Breakout Session #410 JACQUES ABADIE, III, CPCM CHIEF PROCUREMENT OFFICER

1. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

2. WHAT’S SPEND GOT TO DO WITH IT? Breakout Session #410 JACQUES ABADIE, III, CPCM CHIEF PROCUREMENT OFFICER DISTRICT OF COLUMBIA GOVERNMENT April 28, 2004 Time:1140-1240 NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

3. ENTERPRISE SPEND MANAGEMENT (ESM) -AN OVERVIEW • How many of you know what you spent last year on… • Office Supplies • Travel • IT • Services • Shipping Services (UPS/FEDEX etc) • Miscellaneous NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

4. ENTERPRISE SPEND MANAGEMENT (ESM) CONTINUED • How do you manage your organization if you don’t know what you are spending your $ on • How many of your organizations use the following methodology to procure goods & services: Create the need, buy the product, manage the finances after the transaction? NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

5. WHAT IS ESM? • Spend Analysis – (where did my $ go) • Consolidate procurement into similar goods/commodities • Strategic Sourcing • Supplier Management • Organizational Strategy/Vision – Spend-centric focus NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

6. VALUE OF SPEND MANAGEMENT • Shifts financial focus to the front end • Creates sustainable savings prior to sale • Cost control/containment across business enterprise NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

7. HOW COULD ESM APPLY TO MY ORGANIZATION? • Decentralization vs. centralization-where do the savings come from if we go to a centralized organization? • Commodity Groups • Organize Enterprise needs around centralized commodities • Strategic Sourcing NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

8. DISTRICT PROCUREMENT PROFILE The District’s Office of Contracting and Procurement (OCP) is open for business! Our model: • $1.35 billion total spend (FY ’03) • Service approximately 61 agencies • Approximately 14,800 transactions per year NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

9. SUPPLIER PARTNERSHIPS • Leveraged supplier relationships to drive down price while delivering goods & services • Improved delivery time of product & services to agencies • Maintain compliance with organizations • socio-economic goals • 50% goal for all agency spend to LSDBE’s NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

10. DISTRICT OF COLUMBIA- ESM APPROACH 2000’S – OCP’s APPROACH APPROACH • Decentralized Sourcing, Centralized Purchasing • Decentralized Credit Card Purchases ($0 – $2,500) • Empower the End User • Move Toward Commodity Buying Instead of Agency • Predefined workflow and business rules • Reduces Maverick Purchasing • Reduce Cycle time through automation NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

11. DISTRICT OF COLUMBIA- ESM APPROACH (con’t) TOOLS • Web-based Application System That Facilitates Ordering From On-line Electronic Catalogs • System Interfaces Seamlessly With Legacy Accounting System • Procurement System the Primary Tool for Reporting Procurement Information –Not Accounting System • System Access Is Anywhere/Anytime SUPPLIER RELATIONSHIPS • Cooperative Buying Power – Regional Buying – Council of Governments • Lower Purchase Cost through strategic sourcing NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

12. Agency Process Commodity DISTRICT OF COLUMBIA- ESM APPROACH (con’t) RE-THINK YOUR PROCUREMENT REQUIREMENTS • Consider Commodity vs. Agency Process • Use the System to Assist Other Agencies with their Processes • Assist in Acquisition Planning • Tracking status of orders/procurements • Improve Management Control (Analysis) • Improved Payment and Settlement Process NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

13. DISTRICT OF COLUMBIA- ESM APPROACH (con’t) DESIGN AND IMPLEMENTATION • Interfaces with Old Financial Management Systems • Reorganize Agency Ordering Process • Implement Commodity Groups in Procurement Organization • Insure Accountability of Funding Obligation NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

14. ELECTRONIC PROCUREMENT LESSONS LEARNED • Cost and Resources Needed to Implement and Support This Application May Be a Barrier • Some Organizations Have Outsourced This Procurement Function • E-procurement in Government Is an Enabler for an Existing Procurement Process • Changing Government Methodologies Is Typically Difficult • Establishing a Web Based IT Backbone Within the City Structure Is Critical for Implementation of Any E-Procurement Systems NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

15. Total Dollars for all Commodity Groups = $1,227,409,148 NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

16. ENTERPRISE SPEND MANAGEMENT ESM – helping you find the money, get the money, and keep the money! NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

17. CONTACT INFORMATION Jacques (Jack) Abadie, III, CPCM Chief Procurement Officer Phone: 202 724-4242 Fax: 202 727-3229 E-mail: jacques.abadie@dc.gov NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”