upmc

Controlling Services Spend at a $9 Billion Organization

• UPMC Overview

• Introduction to sPro

• Project Goals / Benefits / Scope / Methodology

• Business Process Design & Setup

• Using sPro

– eProcurement Requisitions for Services

– Processing Work Orders

– External Supplier Portal (Viewing Work Orders, Entering Progress Logs, Inquiry)

– Approving/denying Progress Logs and Inquiry

• Challenges

• Lessons Learned

• Supplier Deployment Plans / Next Steps

• Questions

Agenda

3

UPMC Overview

$9 billion in revenue

20+ hospitals, operating nearly 4,000 beds

400+ service locations

50,000+ employees

200,000 admissions

UPMC’s Supply Chain Environment

Spend Managed:

• $1.8 billion

Transaction Volumes:

• Process 70,000+ invoices per month

• Process 4,000+ purchase requisitions per week

• Manage over 600 point of consumption material carts

• Receive 1.1M packages per year; central distribution center

UPMC’s Supply Chain Team

Single SCM Organization:

• 370 team members…

UPMC Supply Chain

7.9 Million cellular phone minutes

355 Million KWh of electricity

956 Miles of rolled paper towels

11 Million minutes of audio conferencing

26 Million lbs municipal solid waste

33,739 lbs of ground coffee

8.1M Clorox wipes

84 Million exam gloves

2.2 Million alcohol prep pads

1.6 Million syringes used

4.1 Million isolation & cover gowns

542,523 lbs of poultry

31,035 Miles of toilet paper

6,495 Airline tickets

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• UPMC Overview



• Business Process Design & setup

• Using sPro





• Challenges

• Lessons Learned


• Questions

Agenda

• Overview

– Enables control and oversight of services spend

– Reduces excessive service costs

– Creates visibility and enforces compliance

– Allows effective management of the process from request through settlement

sPro Overview

sPro Overview

Standardized Templates

• ePro requisition

• sPro Work Order

Settle Manage Procure

Financials Projects

Requestor Service

Providers

Supplier Collaboration

• View Work Orders

• Submit progress logs

• Electronic bill

presentment

• Plan and budget

• PO Integration

Request Analyze

Centralized Information

• Approved suppliers

• Negotiated contracts and rates Secure

Access

sPro Enables Flexible Progress Payments and Approvals

Rate Based

Milestone

Fixed Amount

• Supplier enters payment amount in progress

logs

• Multiple entries permitted for partial completion

• Payment is made when the agreed upon

milestones are completed

• Suppliers can designate a milestone complete

once

• Supplier enters the percentage of completion

• Payment amount based on percentage

completion of the total work order amount

• Payment amount based on the agreed rate for

the activity

• Payment based on the quantity entered in the

progress log

Percentage

• Require approval from

requesters

• Enforce contracted

payment schedules and

rates

• Eliminate premature,

excessive and/or

incorrect payment

requests

• UPMC Overview




• Using sPro





• Challenges

• Lessons Learned


• Questions

Agenda

UPMC sPro Deployment - Project Benefits / Goals

• Increase control over our services spend

• Automate invoice activity and put the onus on the vendor to start the process to collect their payments

• Reduce the use of blanket orders for services

• Accommodate progress payments driven by milestones or the percentage of a total dollar value

• Capture/definition of rates for services

• Better management of Project-related services

sPro is helping UPMC to achieve the following goals:

• Leverage existing eProcurement application and workflow

• Ensure use of contracted rates and suppliers

• Increase control by introducing “invoice” approvals that are performed by the original requester of the service

• Eliminate match exceptions and related rework

• Automate manual invoice processes

• Earn discounts through early payments

• Provide self-service inquiry capability to help suppliers apply payments correctly

Benefits of sPro deployment include:

UPMC sPro Deployment - Project Scope

• In-Scope

– Configuration, testing and deployment of sPro for deliverable-based Work

Orders with the following settlement methods: • Fixed Amount

• Percentage

• Milestone

• Rate-Based

– Integration with Project Costing through the Purchasing module

– Supplier interaction with Services Procurement via the External Supplier Portal

– Initial pilot with a small group of users / one vendor

– Subsequent vendor by vendor roll-out

• Out-of-scope

– Resource-based Work Orders with timesheet reporting/approval

– Integration with Strategic Sourcing (customized to eliminate this)

– Integration with Purchasing Contracts

UPMC sPro Deployment - Project Methodology

Plan

•Investigated functionality in Demo and conducted initial testing - delivered functionality did not meet UPMC’s needs or function fully

•Determined that UPMC would customize portions of the application

•Developed the project plan based on the Functional and Technical Design Documents

Design

•Gathered and documented business requirements & process for sPro and the External Supplier Portal

•Developed Functional Design Documents for customizations needed to support business requirements

•Created Technical Design Documents to establish a record of the technical changes needed

Build

•Completed and documented sPro configuration

•Created prototypes of various page changes/pages

•Executed technical development required to build customizations/custom processes and ready the External Supplier Portal

Test

•Initial testing was required after applying a large patch from Oracle

•Conducted multiple rounds of testing (shakedown, unit, integration, regression) with sPro and all related modules with DEV, TST, PRD migration

•Self-Service Portal, eProcurement, sPro, PO, External Supplier Portal, AP, GL, Project Costing

Train

•Conducted intro/overview sessions for each user group

•Developed process documents for each section of sPro, organized by user function/tasks

•Created and delivered training for End Users, Purchasing Staff and Vendor Contacts

Deploy

•Initiated a pilot deployment with a small group of users (~30-60 days)

•Identified a list of target suppliers for future deployment and initiated planning

• UPMC Overview




• Using sPro





• Challenges

• Lessons Learned


• Questions

Agenda

High-Level Process Design

Complete configuration and security setup

Select the Vendor

– Complete Checklist / Supplier Review – Is sPro a good fit?

• Includes review of ongoing orders/end users throughout UPMC

• Goods, services or a combination?

– Evaluate current invoicing methods and possible settlement method types

– Assess taxability and other unique requirements for doing business with the supplier

Communication to End Users and Vendors - ID contacts & gather details; overview

of tools & related process

Complete Vendor and End User Access Requests and related setup

Contract review / addendum (including rates if needed) and sign tech agreements

Complete category/Service Type, Vendor and Activity setup in ePro/sPro

Conduct Vendor and End User Training

Cutover planning (from old Purchase Orders to sPro) and coordination of new

order creation – particularly critical with Projects

Set up steps required prior to use of sPro

• UPMC Overview




• Using sPro





• Challenges

• Lessons Learned


• Questions

Agenda

eProcurement Requisitions for Services

New Links!

•Manage Progress Logs

•sPro Inquiry

Requisitions begin in the

same way…


Selecting “Services Requisition”

defaults the origin code to SPC


also makes a new link available

on the Special Request tab


By clicking the “Fixed Cost Service” link, we can enter details about the service requisition.


The “Review and Submit” page in ePro is the same for service requisitions.


Services requisitions follow the same, established eProcurement workflow as all other requisitions.

• UPMC Overview




• Using sPro





• Challenges

• Lessons Learned


• Questions

Agenda

Processing Work Orders – Accessing Work Orders

New Navigation to sPro

Primary menu option for

Service Coordinators

Processing Work Orders - Searching for Work Orders

Search for Work Orders

Select Work Orders to

review/take action

Processing Work Orders (Service tab)

WO header details

Defaulted Info from the ePro

req

Service information is

defaulted from the req,

including: •Service Type (Category)

•Initial settlement type

•High-level scope of work

•Requesting dept and location

Processing Work Orders (Service tab, continued)

Populated with Service

information from req,

including: •Projected start date

•End date

•Vendor information

Processing Work Orders (Approvals and Alerts tab)

The Progress Log Approver is

the ePro Requester!

Processing Work Orders (Comments tab)

Comments from ePro req will

appear on the WO; additional

comments can be added

Processing Work Orders (Cost tab)

Value of WO defaults from req

total

Progress Log Template (type of

settlement method) and Activities

(how progress is reported)

determine WO structure and how

vendor will invoice

Chartfield information defaults

from req

If project-related, a “ghost” PO

will be created upon release

Processing Work Orders (Cost tab) - Activities

Activities must be set up in sPro

before they can be selected on a

Work Order.

After an activity is picked, Service

Coordinators enter a number of

hours to be worked (rate-based) or

total value (fixed amount) or amount

upon completion (milestone).

30.00

Processing Work Orders (Consumption tab)

The Consumption tab

appears after the WO is

released and shows the

amount consumed,

remaining and invoiced.

• Service Coordinators determine the appropriate service/settlement

method/activities and update the WO accordingly

• Service Coordinators use a work instruction to determine taxability and

associate activities if needed to capture sales tax

• After a WO is finalized, it must be submitted and released

• Service Coordinators can only manage/process their own WOs

• WOs cannot be modified at all after release

– If the funds are completely depleted, a new requisition must be entered

• A “ghost” PO will be created for project-related WOs only

– This is necessary to facilitate integration with Project Costing

– No action required by Service Coordinators – POs build as approved and

dispatched

Processing Work Orders - Key Items to Note

• UPMC Overview




• Using sPro





• Challenges

• Lessons Learned


• Questions

Agenda

External Supplier Portal – Logging In

Service Provider

Contacts receive a

personal User ID and

Password

External Supplier Portal – Navigation


defaults the origin code to SPC

This is the main Navigation screen

within the External Supplier Portal

Initially, the Portal will be used for

Services Procurement only but future

deployments of other tools are planned

External Supplier Portal – sPro Navigation / Menu Options

After clicking on “Services

Procurement,” additional menu options

are available

External Supplier Portal – sPro - View Work Order

Suppliers can search within their list of

Work Orders

To select a Work Order, click the blue

underlined link


The Work Order Details tab provides

overview information

High-level detail includes the name of

the Requester

More detailed Service Information

covers the type of service, requesting

location and high-level scope of work


Duration Information provides the

length of the service term

Supplier information is displayed here

The Progress Log approver is the

same person as the Requester


42

Work Order details (such as the total

value) are visible, but cannot be edited

by the Vendor

External Supplier Portal – sPro - Maintain Progress Logs

Suppliers can search for WOs to enter

Progress Logs , or can search existing

Progress Logs

Submit Progress Logs – Pick an activity

44

Submit Progress Logs (rate-based)

45

Select an Activity to indicate

the work performed, Input the

number of hours worked

The Vendor’s

invoice number is

entered here

Submit Progress Logs (fixed amount)

The Vendor’s

invoice number is

entered here

Add comments to

send to the

Approver; may

include dates of

service or other

details

Select an Activity to indicate

the work performed, Input a

Complete Date and the

Billable Amount

External Supplier Portal – sPro - Submit Progress Logs

The “Details” link

launches a page

that covers the

details/history of

this Progress Log

The “History

Information” link

displays the status

of all Progress Logs

submitted against

the Work Order

External Supplier Portal – sPro - Submit Progress Logs

After clicking “Submit

for Approval” a

confirmation is

requested

After clicking OK, we return

to the “Maintain Progress

Logs” screen and see the

new Progress Log

displayed in the list

External Supplier Portal – sPro - Vendor Invoice Inquiry

A custom sPro Inquiry page can be used to track the status of Progress Logs from submission to payment

This page can be used by multiple contacts within the Vendor’s organization

• Each contact at a Vendor company will have their own User ID and Password

• Only one “Service Provider Contact” can be assigned to a Work Order – this is

the only person who can submit Progress Logs for that Work Order

• The SCM Sourcing Specialist works closely with the Vendor to construct the

Work Order and explain how progress will be submitted (settlement method)

• Once the value of the Work Order is fully consumed, no Progress Logs can be

submitted and the process must begin again with a new requisition/Work Order

• If a Progress Log is denied, the Vendor has the opportunity to modify and

resubmit for approval

• UPMC is treating the Progress Log as the Vendor’s “Invoice” to UPMC

• This is the only method to invoice UPMC and be paid for the specified services -

no paper invoices may be submitted

External Supplier Portal – sPro - Key Items to Note

• UPMC Overview




• Using sPro





• Challenges

• Lessons Learned


• Questions

Agenda

Progress Log Review / Approval

52

Approvers begin the process

to approve Progress Logs on

the eProcurement Homepage


Progress Log Approvers can

search for specific Progress

Logs, or work from a list


Approvers can review

comments and the work

completed by Activity, and

can approve or deny the

Progress Log


Additional detail is available

for each Activity line,

including the approval history

of the progress log


56

If the Progress Log is denied,

users are trained to enter a

comment.

Whether the Progress Log is

approved or denied, a

confirmation is required.

sPro Inquiry – Internal UPMC Users

A custom sPro Inquiry page can be used to track the status of Progress Logs from submission to payment.

• UPMC is treating the Progress Log as the supplier’s invoice of record

• Approvers have the ability to review any supporting documentation that

the Vendor attached to the Progress Log

• Progress Log Approvers may only approve or deny a Progress Log – we

do not permit edits

• If the work is not fully completed or there are other issues with the

Progress Log, Approvers are instructed to deny the Progress Log and

enter detailed comments

• The Vendor receives notifications when Progress Logs are approved or

denied

Key Items to Note – Progress Log Approval

• UPMC Overview




• Using sPro





• Challenges

• Lessons Learned


• Questions

Agenda

• Few organizations have deployed sPro focusing on Deliverable-based

Work Orders/Progress Logs

– Not many opportunities existed to compare notes and benchmark

• sPro configuration offers an overwhelming number of options

– Narrowing this down to the appropriate setup for UPMC was time-intensive and

involved “trial by error” investigation

• Testing revealed that a relatively large patch was needed from Oracle in

order for the deliverable-based Work Orders to function properly

– This required a fair amount of additional development and testing that was not

anticipated

• A significant development effort and time investment was required to

complete all customizations

• Defining security and properly establishing user setup was an iterative

process

– sPro user setup differs from all other PSFT modules that we are aware of and the

order of events is extremely important

Challenges

• Engagement from operational areas is critical in the early stages of requirements

development to validate the business process that is created and ensure it will

meet operational needs – eProcurement users, Strategic Sourcing, Purchasing, Accounts Payable, Project Costing, Project

Finance, Finance/Accounting, Construction Accounting, General Ledger

• Very detailed configuration documentation proved to be a worthwhile

expenditure of time and resources – Reconfiguration was required many times over the course of the project due to refreshes and

migration to other instances – small differences in config can produce major issues

• Significant custom development on a new module will generally take longer than

anticipated

• An external consulting resource was very helpful in researching sPro

capabilities/issues and assisting with development/testing

• Thoughtful and thorough unit/integration/regression testing identified issues

early and provided critical feedback to development – Approximately 500 test scripts were executed

Lessons Learned

• Complete the pilot deployment with our initial supplier

– Feedback from end users and the Vendor is extremely positive

• Eliminated blanket orders, paper invoices and related processing time (including

lost invoices)

• Greater visibility for End Users into consumption against the Work Order

• Vendors are enthusiastic about the ability to review progress log and payment

status on their own

– A pilot wrap-up session will help identify opportunities for improvement and future

enhancements

• Extended roll out plans

– Developed process documents for future vendor deployments

• Example suppliers include: Linen, Landscaping, Snow Removal, Cabling, IT

consulting, IT services, recruiting services, equipment repair

– Created a list of initial priority vendors for roll out

– Future deployments will be vendor by vendor

Supplier Deployment Plans / Next Steps

upmc

Health & Medicine