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90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Administrative Program Review Boston College Slide 2 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Paul McGowan Director of Procurement Services Slide 3 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee APR Self Study Team Paul McGowan Director of Procurement Services Laurie Simard - Contract Manager Jerri Cole - Associate Director, Procurement Services Bill Corcoran - Associate Director, Procurement Services Janice Daly - Assistant Director, Accounts Payable Carolyn Donoghue - Procurement/AP Systems Support Specialist Karen Hughes - Financial Systems Manager, Financial Management Systems Slide 4 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee 1.Introduction of the Administrative Program Review (APR) 2.High-level review of the program and its processes 3.Discussion of how Boston College Procurement Services will use APR for assessment and planning activities Todays Objectives Slide 5 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Agenda 1.Introduction: What is APR 2.Data Gathering Stage 3.Key Customers 4.Department Interviews/Focus Groups 5.Report 6.External Reviewers 7.Action Plan 8.Q & A Slide 6 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee What is Administrative Program Review? For the University: APR is a developmental process of on-going program reviews that involve systematic assessment, planning, action and improvement across administrative units at Boston College. For Departments: APR is a set of activities designed to help managers and employees examine their departments current operations, make adjustments and establish plans for continuous improvements. Slide 7 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee What Administrative Program Review is NOT Academic Program Reviews Cost reduction or budget cutting Means to request additional resources University-wide resource reallocation Organizational realignment Audit External consultant engagement Slide 8 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Changing Student Demographics Technological Advances Accountability Changing Nature of the Workplace Internal Staffing and Organizational Changes Resources Constraints / The Economy University Strategic and Master Plans Student Formation / Student Development Capital Campaign External Trends and Local Needs Slide 9 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Summary of Key Strengths Executive sponsorship Developmental approach Managed by the departments/not outside consultants Mix of internal expertise and external advice Alignment with university mission and plans Pro-active planning and continuous improvement Mechanism for tracking on-going progress Management and employee development Slide 10 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Academic Review vs. Administrative Review ACADEMIC 1. Standard units 2. Standard measures (teaching, research, service) 3. Peer review 4. Tied to budget process ADMINISTRATIVE 1. Non-standard units 2. Non-standard measures (customer satisfaction?) 3. No external input 4. Developmental approach Slide 11 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee APR Organizational Structure Executive Steering Committee EVP & VPs Administrative Program Review Committee Institutional Research, Planning and Assessment APR Director Logistical Support Data Support Departments Under Review Internal Team Members Department Managers Self-Study Team Department Members External Team Members Outside Area Experts Slide 12 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee APR Teams and Deliverables Overview Report Common Set of Recommendations Action Plan External Reviewers Department Team Self-Study Report External Reviewers Report Self-Study Team Slide 13 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee APR Steps and Projected Timeline Preparation & Kick-Off Overview Report Self-Study External Review Implementation & Follow-Up Action Plan April Summer 2009 Winter 2009 January - March 2010 May 2010Fall 2010January 2011 Slide 14 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Process Map Slide 15 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Self-Study Components Mission and Goals Activities and Products/Services Customers and Cross-Unit Relationships External and Internal Environments Resources Organizational Practices Strategic Position and Direction (SWOT) Recommendations and Goal Setting Slide 16 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Identify Procurement Activities For Data Collection Purchasing Related Activities: Deliver on improving execution across the supply chain Identifies cost reductions Mitigate supply risk where necessary Optimize working capital Gathers and disseminates product and supplier information Reviews University needs for efficiency of purchases or process Collaborates with departments on strategic planning for sourcing and vendor negotiation, and due diligence qualification of potential bidders Creates RFI and RFPs Solicits and analyzes bids Creates University standards Establishes processes surrounding procurement, pricing negotiations reviews and negotiates contract terms and conditions Awards business to vendors Reviews and approves capital appropriations Acquires products Reviews contract usage and policy compliance Manages vendor relationships Administers the purchasing card program and processes Analyzes the Universitys spend patterns and trends Prepares ongoing reports, e.g. Exception reporting Processes vouchers and credits related to purchase orders Researches and/or creates change orders to purchase orders Redistributes surplus furniture and equipment Provides university procurement transaction reports as requested Reviews transactional costs and processes Slide 17 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Identify Procurement Activities For Data Collection Travel-related Activities: Travel agency review and selection Hotel contracts Bus and vehicle rentals Air transportation Other travel related contracts Administration of the American Express Card Program Travel web page creation and maintenance Accounts Payable Activities: provides the following services: Vendor payments (PO and non-PO) Employee travel and expense reimbursements Cash advances fund and reconcile Grad non-service stipends Student refund check processing OFAC compliance Maintain and update master vendor file 1099 reporting EFT Program for employees ACH Program for vendors Slide 18 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Highlighted APR Activities Carolyn Donoghue: Data Collection, Total University Spend, Pcard, and Accounts Payable Laurie Simard: IT, Travel Bill Corcoran: Capital Projects, Facilities, Department Interviews, Sciences, Report Paul McGowan: External Review Team, Key Findings, Action Plan Slide 19 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Carolyn Donoghue Procurement/AP Systems Support Specialist Slide 20 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Process Map Slide 21 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Gathering Data Gathering Data was a Nightmare!!! BC has no Data Warehouse -All information was not available from a single source Information had to be identified in various ways Cross checking was required to be sure the picture was accurate and not duplicated or missing. Information had to be sliced in various ways, presenting different stories and answering different questions: Who are our major customers? Where do we spend our money? What spend is managed through Procurement? etc. Slide 22 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Gathering Data Having a combined view of Purchasing and Accounts Payable activities provided better TOTAL spend visibility. Identify systems and best sources of data for your related activity areas Your data may be from different sources Sources of data include: PeopleSoft Reports Expense Transaction Reports Wire Transfer Reports Capital Budget Reports P-card Reports Surveys American Express / Other Vendor Reports Interviews with staff on activities performed Review of Systems used to support procurement functions Slide 23 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings Gathering Data The PROCESS of gathering data resulted in its own set of key findings: The merger of Accounts Payable and Purchasing provides a better view of TOTAL university spend Data and reporting capabilities need to be improved Data Warehouse is required to compile data Need to enforce Standard use of accounts and categories Policies require communication and enforcement Need easy front-end procurement system for ALL staff University wide Contract Management System is required Need a Comprehensive Travel Expense Management System Use of Metrics is required to consistently measure change Slide 24 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Areas to consider in your own APR Study Overall University Data: Spend under Management How much do we control? Spend by Key Areas Who are our major Customers? Spend by Account Type What are we buying? Transaction Counts Who are our most frequentsuppliers? Spend by Vendor Who are our Top $ Suppliers-Contracts? Number of New Vendors Are we communicating existing vendor contracts and capabilities? Departmental Resources - Who is doing what and how much of the time? Also consider Key Areas or areas that are high-profile or contentious: Information TechnologyFacilities P-cardTravel Problem Children Slide 25 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee University versus Managed Spend University Budget Excluding Salaries and Benefits FY08 $243,000,000 Slide 26 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee University Budget Key Findings 60% of Spend is managed by Procurement 20% of Spend is managed in other areas (*Dining, Controllers, Insurance) 20% of spend is not managed and should be reviewed in more detail Slide 27 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Trans. by Vice Presidential Area Findings Slide 28 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Spend by VP Area Key Findings 92% of spend is in 6 VP areas 25% Facilities 22% Provost (Student insurance, Professional Services) 18% Financial VP (Legal, Outside Audit, Real Estate) 10% Auxiliary Services 9% Information Technology 8% Athletics Strong partnerships with Facilities, IT, and Athletics Need to improve our relationships with Provost, Financial VP and Auxiliary Services. Slide 29 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Transactions by Expense Type (account) Slide 30 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Spend by Account (Expense Type) Findings $51 Million (24%) - Misc Vouchers (small dollar transactions) still not on P-cards (SupplyOrg) $17 Million (8%) being spent on Professional Services, not under Procurement (Identifying and strategizing) $5 Million (2%) being spent on Meetings and Meals, not under Procurement, not under Dining (under discussion) Slide 31 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Top Vendors by Count Slide 32 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Vendors by Voucher Count Key Findings 24% of vouchers are for two scientific Vendors small dollars, not using P-card. Need automated system (SupplyOrg) (In Process) Move more departments to Automated Federal Express with P-cards (in process) Automate Utilities payments (in process) Automate Dining payments (under investigation) Slide 33 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Summary: Be sure you have the subject matter expert analyzing the data, i.e.: identify if there is missing or duplicate data. Allow sufficient time to collect and analyze the data, and then to gather and analyze any additional data that may be required. Slide 34 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Purchasing Card Program Example Slide 35 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee P-card Activity FY08 P-Card by Contracts FY08 Total Dollars $26,470,040 Dining Bids or contracts 9,899,359 37% University Contracts 4,605,297 17% Other - Non-Contract 10,365,519 39% Athletic Contracts 404,014 2% Internal Charges to Theatre 15,696 0% Internal charges to Bookstore 445,047 2% Bookstore Contract Champion 735,107 3% Slide 36 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings P-card Good use of contracts - 60% of the $26M p-card purchases in FY08 were made from the top 11 p-card contracts Good use for intended purpose - 80,000 transactions not put into PeopleSoft, with over 6,000 different vendors, by the 1,680 p-cards in the University Controlled Risk- Audit of the p-card program resulted in one-tenth of one percent (.1%) identification of out-of- policy charges 92% Satisfaction Rate from Users Slide 37 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Summary : Look at your data differently depending on the aspect of the business you are studying. Start at a high level and see if you have a strategy. Drill down in areas where you need more information. Let the data lead you. Dont lead the data. Slide 38 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Accounts Payable Slide 39 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Accounts Payable Slide 40 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Employee EFT Slide 41 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Accounts Payable Key Findings Need to increase use of automation to relieve strained resources Electronic Invoicing Supply Org and Utilities ACH payments to Vendors Employees expense through EFT Vendor Create Process automated W9 Need to communicate standard procedures to reduce re-work Mandatory W9s Reduce non-travel related expense reports Candy Corn 1099 Tin Matching Need policies to improve regulatory compliance Independent Contractors Student Payments Slide 42 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Laurie Simard Contract Manager IT and Travel Examples Slide 43 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee IT Spend Slide 44 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee IT Spend Slide 45 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee IT Spend Slide 46 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings IT Spend Procurement Services and IT partnered on $21M out of $26M total IT budget for FY08. There was $12M in Capital Appropriations. Of which $5M was in IT Consultants were Procurement did not get involved. Procurement Services reviews, negotiates and assists with facilitating over 200 hardware and software agreements equating to $5.3M. Vouchers for IT total $1.5M of which $1.4M is Voice Service Contracts that Procurement Services assisted in contract negotiation and review. Slide 47 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings IT Spend P-card expenditures were $778k for FY08 and include purchases under contracts set up by Procurement Services. Remaining IT purchases of $6.7M are on Purchase Order and come through Procurement Services for bidding and contract review. Slide 48 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Travel Spend Slide 49 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Travel Spend Slide 50 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Travel Spend Slide 51 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings - Travel University travel expenditures (air, hotel, car rentals and bus charters) for employee business and team travel for 2008 were $8.8M. Sources of expenditures were expense reports, vouchers to Amex, vouchers, agency reports and p- card totals. Because there is not a centralized reporting source for travel data and the data is in a variety of locations, we found that some of the data could be duplicated and some assumptions were required. Slide 52 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings - Travel Procurement Services has very little involvement in the majority of the hotel expenditures because they are conferences and are booked directly to the hotel or by a sport team. Procurement Services has contracted car rental agencies in place but we do not get reporting from these vendors and the data is buried in travel expense reports. Slide 53 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings - Travel The University Air total is $4.5M. $1.9M of the air volume is through contracted agencies established by Procurement Services. $1M is for Athletic charters direct to an airline or through a charter service company. Procurement Services has partnered with Athletics in this charter agreement. The difference of $1.6M not included above but part of the total University Air volume may be for University travel that was booked directly with airlines or other agencies. Slide 54 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings - Travel Action Items: The University travel policy needs to be tightened to increase compliance. We need a on-line travel expense reporting system that will centralize and capture all of our travel data. We put a travel informational session in place to increase communications of vendor contracts and our travel program to our travelers. Slide 55 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Bill Corcoran Associate Director Facilities Example Slide 56 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Facilities Spend Slide 57 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Facilities Spend Slide 58 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Key Findings - Facilities Increase involvement in areas we add little or no value. Ensure we have pre approved qualified bidders. Ensure we are bidding to financially qualified companies. Allow us to take the specifications and bid the actual job out, allowing the project manager to concentrate on the actual construction issues as they relate to the building. Increase involvement earlier in the bidding and awarding of major scientific pieces of equipment. Work to increase the number of contracted suppliers we have. We would like to move away from the preferred supplier name to actually having contracts in place with viable terms and conditions, become more strategic in our focus as opposed to the paper processing. Slide 59 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Interview, Survey and Focus Groups Slide 60 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Voice of our staff Internal Interviews Purchasing and AP Staff Conducted by the Institutional Research Team Conducted to assess working experience Key Findings Professional development Communication Slide 61 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Voice of our customers Survey Institutional Research team distributed using Zoomerang 25 questions about our services including Travel and AP Sent out to 996 people, 356 overall responses, 200 travel responses Slide 62 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Voice of our customers Key Findings o Review survey audience to target specific group not random sampling o 50% - no interaction, 30% - once or twice a year o Procurement needs to communicate their services and get in front of the spending o Many do not follow policy and are not aware of our services and contracts Slide 63 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Voice of our customers Focus Group Sciences - Conducted by Institutional Research Team 3 focus groups made up of 20 faculty, staff and administrators Challenges: oLow Dollar/High Transactions oHistory of non compliance oWork Arounds Slide 64 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Voice of our customers Key Findings Two major complaints System limitations and Communication Immediate Steps Identified System Improvements - SupplyOrg Cross Training Improved Lines of Communication Generated Reports including problem data Slide 65 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Summary: It is important to reach out and understand the needs of your customers. You might think you are doing a great job but they might think differently. Listen to the customers feedback to help build your action plan. Slide 66 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Writing the Report Slide 67 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Tips for Writing the Report Create a template if you have multiple writers Do not have multiple edits at the same time merge the documents Decide on the voice Active versus Passive (is/was) Boston College versus BC Important information in the report and everything else in the appendix average report 20 pages Slide 68 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Paul McGowan Director of Procurement Services Slide 69 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Process Map Slide 70 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee External Reviewers Who are they How are they selected The Process Interview departmental staff Interview key customers The Deliverables - report Slide 71 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Schedule for the Reviewers Slide 72 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Writing the Action Plan Slide 73 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Action Plan Internal Reviewers Recommendations Invest in the e-procurement and e-payable tools Identify new solutions to reduce the operating costs of the University Address Sciences large dollar capital procurements Market the services offered by Procurement Services more effectively Establish training in high spend areas in order to add more strategic value to our spend management. Establish a supplier diversity program in accordance with the Universitys organizational mission. Slide 74 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Action Plan Internal Reviewers Goals E-procurement Continue to focus on establishing and implementing key procurement fundamentals in order to move from a transactional focus to a strategic focus. Advance the Accounts Payable department to an e-payables automated environment Identify a simplified, systematic reporting source that would provide metrics which are important to the organizations goals and objectives. Become the leader in procurement throughout the Catholic higher education marketplace. Slide 75 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Leadership & Direction The Director of Procurement Services is widely respected Relationships Formed by Positive Experiences Finance, Provost, Facilities, IT, Athletics, Auxiliary Services Proven Success Delivering Results Several million dollars in savings and revenue generated over the last 3 years. Environment & Platform for Change - The value proposition is stronger than ever Experienced Core Team - Staff possess a vast institutional knowledge base Extensive P-card Program - P-card adoption and utilization improves efficiency Updated Procurement Services Website - Appreciated by a number of customers Some Process Automation - T&E reimbursement, vouchers, EFT, ACH Some Robust Controls - Declining balance p-cards, budget checking & approval process Action Plan - External Reviewers Findings Slide 76 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Internal Reviewers Action Plan incorporates all of the External Reviewers recommendations. Develop core set of standard reports to better manage our business. Further develop policies which promote our strategic direction. Analyze policy compliance problems and take corrective actions. Establish metrics. Action Plan - External Reviewers Recommendations Slide 77 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Align the groups understanding of Superior Customer Service. The organization would benefit from a more consistent & systematic approach to gathering and incorporating customer input, and setting expectations on responsiveness. Lack of a comprehensive electronic catalog offering is creating additional work and frustration for customers of both purchasing and accounts payable. Improve visibility for all customers and process administrators to actively track, manage and make improvements when necessary. Action Plan External Reviewers Recommendations Slide 78 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee How To Set Up an Action Plan Brainstorm Categorize Prioritize High level goals Broad objectives Specific actions Slide 79 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Action Plan Final Slide 80 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Where are we today Automated low dollar/high transactions for Sciences Streamlined data gathering Incorporated - APR into performance review process Reorganization Our department Enhanced - relationship with problem children Increased - communication with customers Slide 81 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Group Discussion 1.What are the Pros and Cons of the APR approach? 2.How might a similar model work at your institution? 3.What are the opportunities and challenges associated with adopting a similar approach to your institution? 4.How can Procurement Services professionals lead the way with assessment and planning activities? Slide 82 90 th Annual Meeting & Exposition April 3 6, 2011 Memphis, Tennessee Thanks for Attending this Session! Office of the Director of Procurement Services Boston College 140 Commonwealth Avenue Chestnut Hill, MA 02467 617-552-4561 www.bc.edu/procurement