LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT Copyright University of Reading EMBEDDING CATEGORY MANAGEMENT AT THE UNIVERSITY OF READING 10 th September V.2

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT WHERE DID WE BEGIN Head of Procurement reporting to the Director of Finance and Corporate Services Deputy Head of Procurement 4 x Contract Managers (combination of MCIPS and working towards it) 2 x Admin staff Dealing with over 100 tenders a year for approximately £100m non-pay spend Influence on impactable spend low Purchase to pay system in place and use of e-tendering Procurement Policy and Strategy in place Reactive to stakeholders requirements Engaging with stakeholders limiting 2

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT WHAT CHANGED In 2013 the Procurement undertook its first Procurement Maturity Assessment The University engaged consultants to review its operation model in 2013 Establishment of the Efficiency and Effectiveness Programme Number of Workstreams – Commercial, Student Journey, Enabling Technology Commercial focused on how procurement was delivered across the University 3

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 4 UNIVERSITY VISION

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 5 UNIVERSITY STRATEGIC OBJECTIVES

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 6 PROCUREMENT DEPARTMENT THE VISION The Procurement Department aim is to: become a world class centre led procurement function that supports the University’s vision and operating model. leading on embedding category management approach across all areas of spend. It will be a professional enabling service that delivers to the business functions optimising the value of third party spend in both reducing costs and improving outputs. The Procurement Department will lead the international procurement agenda to support the University’s aspirations globally.

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 7 CONTRACT MANAGEMENT TO CATEGORY MANAGEMENT FIRST STEPS Firstly the Project Team undertook the following: Review of the non pay spend from the Finance System Review of the contracts in place Stakeholder engagement As is Workshop and survey Systems Business Requirements Workshop To be workshop Development of a blue print of the future state Savings targets

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT PROCUREMENT ARE PROGRESSING TO A TARGET OF £7.1M ANNUALISED SAVINGS BY THE END OF FY 2016/17 Wave 1 activities c.£20m of spend addressed Wave 2 activities c.£20m of spend addressed Wave 3 activities c.£30m opex and c.£14m capex spend addressed £2.4m £2.3m Full annual savings estimate Oct ’13 – Apr ’14Oct ’14 – Apr ’15Aug 15 – Feb 16 SSP development August 2014 onwardsAugust 2015 onwardsAugust 2016 onwards Delivery of benefits started FY 16/17 onwardsEnd of FY16/17 Full delivery of benefits c.£2.7m benefits identified, strategy approved and delivery initiated Wave 2 category plans ready for approval To be initiated Current status of benefits £7.1m annual savings by end of FY 2016/17 – view of savings contracted and planned view Travel and accommodation IT HW Lab equipment and consumables Professional services (recruitment) Legal services Staff learning and development Print Wave 1 c.£20m addressed Marketing IT Networks & Infrastructure Facilities Management & Estates Professional Services Office furniture Office supplies Wave 2* c.£20m addressed Opex categories tbc Capex categories tbc Wave 3 * c.£30m opex + c.£14m capex Procurement spend categories planned for each wave

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 9 CONTRACT MANAGEMENT TO CATEGORY MANAGEMENT STEP CHANGES Following the review it was agreed in early 2014: An expanded and high performing centre-led procurement function to provide strategic direction and ambition that links in to efficiency and effectiveness in 3 rd party spend management. Creation of a Strategic Procurement Board to provide oversight and governance for University procurement activity. Implementation of e-procurement, using technology to eliminate, automate and reduce low value activity.

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 10 CATEGORY MANAGEMENT MAIN PRINCIPLES CONSIDERED Strategic end to end process for buying goods & services (it is not just sourcing) Aligning business goals and requirements, maximising long term benefits for the University Bought in goods/services spend is categorised into discrete Category/Commodity areas Category spend is profiled to identify current usage, volumes, spend, pricing and Suppliers Analysis of the supply market Establish Category spend forecasts across Departments On going benchmarking –process improvements Identifying business owners and engaging with stakeholders

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 11 THE TEAM The team went through a restructure: Reporting to the Director of Finance and Corporate Services Director of Procurement Lead Category Manager Business Manager 4 Category Managers 5 Assistant Category Managers 1 Admin Assistance During transitional period additional staff: 2 Interim Category Managers Communications consultant Procurement consultants

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 12 CHANGE MONITORING Potential changes in market or category Ensuring no strategic drift Ongoing review Changes in other areas with the university including any staff changes Implementation of new campus in Malaysia Benefits tracking

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 13 BEING A CATEGORY MANAGER CHALLENGES Transitioning from transactional procurement to strategic, still expected to do both in the interim Changing the way of working, Shifting perspectives of what the department does Pulling the data and data cleansing. Promoting new ways of working to wide stakeholder groups Communication – targeting the correct groups. Structures, hierarchy and power within the University structure. Promoting change in a major University shake up which effects everyone and everything.

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 14 BEING A CATEGORY MANAGER SUCCESSES increased collaboration between user community and procurement, greater integration of University Strategy to day to day purchases. gaining buy-in of strategic category plans (giving stakeholders a voice to express views) Data has been cleansed and baselines set. seen as more professional service Potential to really achieve good savings both cashable and efficiency savings

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 15 WHAT HAVE WE ACHIEVED? New Centralised Procurement Operating structure including new role of Business Manager Procurement Board chaired by Chief Operating Officer (direct link to University Executive Board) Aligning ways of working with the University Strategies and Vision Business as usual maintained Category management methodology accepted by key stakeholders and implemented Savings identified in all categories for the 3 year programme Category plans in place in all key category areas including Estates and Facilities First ever e-auction carried out Key relationships built with Legal team and Management Accounts Supporting the University in its transformation Leading the procurement of the Malaysian Campus

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 16 LESSONS LEARNT COMMERCIAL A close relationship between Finance and Procurement is essential A business case mind-set needs to be developed and adopted not just within procurement but within other departments that commission external spend A demand review methodology should be set in place for all major areas of spend at regular and appropriately spaced intervals Compliance and risk should be looked at in conjunction with commercial value to the University Training on new models of delivery should be prioritised for key staff

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 17 LESSONS LEARNT GOVERNANCE Clearly identify each governance forum and any process change, policy change or new contract implementation etc. that needs to go through to allow for accurate time management Clear expectation setting for governance forums to enable efficient usage of group meetings/sessions Where possible, alignment with governance forum members should be completed prior to the final review sessions scheduled

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 18 LESSONS LEARNT PROJECT PLANNING Early identification of dependencies and involvement of relevant stakeholders Allow sufficient time for process changes to embed for delivery of benefits Robustly assess readiness for implementation of new processes/policies/technology that can delay delivery of benefits Accurately account for business as usual activities to ensure correct timelines are developed Visibility of milestones for all team members early in the process

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 19 LESSONS LEARNT COMMUNICATION A detailed communication plan should be developed for any changes to existing ways of working and /or new contracts that are being implemented. Change agents should be identified for every major project so that behaviour change is encouraged across the organisation. For affected stakeholders a view on supporters, advocates, neutrals and resistors should be developed where changes in policy and processes require change in staff behaviour

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT 20 WHAT IS NEXT FOR PROCUREMENT AT THE UNIVERSITY OF READING Continuous review of plans Single contract database Staff resources review Tracking of all benefits including cash releasing savings identified in the category plans Finalising Procurement Maturity Assessment review CIPS Accreditation renewal Source to Pay continued review and implementation

LIMITLESS POTENTIAL | LIMITLESS OPPORTUNITIES | LIMITLESS IMPACT LIMITLESS 21 ANY QUESTIONS?