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Procurement Transformation Maximizing the Potential of Procure-to-Pay Technology Jack D. Zencheck, Chief Procurement Officer, Yeshiva University.

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Presentation on theme: "Procurement Transformation Maximizing the Potential of Procure-to-Pay Technology Jack D. Zencheck, Chief Procurement Officer, Yeshiva University."— Presentation transcript:

1 Procurement Transformation Maximizing the Potential of Procure-to-Pay Technology Jack D. Zencheck, Chief Procurement Officer, Yeshiva University

2 Celebrating its 125th year. YU is the country’s oldest and most comprehensive institution combining Jewish scholarship with academic excellence and achievement in the liberal arts and sciences, medicine, law, business, social work, psychology, Jewish studies, and education. Students: 7,232 Annual sponsored research: $225 million Operating Budget: ~$648 million Campuses: Locations throughout New York City and Israel Yeshiva University (YU)

3 What is Procure-to-Pay? Strategic rather than tactical Acquiring best contract pricing and terms vs. just buying (Procure) Cost-effective methods of processing payments through technology. (Pay)

4 Why Procure-to-Pay? Executive Level Support Strategy Cost Benefit Risks Separation of Duties Controls o Manual vs Systematic Governance

5 YU Procurement Services at a Glance Purchasing 90,000 purchase orders processed 80% ≤ $2,000 67,000 purchase orders processed electronically $300,000,000 in spend Accounts Payable 179,623 total invoices processed 116,182 on Purchase Orders 27,364 not on Purchase Orders 36,077 processed thru EDI

6 Procure-to-Pay - Table of Organization Open Director, E-Commerce (P Cards)(B2B) A. Butta Administrator, E-Commerce G. Braithwaite Systems Analyst A. Moore Sustainability Coordinator R. Gandolfo Contract Admin. IT Jack D. Zencheck Chief Procurement Officer Tova Ackerman Director, Purchasing T. Singh AP Supervisor T. Brown Contracts Administrator H. Nonnon Acquisitions Clerk A. Villamar Bookkeeper L. James Bookkeeper Michael Winkler Director of Energy Mgmt & Sustainability G. Gillott Assistant to CPO J. Iurato Travel & Expense B. O’Farrell Construction Buyer R. Labrew Freezer Program Clerk R. Osi Contracts Administrator N. Franco Acquisition Clerk H. Martinez Bookkeeper E. Teehan AP Clerk K. Neufville AP Clerk Thomas Cannon Director of Accounts Payable A. Basilone Receptionist Natalia Volodarsky Purchasing Manager, Scientific P-2-P V. Mew Asst. Contract Adm, MRO S. Gonzalez AP Clerk

7 P-2-P System Banner for Higher Markets SciQuest Full Suite (Higher Markets) Requisition Manager Order Manager Spend Director A/P Director Sourcing Manager Contract Manager

8 P-2-P System JPMorgan PaymentNet System P-Card Enzyme Freezer Program, Alcohol Ordering, Reporting and Inventory System A/P Director e-Invoicing and Digital Mailroom Automation System

9 P2P Process 2) A/P DIRECTOR 3 WAY MATCH (5k+) 2 WAY (<5K) 1B) SCAN & CONVERT TO DIGITAL FORMAT & IMPORT DIT DIGITAL MAILROOM

10 Accounts Payable Automation – E Invoicing E-Invoice SciQuest 3 Way Match Banner ACH

11 E-Invoice Direct Data Extraction Email Fax Lock Box CXML Conversion SciQuest 3 Way Match Banner ACH Accounts Payable Automation – E Invoicing

12 Outline We hired E&I Consulting to assess and recommend the following: Technology Assessment Organization & Operations Marketing & Communications Supplier Enablement Procurement Transformation Project

13 Performed a thorough evaluation of technology implementation Banner and SciQuest full suite Identified post-implementation issues system workflow (configuration and performance) functionality deficiencies that impact performance client satisfaction Documented and categorized appropriate solutions Implemented recommended solutions Documented and categorized outstanding Banner/SciQuest issues Reinforced the values and benefits of compliance and utilization Technology

14 Completed process mapping of the procure-to-pay process Validated each process step and decision point Identified opportunities to: streamline workflow reduce process time and effort for the campus users maintain appropriate level of control and oversight Increase operational efficiencies by implementing reengineered processes resulting from the following mapping exercises: Processing non-catalog small dollar purchases | Processing Requests greater than $7,500 Processing Change Orders | Vendor Set Up Remit-to-Addresses | Processing Invoices Monitoring Sub-Recipient Process Technology

15 Conducted a formal organizational review to determine alignment with objectives of senior leadership and key internal business partners Determined need for more formalized strategic vision supported by senior leadership Developed a 3-5 year strategic plan Expressed to senior management the role of Procurement to: Project ROI Address budget and staff requirements Identify dependencies in order to achieve the strategy Recommended utilization of CPO’s skills to concentrate on: Higher value Strategic objectives Delegated appropriate contractual signing authority to: Increase efficiencies Minimize risks Organization & Operations

16 Established standard institutional procurement terms and conditions and a standard Master Supplier Agreement Obtained cooperation from the other internal stakeholders including: Human Resources Business Affairs Finance Environmental Health and Safety Insurance and Risk Management Established a formal Procure-to-Pay strategy and structure with shared ownership among: IT Finance Procurement Organization & Operations

17 Reviewed the skillsets and capabilities of Procurement staff and determine Skills and staffing levels were sufficient to meet goals and expectations Technology related skills were inadequate and needed improvement

18 Performed a Procurement Customer Satisfaction Survey determined current level of satisfaction identified key areas of concerns Survey Results: 82% satisfied with content and supplier enablements in eMarketplace 59% satisfied/very satisfied with service and support received from the Procurement Services organization 68% understand approval levels 29% understand competitive bid threshold Organization & Operations

19 Performed supplier enablement to ensure successful hosted or punch-out catalog content for preferred contract suppliers. Enabled additional SciQuest science pack suppliers to further streamline ordering process for the campus community Initiated process change requiring suppliers to sign a written agreement to pay the 1.5% technology fee upfront vs. after the fact (current practice) Deactivated infrequently used suppliers to drive business to the preferred, contract and marketplace enabled suppliers Supplier Enablement

20 Developed a formal Marketing and Communications Plan (MCP) to communicate Vision Direction Goals Collaboration Invested in the redesign of the Procurement Services website to become the central repository of all procurement and disbursement related information customer support resources policies & procedures how-to-buy commodity and supplier information redesigned process documents Ensured regular communication and collaboration with key procurement stakeholders: Human Resources Controller Office Risk Management Finance Environmental Health and Safety Marketing & Communications

21 Implemented new process to formally track and report all cost reduction accomplishments Developed and provided formal cost containment savings and criteria for tracking results Developed formal and regular communications with senior leadership and the campus community the monthly results of cost reduction initiatives Supplier Enablement

22 Staff Highly respected by peers in higher education Skilled and motivated Frustrated with pace of transition to more strategic and value- added activities Burdened by non-value duties and responsibilities Would embrace and benefit from regular professional development opportunities General Observations

23 Impact of Procurement Procurement function should be elevated to the highest levels of the organization to support its the strategic objectives of the institution Designate Procurement as an institutional priority, because it: Represents second largest percentage of annual operating budget Interacts with and can positively impact operational efficiencies in virtually every department Can dramatically impact the Institution's bottom-line by reducing costs and extending the value and potential of every dollar of available funding Procurement Services should be separated from non-core procurement activities General Observations

24 This all requires change management “We can't solve problems by using the same kind of thinking we used when we created them.” - Albert Einstein Internal Challenges & Solutions

25 Ralph Maier and Melánie Lund E&I Consulting Group (267) 207-9338 rmaier@eandiconsulting.org www.eandiconsulting.org Acknowledgement

26 Conclusion


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