Past Activity Informing Future Value Florence Gregg, figpc ltd NAEP 2008 Annual Meeting Austin, Texas 2 Outline Background Case Studies showing how information used Questions and Answers figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 3 Once upon a time in Belfast 1996: Queens University Belfast We can benchmark! 1998/9: IBIS Demonstrated at NAEB 2007/8: Use of specialist spend analysis approach NAEP 2008 Annual Meeting & Exposition, Austin, Texas figpc ltd 2008 4 HE Supplier Spend Analysis figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 5 Supplier Analysis by Commodity figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 6 IBIS helped UK universities to Review annual spend patterns Total spend by group and sub-group Spend by arrangement type Maverick spend Use information to inform future strategies Monitor year on year activity However, Very institution and HE sector focused figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 7 Triggers for Change Focus at government level to release back- room costs to spend on frontline services Starting to measure what benefit we bring Achieved efficiencies/savings retained within organisation Demonstrate what benefits result Recognition of benefits of spend analysis within and across sectors figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 8 Case Studies 1.Procurement Legacy 2.Opportunity Analysis Institution 3.Opportunity Analysis Sector 4.Scottish Universities 5.Risk assessment influencing the market figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 9 1. Procurement Legacy Its about more than money! Procurement impact doesnt end with the process and receipt of the goods Bad decisions We hear about again and again Good ones We rarely hear about The benefits of our actions should extend beyond the initial purchase figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 10 Example: RFID and Library Books Competition - 4k under budget Staff impact Issue desk staff had more time to work with students FTE of 7 days/week Quality of Service provided Students borrow books outside normal hours with need for issue staff to be present Staff have more time to work with and support the students figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 11 RFID Cash releasing savings 4,000 available to spend on other things Incorporation of tagged books in Book Contract Soft efficiencies 4,760 from 7 FTE days/week released to other duties Improved quality of service figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 12 2. Opportunity Analysis Institution Understanding spend patterns Started in Universities with IBIS Identify opportunities to Aggregate demand Leverage expenditure Focus resources figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 13 IBIS Spend Analysis Institution A figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 14 IBIS Spend Analysis Institution B figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 15 Opportunity Analysis Commodities High spend areas Estates, Professional Services (~60% non-pay spend) Identification of common suppliers Not fully automated, managed outside system Required time and interest to complete CommoditySpend A% of TotalCumulative Cumulative % Estates and Buildings10.57m34%10.57m34% Professional Services8.24m27%18.11m61% Telecommunications2.18m7%20.99m68% Libraries1.54m5%22.53m73% Computing1.46m5%23.99m78% Catering1.41m5%25.40m83% figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 16 Opportunity Analysis Institution Library Expenditure Common to all institutions Identification of common suppliers Manual comparison high match in value terms Opportunity for local, regional and national initiatives Commodity - LibraryABCommon No suppliers Total spend2.86m1.34m4.21m Top 10 (7 common)2.18m1.05m2.71m % total spend78%76%77% figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 17 Possible Strategies Concentrate of Top x suppliers in Group Bring y% of spend under control Aggregate and leverage spend Move to next commodity area Seek to manage all commodity areas Use analysis to prioritise activity At institutional, consortium and national level figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 18 3. Opportunity Analysis Sector Crossinstitutional spend pattern comparison Manual process Relied on availability of time to complete analysis Results were achieved Improved terms Greater control, accountability Improved governance figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 19 Two Institutions comparison figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 20 Example: Library spend Manual aggregation of commodity data Displays high level of commonality of supplier Provides MI to support business case for collaborative procurement activity LibraryABCommon No suppliers Total spend2.86m1.34m4.21m Top 10 (7 common)2.18m1.05m2.71m % total spend78%76%77% figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 21 Opportunity Analysis Sector Reduced processing costs through shared workload Reduced unit prices through aggregation and leverage of requirement However, getting full support remains a challenge figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 22 4. Scottish Universities Historically institutional analysis using IBIS At Consortium level Manual aggregation of spend data Informed consortiums commodity group activity Some peer-group review figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 23 McClelland Report Recognition of need for professionally trained procurement staff Long-term target of 1 professional staff for every 15m of non-pay spend Three-tier approach A National contracts B Sector specific contracts C General contracts figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 24 The statistics 2005/ universities and 14,901 suppliers Expenditure Analysed Number of Invoices Totals430,997,944543,418 Minimum9991 Maximum11,556,17610,649 Average28,92436 figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 25 Data cleansing - Scottish Universities figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 26 Spend distribution by value figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 27 Common Suppliers in value ranges figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 28 Aggregation Opportunities? figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 29 Invoice profile - under 5000 figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 30 Low value invoices by commodity CommodityTotal ValueNo of InvoicesAverage Value Stationery3,787,61536, Catering10,047,37767, Janitorial2,719,43110, Building Materials5,941,88420, Clothing2,074,4886, Transport3,628,43410, Domestic Goods646,5951, Education9,221,03324, Mail Services4,083,5249, Vehicles3,503,9616, ,204,342193, figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 31 Low value invoices by value Invoice Value No of Invoices Cumulative No As % of total (543,413) < 1126, % 11 2030,83357, % 21 5079,142136, % 51 10077,640214, % 101 25099,853313, % 251 50057,915371, % figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 32 DIMMER Now HoPs have access to easy MI they can Develop a strategy/action plan Implement their strategy Manage the on-going activity Monitor what is happening Evaluate success (or otherwise) Report and Review figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 33 Other available reports facilitate. An understanding of your Supplier base Economic impact locally and nationally Sectors impact figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 34 What type of suppliers are used? figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 35 Whats their age profile? figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 36 Where are they based? figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 37 5. Risk Assessments Identification of contracted suppliers Maverick spend What about the wider impact of our actions? Minimise risk of reducing competition HM Revenue & Customs: ASPIRE the re-competition of outsourced IT 19 July 2006 ISBN figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas 38 Summary Some institutions continue to use IBIS for basic spend analysis Scotland moved to more sophisticated solution Procurement starting to look at legacy of its actions Now starting and able to make real use of MI on past activity to inform procurement strategies and actions NAEP 2008 Annual Meeting & Exposition, Austin, Texas figpc ltd 2008 Any questions? NAEP 2008 Annual Meeting & Exposition, Austin, Texas figpc ltd 2008 Thank you NAEP 2008 Annual Meeting & Exposition, Austin, Texas figpc ltd 2008 41 figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas