Presented by Stephen B. Gordon, PHD, CPPO, FNIGP Mesa, arizona June 10, 2019

1. Presented by Stephen B. Gordon, PHD, CPPO, FNIGP Mesa, arizona June 10, 2019

2. Course Overview/Outline • Class Objectives • Relationship Management Models (CRM vs. VRM/SRM) • Outreach Mechanisms for Clients, Internal and External Stakeholders, and Customers • A Bit on Client Service • A Bit on Working with Internal and External Stakeholders • Vendor/Supplier Management Tools and Mechanisms • Leveraging Technology • Diversity • Case Studies • Wrap Up

3. Self Introductions • Name • Where you work, your title, and function • Your background and experience • Something interesting you’re doing at work • Why you are here • Something non-work related

4. Getting the Most Out of this Course • Participate and ask questions • Share your own experiences • Network with your colleagues • Stay comfortable • Explore differences • Recognize that the instructor is aware that he does not (1) know everything; (2) always have the right answer.

5. Intended Learning Outcomes Participants will be able to: • Distinguish a procurement program from a procurement agency • Describe public procurement as a system/subsystem • Explain the value of good relationships in procurement programs • Identify and describe the key relationships in procurement • Discuss why each identified relationship is significant • Apply information, ideas, tools, and best-practices to build and sustain effective procurement relationships • Enable others to apply information, ideas, tools, and best-practices to build and sustain effective procurement relationships

6. Why is This Topic Important? We can contribute the most to the strategic success of our public enterprises if we relate well to the other participants and stakeholders in the procurement process. * Our public enterprises

7. key relationships in a procurement program Clients Departments You Buy For • Examples of such departments • Categories of clients within departments Participants Involved Departments: • Examples of such departments • Categories of participants within departments Stakeholders Recipients of Services Provided Others Impacted by Services Provided Governing Body and Individual Elected Officials Electorate, Ratepayers, etc. Various Categories of the General Public

8. What is a Procurement Program? Every business unit, every line of business, every individual, all the technology, and everything else that together comprises the production system that supplies departments the goods, services, and construction needed to support the achievement of the enterprise’s mission, vision, goals, and objectives.

9. PUBLIC PROCUREMENT SYSTEM Internal Environmental Influences External Environmental Influences External Environmental Influences Level 2 Outputs Goods, Services, and Construction Delivered Compliance Integrity of Process Maintained What Else? Outcomes Clients Requirements Fulfilled Stakeholders Satisfied Mission, Goals, and Objectives Met What Else? Inputs Requisitions Emergency Procurement Requests Sole Source Requests What Else? Level 1 Outputs Purchase Orders Contracts Release Orders What Else? Procurement Operations* P-Cards RFQ IFBs RFPs What Else? Feedback Loop

10. Values and Personal Traits of all the Participants in the Procurement Process • Among the “Internal” Environmental Elements that Affect the Quality of Procurement Outputs and Outcomes • As Important as Competencies • Questions: • What values should the ideal public procurement official have if he or she is going to relate as well as possible to clients, vendors, suppliers, and other participants in the procurement process? • What personal traits should the ideal public procurement official have if he or she is going to relate as well as possible to clients, vendors, and other participants in the procurement process? • Can the behavior of public procurement officials be acceptable regardless of their values or personal traits?

11. Construction Project Case Study • Read the case study School District Construction Project • Consider the following questions: • What are your options? • How do you bring project manager into discussion? • What is your first communication with prime contractor? • What could have been done earlier to prevent this situation? [Revisit these questions.]

12. Customer Relationship Management (CRM) • Seeks input to better understand and respond to our clients • Collects large amounts of data • Can use the data to analyze and set strategic direction • Can impact entire customer relationship cycle • Data can show needs and desires to which we can respond • Comprises more than software and solutions (IT)

13. Using CRM to Improve Relationships with Clients For a CRM program to be effective, we must: • Identify, understand, and prioritize the “pain points” • Develop a program that our agency can afford in terms of potential benefits and opportunity and actual costs • Once program is in place, motivate all staff to participate • Measure and evaluate the level and quality of CRM • Continuously improve the CRM program.

14. CRM Software • Three aspects of CRM software: • Operational - automated customer processes support the procurement agency’s outreach/interaction efforts • Collaborative – facilitates communication and coordination throughout the procurement program • Analytical – enables the procurement agency to analysis of customer information for multiple purposes. • Each aspect can be implemented in isolation from the others.

15. CRM Benefits • Better understand clients’ needs and behavior • Generate more reliable forecasts • Enable more timely, more efficient, and more consistent and accurate communication • Gauge the impact of decisions made and actions taken by the procurement agency • Feed data on customer preferences and problems to staff and management; • Increase effectiveness and success by systematically identifying and managing identified issues • Improve customer relationships/interactions overall

16. Balanced Supplier Relationships Brief Case Study: You are the city’s chief procurement officer. The director of parks and recreation tells you two weeks before the city’s pools are scheduled to open that the contractor who maintains the quality of the water in the pools cannot guarantee that the quality of the water in the pools will be what it needs to be on the scheduled opening day unless the contractor is granted an immediate 20% increase in what it is paid. Working in your assigned group of students, fill in the blanks; then, explain how you and the other members of your group will proceed. Be prepared to be questioned by members of the other groups, acting in the roles of the city manager’s office, the city council, and the local media.

17. Vendor Relationship Management(VRM)/Supplier Relationship Management (SRM) • Is the reciprocal of CRM • Provides customers with tools to help make markets work for both suppliers and customers • Equips customers to be the leaders in their relationships with vendors • To work, vendors must have reason to value VRM. • Customers must invest the necessary time, effort and attention to making it work

18. Value of Quality Vendor/Supplier Relationship • Facilitates better mutual understanding between a procurement program and its supplier understanding of an entity’s operation • Facilitates collaboration between a procurement program and its vendors and suppliers • Result is greater buyer satisfaction.

19. Establishing the Strong Relationship • When is it important to form a strong relationships with a vendor or supplier; when is it not. • When a strong relationship would be helpful, what could prevent it from contributing as much to quality outputs and outcomes as intended? • How should a procurement agency determine the trustworthiness of a vendor or supplier with which it considering entering into a relationship? • How might a vendor or supplier determine the trustworthiness of a public entity that is seeking to enter a strong relationship with it? • How might a strong relationship be built when the solicitation will be an IFP. • How might a strong relationship be built when the solicitation will be an RFP? • What type or types of contracts or contract provisions would conform well with strong relationships? • What are the do’s and don'ts for a public procurement agency when seeking to form a strong relationship?

20. Establishing the Strong Relationship • Ensure that suppliers receive all the business under their contract. • “Rogue buyers” can hurt the vendor/buyer relationship. • Both parties must realize that things won't be perfect. • Some products won't live up to buyer expectations; • Some invoices won't be paid correctly. • Buyers and sellers should decide in advance how to solve problems. SRM

21. Using Technology in VRM/SRM • A strong communication network allows: • Real-time transfer of information. • Suppliers to view forecasts, inventory, and performance ratings. • Consider VRM/SRM Software

22. VRM/SRM Software • An e-procurement product. • Allows buyers real-time communications via web-based programs. • Automates much of the negotiation process; simplifies online bidding. • Organizations find out when to expect deliveries. • Suppliers know exactly when buyer's inventories need replenishing • • One of the biggest advantages of using SRM software. • Save money thanks to the competitive bidding. • Fewer employees are needed for supplier relationship management. • Employees can be devoted to other productive areas. • Paperwork is almost completely obsolete with these systems. • Cost of finding a supplier and negotiating contracts is also easier with the software. • It is important to have a competent vendor in order to skillfully navigate the waters of SRM software.

23. Preparing for VRM/SRM Software • Organizations must able to plan, implement, and use • Procurement officials must be open to collaboration.

24. VRM/SRM Summary • SRM can definitely be an asset, especially those who are trying to cut down costs. • For most organizations, all of these benefits can be achieved simply by creating stronger supplier/buyer relationships. • Using software and implementing it into an existing ERP system, organizations help both parties accomplish their tasks in a more efficient manner.

25. Procurement Technology Case Study A Trashy Story • Read the article “A Trashy Story about the City of Portland’s trash hauling contract • The incumbent contractor has an issue with the City’s procurement process. What is it? • Was the City responsible for notifying the incumbent? • Should the City purchasing agent re-open the bidding process? • What are the responsibilities of the contractor in this case?

26. Outreach – Reaching Out to End-Users • Lessons we learn: • The more you do, the less you have to do. • Saying it once or in just one way – won’t do.

27. The More You Do, The Less You Have to Do • Outreach is a very important and worthwhile investment.

28. Our Clients are Varied • Be fresh • Be fun • Be different to different folks • Reinvent yourself and your message often

29. Leading Clients Through RFPs • Read article “Decision by Committee” from Government Procurement magazine • Active role played by Procurement • Chair of selection committee • Provide instructions and support • Evaluate cost and other areas • Review and “own” the decision • Other considerations?

30. Tools We Use • Push Paper • “PaCS Essentials” • “The Brief” • Quick Reference Guide • Web • Website Overview – Static and Interactive • Checking the Status of Your Project • One-to-One Training • Departmental Visits • Departmental Training • Flow Chart • Group Training • Training Days • Merchant Expo

37. Tools UCSB Procurement Uses • Paper Resources • “PaCS Essentials” • “The Brief” • Quick Reference Guide • Web Resources • Website Overview – Static and Interactive • Checking the Status of Your Project • One-to-One Training • Departmental Visits • Departmental Training • Flow Chart • Group Training • Training Days • Merchant Expo

49. Reaching Out to End-Users (Clients) • Value: • Improved results • Reputation • Professionalism • Proactive – It’s an investment! • Other? • Rules: • Be Responsive • Be Accountable • Use Processes and Metrics • Document, Report, Share, and Use Results • Others?

50. Reaching Out to Vendors • Promoting Your Entity as a Potential Customer • Prioritizing and Targeting Your Outreach • Vendor Fairs and Open Houses • Websites • Advertisements • Printed Media • Collaborating with Other Entities • Educating and Training New Potential Vendors and Suppliers • Continuing Education for Vendors and Suppliers • Working with Various Organizations of Suppliers • Other?