Past Activity Informing Future Value Florence Gregg, figpc ltd NAEP 2008 Annual Meeting Austin, Texas

2 Outline Background Case Studies showing how information used Questions and Answers © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

3 Once upon a time in Belfast… 1996: Queen’s University Belfast  We can benchmark! 1998/9: IBIS  Demonstrated at NAEB 2007/8: Use of specialist spend analysis approach NAEP 2008 Annual Meeting & Exposition, Austin, Texas © figpc ltd 2008

4 HE Supplier Spend Analysis © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

5 Supplier Analysis by Commodity © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

6 IBIS helped UK universities to Review annual spend patterns  Total spend by group and sub-group  Spend by arrangement type  Maverick spend Use information to inform future strategies Monitor year on year activity However, Very institution and HE sector focused © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

7 Triggers for Change Focus at government level to release “back- room” costs to spend on frontline services → Starting to measure what benefit we bring Achieved efficiencies/savings retained within organisation → Demonstrate what benefits result Recognition of benefits of spend analysis within and across sectors © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

8 Case Studies 1.Procurement Legacy 2.Opportunity Analysis – Institution 3.Opportunity Analysis – Sector 4.Scottish Universities 5.Risk assessment – influencing the market © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

9 1. Procurement Legacy It’s about more than money! Procurement impact doesn’t end with the process and receipt of the goods Bad decisions  We hear about again and again Good ones  We rarely hear about  The benefits of our actions should extend beyond the initial purchase © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

10 Example: RFID and Library Books Competition - £4k under budget Staff impact  Issue desk staff had more time to work with students  FTE of 7 days/week Quality of Service provided  Students borrow books outside ‘normal hours’ with need for issue staff to be present  Staff have more time to work with and support the students © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

11 RFID Cash releasing savings £4,000 – available to spend on other things Incorporation of tagged books in Book Contract Soft efficiencies £4,760 from 7 FTE days/week released to other duties Improved quality of service © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

12 2. Opportunity Analysis – Institution Understanding spend patterns  Started in Universities with IBIS Identify opportunities to  Aggregate demand  Leverage expenditure  Focus resources © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

13 IBIS Spend Analysis – Institution A © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

14 IBIS Spend Analysis – Institution B © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

15 Opportunity Analysis – Commodities High spend areas  Estates, Professional Services (~60% non-pay spend) Identification of common suppliers  Not fully automated, managed outside system  Required time and interest to complete CommoditySpend A% of TotalCumulative £Cumulative % Estates and Buildings£10.57m34%£10.57m34% Professional Services£8.24m27%£18.11m61% Telecommunications£2.18m7%£20.99m68% Libraries£1.54m5%£22.53m73% Computing£1.46m5%£23.99m78% Catering£1.41m5%£25.40m83% © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

16 Opportunity Analysis – Institution Library Expenditure  Common to all institutions Identification of common suppliers  Manual comparison – high match in value terms  Opportunity for local, regional and national initiatives Commodity - LibraryABCommon No suppliers Total spend£2.86m£1.34m£4.21m Top 10 (7 common)£2.18m£1.05m£2.71m % total spend78%76%77% © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

17 Possible Strategies Concentrate of ‘Top x’ suppliers in Group Bring y% of spend ‘under control’ Aggregate and leverage spend Move to next commodity area Seek to manage all commodity areas Use analysis to prioritise activity  At institutional, consortium and national level © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

18 3. Opportunity Analysis – Sector Cross–institutional spend pattern comparison  Manual process  Relied on availability of time to complete analysis Results were achieved  Improved terms  Greater control, accountability  Improved governance © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

19 Two Institutions’ comparison © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

20 Example: Library spend Manual aggregation of commodity data Displays high level of commonality of supplier Provides MI to support business case for collaborative procurement activity LibraryABCommon No suppliers Total spend£2.86m£1.34m£4.21m Top 10 (7 common)£2.18m£1.05m£2.71m % total spend78%76%77% © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

21 Opportunity Analysis – Sector Reduced processing costs through shared workload Reduced unit prices through aggregation and leverage of requirement However, getting full support remains a challenge © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

22 4. Scottish Universities Historically institutional analysis using IBIS At Consortium level  Manual aggregation of spend data  Informed consortium’s commodity group activity  Some peer-group review © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

23 McClelland Report Recognition of need for professionally trained procurement staff Long-term target of 1 professional staff for every £15m of non-pay spend Three-tier approach  A – National contracts  B – Sector specific contracts  C – General contracts © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

24 The statistics – 2005/ universities and 14,901 suppliers Expenditure Analysed Number of Invoices Totals£430,997,944543,418 Minimum£9991 Maximum£11,556,17610,649 Average£28,92436 © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

25 Data cleansing - Scottish Universities © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

26 Spend distribution by value © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

27 Common Suppliers in value ranges © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

28 Aggregation Opportunities? © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

29 Invoice profile - under £5000 © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

30 Low value invoices by commodity CommodityTotal ValueNo of InvoicesAverage Value Stationery3,787,61536, Catering10,047,37767, Janitorial2,719,43110, Building Materials5,941,88420, Clothing2,074,4886, Transport3,628,43410, Domestic Goods646,5951, Education9,221,03324, Mail Services4,083,5249, Vehicles3,503,9616, ,204,342193, © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

31 Low value invoices by value Invoice Value No of Invoices Cumulative No As % of total (543,413) < £1126, % £11 – £2030,83357, % £21 – £5079,142136, % £51 – £10077,640214, % £101 – £25099,853313, % £251 – £50057,915371, % © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

32 DIMMER Now HoP’s have access to ‘easy’ MI they can Develop a strategy/action plan Implement their strategy Manage the on-going activity Monitor what is happening Evaluate success (or otherwise) Report and Review © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

33 Other available reports facilitate…. An understanding of your Supplier base Economic impact – locally and nationally Sector’s impact © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

34 What type of suppliers are used? © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

35 What’s their age profile? © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

36 Where are they based? © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

37 5. Risk Assessments Identification of contracted suppliers Maverick spend What about the wider impact of our actions? Minimise risk of reducing competition  HM Revenue & Customs: “ASPIRE – the re-competition of outsourced IT” 19 July 2006 ISBN © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas

38 Summary Some institutions continue to use IBIS for ‘basic’ spend analysis Scotland moved to more sophisticated solution Procurement starting to look at legacy of its actions Now starting and able to make real use of MI on past activity to inform procurement strategies and actions NAEP 2008 Annual Meeting & Exposition, Austin, Texas © figpc ltd 2008

Any questions? NAEP 2008 Annual Meeting & Exposition, Austin, Texas © figpc ltd 2008

Thank you NAEP 2008 Annual Meeting & Exposition, Austin, Texas © figpc ltd 2008

41 © figpc ltd 2008 NAEP 2008 Annual Meeting & Exposition, Austin, Texas