achieving operational excellence through shared services
TRANSCRIPT
Achieving Operational Excellence Through Shared Services
1,300advertising vendors used
annually
438industrial equipment
vendors used annually
9,800unused licenses for one
software program
Shared Services in Higher Education
•SUNY is one of the institutions leading colleges and universities in the planning and launching shared services
•SUNY is one of very few systems attempting a comprehensive University-wide shared services program
Shared Services Initiative
• SUNY-wide, regional, multi-campus and campus to campus projects, systems, and adoption of best practices.
• Lead by Shared Services Steering Committee– Jim Malatras, Chair– Represented Constituencies
• Campus Leadership: President, Provost, and Business Officer from every sector
• Shared Governance Leadership: Faculty, Student, and Trustee
• Other Stakeholder Groups: Information Technology, Human Resources, Training and Organizational Development
SUNY’s Progress
Goal: Reinvesting $100M in savings from shared services and efficiencies into instruction and direct student support.
2012 2013 2014 Total $0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$14.90 $21.40
$11.40
$47.70
$13.00 $13.10
$26.10
Series2Identified savings Implemented savings
Key categories for savings: • Savings from reduction in energy
use• Savings from reductions in back
office and administrative functions:-IT Transformation
-Procurement/Strategic Sourcing
-Other administrative services
Savings from efficiencies will be reinvested into
the academic enterprise.
Questions?
Strategic Sourcing
The “Buzz” about Strategic Sourcing
Strategic Sourcing
“A collaborative, structured process of critically analyzing an organization’s spending and using
this information to make business decisions about acquiring commodities and services more
effectively and efficiently.”
http://www.acq.osd.mil/dpap/ss/
Strategic Sourcing
An improvement approach that focuses on all dimensions of procurement; A program with the objective for “bottom line” financial results and sustainable procurement excellence; A balance of focus on both long-term and short-term objectives.
What it is:
Just about sourcing or a collaborative buy program;
A short-term, project based initiative; Purely a cost reduction measure.
What it is not:
Steps to Success
Profile the category:
• Strategic Sourcing begins with robust data analysis.
• Understand everything about the category by analyzing historical spending and conducting surveys to determine:o Who are the users and stakeholders?o What are the procurement processes currently
used?o Within a category, define sub-categories of like
service/commodities.
Supply Market Analysis:
• Identify current and potential suppliers;• Issue Request for Information (RFI), if applicable;• Go to Subject Matter Experts (SMEs) for
information on:o industry landscape; o supplier specific information; and o changing technologies;
Develop the Strategy:
• Are there opportunities to standardize commodities/services?
• Are there alternatives to current suppliers?
• Are there alternatives to current commodities/services?
Essential to include stakeholders in the development of a category strategy.
Select the Sourcing Process(es):
• Renegotiate the current contract?• Consolidate multiple existing contracts?• Issue a solicitation?• Piggyback of an eligible existing
contract?
Manage the Contract & Supplier:
• Managing the contract:o Monitor usage.o Verify pricing.o Ensure adherence to T’s & C’s.o Evaluate performance.
• Managing the supplier relationship:o Try to understand their perspective (e.g., what make a good
client, are there other opportunities to enhance the contract?)
o Do they have other contracts already in place (e.g., cooperatives, consortia) that might be useful?
o Share current/future initiatives, direction of the organization
Advertising vendors used annually
Step 1: Profiling SUNY Advertising
• An analysis of spending initiated as part of New York State’s strategic sourcing efforts showed SUNY wide advertising spend of ~$23M over a two year period.
• Vendors were categorized (bucketed) into types.o PR marketing firms;o Newspapers;o radio;o outdoor ads;o etc.
Results: SUNY Spending in Advertising is very fragmented
Profiling SUNY Advertising
• SUNY advertising spend is fragmented in multiple ways.
• Fragmentation within category of ~1,300 vendors:o 21 PR Marketing Firmso 54 Newspapers/Periodical Vendors (non-specialized)o 73 Promotional Product Vendorso 84 Radio Advertiserso 99 Specialty Publications (i.e., Science Magazines, college specific
magazines, journals etc.)• Fragmented across various media outlets
o Expenditures were with 35 different types of vendors including: direct mail and e-mail, internet, television telemarketing, radio, newspapers, yellow pages, Movie Theatres, Billboards, Misc. Local Ads, Billboards, Subways, Buses, PR/Marketing Firms, and promotional products.
Profiling SUNY Advertising
• Fragmentation within campus (# of vendors in each category):
• Some fragmentation is acceptable for SUNY in the advertising category because of the diverse audience and need for local advertising.
Next Steps
• Category Profile:o Detail spending information needs to be gathered from
each campus to complete SUNY’s advertising category profile.
• Central accounting system does not have detail needed to determine actual services procured and detailed costs.
o Campuses will be surveyed to gather more detailed spend data and information such as various procurement processes utilized, category stakeholders, future needs.
When we get to “Selecting the Sourcing Process(es):”
• Category profile may show a need for multiple procurements.o Example: SUNY PR/Firm needs may be grouped
together for a single RFP.o Newspaper Ads may be regionally or locally
procured. o Buying power may be maximized at a local level by
looking at the possibility of reducing types of advertising and/or number of vendors.
Strategies ASCs Might Employ
• Do collaborative procurements (could be regional or State –wide).
• When possible, utilize SUNY U-wide contracts.• Ask to “piggyback” off existing contracts.o Enter into an agreement with another ASC to use
their contract; otherwiseo Because ASCs and contracting for or on behalf of
the State (SUNY) may have to follow Office of General Services’ (OGS) procedure.
Strategies ASCs Might Employ
• Consider buying cooperatives or consortia:Graham SmeilusMember Relations ExecutiveE&I Cooperative Services(973) [email protected]
Contact Information
Thomas J. Hippchen, Ph.D.Director of University-Wide Procurement
518-320-1341 [email protected]
SUNY Means Business on SUNY.edu
Questions?