Administrative Program Review Boston College . Paul McGowan Director of Procurement Services. APR Self Study Team. Paul McGowan – Director of Procurement Services Laurie Simard - Contract Manager Jerri Cole - Associate Director, Procurement Services
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
Today’s Objectives Introduction of the Administrative Program Review (APR) High-level review of the program and its processes Discussion of how Boston College Procurement Services will use APR for assessment and planning activities
Agenda Introduction: What is APR Data Gathering Stage Key Customers Department Interviews/Focus Groups Report External Reviewers Action Plan Q & A
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 department’s current operations, make adjustments and establish plans for continuous improvements.
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
External Trends and Local Needs 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
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
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
APR Organizational Structure Executive Steering Committee EVP & VPs Institutional Research, Planning and Assessment APR Director Logistical Support Data Support Administrative Program Review Committee Departments Under Review Internal Team Members Department Managers Self-Study Team Department Members External Team Members Outside Area Experts
APR Teams and Deliverables Self-Study Team External Reviewers Department Team External Reviewers’ Report Self-Study Report Overview Report Common Set of Recommendations Action Plan
APR Steps and Projected Timeline Preparation & Kick-Off Self-Study External Review Overview Report Action Plan Implementation & Follow-Up April – Summer 2009 Winter 2009 January -March 2010 May 2010 Fall 2010 January 2011
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
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 RFP’s 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 University’s 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
Identify Procurement Activities For Data Collection Travel-relatedActivities: 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
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
Carolyn Donoghue Procurement/AP Systems Support Specialist
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.
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
Key Findings – Gathering Data The PROCESS of gathering data resulted in it’s 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
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 frequent…suppliers? 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 Technology Facilities P-card Travel Problem Children
University versus Managed Spend University Budget Excluding Salaries and Benefits FY’08 $243,000,000
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
Trans. by Vice Presidential Area Findings
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.
Transactions by Expense Type (account)
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)
Top Vendors by Count
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)
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.
Purchasing Card Program Example
P-Card by Contracts FY08 Total Dollars $26,470,040 University Contracts 4,605,297 Other - Non-Contract 17% 10,365,519 39% Athletic Contracts Dining Bids or contracts 404,014 9,899,359 2% 37% Bookstore Contract Champion 735,107 3% Internal charges to Bookstore Internal Charges to Theatre 445,047 15,696 2% 0% P-card Activity FY08
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
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. Don’t lead the data.
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
Laurie Simard Contract Manager IT and Travel Examples
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.
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.
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.
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.
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.
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.
Bill Corcoran Associate Director Facilities Example
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.
Interview, Survey and Focus Groups
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
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
Voice of our customers Key Findings Review survey audience to target specific group – not random sampling 50% - no interaction, 30% - once or twice a year Procurement needs to communicate their services and get in front of the spending Many do not follow policy and are not aware of our services and contracts
Voice of our customers Focus Group – Sciences - Conducted by Institutional Research Team 3 focus groups made up of 20 faculty, staff and administrators Challenges: Low Dollar/High Transactions History of non compliance Work Arounds
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
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.
Writing the Report
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
Paul McGowan Director of Procurement Services
External Reviewers Who are they How are they selected The Process Interview departmental staff Interview key customers The Deliverables - report
Schedule for the Reviewers
Writing the Action Plan
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 University’s organizational mission.
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 organization’s goals and objectives. Become the leader in procurement throughout the Catholic higher education marketplace.
Action Plan - External Reviewers Findings 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 Recommendations 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 Align the group’s 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.
How To Set Up an Action Plan Brainstorm Categorize Prioritize High level goals Broad objectives Specific actions
Action Plan – Final
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
Group Discussion What are the Pro’s and Con’s of the APR approach? How might a similar model work at your institution? What are the opportunities and challenges associated with adopting a similar approach to your institution? How can Procurement Services professionals lead the way with assessment and planning activities?
Thanks for Attending this Session!Office of the Director of Procurement ServicesBoston College140 Commonwealth AvenueChestnut Hill, MA 02467617-552-4561www.bc.edu/procurement