During this informative session, Paul Dugal shares the journey that the University of Manitoba experienced—from making the business case to implement the end-to-end Ariba solution suite as an essential tool for transforming their new purchasing operating model, to engaging the broad University community in its successful implementation. Paul Dugal, Manager, Purchasing Services - University of Manitoba 2012 Ariba Commerce Summit in Toronto

1. ARIBA Commerce Summit
November 8, 2012

2. An EPIC
transformation
of purchasing processes
at the
University of Manitoba
By: Paul Dugal, Manager, Purchasing Services

3. In Summary

4. Lessons Learned
• eProcurement is an essential tool to achieve
purchasing excellence. It is not the only tool.
An effective Purchasing Operating Model and
Strategic Sourcing methodology are equally
important
• Include all three areas in your business case

5. Lessons Learned
• eProcurement is not just a purchasing system.
More importantly, it’s a Finance System
• Engage key stakeholders and potential users of
the system, right from the beginning
– and it begins before you decide to buy an
eProcurement system
– What’s wrong with the current purchasing
processes?
– What could make it better?

6. Lessons Learned
• Combine the operational effectiveness of both
the Purchasing Services organization with the
organization as a whole, to build your business
case
• Your ROI will be much quicker and gain an
easier buy-in from Senior Management

7. Lessons Learned
Investment:
• New Purchasing Operating Model and
Strategic Sourcing (consulting and additional
staffing costs)
• Current State / Future interviews (consulting)
• User Engagement costs (participants)
• The eProcurement Service costs
• Implementation Resources:15 FTE/yr x 2yrs
• Ongoing annual internal maintenance costs

8. Lessons Learned
Benefits:
• Prove the power of Strategic Sourcing
Savings. U of M achieved $4.5 million (3%
of addressable spend) prior to buying
eProcurement
• Consider the redeployment of users’ time
savings to more productive tasks

9. The Journey

10. How did we get here?
1. Reorganization of Purchasing Services
(2010):
• Category Management
• Performance Management
2. Strategic Sourcing (2010-2011)
3. eProcurement implementation (2011-2013)
4. EPIC Launch (October 9, 2012)

11. How did we go about designing
an eProcurement system for
U of M?
• Engaged Faculty and Staff in Current State and
Future State workshops
• Engaged them in RFP requirements
• Engaged them in supplier selection
• Engaged them in design stages
• Engaged them in testing
• Engaged them in Pilots

12. “Current State” & “Future State”
Analysis Workshops
• 15 workshops over a 6 week period with 30
participants from a range of faculties and
departments
• Over 3,300 person-hours of analysis

13. What did we learn?
• Too many ways to make purchases
• Too many forms to chose from
• Too many steps
• Too time consuming of processes
• Not enough departmental control
• Ordering time too long

14. What did we learn?
• Time consuming approval process
• Difficult to track the approval process
• Not aware of purchases until expensed
• No commitments on low-dollar purchases
• Difficult to obtain copies of low-dollar
Requisitions and Invoices

15. What we didn’t hear
• We need help to save us money
• We need better consulting from Purchasing
Services
• We need to standardize the variety of
products/services we buy
• We need to consolidate our supplier base

16. Conclusions
• Need an easy electronic method to request
goods/services, financially commit purchases,
approve, order, invoice, receive, view and
archive related documents
• Need a spend analytics tool
• Need to manage contracts
• Need to automate competitive tendering and
evaluation process
• Need an eProcurement solution

17. Search for an eProcurement
Service Provider
• Built the RFP requirements according to the
As Is & To Be workshops and operational needs
• Engaged 155 faculty and staff from 79
departments in top 3 supplier demonstrations
• 95% in favor, and we selected Ariba Inc.

18. Implementation
• Conducted a 54 week implementation process in
Sept. 2011
• Implementation team of 15+ FTE
• Continued to engage stakeholders in the design
work
• Did we build what you wanted?
• Did we hit the target?

19. Conference Room Pilots

20. Not a Bull's-eye, but we made
improvements of EPIC
proportions
• $250 million/annually – 100,000 transactions
• Variety of Goods/Services: live animals,
scientific apparatus/chemicals, musical
instruments, consulting services, IT hardware/
software, construction, office furnishings,
transportation services, etc.

21. EPIC Improvements
 One electronic procurement process
• EPIC (Purchasing Card as a back-up)
 Fewer ways to buy
• one Purchasing process
• one Sourcing Request process
• one Contract Request process

22. EPIC Improvements
Simplified, automated, faster procurement
process with less steps
Under $2,500 ordering time reduced from 8
days to less than 1
Departmental control on their purchases
Visibility of entire process

23. EPIC Improvements
 More efficient electronic approval process
 All related information available on-line & reports
 Upfront commitments on all purchases
 Paper(less). Some faxing of P.O.’s
 Requester driven (empowerment of Requestors)
 Purchasing Services assists when > $2,500/item
or $25,000/order

24. EPIC Improvements
 Electronic Catalogue ordering (75% of orders)
– On-line searching
 Electronic non-catalogue ordering
 On-line Receiving of higher valued orders
 Automated Budget checking
 On-line invoice variance reconciliations

25. EPIC Improvements
Operationally
• eSourcing
• eContracts
• Enablement of suppliers to transact
electronically
• Spend Analytics
• Enhanced by use of Commodity Codes

26. EPIC Improvements
Operationally
• Strategic Sourcing Savings
• $4.5 million per year so far
• Standardization of goods/services
• Consolidation of suppliers
• Improved Services by Purchasing Services
• Purchasing Services is now being recognized
for its strategic value and importance

27. Spend Analytics
Example

28. Services
IT Construction
Logistics
Research
and
Science
Total Spend by Category

29. Consolidation of Suppliers

30. Services Spend By Supplier

31. Exported Spend of All Services
Suppliers

32. Consolidation of Suppliers

33. In Summary

34. Lessons Learned
• eProcurement is an essential tool to achieve
purchasing excellence. It is not the only tool.
An effective Purchasing Operating Model and
Strategic Sourcing methodology are equally
important
• Include all three areas in your business case

35. Lessons Learned
• eProcurement is not just a purchasing system.
More importantly, it’s a Finance System
• Engage key stakeholders and potential users of
the system, right from the beginning
– and it begins before you decide to buy an
eProcurement system
– What’s wrong with the current purchasing
processes?
– What could make it better?

36. Lessons Learned
• Combine the operational effectiveness of both
the Purchasing Services organization with the
organization as a whole, to build your business
case
• Your ROI will be much quicker and gain an
easier buy-in from Senior Management

37. Lessons Learned
Investment:
• New Purchasing Operating Model and
Strategic Sourcing (consulting and additional
staffing costs)
• Current State / Future interviews (consulting)
• User Engagement costs (participants)
• The eProcurement Solution costs
• Implementation Resources:15 FTE/yr x 2yrs
• Ongoing annual internal maintenance costs

38. Lessons Learned
Benefits:
• Prove the power of Strategic Sourcing
Savings. U of M achieved $4.5 million (3%
of addressable spend) prior to buying
eProcurement
• Consider the redeployment of users’ time
savings to more productive tasks

39. It is EPIC!

40. It is Live!

41. Now
Playing

42. University of
Manitoba

43. EPICquestions