How to Make Your Donors’ Dollars Go Even Further
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Hosted by TechSoup Connect BC on June 7, 2022. https://events.techsoup.org/e/m6r8cn/ Every charity wants to do as much as possible with the funds that they have. However, the pressures of the last two years have accentuated this need even further. One way to make your donors’ dollars go further is to be smarter at managing your third-party suppliers. Learn how to create effective and easy-to-follow procurement processes, with simple tips and examples for every nonprofit. Our expert presenter will cover: Finding the best value Sourcing and contract management Supplier and savings management Hiring compliant suppliers who share your values
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How to Make Your Donors’ Dollars Go Even Further
- 1. How to make your donors’ dollars go further Adam Thomas, Co-founder of oboloo
- 2. Be smarter at managing your third-party vendors 1. Purchasing vs Procurement 2. Sourcing Goods & Services 3. Contract Management 4. Vendor Management 5. Savings Management 6. How to make it happen 7. Digital Solutions
- 3. Purchasing vs Procurement • Purchasing • Procurement • An everyday example of procurement ‘Effective management of third party spend can on average release savings of between 7- 12% and can have a direct impact on the bottom line’ PwC, 2014
- 4. Sourcing Goods & Services Steps in the Sourcing process: What exactly is required? What represents best value? Which vendors to go to? Evaluate vendors Negotiate & Award Contract Implement Specify what and how much of it is required Specify what’s important and how to compare suppliers Establish a list of 3+ vendors to quote Assess which vendor will deliver best value Agree on acceptable commercials and contract terms Work with the vendor who has experience of doing this
- 5. What’s Best Value? • Cost • Quality • ESG (Environmental Social & corporate Governance) • Your values "Increasing migration from a relentless price and cost focus to a more holistic approach" PWC, 2020
- 6. Tips for Sourcing • Involve internal stakeholders from the beginning • Review previous purchases and practices to identify new efficiencies and reduce waste and redundancy • Provide prospective vendors with details of what’s required to enable complete responses • Have a clear and objective scoring criteria for vendor assessment • Negotiate - If you don’t ask you don’t get! • Read the vendor contract before signing and be clear about any buyer and seller obligations and key dates • Treat all vendors as you’d want your own people to be treated and remember that feedback is a gift • Run sourcing activities towards the end of every contract to ensure the continued receipt of best value
- 7. Contract Management • Contract repository • Store all associated contract documents • Permanent records of active and archived contracts • Alerts of key contract dates ‘The average company loses about 9% of annual revenue due to poor contract management practices. With typical profit margins hovering around 10%, even halving this loss can increase profit margins by 50%’ International Association for Contract & Commercial Management (IACCM)
- 8. Tips for Contract Management To have consistency, transparency and control over contract management create and document a simple process that everyone can follow keep up to date contract records and documents Avoid missing contract notice periods or end dates by simply diarising key dates. Missing them can be expensive as many contracts automatically roll-over Avoid evergreen contracts. These favour the vendor as they roll over and over. Companies lose 3-5% of savings opportunities because of auto- renewing evergreen contracts Review contracts every two or three years to ensure that they’re still relevant and accurate and meet the actual requirements
- 9. Vendor Management • Vendor repository • Store all associated vendor documents • Compliance • Preferred Supplier List ‘65% of procurement leaders say they have limited or no visibility beyond their tier 1 suppliers’ The Deloitte Global Chief Procurement Officer Survey 2018 • Monitor performance • Monitor risk • Monitor sustainability • Vendor on-boarding process
- 10. Tips for Vendor Management To have consistency, transparency and control over vendor management create and document a simple process that everyone can follow keep up to date vendor records and documents Don’t assume that just because a vendor was compliant last year that they are still compliant this year, especially important for critical vendors Record vendor performance regularly, getting feedback from a variety of users so that it’s balanced and objective. Feed it back to vendors Create a Preferred Supplier List that is easily accessible by employees so that they know which vendor to go to for different goods and services
- 11. Savings Management • Monitor Projected and Realised savings • Cost reduction • Cost avoidance • Split savings projects into multiple milestones Reducing costs is the top priority for 76.4% of CPOs, followed closely by improving operational efficiency. Cost saving has been the number one priority for the past ten years Deloitte CPO 2021 Survey
- 12. How to make it happen • Do-It-Yourself • Work with specialist consultants • Leverage a digital solution
- 13. Digital Solutions Considerations when assessing any digital solution: • Processes & Outcomes • Budgets • People
- 14. oboloo is a simple and intuitive self-service cloud procurement software
- 15. Any questions?
Editor's Notes
- Purchasing is the process of creating a purchase order, approving it, placing the order, delivering the goods and services, and obtaining payment instructions. Its short-term tactical Procurement is procurement encompasses all of the activities from identifying which goods and services are required by a business, to sourcing the best value suppliers, to negotiating and managing contracts to managing the suppliers and evaluating their performance. Its longer term and strategic. An example of us following a procurement process in our own lives An individual wants to purchase a new car. Having done their research, they come up with list of the make and model of the car and the exact specification they want. Their choice of car will be driven by their values and budget. Next, they’ll research the garages who are able to supply the new car they’re after and having test driven the car they’ll make their choice from which one they purchase the car. Cost is going to be important, but there may be other values considered as well. Having selected the garage, negotiated the price of the car a three-year lease finance contract is signed. Sometimes there may be problems that arise that need to be resolved and it’s the supplier’s response to this that we have to manage, which costs us our valuable time and sometimes money. Towards the end of the contract, assuming the individual wishes to purchase another new car the process is repeated all over again.
- What exactly is required? - Specify what and how much of it is required What represents best value? - Specify what’s important and how to compare suppliers Which suppliers to go to? - Establish a list of at least three suppliers to get quotes from Evaluate suppliers - Assess which supplier will deliver best value Negotiate & Award Contract - Agree on acceptable commercial and contract terms Implementation - Work with the supplier who will have experience of doing this
- To have consistency, transparency and control over Supplier Management create and document a simple process that everyone can follow and keep up to date supplier records and documents Don’t assume that just because a vendor was compliant last year that they are still compliant this year, especially important for critical suppliers Record vendor performance regularly, getting feedback from a variety of users so that it’s balanced and objective. Feed it back to suppliers Create a Preferred Supplier list that is easily accessible by employees so that they know which vendor to go to for different goods and services
- To have consistency, transparency and control over Supplier Management create and document a simple process that everyone can follow and keep up to date supplier records and documents Don’t assume that just because a vendor was compliant last year that they are still compliant this year, especially important for critical suppliers Record vendor performance regularly, getting feedback from a variety of users so that it’s balanced and objective. Feed it back to suppliers Create a Preferred Supplier list that is easily accessible by employees so that they know which vendor to go to for different goods and services
- oboloo is a simple and intuitive self-service cloud software that gives organizations consistency, visibility and control over every part of the procurement process from sourcing and contract management to supplier management and savings management. Enabling organizations to work with compliant suppliers whose values align with their own.