ERP E-Procurement and Vendor Self-Service

Opening Remarks Moderator R. Kinney Poynter Executive Director NASACT Speaker Dale Kress Project Manager Advantage Procurement (CGI) Speaker Edgar C. (Ed) Ross State Controller (KY) Speaker Thomas L. White State Comptroller (AL)

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Introductions Thomas L. White, Jr., CPA Agenda State Comptroller Department of Finance State of Alabama Agenda Introductions E-Procurement and Vendor Self-Service Edgar C. (Ed) Ross State Controller Commonwealth of Kentucky Case Studies Kentucky | Alabama Dale Kress Product Manager, CGI Advantage Procurement Lessons Learned

E-Procurement and Vendor Self-Service Defined ERP Source-To-Settle Procure-to-Pay Spend Analysis Vendor Self-Service Receiving Three Way Match Vendor Registration Contract Mgmt E-Catalogs E-Invoicing Sourcing

to-Pay (indirect spend) The Solution Market Market penetration – 5% to 20% of target audience Maturity – Adolescent Main stream adoption – 2 to 5 years Procure- to-Pay (indirect spend) Market penetration – 1% to 5% of target audience Maturity – Adolescent Main stream adoption – 5 to 10 years Source-to-Settle (Gartner: Hype Cycle for Procurement, 2013)

How Does E-Procurement Impact Spend and Improve Efficiencies? Provides access to consolidated spend information Maximizes buying power Reduces the costs of goods and services Brings more spend under management Leverages procurement card rebates Increases transaction accuracy and reduces cycle times

Legislative and Policy Mandates and Objectives Promote transparency 1 Support local government entities 2 3 Increase supplier base (diversified, etc.) programs Increase competition 4

Commonwealth of Kentucky Case Study: Commonwealth of Kentucky

Current State in Kentucky Single Statewide ERP with Vendor Self Service Contract Management Sourcing Procure-to-Pay Procurement Cards Spend Analysis

E-Procurement in Kentucky Solicitation Management Contract Management Catalog Management Buyers Requisition Management Order Management Payment Management End Users Account Management Opportunity Management Contract Management Vendors Solicitation Management Contract Management Catalog Management Citizens

Kentucky catalogs support decentralized ordering and leverage buyer power # of Catalog vs Non-catalog MA’s # of MA Lines vs Catalog Lines Catalog MA’s 1,842 Non-Catalog MA’s 6,228 Total 8,070 # of MA Catalog Lines 2,577,270 # of MA Commodity Lines 41,408 Total 2,618,678 98% 1,842 8,070 2,577,270 % of Master Agreements (MA) % of Spend Total MA Spend = $7.9B* 23% Catalogs 34% 77% 66% Catalogs ($2.7B)* Non-Catalogs Non-Catalogs ($5.2B) *Total MA Spend and Catalog Spend were calculated from FY2007-2012 and do not account for Procurement Card usage

Kentucky catalogs support decentralized ordering and leverage buyer power Top Catalog Spend by Commodity Code 96200 $1.44B Miscellaneous Services (Mostly Medicaid – MCO’s) 91829 $198.5 M Computer Software Consulting 91395 $103.6 M Paving/Resurfacing, Highway and Road 77545 $72.3 M Road Maintenance Salt 20400 $66.9 M Computer H/W & Peripherals (for Microcomputers) Computer H/W & Peripherals (for Mini & Mainframe Computers) 20600 $66.3 M 96130 $52.5 M Employment Agency/Search/Temp Services 95823 $47.4 M Computer Management Services $0 $50M $100M $150M $200M $1.5B *Top Catalog Spend by Commodity Code was calculated from FY2007-2012.

Punch Out Usage and Benefits SPEND Total PunchOut Spend $2,780,555.07 Dell $2,208,124.91 Grainger $301,616.10 Steelcase $132,216.32 Fastenal $130,175.12 MSC $6,707.34 Software House (SHI) $1,715.28  Streamlined, efficient ordering process  Reduced order cycle time (quicker receipt of materials)  Secure Internet shopping using an online catalog customized with your standards and pricing Increased contract compliance 

Punch Out Risks and Challenges Coordinating an implementation timeline with multiple parties Holding vendors accountable for custom catalog content (auditing) Reliance on vendor Punch Out site stability Educating buyers and users

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Case Study: State of Alabama

Highly customized solution of on-line and batch processes for History Highly customized solution of on-line and batch processes for Accounting Financial Reporting Payroll Procurement Personnel Functionality

Current System Landscape Agency Accounting System State-wide Payroll/ Personnel System Central Accounting System Additional Agency Accounting Systems Procurement

The Plan 2013 2014 2015 Financials Proof of Concept Agency Went Live October 1, 2013 Financials Proof of Concept Agency Target Go Live date April 1, 2015 Budget Preparation Financial, Procurement and VSS Target Go Live date October 1, 2015

Future Application Landscape Single Integrated Statewide ERP with Vendor Self Service Financial Management Human Resource Management Procurement Vendor Self Service Budgeting Business Intelligence

Modernization Background: Decision Process GOAL Replace legacy procurement system with state of the art integrated system Reduce the total number of systems, interfaces and analysis required to support an expanding network of disparate systems Support the complete procure-to-pay cycle Eliminate the need to re-key transaction information, preventing errors at the point of entry Allow procurement professionals to spend more time negotiating with vendors, managing contracts and strengthening relationships, thus reducing the cost of goods and services

Procurement Primary Objectives Benefit Feature Maximize User Adoption Simple web and mobile enabled solution Remain Current Release upgradable sustainability Reduce State Support Needs Self service vendor portal to simplify vendor updates and catalogue maintenance Immediate Access to Information Modern business intelligence and real-time funds availability check and posting

and Mitigation Strategies Lessons Learned and Mitigation Strategies

Lessons Learned and Mitigation Strategies 1 2 3 4 5 The importance of a public sector solution Define your measures of success The value of ERP integration Vendor outreach is essential Target the right goods and services Mandate usage

Questions? Moderator R. Kinney Poynter Executive Director NASACT Speaker Dale Kress Project Manager Advantage Procurement (CGI) Speaker Edgar C. (Ed) Ross State Controller (KY) Speaker Thomas L. White State Comptroller (AL)

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Contact Info ISO 9001 Certified Dale Kress Procurement Product Manager, CGI Advantage CGI State & Local Government/ERP Solutions (703) 267-8778 Dale.Kress@cgi.com Thomas L. White, JR. State Comptroller State of Alabama 334.242.7050 Tom.White@Comptroller.alabama.gov Edgar C. (Ed) Ross State Controller Commonwealth of Kentucky 502.564.2998 EdC.Ross@ky.gov

Thank you