SCC Procure-to-Pay Executive Sponsor

UpdatePresented by Procurement Department

June 23, 2016

Creative Idea in 1996

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20 Years Later in 2016!

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Alan Minato George Doorley Joyce Wing Jeffrey Daniels Pete Torrenti

David Claude James Williams Paul Lorenz Jennifer Morgan Robert Jones

Emily Harrison Jeff Smith Steve Conrad Matt Johnsen Scott Porter

Gary Graves Jenti Vandertuig Craig Myers Marianne Heer Keith Krach

SCC Procure-to-Pay Project Executives

SCC Procure-to-Pay Project Team105+ Team Members

Alan Minato Jaslin Yu Mitali Shah Charlie Brickley Paul Baker

Alexander Auer Jayson Mampusti Neysa Fligor Clement Choong Paul Mansfield

Alicia Jauregui Jennet Chan Norma Zapien Dan Contreras Phani Appajodu

Anthony Regala Jennifer Lu Nu Dang Dencil Paul Phillip Castaneda

Anthony Trans Jenti Vandertuig Pauline Herrera Don Walker Ram Ranganathan

Asit Gosalia Jimmy Lee Petrus Chan Eric Harris Randy Knopf

Becky Lopez Juvy Centeno Pomi Amjad Eric Hiles Scott Cook

Ben Reyes Ken Yamamoto Ramesh Amin Hwee Yeo Seth Mundorff

Caroline Kho Kristine Au Reynaldo Aralar Jeffrey Kostko Suganthi Manickam

Cheryl Liu Lawrence Clewis Rinky Chopra Jerry Dragun Susan Quick

Chi Pham Linh Vu Rita Jin Joanne Cheek Tanya Grannemann

Christina Rivera Lourdes del Rosario Susie Velez John Fast Thomas Lee

David Indra Maggie He Tarique Shafaeen Juan Barrera Tina Jerzyk

David Strausser Maria Melgoza Teresa Pascali Kevin Davis Tom Rocco

Ed Bagsik Maridel Aguirre Andy Eagle Lance Robertson Tony Wu

Efrain Reyes Mary Piraro Alok Sinha Lolita Lee Vernon Thompson

Elva Wilson Matt Woo Ari Stone Marta McCreary Vidyadhari Vijjapurapu

George Doorley May Garcia Arul Anjaneyan Matt Johnsen Willie Oshodin

George Sadtler Michael Pangilinan Ben McEwen Mohammad Zarku Jennifer Baker

Hema Thanapathy Mickey Matkovich Blaine Wilkes Nick Evans Michael Podsiadly

Henry Lo Mike Nguyen Chad Crook Nicole Oliver Tom Pellegrino

SCC Procure-to-Pay Team Includes Members from SCC, SAP-Ariba & DocuSign

1. Supplier Information Management

2. Sourcing Professional

3. Discount Professional for Cash Management

4. Supplier Enablement and Cataloging for Goods Contracts

5. P2P Module for Transactional Procurement

6. P2P Module Implementation Progress

7. Contract Module Rollout with DocuSign

8. The Next Six Months

9. Executive Ask

Updates

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Supplier Information Management (SIM)

Pre-Ariba

Our current system is not working effectively. Our vendor data was 90% inaccurate in SAP for vendor contact information so cash management process slowed down. This is due to SCC entering vendor information in the system when a supplier is ready to do business with the County.

Out of our 10,239 vendors registered to do business with SCC in BidSync, only 1,800+ had email addresses. Of the 1,800+ vendors, 500+ had incorrect email addresses and Procurement received over 3,500 return mail due to old addresses in our bid management system. This is due to the fact that SCC did not have direct access to the suppliers and had to rely on the bid management vendor.

Utilizing the SIM Module in Ariba

SCC was able to configure the system with fields for data specific to SCC. SIM allows suppliers to register and provide financial information in one centralized location. Additionally, instead of SCC being responsible for entering supplier information, suppliers will be able to self register in SIM and be responsible for maintaining their current information including socio-economic requirements such as small business etc.

Ariba’s system is configured in a manner that requires suppliers to update their profile every 6 months so that information is kept current.

To date, 1408 vendors have successfully registered in SIM.

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Sourcing Professional

Pre-Ariba

The sourcing process is manual for the entire County. Solicitations are published on the bid management system and registered vendors receive notification of the posting. If the vendor wanted to respond to a solicitation, they had to submit a hardcopy bid or proposal. The Procurement Department utilized eSourcing only for informal Request for Quotations.

Utilizing the Sourcing Module in Ariba

SCC has taken a phased approach to design and implement the Sourcing Module for the various types of solicitation. The plan is to have the Procurement Department test and utilize the module prior to release for decentralized contracting.

The Procurement Department commenced utilizing the Sourcing Module in July 2015 for Invitation to Bids and Request for Quotations.

164 solicitations have been issued and vendor responses are received electronically and bid abstracts are managed

electronically.

The Request for Proposal and Request for Statement of Qualifications templates have been designed, configured and tested. With the revision of the Board Policy related to Bidding and Contracting, the Procurement Department will make the necessary changes and commence using these templates in December 2016.

All necessary rules of engagement for solicitations and eTerms and Conditions have been incorporated in the system for self selection by contracting staff.

All workflow approvals are conducted electronically expediting the process by weeks increasing accountability and transparency.

Reduce paper and increase operational efficiencies.

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Discount Professional for Cash Management (Dpro)

As part of the Dpro program, suppliers were given the following options:

Select from listed discount payment terms

2.25% 10 Net 45 (provides 35 days of cash acceleration)

2.00% 15 Net 45 (provides 30 days of cash acceleration)

1.75% 20 Net 45 (provides 25 days of cash acceleration)

1.33% 25 Net 45 (provides 20 days of cash acceleration)

1.00% 30 Net 45 (provides 15 days of cash acceleration)

Select N45 payment terms

Stay with current contract payment term

Sign up for dynamic discounting per invoice

Year-to-Date (YTD) 2570 vendors have been contacted as part of the Dpro Program

124 vendors signed up for discount term and YTD discounts realized is $242,098

552 vendors signed up for N45 payment term and YTD interest earned is $14,828

148 vendors maintained status quo

368 vendors were not responsive

1378 vendors were non-strategic vendors will move to N45 for future transactions

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Currently the team is working on reviewing the discount performance and identifying if there is a system control to reduce discount lost and payment term change during invoice input (discounting per invoice)

The completion of the P2P Module rollout will enable suppliers to transact in the Ariba network and participate in eInvoicing and automatic invoice to Purchase Order matching which will result in reduced payment time.

SCC completed a study of payment terms and average payable cycle times. Based on the study, SCC decided on N45 payment term. This was to increase the discount and to leverage cash flow opportunity for County as payments were made beyond 30 days.

Supplier Enablement & Cataloging Goods Contracts

Pre-Ariba

The entire process is manual and there was no supplier enablement nor catalogs. Departments have to review each contract to determine the contracted items and pricing manually. Departments consistently overspent on contracts including buying non-contracted items.

Utilizing Supplier Enablement and Cataloging Functions in Ariba

In order to facilitate the electronic exchange between two parties in the cloud to procure and pay for goods and services, suppliers who are registered to do business with the County need to be enabled, and items on term contracts established by the Procurement Department need to be cataloged and be made available for departments to order electronically in the Ariba Network.

Supplier Enablement

The County has 3358 suppliers for goods and services who have had transactions with the County over the last 12 months.

Of the 3358 suppliers, the P2P production team has enabled 703 suppliers who are ready to transact with the County on

the Ariba Network. The plan is to enable the rest of the suppliers by end of June 2017. Additionally, as new suppliers register to do business with the County in SIM, they are automatically contacted to complete the full supplier enablement process.

Catalogs

The Procurement Department has 707 contracts in its portfolio valued at approximately $1.5 billion. The catalog team has

successfully developed 206 catalogs with a plan to enable the rest of the catalogs by June 2017. As new contracts are

established, the Procurement Department determines the type of catalog needed (Punch-out or CIF) and work with suppliers.

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P2P Transactional Procurement of Goods in the Ariba Network

$627,759$820,956

$1,257,526

$1,829,997

$4,048,797

$6,159,836

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Jan. '16 Feb. '16 Mar. '16 Apr. '16 May. '16 Jun. '16

P2P Spend

258369

519

691

979

1,520

0

200

400

600

800

1,000

1,200

1,400

1,600

Jan. '16 Feb. '16 Mar. '16 Apr. '16 May. '16 Jun. '16

P2P Transactions

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P2P Transactional Procurement of Goods in the Ariba Network

The manual purchase requisition process takes 1 to 4 weeks if the paperwork does not get lost. In comparison, requisitions take less than a day to route electronically for approvals and processing.

940, 70%

176, 13%

183, 14%

34, 3%

Purchase Requisition Cycle Time

Number of PRs Approved in 0 day(same day)

Number of PRs Approved in 1 day

Number of PRs Approved Same Week

Number of PRs Approved Over 1 Week

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P2P Module Implementation Progress

1. To date 14 Agencies/Departments have been trained on P2P;

2. Rollout to remaining 30~ Agencies/Departments planned;

3. 13 sessions have been scheduled in July and August;

4. 600+ Requisitioners + Approvers, Receivers, Invoice Processors/Approvers will be trained;

5. Countywide rollout to be completed by August 31, 2016;

6. Contracts with catalogs in Ariba will enable us to closeout contracts in SAP to maintain compliance.

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Contracts Module Rollout with DocuSign

1. Contracts Module has been configured and ready for use in the Procurement Department;

2. Plan for a phased rollout as we also tackle legacy contracts;

3. Work in progress with Procurement staff to forecast which projects will be completed in the near future to commence use of the Contracts Module;

4. Simultaneously Procurement is working with ISD and SSA to rollout DocuSign for service agreements and Board Contracts for operational efficiencies.

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The Next Six Months

1. Rollout P2P Module to the entire County;

2. Continue enabling suppliers and cataloging the goods and related services contracts in Procurement;

3. Evaluate Spot Buy and Light Enablement to enhance small dollar purchases and off contract buying;

4. Rollout Contracts Module with DocuSign in Procurement;

5. Continue our quarterly vendor fairs and educate suppliers on how to do business with the County;

6. Recruit and hire staff for both SE/Catalogs & Change Management and Support functions;

7. Strengthen the business and technical support to manage the P2P and Contracts rollout;

8. Evaluate the feasibility of Supplier Performance Management and Spend Visibility as planned.

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The Next Six MonthsSUPPORT, ENCOURAGEMENT & UNDERSTANDING PLEASE!

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Executive Ask

1. Quarterly Business Reviews;

2. Focus on enhancing functional and business configurations that don’t need an ER;

3. Ability to converse with the product development team and share our ideas for future development;

4. Assistance with advancing our training tools;

5. Assistance with different catalog types to support SCC business cases;

6. Follow up on the planned Enhancement Requests from 2015.

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