PRESENTATION TO
LSU TRANSITION ADVISORY TEAM
JOINT MEETING OF ADMINISTRATIVE SERVICES,
TECHNOLOGY, STREAMLINING TASK FORCE...
Agenda
1. Introduction
2. LSU System Overview
3. LSU Shared Services
4. Procurement Evolution
5. Subcommittee Recommendati...
Subcommittee Members
 Subcommittee members include the following:
 Marie C Frank, Executive Director of
Procurement Serv...
Subcommittee Members
 Subcommittee members include the following:
 Donnie Thibodeaux, Assistant to the Vice
Chancellor f...
Subcommittee Members
 Subcommittee members include the following:
 Ben Lousteau, Fiscal Analyst, LSU HSC New
Orleans
 G...
LSU System Overview
6
# of
STAFF
REPORTS TO ANNUAL
SPEND
ANNUAL # OF
PURCHASE
ORDERS
# OF
SOLICITATION
S
SYSTEM
LSU BR (1)...
LSU Shared Services
7
Institution
Formal
Solicitations
Professional
Services
PRO
System Facilities
Property
Management
Fin...
Procurement Evolution
Administrative
Operational
Tactical
Strategic
Transaction Management Contract & Supplier Management
...
Pilot Procurement Code
Spend Analytics – eProcurement
Pilot
Procurement
Code
eProcurement
Spend
Analytics
RECOMMENDATIONS10
Pilot Procurement Code and Structure
eProcurement System
Spend Analysis and Savings Opportunity
in Procu...
#1 – Pilot Procurement Code
and Structure
Recommendation: The Pilot Procurement Code
being created for LSU should apply to...
UPPC
 Used in lieu of:
 Louisiana Procurement Code for
goods and services
 Laws governing professional,
personal, consu...
#1 – Pilot Procurement Code
and Structure
Where are we now?
 Received approval from the Board of Regents
 Received appro...
UPPC – What does it Do?
 Adopt a procurement code that is simple –
freedom from unnecessary bureaucratic
processes
14
UPPC – What does it Do?
 Ability to use more competitive strategies –
limits, electronic processes, selection… every
meth...
Office Max
 Analyzed spend of LSU and its Shared
Services Institutions to be $2 M per year
 Sought and received approval...
Reverse Auctions
 Very similar to eBay auctions where the
suppliers bid for the contract
 The ability for suppliers to p...
UPPC – What does it Do?
 Ability to solicit/contract for the most cost
effective term
EXAMPLE: Bus Transit
 Use effectiv...
Pilot Procurement Code
 REMAINING STEPS TO
IMPLEMENT:
 Approval of the Joint Legislative Committee
on the Budget (JLCB)
...
#2 – eProcurement System
Recommendation: LSU electronic procurement
system (Sciquest) should be expanded and
utilized by a...
eProcurement – July 22, 2013
launch22
eProcurement
 Electronic Public Notice
 Electronic Solicitation
 Electronic Signatures
 Reverse Auctions
 Strategic S...
#3 – Spend Analysis and
Savings Opportunities in
Procurement24
Recommendation: Identify savings
opportunities across all i...
FY 2012 – Spend Analysis
 Total Spend ≈ $252M
 Breakdown by Institution:
≈ $189M – LSU Main Campus
≈ $25M – LSU Agricult...
FY 2012 – Spend Analysis
 Total Transactions ≈ 181,698
 Total Purchase Orders ≈ 16,102
 Total LaCarte (Pcard) Transacti...
FY 2012 – Spend Analysis
27
Percent Spend by
Payment Method
Percent Spend by # of
Transactions
$193,369,473
16,102
$58,369...
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
LSU Spend Detail (FY2012)
$251.9M Spend Base
28
Taxes /
Permits / Fees IT / AV...
Savings Potential and Costs to
Date29
Based on $252M annual spend for FY2012:
Savings Opportunities (Hard $)
• Increase sp...
Savings Examples
 Several commonly used items
 Lamps
 Scientific Gloves
 Lab Coats
 Towels
 Scouring Pads
30
Procurement Evolution:
Strategic Procurement
Pilot Procurement Code
Strategic Sourcing &
Spend Analytics
eProcurement
QUESTIONS?38
THANK YOU
MARIE C FRANK, MPA, CPPB
LSU OFFICE OF PROCUREMENT SERVICES
213 THOMAS BOYD HALL
BATON ROUGE, LOUSIANA 70803
(22...
July 15 Presentation to Transition Advisroy Team on Procurement
July 15 Presentation to Transition Advisroy Team on Procurement
July 15 Presentation to Transition Advisroy Team on Procurement
July 15 Presentation to Transition Advisroy Team on Procurement
July 15 Presentation to Transition Advisroy Team on Procurement
July 15 Presentation to Transition Advisroy Team on Procurement
July 15 Presentation to Transition Advisroy Team on Procurement
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July 15 Presentation to Transition Advisroy Team on Procurement

  1. 1. PRESENTATION TO LSU TRANSITION ADVISORY TEAM JOINT MEETING OF ADMINISTRATIVE SERVICES, TECHNOLOGY, STREAMLINING TASK FORCES Presented by Marie C Frank LSU Office of Procurement Services
  2. 2. Agenda 1. Introduction 2. LSU System Overview 3. LSU Shared Services 4. Procurement Evolution 5. Subcommittee Recommendations: 1. Pilot Procurement Code and Structure 2. eProcurement System 3. Spend Analysis and Savings Opportunity in Procurement 6. Savings Examples 2
  3. 3. Subcommittee Members  Subcommittee members include the following:  Marie C Frank, Executive Director of Procurement Services, LSU  James Frazier, Associate Director of Procurement Services, LSU  Wendy Simoneaux, Assistant Vice President for Budget & Finance, LSU System  Monica Mougeot, Director of Fiscal Operations, Pennington Biomedical Research Center  Larry Williams, Director of Purchasing, LSU Alexandria 3
  4. 4. Subcommittee Members  Subcommittee members include the following:  Donnie Thibodeaux, Assistant to the Vice Chancellor for Business Services, LSU Eunice  Bill Wolfe, Director of Human Resource Management, LSU Shreveport  Jan Bernath, Director of Accounting Services, LSU Agriculture Center  Angela Neal, Acting Director of Purchasing and Materials Management, LSU HSC Shreveport  Rob Parker, Director of Purchasing, LSU HSC New Orleans 4
  5. 5. Subcommittee Members  Subcommittee members include the following:  Ben Lousteau, Fiscal Analyst, LSU HSC New Orleans  Glenn Ducote, Attorney at Law  Vic Cleveland, Manager of Contracting & Procurement, Shell Geismar LP  Tony Calcagno, Procurement Director, CB&I  Ron Krajewski, Specialty Underwriters 5
  6. 6. LSU System Overview 6 # of STAFF REPORTS TO ANNUAL SPEND ANNUAL # OF PURCHASE ORDERS # OF SOLICITATION S SYSTEM LSU BR (1) 19 VC of Finance & Administration $230 M 6,900 450 PRO LSU AG (9) 2 Associate VC for Administration $20 M 784 152 PRO LSUE (6) 2 VC Business Affairs $16.5 M 900 9 PRO LSUA (2) 2 VC of Finance $4.5 M 1,075 35 PRO PENNINGTON (3) 3 AED of Operations/Chief of Staff $10 M 415 18 PRO LSU LAW (8) 1 VC of Administrative & Finance $3.8 M 59 10 PRO LSU HSC NO 10 VC of Administration & Finance $ 61.4 M 4,019 200 PEOPLESOFT LSU HSC SHREV PEOPLESOFT LSUS ** 2 VC Business Affairs $4.7 M 1,950 98 Integrow Total 41 $350.9 M 16102 972
  7. 7. LSU Shared Services 7 Institution Formal Solicitations Professional Services PRO System Facilities Property Management Financial Accounting, Payroll, and Benefit Administration LaCarte Card LSU Y Y Y Y Y Y Y LSU Alexandria N N Y N Y Y Y LSU Eunice N N Y N Y Y Y LSU Ag Center Y N Y Y/N Y Y Y LSU Law Center Y N Y N Y Y Y PBRC Y N Y N N Y Y LSU System Y Y Y Y Y Y Y
  8. 8. Procurement Evolution Administrative Operational Tactical Strategic Transaction Management Contract & Supplier Management Low Performance Average Performance High Performance 8
  9. 9. Pilot Procurement Code Spend Analytics – eProcurement Pilot Procurement Code eProcurement Spend Analytics
  10. 10. RECOMMENDATIONS10 Pilot Procurement Code and Structure eProcurement System Spend Analysis and Savings Opportunity in Procurement
  11. 11. #1 – Pilot Procurement Code and Structure Recommendation: The Pilot Procurement Code being created for LSU should apply to all institutions under a “Shared Services” Model. Challenge: Currently, LSU Shreveport, LSU HSC New Orleans and LSU HSC Shreveport do not currently operate under LSU’s Shared Services Model. 11
  12. 12. UPPC  Used in lieu of:  Louisiana Procurement Code for goods and services  Laws governing professional, personal, consulting and social services  Laws governing equipment and services governed by the Office of Information Technology 12
  13. 13. #1 – Pilot Procurement Code and Structure Where are we now?  Received approval from the Board of Regents  Received approval from the LSU Board of Supervisors  Received approval from the DOA as the “initial qualifying institution” subject to approval of the UPPC  Received approval of the UPPC from DOA  Issued a Notice of Intent to begin promulgation of the code into the Louisiana Administrative 13
  14. 14. UPPC – What does it Do?  Adopt a procurement code that is simple – freedom from unnecessary bureaucratic processes 14
  15. 15. UPPC – What does it Do?  Ability to use more competitive strategies – limits, electronic processes, selection… every method for determining low cost and best value EXAMPLES: Increased Thresholds, Office Supplies, Reverse Auctions 16
  16. 16. Office Max  Analyzed spend of LSU and its Shared Services Institutions to be $2 M per year  Sought and received approval from the DOA to issue an RFP (best value) as opposed to an ITB (lowest cost)  Current laws limited specifications to narrow terms and scoring/negotiation methods  Awarded to Office Max for a signing bonus, volume rebate and 25-55% discounts on all items. 17
  17. 17. Reverse Auctions  Very similar to eBay auctions where the suppliers bid for the contract  The ability for suppliers to participate is minimal and entirely in an electronic environment  Louisiana Procurement Code passed recent law to allow the use of Reverse Auctions but only to be conducted by the Division of Administration 18
  18. 18. UPPC – What does it Do?  Ability to solicit/contract for the most cost effective term EXAMPLE: Bus Transit  Use effective methods for public notice EXAMPLE: Electronic notification of solicitations  Utilize new technology – eProcurement and employ supplier technology EXAMPLE: Cooperative Purchasing Catalog Enablement's  Apply commodity strategies EXAMPLE: Scientific and IT supplies/equipment 19
  19. 19. Pilot Procurement Code  REMAINING STEPS TO IMPLEMENT:  Approval of the Joint Legislative Committee on the Budget (JLCB)  Development and approval of Procurement Policies which are 60% complete  Final approval of the LSU Board of Supervisors  Execute Change Management within LSU 20
  20. 20. #2 – eProcurement System Recommendation: LSU electronic procurement system (Sciquest) should be expanded and utilized by all institutions either under the Shared Services Model or through the use of acquired Business Units of Sciquest. Opportunity: The increase of electronic methods of procurement will increase efficiency and savings because it serves as the tool to bridge the flexibilities of the UPPC and the other institutions; however, the challenge is to dedicate resources necessary to implement 21
  21. 21. eProcurement – July 22, 2013 launch22
  22. 22. eProcurement  Electronic Public Notice  Electronic Solicitation  Electronic Signatures  Reverse Auctions  Strategic Sourcing  Negotiated Hosted Catalogs  Real-time Competition at Dollar 1 23
  23. 23. #3 – Spend Analysis and Savings Opportunities in Procurement24 Recommendation: Identify savings opportunities across all institutions through spend analysis and the utilization of strategic sourcing strategies to procure goods and services and revenue-generating opportunities through the optimal channels with the best suppliers. Challenge: The lack of tools, integration and disparate data sources; however, the opportunity exists for this recommendation to act as bridge for consolidating all the data across all the
  24. 24. FY 2012 – Spend Analysis  Total Spend ≈ $252M  Breakdown by Institution: ≈ $189M – LSU Main Campus ≈ $25M – LSU Agricultural Center ≈ $12M – Pennington Biomedical Research Center ≈ $11M – LSU System Office ≈ $6M – LSU Eunice ≈ $5M – LSU Alexandria ≈ $4M – Paul M. Hebert Law Center Data from July 1, 2011 – June 30, 2012 25
  25. 25. FY 2012 – Spend Analysis  Total Transactions ≈ 181,698  Total Purchase Orders ≈ 16,102  Total LaCarte (Pcard) Transactions ≈ 165,596  Breakdown by Threshold: > $100,000 ≈ 3 > $50,000 ≈ 23 > $25,000 ≈ 77 > $15,000 ≈ 110 > $10,000 ≈ 98 > $5,000 ≈ 522 < $5,000 ≈ 164,763 26
  26. 26. FY 2012 – Spend Analysis 27 Percent Spend by Payment Method Percent Spend by # of Transactions $193,369,473 16,102 $58,369,473 165,596 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent Spend By Mechanism Percent Spend By # of Transactions PO LaCarte
  27. 27. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% LSU Spend Detail (FY2012) $251.9M Spend Base 28 Taxes / Permits / Fees IT / AV PassthroughUtilities Facilities & Maintenance Scientific Scientific Supplies & Equipment Prof. Services – General Financial Services IT Services State Local Federal IT / AV - General Software Licensing AV Eqpt Computers General Foundations Other Universities Electric Gas Telecom Water General Industrial Components & Fabrication (MRO) Electrical HVAC Landscaping General Specialty Vendors Building Systems Professional Services Other Vendors Construction Travel Library Transp. Marine Gases Other Vendors General Gen. Contractors Constr. Eqpt Travel Agents Hotel & Lodging Commercial Airlines Elevator Maint Jan. Labor Plumbing Jan. Supplies Painting Car Rental % of Category Spend ($M) 0 25025 50 75 100 125 150 175 200 225 Work In Process 31.7 21.7 20.9 20.2 19.3 18.3 14.7 14.5 14.2 13.5 8.3 8.1 7.5 Bldg Matls • Medical • Athletics • Interiors • Prof. Associations • Food Services • General Retail • Logistics/Shipping • Campus Svcs • Agriculture • Veterinary • Human Resources • Waste Mgmt. • Insurance • Dental Other Categories BusTransitVehicleAcq.FuelVehicle Maint. PrintingGeneralPromotional Products GeneralOfficeSupplies Copiers& MFDs Comm / Mktg % total spend 12.6% 8.6% 8.3% 8.0% 7.7% 7.3% 5.5% 5.7% 5.6% 5.4% 3.3% 3.2% 3.0% 38.9 15.5%
  28. 28. Savings Potential and Costs to Date29 Based on $252M annual spend for FY2012: Savings Opportunities (Hard $) • Increase spend under contract and reduce non-competitive spend • Utilize Office Supplies contract flexibility • Utilize Strategic Sourcing events (e.g., reverse auctions) Total Hard $ Savings Opportunity Savings Opportunities (Soft $) • Transaction processing costs Total Soft $ Savings Opportunity $1.29M $1.12M $2.77M $5.18M $1.00M $1.00M $6.45M $3.63M $13.85M $23.93M $5.00M $5.00M 5-Yr ValueYr 1 Value Total Hard Costs To Date $2.1M
  29. 29. Savings Examples  Several commonly used items  Lamps  Scientific Gloves  Lab Coats  Towels  Scouring Pads 30
  30. 30. Procurement Evolution: Strategic Procurement Pilot Procurement Code Strategic Sourcing & Spend Analytics eProcurement
  31. 31. QUESTIONS?38
  32. 32. THANK YOU MARIE C FRANK, MPA, CPPB LSU OFFICE OF PROCUREMENT SERVICES 213 THOMAS BOYD HALL BATON ROUGE, LOUSIANA 70803 (225) 578-2307 MFRANK@LSU.EDU

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