Introduction to Measure â How to Measure Savings and
Introduction to Measure – How to Measure Savings and Show Value
What is the goal? “Procurement Transformation” “Spend Analysis” “Strategic Sourcing” “Guiding Principles”
“Best Value” “Value for Money”
“Local Spend” “Diversity Spend” “Green Spend”
“Cost Reduction” “Cost Elimination”
“Sustainable Procurement”
What is the goal?
“Doing More With Less” When other departments cut costs, they usually cut services in one way or another
Procurement has the capability to cut costs without compromising the quality of services
Who is already measuring?
Who records their savings already?
If you do, how do you record it?
If not, why not?
Fear?
Standards?
Culture?
Compare?
Why you should Measure? • Show value internally • Demonstrate value to elected officials • Provide transparency to the general public • Recognize achievement • Identify best practice
When and what should we report? Was Procurement involved?
Will it stand up to review?
What would have happened otherwise?
Why are we here? •Procurement teams make a significant contribution •Often receive inadequate recognition •Procurement is more than overhead •Raise the profile
Why are we here?
For the benefit of its members, NIGP and the Board of Directors now provides National Agency Members with a tool for capturing and reporting the value that procurement professionals bring to their agencies every day. The tool is called Measure.
What is Measure? Online tools to record savings and produce reports in a standardized way.
Cloud based Simple interface Scalable Standardized
Free to NIGP National Agency Members
Efficiency 1
Structure of Measure
Price Difference – price reduction
Reports
Project: New Training Facility
Efficiency 2 Process Re-engineering – E-Bidding
Total Savings of all projects
Charts Graphs Tables
Efficiency 3 Added Value – additional warranty
What can I report? Added Value Cost Avoidance
Sustainable Procurement Process Re-engineering Price Reduction
Risk Reduction Revenue Generation
What can I report? Added Value • Special Drawings • Additional Items/Services • Modification/Re-specification • Lease/Hire/Financing • Alternative Solution
Cost Avoidance • Avoiding price increase during existing arrangements • Marketplace awareness • Suppliers sponsorship/income • Use of consortia or other collaborative agreements • Elimination of Purchase Request
Sustainable Procurement Process Re-engineering Price Reduction Risk Reduction Revenue Generation
Demonstration
Example Efficiency In 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 on their current contract. In February, the procurement team gets involved and puts out an IFB/RFP to purchase 300 conference room chairs for the new facility. The RFP ends, the supplier is chose, and the chairs are purchased in March 2010. The winning supplier’s price was $80 per chair.
Existing contract price: $100 X 300 = $30,000
New contract price $80 X 300 = $24,000 Savings: $6,000
Registration
www.nigp.org/measure • 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.
More Information Set 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
Next steps? You are uniquely positioned in your organization to make an impact on the bottom line without compromising service quality.
Start recording your contribution – it doesn’t have to be a burden
Demonstrate your value internally, upwards and externally
What is the goal? “Procurement Transformation” “Spend Analysis” “Strategic Sourcing” “Guiding Principles”
“Best Value” “Value for Money”
“Local Spend” “Diversity Spend” “Green Spend”
“Cost Reduction” “Cost Elimination”
“Sustainable Procurement”
What is the goal?
“Doing More With Less” When other departments cut costs, they usually cut services in one way or another
Procurement has the capability to cut costs without compromising the quality of services
Who is already measuring?
Who records their savings already?
If you do, how do you record it?
If not, why not?
Fear?
Standards?
Culture?
Compare?
Why you should Measure? • Show value internally • Demonstrate value to elected officials • Provide transparency to the general public • Recognize achievement • Identify best practice
When and what should we report? Was Procurement involved?
Will it stand up to review?
What would have happened otherwise?
Why are we here? •Procurement teams make a significant contribution •Often receive inadequate recognition •Procurement is more than overhead •Raise the profile
Why are we here?
For the benefit of its members, NIGP and the Board of Directors now provides National Agency Members with a tool for capturing and reporting the value that procurement professionals bring to their agencies every day. The tool is called Measure.
What is Measure? Online tools to record savings and produce reports in a standardized way.
Cloud based Simple interface Scalable Standardized
Free to NIGP National Agency Members
Efficiency 1
Structure of Measure
Price Difference – price reduction
Reports
Project: New Training Facility
Efficiency 2 Process Re-engineering – E-Bidding
Total Savings of all projects
Charts Graphs Tables
Efficiency 3 Added Value – additional warranty
What can I report? Added Value Cost Avoidance
Sustainable Procurement Process Re-engineering Price Reduction
Risk Reduction Revenue Generation
What can I report? Added Value • Special Drawings • Additional Items/Services • Modification/Re-specification • Lease/Hire/Financing • Alternative Solution
Cost Avoidance • Avoiding price increase during existing arrangements • Marketplace awareness • Suppliers sponsorship/income • Use of consortia or other collaborative agreements • Elimination of Purchase Request
Sustainable Procurement Process Re-engineering Price Reduction Risk Reduction Revenue Generation
Demonstration
Example Efficiency In 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 on their current contract. In February, the procurement team gets involved and puts out an IFB/RFP to purchase 300 conference room chairs for the new facility. The RFP ends, the supplier is chose, and the chairs are purchased in March 2010. The winning supplier’s price was $80 per chair.
Existing contract price: $100 X 300 = $30,000
New contract price $80 X 300 = $24,000 Savings: $6,000
Registration
www.nigp.org/measure • 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.
More Information Set 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
Next steps? You are uniquely positioned in your organization to make an impact on the bottom line without compromising service quality.
Start recording your contribution – it doesn’t have to be a burden
Demonstrate your value internally, upwards and externally
