demystify public sector procurement – a peoplesoft journey · demystify public sector procurement...
TRANSCRIPT
Demystify Public Sector Procurement –A PeopleSoft Journey
Puneet Sharma, Deloitte
Tracie Byrne, Niagara Region
3
Agenda
Introductions
Objectives
Procurement Challenges and Opportunities
Contracts Process – Corporate v/s Dept
Approval Processes – Setting the right Accountability
Lights out Purchase Orders
Questions & Answers
Introductions
4
Tracie ByrneManager - Strategic Sourcing, Niagara Region
Worked in public sector procurement for over 15 years (UK and Canada) as a Procurement Officer and Procurement Manager. Implemented large scale ERPs in the UK and Canada.
Puneet SharmaSenior Consultant - Oracle, Deloitte
Senior Consultant at Deloitte in the Technology practice. Over 11 years of experience in the world of PeopleSoft ERP. Led procurement stream in many large scale implementation projects across 3 countries and multiple sectors.
• Share our experience of PeopleSoft implementation at Niagara Region
• Discuss the Challenges and Opportunities of Procurement Process @NR
• Discuss Contracts Process – Corporate v/s Dept• Discuss Approval Processes – Setting the right Accountability • Discuss Auto PO Creation and Dispatch
5
Objectives
Procurement Implementation – Scope, Challenges and Opportunities
7
PeopleSoft Procurement Stream @NR
Procurement ContractseProcurement
Purchasing Inventory Management
Process scope
PeopleSoft 9.2
Enhance integration with PeopleSoft (HR) and non-PeopleSoft platforms
Technology scope
PS and Non-PS Integrations
8
Challenges
• Complex Procurement By-law with multiple levels of authorities based on transaction type and amount
• Decentralized procurement process up to a $ limit, after which Central purchasing department takes over.
• End User departments do not fully understand their accountability
• Paper based process – data not readily available for analysis
• Low corporate visibility
• Different Procedures/Contract T&Cs
• Multiplicity of ‘Duplicate’ Contracts
Opportunities
9
• Opportunity to modify the Procurement Bylaw’s Purchasing and Execution Authority to align with modern ERP systems
• Draft common policies, procedures and guidelines for corporate and end user departments
• Implementation of a leading ERP system, utilizing industry’s best practices
• Utilize the PeopleSoft Approval Framework to configure based on the Bylaw approvals
• Supplier Rationalization – Clean up the supplier list and opportunity to get more suppliers on EFT
• Provide Report and Inquiry Dashboard to management
• Implement the policy of ‘No PO/Contract, No Pay’
Contract Process- Corporate v/s Department Contracts
Corporate Contract Department Contract
Managed by Central Purchasing Managed by Departments
Applies to all purchases within the Region
Applies to purchase(s) by the specific Department only
Initiated by Central Purchasing as advised by strategic sourcing group
Initiated by Departments based on their operational requirements
Promotes Standardized company policies and practices
Provides focused, specialized expertise for the contract
Multiple requisitions Single and multiple requisitions
Vis-à-vis
11
Procurement Contracts Process
Department completes and submits Contract Request
Form
PeopleSoft Manual
• Department creates requisition• Budget check (creates pre-
encumbrance)• Approvals
Strategic Sourcing initiative
Corporate Contract:
• Procurement creates purchase order
• Budget check (creates encumbrance)
• Approvals• Purchase Order dispatched to
supplier
• Department creates requisition• Budget check (creates pre-encumbrance)• Approvals• Purchase Order Auto-dispatched to Supplier (budget check,
creates encumbrance)
Procurement creates PeopleSoft contract
Procurement conducts formal procurement process
Initi
atio
nPu
rcha
se
Ord
er
Department Contract:
Multiple Requisitions/Purchase Orders against a contract
One Requisition/Purchase Order against a contract
Department receives spend thresholds and expiration notificationsProcurement receives spend thresholds and expiration
notificationsCon
trac
t M
anag
emen
t
Approval Process – Setting the right Accountability
Procurement Bylaw
• Existing Bylaw contains multiple levels of approval authorities
• Separate levels for Purchasing and Document Execution Authority based on type and amount of purchase
• Sample excerpt-
14
Procurement Bylaw – Interpretation for PeopleSoft
• Bylaw was interpreted in a tabular form to align with PeopleSoft’s approval framework approach
• Levels were defined for each transaction type (Req/ PO/ Voucher etc), type of purchase (Low Value, Informal or Formal sourcing etc) and amounts of purchase.
• Some of the levels were merged to standardize the process across transactions
• Utilized PeopleSoft’s checks and balances to remove some of the approvals, e.g. Matching removed PO-voucher approvals
15
Sample Approval Matrix – Non formal Requisitions
16
Thresholds of Approval
Up to $10,000 Level 1 Manager> $10,000 to $25,000 Level 1 Manager
> $25,000 to $100,000 Level 1 Manager
> $100,000 to $250,000 Level 2 Manager -> Director
> $250,000 to $1 million Level 3a Manager -> Director -> Commissioner
> $1 million to $5 million Level 3bManager -> Director -> Commissioner -> Commissioner Corporate Service/CAO
> $5 million Level 4Manager -> Director -> Commissioner -> Commissioner Corporate Service/Treasurer -> CAO
NON-FORMAL SOURCING EVENTSUsed on purchase requisitions & change requisitions
Never any PO approvals(Only time this should be above $25k is if we are drawing on an existing corporate
contract or Schedule A exceptions)
Approval Process – Key Drivers
Driver Sample Values Usage
PO Origins ONL – OnlineFRM – FormalSPE – Special Circumstances
Selected by the requestor as the ‘type’, based on Procurement process to be followed
Department ID Range
10000-39999 – Region Corporate40000-49999 – Regional Police71000-71999 – Regional Housing
Department ranges were defined to distinguish the three arms of NR having distinct approval flows
Category Code Cat X – IT ApplicationsCat Y – IT Infrastructure
Category code based special approvals
Total Transactionamount
> $25,000> $250,000> $1 million
Based on the bylaw, total Req/ PO Amounts were used to trigger approvals
Department Tree Winter tree of departments based on dept managers’ hierarchy
Used to find out the appropriate level of approver based on dept ID(s) used in transaction
Security Roles Director Strategic ProcurementManager Procurement
For central procurement group, Security roles were used to get approvers
17
18
Requisition Types
Requisition Type Procurement process (Procurement By-law):
Online Entry• Low Dollar Value (<$10K)• Informal Quotations ($10K to $25K)• Request against a contract
Single Source • Single source or specific-supplier
Special Circumstance • Special Circumstance
Schedule A • Exceptions to formal procurement process
Negotiation • Negotiation
Co-operative Purchasing • Co-operative Purchasing
Non-Compliance • Not compliant with the Procurement By-law
Emergency • Region declares emergency
RFQ/RFP/RFT• Request for Quotation• Request for Proposal• Request for Tender
Non
-For
mal
Form
al
Examples:
Level 3 Approval Required (Commissioner)
Skipping first 3 Approval Levels for CAO
19
Approval Process – Accomplishments • Paper-less approval process. All approvals are captured in the system
• Decentralization of Purchasing Authority up to max amount as dictated by the by-law
• Checks and balances in form of usage of Origins like Special Circumstances, Emergency etc
• Central Purchasing only gets involved with decentralized purchase when user selects type as ‘Online- low value purchase’, but exceeds limits
• Results in setting the accountability at the right level of authority, in both centralized and decentralized processes
20
Auto PO Creation and Dispatch
Purchase Orders – Lights out!• Requisitions under 25K – Auto PO Creation and Dispatch
• PO layout and process standardized across the Region, Region Housing, EMS services and Region Police.
• Batch Process designed to achieve lights out PO.
• PO is dispatched via email within the hour of Req Approval
• Change Req > PO process to enable departments manage non-formal POs
• Procurement involved only for centralized purchases
22
23
Process: Requisitions (Non-Formal Procurement)
Requester
Approver(s)
Creates and Submits
Requisition
Reviews Requisition
Budget Check
Create Purchase Order
Automated TaskTask
Approves
Dispatch Purchase Order
Deny
Dispatch Purchase OrderCentral
Procurement
Supplier PO email exists
No supplier PO email
Auto Process
Procurement and/or IT may be included in the requisition
approval workflow
24
Process: Requisitions (Formal Procurement)
Requester
Approver(s)
Creates and Submits
Requisition
Reviews Requisition
Budget Check
Automated TaskTask
ApprovesDeny
Dispatch Purchase Order
CentralProcurement Create Contract and/or
Purchase Order
Manages the formal procurement
process
Approves
Auto PO Process - Accomplishments
• Departments manage own purchases without the need to have access to Purchase Order components
• Increases efficiency of procurement staff
• Low dollar value POs dispatched to supplier within 1 hour
• Encourages more suppliers to switch to email communications
• Procurement By-law compliance from requester and approved accountability
25
26
To sum it up…
Contract processCorporate v/s Department
Approval Process
Auto PO Dispatch
• All Contracts in one system, with Central Procurement having oversight on all
• Complete Visibility to central purchasing• Enables Strategic Sourcing group to rationalize
‘duplicate’ contracts
• Ensure compliance to Procurement Bylaw• Enables departments to carry out decentralized
purchases within authorized $ limits• Sets accountability with the right authority for centralized
and department purchases
• Batch Processes designed to achieve optimal frequency and efficiency
• Lights out POs – no manual intervention required to create and dispatch POs
• Encourages suppliers to enroll on Email dispatch method
Questions and Answers
27