University of Notre Dame Rob Kelly Nancy Fulcher NAEP Annual Meeting April 22, 2009 An Organization Chart for the Future: A Case Study

University of Notre DameProcurement Services Agenda Profile Timeline Organization Transition Strategic vs. Tactical Leadership vs. Management Commodity vs. Process Expertise Takeaways 2

University of Notre DameProcurement Services University Profile Private/Catholic: founded in 1842 by Rev. Edward F. Sorin National: students from all 50 states, many countries Location: beautiful South Bend, IN Enrollment: ~8,500 undergraduate; ~3,000 graduate Employees: ~5,000 faculty and staff Budget: ~$1B total, ~$300M non-wage, non-scholarship 3

University of Notre DameProcurement Services The Campus Procurement Landscape Spend Managed by Procurement Services~40% – Office Supplies, Lab Supplies & Equipment, Furniture, IT Hardware & Software, etc. Spend Managed by Decentralized Purchasing Units~30% –Architect’s Office (Construction) –Performing Arts (Artists, Theatre Equipment/Supplies) –University Libraries & Law Library (Books & Periodicals) –Food Services (Food, Supplies) –Utilities (Energy) –Transportation Services (Automobiles) Other Spend~30% –Travel, Entertainment & Reimbursements to Employees & Students –Payments to Other Universities –Consulting, Legal & Professional Services (Most) –Books & Periodicals (Some) –Organizations & Clubs –Other 4

University of Notre DameProcurement Services 5 Timeline of Recent Major Events 2007  Realignment Under Finance Division/Controller’s Group  Reorganization of Personnel & Creation of Director role 2008  First full cycle of Strategic Planning & Goal/Objective Setting  Strategic Sourcing Engagement with Huron Consulting Group 2001  McKinsey Study Commissioned  Departmental Reorganization & Creation of AVP role 2002  Initial Implementation of e-Procurement Solution  Go-Live with HigherMarkets (later acquired by SciQuest)  First Wave of University-wide RFPs/Contracts Executed 2004  ERP Go Live with SCT Banner Higher Ed.  Campus-wide Deployment of e-Procurement  Contracts Administrator Hired (First Contracting FTE) 2009  New Responsibility for Outsourced Printing Services and Travel

University of Notre DameProcurement Services Organization Prior to December Full Time Positions (excluding Central Receiving, NDSurplus and Intern)

University of Notre DameProcurement Services Functional Org Prior to December

University of Notre DameProcurement Services Issues & Proposed Changes Issues: –Structure not conducive to performance management –Implicit management structure without explicit authority –Lack of clarity regarding roles and responsibilities Proposed Changes: –Reduce span of control –Create a level of working managers with authority –Build teams with specific functional responsibilities 8

University of Notre DameProcurement Services Proposed Organization February Full Time Positions

University of Notre DameProcurement Services The Reorganization New organization structure rolled out May 2007 Three functional teams created; each with a new manager Three positions eliminated/absorbed –13 FTEs remain in Procurement Services All employees retained and reassigned as necessary 10

University of Notre DameProcurement Services The Procurement Functions 11 Procurement Services ContractsSourcingSystems

University of Notre DameProcurement Services Resulting Organization July 2007 ~ 130 Years Procurement Experience across 13 FTEs 3 MBAs, 1 JD, 5 C.P.M.s, 8 Bachelor Degrees 12

University of Notre DameProcurement Services Functional Organization July

University of Notre DameProcurement Services Continuous Change In past 18 months, four departures and four new hires One Buying Assistant splits time with AP Senior Staff Assistant becomes temporary Creation of Procurement Agent position 14

University of Notre DameProcurement Services Current Organization 15

University of Notre DameProcurement Services Strategic vs. Tactical StrategicTactical Managing changeAnswering phone calls, , etc. Developing people; building teamsProcessing orders Creating and monitoring goalsFacilitating customer needs Creating/analyzing business plans/cases Collecting data and information Building and managing relationshipsMonitoring contract compliance 16

University of Notre DameProcurement Services Strategic vs. Tactical 17 % Strategic / % Tactical CurrentTarget 60/4080/20 50/5070/30 20/8050/50 0/10010/90

University of Notre DameProcurement Services Leadership vs. Management LeadershipManagement Developing and communicating vision Monitoring performance to objectives Introducing changeCreating stability and structure Authority from followersAuthority from subordinates Provide directionProvide instruction InnovationAdministration 18

University of Notre DameProcurement Services Leadership vs. Management 19 % Leadership / % Management CurrentTarget 50/5080/20 20/8050/50 10/9025/75 0/10010/90

University of Notre DameProcurement Services How Do We Get There? 1.Eliminate –Just stop doing the non-value added work 2.Automate –Leverage technology wherever possible 3.Delegate –Use the resources we have to free up others 20

University of Notre DameProcurement Services Commodity vs. Process Faced with these realities: –Can not replace the experience and knowledge we have –Budget constraints limit salary and relocation flexibility –Increasing need for cross-training and extended coverage We changed our hiring philosophy: –Value process expertise over commodity knowledge –Personality and “fit” become even more important –Potential for development also given strong consideration 21

University of Notre DameProcurement Services Takeaways Have a detailed vision for your organization –Develop an ideal future state Revisit your organization chart and vision regularly –Organizations are fluid; change presents opportunity Make strategy and leadership a priority –Eliminate, Automate, Delegate 22

University of Notre Dame 23 Thank You. Questions?