Show Them The Money! Ways to Find Savings In Your Organization Marcheta E. Gillespie, CPPO, C.P.M., CPPB, CPM NIGP 3 rd Vice President Deputy Director of Procurement, City of Tucson

The world we live in today…..

A few numbers to consider: $3 Trillion $250 Million 180, out of 50

A Request from the White House :

“For the upcoming two years [fiscal years 2011 and 2012], it is estimated that states will face shortfalls of about $260 billion even after taking into account aid from the federal government….Given the balanced budget requirements enshrined in almost every state constitution, state policymakers will continue to slash spending, expand gaming, tap rainy day funds, and raise taxes and fees to bridge the shortfalls." Sujit CanagaRetna Senior fiscal analyst, Council of State Governments (CSG) Keating Report Published: June 15, 2010 By Michael Keating

Urban NotebookUrban Notebook | More Muni Threat: Cities Weigh Chapter 9 The economic slump is forcing debt- laden municipalities nationwide to consider filing for bankruptcy. Todd Newcombe | May 2010 More Todd Newcombe

Health & Human ServicesHealth & Human Services | More More Poverty Comes to the Suburbs: “Poverty is encroaching on suburban enclaves – even the most affluent of them. Many are ill-equipped to meet the new social-service needs.” Zach PattonZach Patton | May 2010

BP oil spill nears record as Gulf's worst Jul 01, 2010

Unemployment News: National Unemployment Rate at 9.7% in May Thursday, July 1, 2010

Now More Than Ever….. Economic Uncertainty Strain on Agency Resources Crucial Opportunity for Procurement Economic, Social and Environmental Uncertainty Strain on Agency Resources

Are We Prepared? Proactive & Strategic Seat at the Table; Alignment Solution Providers Beyond ‘Thinking Lean’ --- ‘Be Lean’

Are We Prepared? Bid Shoppers Negotiators Value- Added Service Providers & Revenue Generators

Your Opportunity To Demonstrate Value Strategic Orientation Professional

Targeting Opportunity Organizational Savings – Hard Savings – Soft Savings – Avoided Costs Revenue Opportunities – Procurement – Organizational

Organizational Savings – Hard Costs Solicitations – Specification & scope analysis – Using appropriate processes – Negotiate – Alternative approaches to meeting a need – Research the market & industry

Organizational Savings – Hard Costs (cont) Solicitations (cont.): – Analyze pricing strategies – Consider revenue opportunities – Evaluate conditions & requirements (bonds, insurance) – Freight & Delivery Services – Scrutinize & negotiate sole sources, emergencies

Organizational Savings – Hard Costs Contract Administration – Tremendous opportunity to save! – Start on the right foot: CAT, CAP and PAP – Change Orders – Project Management – Invoice Reconciliation

Organizational Savings – Hard Costs Contract Renewal – To renew or not to renew? – Consider market conditions – Re-negotiation – Opportunities to improve

Organizational Savings – Hard Costs Supplier Contribution – Solicitation and contract – Creative solutions – Sharing tasks, risk and savings

Organizational Savings – Hard Costs Inventory Document Management Sourcing Alternatives – Appropriate Use of Cooperatives – Inventory and surplus – Lease v. Buy v. Refurbish – Outsourcing

Organizational Savings – Hard Costs Spend Analysis – You’re only as good as your data! – Availability, accuracy, coded – Reporting, benchmarking – NIGP Observatory

Organizational Savings – Soft Costs Organizational Assessment – Organizational restructuring – Re-alignment – Re-prioritization – Re-assignment – Identifying efficiencies

Opportunity Savings – Soft Costs Technology – eProcurement, website – Solicitation delivery – Vendor registration – On-line contracts – pCard, EFT, punchouts

Organizational Savings – Soft Costs Staff – Communicate/coordinate with clients – Appropriate tasking – Cross-training – Job sharing – Re-assessing roles

Organizational Savings – Cost Avoidance Specification and scope reviews Mitigation of risk IGAs “In Sourcing” Standardization

Generating Revenue Opportunities What do you have that’s valuable?

Generating Revenue Opportunities Cooperative Contracts pCard (implement or expand) On-Line Surplus Outsourcing Procurement Services

Generating Revenue Opportunities Electronic payment of invoices (“e-pay”/“E-AP”) Storage services Debt collection Invoice audit Vendor list

An Austrian zookeeper enlisted the help of unwitting rhinos by growing cannabis in their enclosure. The scheme worked for years until a stool pigeon betrayed him. Zookeeper Fired for Growing Cannabis in Rhino Enclosure October 4, 2010 – Spiegel Online InternationalInternational

Getting Started Create your list of ideas! Stakeholder input Transparency and accessibility Communication Training and education Customer service Measure/performance metrics

Share Your Success! ROI/P&L Negotiated Value Data Stakeholder Reports Focus Groups Share success with the media

Go Find Savings In Your Organization! Marcheta E. Gillespie, CPPO, C.P.M., CPPB, CPM NIGP 3rd Vice President Deputy Director of Procurement City of Tucson, AZ Thank you!