplies, solar energy panels, and fixed assets system (for school boards). Subject to validation June 2008.

Invitation to participate on SS Committees forthcoming in June

Strategic Sourcing - Milestones Project charter Developed (May 22) Conduct consultations with SCU’s and others (June 5) Develop draft Working Group Terms of Reference (June 5) Present commodity recommendations and gain approval (June 11) Launch Initial Pilot activities: Confirm detailed implementation plan (June 11) Formally establish Working Groups (June 16) Develop draft business requirements (June 30) Conduct Industry Consultations (July 8) Finalize Sourcing Strategy and Procurement Framework (July 14) Approval to post Procurement on MERX (July 18)

Project charter Developed (May 22)

Conduct consultations with SCU’s and others (June 5)

Develop draft Working Group Terms of Reference (June 5)

Present commodity recommendations and gain approval (June 11)

Launch Initial Pilot activities:

Confirm detailed implementation plan (June 11)

Formally establish Working Groups (June 16)

Develop draft business requirements (June 30)

Conduct Industry Consultations (July 8)

Finalize Sourcing Strategy and Procurement Framework (July 14)

Approval to post Procurement on MERX (July 18)

… Looking for new business

The Role of Institutions in Launching & Sustaining OECM Contribute additional data to enable OECM to have a complete picture of Institution spend Become an OECM customer (sign the Institution Service Agreement); commit to use eMarketplace for agreed categories on agreed ramp-up schedule of spend; promote eM use within Institution and sector; participate in OECM’s Operational Excellence Committees and/or Technical Advisory Committee Designate OECM as their Strategic Sourcing partner; agree to value-sharing formula May 7, 2008 Confidential Draft - Version 1.0

Inform, promote, recruit… Face-to-face meetings with university executives Who’s next?

Face-to-face meetings with university executives

Who’s next?