Introduction to Measure – How to Measure Savings and Show Value
Why are we here?What is Measure?Why would you use it?Terms and StructureDemonstrationRegistrationMore information
Introduction
Why are we here?
• Procurement teams make a significant contribution
• Often receive inadequate recognition
• Procurement is more than overhead
On behalf of its members, the NIGP Board of Directors has negotiated to
provide its National Agency Members with a tool to enable agencies to record and report the value that
procurement professionals bring to their agencies every day.
The tool is called Measure.
• Web based (SAAS)• Easy to use and scalable• Standardized data input• Records savings and
efficiencies• Produces reports, charts,
graphs and tables • Enables you to clearly
communicate the value your procurement team brings to your agency.
• Free to National Agency Members
What is Measure?
• Report to your manager
• Demonstrate value to elected officials
• Provide transparency to the general public
• Recognize achievement
• Identify best practice
Why would you use it?
Terms•Savings: Any type of savings made, whether it translates directly into cash or not.
•Cashable Savings: Real Money - Sub-group of savings where the value of the savings resulted in a hard cash returned to the organization. There is no universally accepted definition of what precisely constitutes a “cash”, “cash releasing” or “cashable” saving. NIGP is currently researching best practice in this area.
•Project: The overall description of a procurement savings or revenue initiative which may have multiple types of efficiencies achieved.
•Efficiencies: The record and value of what was actually done to achieve a savings.
Project
Efficiency 1Discount
Efficiency 2Process
Re-engineering
Efficiency 3Added
Value
TotalEfficiencies
Reports
Charts
Graphs
Tables
Structure
Base EfficiencyIn January of 2010, the agency acquires a new building to use as a staff training and meeting facility.
The fit out of the new facility requires 300 conference room style chairs. The price for a conference room chair is $100 per chair were they to buy from their existing supplier on the existing contract.
In February, the purchasing team gets involved and puts out an IFB/RFP to supply 300 conference room chairs for the new facility. The RFP ends and a supplier is chosen in March 2010. The agency’s existing supplier wins the contract with a bid price of $80 per chair.
How Achieved: Price ReductionSub-type: Price Difference
Existing contract price: $100 X 300 = $30,000
New contract price $80 X 300 = $24,000
Savings: $6,000
Other EfficienciesE-Bid for Data Projectors
Reduced cost to administer the process through use of electronic tools for submission and
evaluation of bid responses.How Achieved: Process Re-engineeringSub-type: Electronic Tenders/Bidding
Normal Cost: $3,000E-Bid Cost: $1,000
Savings: $2,000
Extended Warranty Period – Projector Bulbs
Result of e-bid process was an increase to 5 year parts and labor warranty for the price of 3.
How Achieved: Added ValueSub-type: Additional Items/Services
Normal Cost: $2,000Actual Cost: $0Savings: $2000
Demonstration
• Electronic registration behind NIGP member wall
• 1 Full license per agency (Data Input and Reporting)
• Up to 9 Data Input licenses per agency (dependent on Agency Category)
• Additional licenses are available.
Registration
www.nigp.org/measure
More InformationSet up and Training Spikes Cavell
(800) 990 0228 ext. 200
Additional Licenses: Spikes Cavell(800) 990 0228 ext. 100
Additional NIGP Agency Members NIGP Customer Care(800) 367 6447
What is a saving and is it cashable? Best practice guidance documents are being developed, however it is best to discuss these conventions within your own organization. There are a number of training and support documents available for Measure with examples.
NIGP website login issues: NIGP Customer Care(800) 367 6447
