Purchasing Directors’ Meeting May 13, 2004

Purchasing Directors’ Meeting May 13, 2004 Agenda Welcome / Meeting Overview How Are We Doing? Open Floor / Strategic Issues for Upcoming Year Florida Government Conference Center for Efficient Government Strategic Sourcing Operations Update Next Meeting Location / Time

Purchasing Directors’ Meeting May 13, 2004 Agenda Welcome / Meeting Overview How Are We Doing? Open Floor / Strategic Issues for Upcoming Year Florida Government Conference Center for Efficient Government Strategic Sourcing Operations Update Next Meeting Location / Time

Purchasing Directors’ Meeting May 13, 2004 Agenda Welcome / Meeting Overview How Are We Doing? Open Floor / Strategic Issues for Upcoming Year Florida Government Conference Center for Efficient Government Strategic Sourcing Operations Update Next Meeting Location / Time

DMS/State Purchasing Mission DMS Mission To be a customer focused agency providing effective and efficient services in order to better enable state agencies and employees to deliver the Governor’s priorities to the people of Florida. State Purchasing Mission To gladly deliver useful and innovative purchasing services in order to be a customer focused agency providing effective and efficient customer services.

State Purchasing FY 03-04 Mission Tasks Amend purchasing statutes Amend purchasing rules Improve contract management Reorganize division Deliver state term contracts that provide the right commodities and services at lower cost Consolidate purchasing into MFMP Training for division DMS customer satisfaction survey Support Facilities’ ITNs Upcoming Year?

State Purchasing Mission Goals (Measures) FY 03-04 Purchasing statutes and rules improved before May 2004 Recruit at least four employees highly esteemed by their peers before October 2003, and reduce annual turnover by 50% Increase customer satisfaction by at least 15% before January 2004 Successful delivery of innovative purchasing solution that reduces costs and saves time – MyFloridaMarketPlace adopted by all initial users before July 2004 Upcoming Year?

Purchasing Directors’ Meeting May 13, 2004 Agenda Welcome / Meeting Overview How Are We Doing? Open Floor / Strategic Issues for Upcoming Year Florida Government Conference Center for Efficient Government Strategic Sourcing Operations Update Next Meeting Location / Time

Florida Government Conference September 21-23, 2004 Co-sponsored by DMS and the FSU Center for Professional Development Combines the Government Expo and the Government Technology Conference Send purchasing-related program ideas and requests to Fred.Springer@MyFlorida.com See www.floridagc.com for more information

Purchasing Directors’ Meeting May 13, 2004 Agenda Welcome / Meeting Overview How Are We Doing? Open Floor / Strategic Issues for Upcoming Year Florida Government Conference Center for Efficient Government Strategic Sourcing Operations Update Next Meeting Location / Time

Governor’s Center for Efficient Government Oversight Board Secretary Bill Simon Department of Management Services Dr. Jim Zingale Department of Revenue Secretary José Abreu Department of Transportation Dr. John Agwunobi Department of Health Director Susan Pareigis Agency for Workforce Innovation

Governor’s Center for Efficient Government Initial Goals Develop statewide outsourcing standards and a business case template applicable to any proposed outsourcing project. Review existing outsourcing plans within the state agencies to ensure compliance with Center standards and business case, execution of effective contract language with vendors and implementation of successful change management. Propose for the Governor’s consideration by July 1 an initial list of specific outsourcing projects and initiatives that can be developed over the next 3 years.

Governor’s Center for Efficient Government Project Gate Management Process Current Projects Gate 1 Gate 2 Gate 3 Gate 4 Business Case Procurement Contract Management Change Management Post Implementation Monitor Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 New Projects

Center for Efficient Government Recent Developments Business Case Standards Published Next Week Developing On-line Resource Center http://dms.myflorida.com/administration/ center_for_efficient_government

Purchasing Directors’ Meeting May 13, 2004 Agenda Welcome / Meeting Overview How Are We Doing? Open Floor / Strategic Issues for Upcoming Year Florida Government Conference Center for Efficient Government Strategic Sourcing Operations Update Next Meeting Location / Time

Strategic Sourcing Methodology Profile Internally & Externally Develop Strategy Screen Suppliers & Selection Factors Conduct Auctions & Shape & Negotiate Value Propositions Implement Agreements Assess Opportunities Kick - Off & Profile Internally & Externally Develop Strategy Develop Selection Factors & Screen Vendors Conduct Competitive Event Prepare Value Proposition & Award Kick-Off & Assess Opportunities Develop Value Proposition Around Options Level High High - - Prepare Fact Prepare Fact - - Fast Track to Value Fast Track to Value Fast Track to Value Measure Measure Measure Data Data Complete Complete Complete Based Based Results Results Results Collection & Collection & ITB/ITN/ RFQ/RFP Negotiation Negotiation Build Build Build & Trends & Trends & Trends Analysis Analysis “Packages” “Packages” Validate & Validate & Validate & Build Total Build Total Build Total Key Worksteps Supplier Supplier Vendor Profile Profile Profile Cost of Cost of Cost of - and / or - Selection Selection Selection Segment Segment Category Category Category Ownership Ownership Ownership Decision Decision Decision Make Award Decision Negotiate Negotiate Purchases Purchases Model Model Model Matrix Matrix Matrix Develop Vendors Develop Develop Value Value Conduct Conduct Conduct Propositions Propositions Form Form Auctions Auctions Auctions Cross- Cross - Conduct Conduct Conduct Develop Develop Develop Conduct Conduct Conduct Functional Functional Industry Industry Industry Category Category Category Supplier Supplier Vendor Sourcing Sourcing Analysis Analysis Analysis Strategy Strategy Strategy Analysis Analysis Analysis Teams Teams Typical Deliverables In-Scope Categories Category Profile TCO Model Selection Decision Matrix ITB/ITN/RFQ/RFP Value Propositions Benefits Realization Industry Profile Category Strategy Auctions Award Decision (ITA) Continual Vendor Improvement CFSTs (Cross-Functional Sourcing Teams) Ariba Analysis Ariba Contracts Ariba Analysis Ariba Sourcing Ariba Sourcing Ariba Contracts Ariba Analysis Tools Source: Accenture Best Practices

Strategic Sourcing Preliminary Prioritization Matrix Easy 1 2 Office Supplies-$33 Office Machinery-$14 Food Products - $67 Janitorial Supplies & Services-$24 Motor Vehicles – Other - $3 MRO Materials-$87 Food Services - $0.09 Motor Vehicles – Passenger - $33 Ease of Telecom-$153 IT Hardware-$73 Implementation IT Software-$23 # of Agencies # of STCs STC Penetration % Competitive Demand Vendors = 80% Spend Sourceability Agricultural Supplies - $18 Financial & Insurance-$90 Fuel-$21 Building & Fixed Equip. - $44 Temp. Employment - $16 Furniture&Equip.-$72 Postage&Freight-$35 Other Prof. Svcs.-$11 Advertising-$98 Printing-$20 IT Svcs.-$150 Property Svcs.- $5 Utilities-$71 Consulting Svcs.-$214 Engineering Svcs. - $585 Other Rental Equip.-$3 3 Other Construction - $0.7 Prof. Dev.-$28 Travel-$21 Ind. Contractor NEC- $1,360 Medical Equip. - $2 Legal-$48 Medical Svcs. - $75 MRO Services-$185 4 Medical Supplies - $183 Const. Svcs. - $199 Structures - $1,671 Difficult Building/Const. Material-$23 Low Benefit Potential Sourceable Spend Savings Potential High ($) = Spend in millions Source: FLAIR data extract FY 01-02

Strategic Sourcing Preliminary Approach and Projected Savings

Strategic Sourcing Waves 1 and 2 Office Consumables DMS – Tom Butler MRO Materials DMS – David Comer Printing DMS – Charles Day DOR DOH DCF DHSMV Facility Services DMS – Chuck Beall DOT DOH DJJ Medical Supplies DMS - Susan Barr DCF DOC Uniforms/Officer Equipment DMS – Mark Lovell DHSMV DOT DEP FDLE FWCC DOC

Strategic Sourcing Other States’ Approaches DE: Furniture, Office Supplies, Packaged Food, Janitorial Supplies, Paper, Copiers, Electrical Supplies, Uniforms, Lab Supplies, IT Hardware, Software, LD Telephone Service, Cell Phone Service, Network Services CT: Police Cruisers, Office Supplies, Office Equipment, Trash Hauling, MRO, Food Service, IT Service, Pharm., Advertising, Printing PA: Cleaning, Autos, IT Hardware, IT Hardware Maintenance, Software, Copiers, Furniture, Supplies, Food, Roadway Materials

Strategic Sourcing Implementation Criteria Multiple agencies involved Status of current STC Current and future spend is anticipated to be large enough to warrant resources/effort Top spending agencies are willing and able to devote resources to support process

Strategic Sourcing Wave 3 and Beyond? IT Hardware IT Software Fleet Other?

Purchasing Directors’ Meeting May 13, 2004 Agenda Welcome / Meeting Overview How Are We Doing? Open Floor / Strategic Issues for Upcoming Year Florida Government Conference Center for Efficient Government Strategic Sourcing Operations Update Next Meeting Location / Time

Operations Update New Bureau Chief – Don Poorman State Purchasing Agreement for Quick Copy Summer Hours Legislative Update **SB 1678 enacted (public records)** HB 1898 not enacted (ch. 287 overhaul) HB 1533 not enacted (in-state residents on service contracts) HB 1211/SB 2756 not enacted (privatization and oversight) Training Update

Purchasing Directors’ Meeting May 13, 2004 Agenda Welcome / Meeting Overview How Are We Doing? Open Floor / Strategic Issues for Upcoming Year Florida Government Conference Center for Efficient Government Strategic Sourcing Operations Update Next Meeting Location / Time

Purchasing Directors’ Meeting Next Meeting Time: 3:00 pm to 5:00 pm Date: Thursday, June 10, 2004 Location: Department of Corrections Blairstone Road