PowerPoint Presentation

Orlando, FLApril 7 10, 2013NAEP Annual Meeting

The Magic of Collaboration & PartnershipPresented by Rensselaer Polytechnic InstitutePaul Martin, Assistant Vice President for AdministrationKelli Hudson, Assistant Vice President for Finance/ControllerRon Moraski, Director of Procurement ServicesObtaining Investment in Procurement to Help your Institution Cope with Budget Reductions

2Annual MeetingApril 7 - 10, 2013Orlando, FloridaRensselaer: A Journey of Transformation

Annual MeetingApril 7 - 10, 2013Orlando, Florida3AgendaLong-Term Vision to Transform ProcurementShort-Term Trigger that Forced TransformationThe Path to a SolutionSenior Management Approval and Funding ObtainedThree Prong ApproachStrategic Sourcing Transactional to StrategicTravel and Expense Management Complete Procure to Pay ProcessAnnual MeetingApril 7 - 10, 2013Orlando, Florida4Envisioned Long-Term Procurement TransformationPurchase/Travel Card Integrated with ERP 1996E-Procurement Implementation via SciQuest (HigherMarkets) 2006 Minimize Purchase Card Program and Implement Sourcing ProgramAnnual MeetingApril 7 - 10, 2013Orlando, Florida5Trigger for Transformation

Elimination of P-Cards

Annual MeetingApril 7 - 10, 2013Orlando, Florida6

Cancellation of P-Card ProgramMay 2010 cards were cancelled overnightAnnual MeetingApril 7 - 10, 2013Orlando, Florida7P-CardsNo P-CardsNumber of Cards85040Number of Requisitions11,00046,000+Number of POs Processed5,70016,000+Number of Direct Pays8,80026,000+Rebate $$$100K$0The Path to a SolutionFirst Task Crisis Management: How do we deal with all the orders and all the invoices?Hired PMG @ VCU to help us get startedWe formed SMART Small Procurement Assessment and Recommendation TeamConducted a needs assessment of campusBenchmarked Best Practices within Higher Ed and Private IndustryEvaluated current E-Procurement system

Annual MeetingApril 7 - 10, 2013Orlando, Florida8Findings and Best PracticesWe found best practices in higher education and industry included:Strategic SourcingE-invoicing and E-SettlementContinuous AuditMinimal P-cardsAutomated Travel ManagementAnnual MeetingApril 7 - 10, 2013Orlando, Florida9ObjectivesOnce we knew best practice, we needed to determine our outcome objectives:Mitigate RiskProvide Robust ControlsStreamline and Automate ProcessesBecome State-of-Art in IndustryAnd ObviouslyAnnual MeetingApril 7 - 10, 2013Orlando, Florida10

Collaboration Was the Only WayTo accomplish this the Procurement and Payables Offices that reported to two separate VPs needed to join forcesAnnual MeetingApril 7 - 10, 2013Orlando, Florida11

Not an easy task..Three-Prong ApproachStrategic Sourcing Initiative

Automated Travel Management

Complete Procure to Pay ProcessAnnual MeetingApril 7 - 10, 2013Orlando, Florida12Approval of Funding Savings PromisedAnnual MeetingApril 7 - 10, 2013Orlando, Florida13Start-up CostsOngoingAnnual CostP2P135,00025,000Travel Management28,500187,340Strategic Sourcing530,000447,800Totals693,500660,140Estimated SavingsPer YearP2P245,000Travel Management370,000Strategic SourcingUp to 800,000Totals1,415,000Strategic SourcingAnnual MeetingApril 7 - 10, 2013Orlando, Florida14

Transforming Procurement into a Strategic OperationProcurement RecommendationsImplement Strategic Sourcing and move away from 1-off PurchasingGrow Preferred Vendors to maximize buying power and streamline campus use - minimize exception purchasingMaximize use of front-end controls available in E-Procurement SystemCreate dashboards utilizing the data to monitor strategic direction, publicize cost savings and enhance auditing Create hands-free system from procurement through settlement including e-Invoicing and e-Settlement

Annual MeetingApril 7 - 10, 2013Orlando, Florida15Overlapping Activities 15 MonthsAnnual MeetingApril 7 - 10, 2013Orlando, Florida

162/28/201316*Phased approach*When: Targeted for

Overall we are following SCTs recommended conversion timeline.Maps to how the conversion toolkit is builtStudent Implementation is a 18 month effortThis is an aggressive scheduleIf we have to slide an implementation, will likely have to slide it a year.

Strategic Sourcing ProjectPartnerned with Consultants (ESG) to assist with:Annual MeetingApril 7 - 10, 2013Orlando, Florida17Organizational Assessment and TransformationSpend AnalyticsPerforming Institutional Price ReviewsDeveloping and helping implement a Strategic Sourcing PlanMarketplace Supplier Catalog Content Enablement

Process Details

1. Organizational Assessment and TransformationDeveloped the following Job Descriptions:Director of Procurement ServicesAssociate Director of Procurement ServicesStrategic Sourcing ManagersSystems ManagerSystems Support AnalystSupport StaffDeveloped the process in the following:Procurement Services Performance & Staff Development Plan Procurement Department and Individual Scorecards

Annual MeetingApril 7 - 10, 2013Orlando, Florida18Process Details

2. Spend Analytics Collected, analyzed, and categorized full Rensselaer spendPerformed pricing analysis on key category and supplier-specific spendUtilized this information to aid in the development of a Strategic Sourcing Plan3. Conducting Institutional Price Reviews11 E&I contracts have been adopted and enabled on the Rensselaer MarketplaceSupplier Announcements with Contract Summary created and released to campus community

Annual MeetingApril 7 - 10, 2013Orlando, Florida19Process Details4. Developing and Executing a Sourcing Strategy Plan Combined strategies (>$17M opportunity): a combination of RFPs, negotiated contracts, E&I contract adoptions and reverse auctions for new contracts.

5. Marketplace Supplier Catalog Content EnablementPerformed system-related activities between Rensselaer Systems and SciQuest for integration efforts and (15) individual enablements

Annual MeetingApril 7 - 10, 2013Orlando, Florida20Concurrent Themes and DeliverablesAnnual MeetingApril 7 - 10, 2013Orlando, Florida21

Project Planning & ManagementPolicy & Procedure ReviewTraining/Mentoring of Campus and SuppliersCampus CommunicationsDeveloped a Cost Containment Reporting ToolDeveloped Performance Management Metrics (Scorecard)Successes So FarThrough December 2012# of newly awarded master agreements (39) # of new contracts through spend analysis (13)

# of new marketplace suppliers (12)

# of newly enabled e-invoice suppliers (6)

Annual MeetingApril 7 - 10, 2013Orlando, Florida22Successes So FarTotal through December 2012:Documented Cost Savings $1,588,471Purchasing Revenue As a result of these numbers, our President has approved an increase in the project budgetAnnual MeetingApril 7 - 10, 2013Orlando, Florida23Successes So Far

Campus Buy-In

Respected Procurement Team

24What Did We Learn?

25Small $ PositionGreater investment needed in e-Procurement toolsStronger analytical skill-set needed for reportingTime gave us a better understanding of needed administrative support rolesAdditional short term resources needed to get over the workload humpCampus Communication is criticalTravel RecommendationsImplement a system that provides Strong Business Analytics and Built-in ControlsProvides Efficient and Automated Processes from booking to expense reportingImplement the use of one travel agency for all campus usersUse of virtual credit cards for paymentAnnual MeetingApril 7 - 10, 2013Orlando, Florida26Travel ManagementStarted with RFP for both Travel Agency and Management SystemLooking for seamless end-to-end solution for both travel and expenseAutomation was keySelected as subsidiary of Travel Leaders Child/Albany Travel as agentSelected Concur as management systemAnnual MeetingApril 7 - 10, 2013Orlando, Florida27

Implementation ProcessWe formed a small travel implementation team (4 people) key decision maker on team was very importantImplementation took approximately 8 months from start to finishGained feedback from campus during testing phaseProvided extensive up-front training program before the system went liveWeve been live since August 2012Annual MeetingApril 7 - 10, 2013Orlando, Florida28Challenges of ImplementationMandated the use of agency and system for all travel booking and expense submissionWorkflowNo credit cards for RPI challenging but not impossible (Concur systems main control is based on credit card use)Students and Visitors should they use system or not?Higher Ed is different Concur has recognized this and formed a Higher Ed vertical to work through some of the challenges facing the industryAnnual MeetingApril 7 - 10, 2013Orlando, Florida29ResultslOVE iT!Complete automationVisibility into travel habits and spendWe know where everyone is at all timesCapturing savingsNo P-CardsAnnual MeetingApril 7 - 10, 2013Orlando, Florida30Procure to Pay ProcessOriginal GoalsE-invoicing/E-Settlement Raising the performance barChange Order Workflow IntegrationComprehensive Payable SolutionConsider limited use of virtual cards for needed online purchasingDeveloped RFP and Banking Partner was selectedPartner put project on holdCurrently re-evaluating the use of one of our current partners SciQuest or Concur Invoice

Annual MeetingApril 7 - 10, 2013Orlando, Florida31Overall Project SuccessOriginal P-Card Rebate$100K

New Savings:>$1.5MSourcingTravelP2PAnnual MeetingApril 7 - 10, 2013Orlando, Florida32

Q&AObtaining Investment in Procurement to Help your Institution Cope with Budget Reductions

33Annual MeetingApril 7 - 10, 2013Orlando, Florida