Procurement Education Partnership Seminar June 6, 2019

1. Procurement Education Partnership SeminarJune 6, 2019 PROCUREMENT AS A STRATEGIC ASSET

2. WELCOME • We would like to thank all of those that have made this possible: • University of Utah, • Murray City, • Granite School District, • Canyons School District, and • Utah State Board of Education

3. Advancements in Business

4. Who are we? How have our customer’s needs changed the way we do business from 5-10 years ago.

5. Where are we? What innovative, powerful, creative things are you currently doing in your position?

6. Where are we going? What changes do you anticipate the division needing to make to your processes and services in the next 5 – 10 years?

7. Intelligent Spend Management Takes Procurement From The Back Office To The Boardroom • https://www.forbes.com/sites/sap/2019/05/02/intelligent-spend-management-takes-procurement-from-the-back-office-to-the-boardroom/#302fff104a42 • “For years, procurement has been considered a back-office function – the realm of finance, supply chain and operations experts. But with the rise of intelligent spend management, procurement can drive board-level conversations about business strategy.” • “Procurement is often one of the last back-end processes to be digitized but having access to that data will allow organizations to better understand every aspect of acquiring goods and services – and understand how it impacts businesses’ bottom line.”

8. Intelligent Spend Management Takes Procurement From The Back Office To The Boardroom “But with the rise of intelligent spend management, procurement can drive board-level conversations about business strategy.” “it’s the process of managing purchases from all sources including direct, indirect, travel and external labor. From source to pay, it’s about bringing all that spend into one, unified view and being able to understand the data related to every source and category,”

9. Our process can overwhelm our practitioners • Procurement is critical to success • of State Leadership • Fulfillment of budget priorities • Maximum value from tax dollars • Confidence of our constituents • Three factors are core: • The process is seen as an impediment • The office is pigeonholed as a processor • Then someone says the most expensive sentence in government…

10. The process is seen as an impediment • Operational agencies are so committed to mission they view the process as a burden • Value of competition and retaining negotiation leverage may be generally understood but perception of delay dominates • An inclination to view procurement as purchasers – a clerking function • Common comments • “This is my budget and I have to spend it” • “I know you just got this bid yesterday but it needs to go out tomorrow.” • “Why is everything so slow?” • “I need an exception.”

11. The office is pigeonholed as a processor • The volume of requisitions in a low automation environment can be overwhelming • Where the mass of your people are is where you focus • Where is the time for: • Sourcing Strategy & Alternatives Analysis • Spend Management • Contract Quality • Innovative Contracting • If the customers view procurement as a clerking function (and procurement feels like clerks) then the focus will always trend to fulfillment and compliance

12. And then… The Most Expensive Sentence In Government “Don’t Ever Let That Happen Again”

13. “Don’t Ever Let That Happen Again” • A crisis results in governance and risk mentality out of proportion to the original issue • Guiding legislation becomes overlapping/conflicting with unequal application across agencies • “Risk” and “fraud” become synonyms, and procurement becomes risk averse • Creates a culture of high focus on compliance instead of a more balanced approach of efficiency and governance driven by risk management • Delegations and exemptions won by powerful agencies further segment the reality • End users begin to skirt process to try to advance their mission, can get ahead of themselves with poor structure, creating crisis and repeating the cycle

14. Foundations of strategic procurement • Establish guiding principles of the organization with performance measures that roll up (and down) • Have honest conversations about staff needs • Build an “arc” to strategic value through roles and responsibilities • Expand the “tools in the toolkit” • Automate for a purpose

15. Guiding Principles in action Procurement as a strategic efficiency partner Procurement as a strategic quality partner Procurement as a strategic stewardship partner

16. Procurement as a strategic efficiency partner • Efficiency involves phrases like “throughput,” “output” and “volume” • Actively engaging the customer on their pending needs to “prestage” • Building systems that fuse review and execution to reduce friction • Building contract portfolios and tools to be agile • Prioritizing to make time for the big and small • Shedding work which no longer serves

17. Procurement as a strategic quality partner • Quality involves phrases like “approach,” “outcomes” and “value” • Capacity to deliver on maximum value from the dollar through strategic acquisition • Capacity to understand and advise on sourcing strategy as a partner • Commitment to identifying and optimizing gaps • “What doesn’t get done if procurement doesn’t do it?”

18. Procurement as a strategic stewardship partner • Stewardship involves phases like “citizens”, “ethics” and “legacy” • Retain the confidence of our citizens and their representatives • Deliver on the priorities of our state through our actions • Contribute to transparency and open government • Influence the direction of the market through our solicitations • Express our policy goals through the process

19. Key questions for the conversation • What are you most proud that your agency is getting done in the current model? • What are the top things that consume staff time that you think are disproportionate? • What higher level procurement functions are you not able to do within your current model that we should be doing? • How do you measure performance and how does that roll down to people? • How can I help you get your customers be invested in your success? • Do we have the right tools in the toolkit for the state on methods to procure in the way that is right for different projects? How can I help you with any tools you need? • If the governor asked you to help us pivot to more speed and more quality together, what would be the top three things on your list? • What are other states doing to improve [X] so that we can learn from success?

20. Transforming Through Procurement What are your thoughts?

21. Innovative Ideas • Massachusetts – One Procurement Process • Every solicitation is considered a Request for a Response • Main process to follow is listed in the solicitation. • Rank Scoring • Flexibility on how to score proposals • Evaluation of Cost Based on Need • Best Value Procurements • Vendors = vending machine • Statement of objectives • Industry partners

22. Rank Scoring Ranking Scoring Methodology - Part 7 • 5 = The evaluation committee member believes that the proposal to this criteria provided the best response for the evaluation committee member. • 4 = The evaluation committee member believes that the proposal to this criteria exceeded the expectations for the evaluation committee member. • 3 = The evaluation committee member believes that the proposal to this criteria was identified as being satisfactory, but the evaluation committee member believes that the proposal lacks details or solutions offered by other offerors. • 2 = The evaluation committee member believe that the proposal to this criteria does not fully address this criteria. • 1 = The evaluation committee member believes that the proposal to this criteria was confusing, inadequate, or ambiguous. • 0 = The proposal did not provide a response to this criteria.