Data Driven Strategies: Case Studies in Shared Services from Systemwide Procurement Bill Cooper – UC, AVP and CPO T0m Roberts – CSU, DIRECTOR OF CONTRACTs July 11, 2013

Data Driven Strategies Where were we a few years ago? Disparate systems No meaningful business intelligence or analytics in procurement Analytics required to set strategies, gain efficiencies, save money Projects developing over last few years enabled by increasingly sophisticated analytics UC’s P200 program CSU’s Procure-to-Pay project Where we are today What’s next? 11/19/2018 Data Driven Strategies

Procurement Statistics UC $5.6B in annual spend 157,000 normalized suppliers with >900,000 supplier records 1.0M Purchase Orders 2.6M Invoices 5.3M Transaction Lines Over 250,000 systemwide employees CSU $1.3B in annual spend 54,000 normalized suppliers with an unknown number or supplier records Total Purchase Orders unknown Approx. 318,000 Invoices 10,000 Suppliers Paid $1,000 each or less 87,000 Invoices Representing < 5% spend Over 44,000 systemwide employees 11/19/2018 Data Driven Strategies

UC and CSU Procurement Organization De-centralized Model UC and CSU - No system-wide Purchasing, Accounts Payable or IT UC and CSU – Systemwide sourcing and contracting functions Procurement Departments – UC = 11, CSU = 24 Both with varying levels of Procure-to-Pay ownership and influence ERP Systems UC – 9 ERP systems Peoplesoft, Banner, Walker, Homegrown/Legacy* CSU – 1 instance of PeopleSoft financial ERP system eCommerce Instances UC - 6 SciQuest, CommerceOne/PerfectCommerce, Homegrown CSU – no eProcurement system UC and CSU - Fund Based Accounting Many “buckets” of money, varying reporting needs 11/19/2018 Data Driven Strategies

Data Driven Strategies Spend Analytics The process of data: Collection Cleansing Normalization Classification Enhancement For the purposes of creating business intelligence to facilitate: Reduction of procurement costs Agency collaboration Improvements in business efficiency Key Performance Indicators Monitoring of compliance It is not necessarily a report generating tool 11/19/2018 Data Driven Strategies

UC and CSU Procurement Reporting & Analytics Before Spend Analytics Extremely Limited Largely relied on incomplete and often biased supplier reported data Most resources lacked easy access to their own data No access to data at other locations Inconsistent Lack of standardized systemwide data definitions, commodity coding Disparate systems & processes Labor Intensive Data requests to campuses with approx 1 month delivery lead time Additional work & time needed to compile data Suppliers not normalized Spend not consistently classified 11/19/2018 Data Driven Strategies

Data Driven Strategies Two projects enabled by “spend analytics” UC’s “P200 Project” CSU’s “Procure-to-Pay PROJECT” 11/19/2018 Data Driven Strategies

Data Driven Strategies The UC Challenge WORKING SMARTER CHALLENGE: Within 5 years, the University will redirect $500 million from administrative costs to the academic and research missions. http://workingsmarter.universityofcalifornia.edu/ P200 CHALLENGE: Deliver $200 million in annual cost savings across all funding sources through the sourcing, implementation, and utilization of competitive contracts and innovative supply chain strategies for procured goods and services. 11/19/2018 Data Driven Strategies

P200 Program Initiatives P200 Program Projects Key: Initiated Project Future Project Summary of P200 Program Initiatives Completed Project P200 Program Projects Sourcing Technology Spend Analytics Performance Management UCOP Organizational Alignment Utilization Strategic Sourcing Change Management Program Management Organizational Management The projected ROI for the P200 program is 920%. 11/19/2018 Data Driven Strategies University of California

Data Driven Strategies Two projects enabled by “spend Analytics” UC’s “P200 Project” CSU’s “Procure-to-pay Project” 11/19/2018 Data Driven Strategies

Procure-to-Pay Project The CSU Challenge Deliver Efficiencies Through Synergy Procure-to-Pay Project Implements a common business process approach across the university 11/19/2018 Data Driven Strategies

Procure-to-Pay Project Facilitates shared services Relies on a more strategic procurement environment This relies on a highly adoptable eProcuremnent solution Increase efficiencies Uses many analytic tools 11/19/2018 Data Driven Strategies

CSU and CSU Spend Analytics Programs - Similar Visions Provide common infrastructure, data definitions, reporting and analytics tools to address challenges with gathering accurate spend information at the local and system levels Phase 1: Implement the spend analytics solution Phase 2: Build additional local and systemwide functionality Spend Analytics is the building block to managing systemwide performance and contract utilization Spend Analytics Performance Management Utilization 11/19/2018 Data Driven Strategies

UC and CSU Initial Focus: Four Simple Questions What are we buying? Who are we buying from? Who is our Audience? Who is buying? What is being bought? Who are we buying from? How are we buying? Bonus: How is my data filtered Who is buying? How are we buying? 11/19/2018 Data Driven Strategies

UC and CSU Spend Analytics Benefits Efficiencies Quicker and easier to pull data and prepare reports Standardized system wide definitions allow for increased inter- and intra-campus collaboration UC can leverage system wide data to perform price reasonableness checks and supplier negotiations Ease of Use Web based solution with a single system wide view of spend data Cost Savings Spend visibility leads to development of sourcing, forecasting and planning strategies 11/19/2018 15

Data Driven Strategies What’s Next? UC Spend Analytics phase 2 Drive further spend classification accuracy and detail Revisit campus data to fine tune accuracy and gather additional data elements Performance Management Creation of additional systemwide data definitions Additional data sources Additional opportunities for analysis Contract analysis Sustainability/Small Business Reporting P-Card Program Operational metrics CSU Spend Analytics phase “next” Incorporate spend data on more frequent basis Quarterly beginning Q1 2013 Expand vendor and comparative data enrichment Expand training related to campus savings assessments system collaboration tools Incorporate contract data in spend tool to monitor Continue identifying target commodity categories Development of support analytics as required by P2P project Incorporate performance measurement data in analytics 11/19/2018 Data Driven Strategies

What’s Next? UC System Combined Annual Spend > $5 Billion CSU System’s Combined Annual Spend > $1.4 Billion Northridge San José Fullerton San Marcos Pomona Maritime Academy Sacramento San Luis Obispo UC System Combined Annual Spend > $5 Billion Dominguez Hills San Diego Sonoma San Bernardino Monterey Bay What if all campuses had consistent, robust and actionable procurement information that could be leveraged collaboratively in an effort to drive cost savings and efficiencies system wide? Channel Islands Bakersfield Fresno Humboldt Stanislaus Long Beach Chico East Bay Los Angeles San Francisco 11/19/2018 Data Driven Strategies 17

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