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					Procurement Transformation
State of North Carolina


Jocelyn Thornton, C.P.M.
Transformation Project Manager


April 24-25, 2012
Background



 On January 12, 2009, Governor Perdue issued Executive Order No. 5, which
  created the Budget Reform and Accountability Commission (BRAC).


 At approximately the same time, the Office of State Budget and Management
  (OSBM) initiated a review of statewide procurement as a result of Executive Order
  No. 4, NC Open Book


 The State has a complex set of procurement processes and systems


 Decentralized structures exist, with little collaboration among the agencies to
  identify what improvements are needed


 Lack of Central Compliance Resources, Stringent Training Standards
Project Vision




“Create a customer-focused enterprise to achieve
increased procurement effectiveness, efficiency, and
compliance resulting in significant financial benefit for
taxpayers by reducing the costs of acquiring goods
and services.”
Expected Benefits



  Streamline procurement functions across state government by
   increasing efficiencies, leveraging buying power and reducing
   overlap of key functions.


  Better value and more effective use of tax dollars


  More consistency across the enterprise to leverage buying power


  More efficient processes and systems to provide customers with
   what they need—when they need it


  Employees working together to better serve their customers and the
   taxpayers
Guiding Principles



 Best Value - Procure at the lowest total cost of ownership

 Customer Focus - Address all stakeholders’ business needs
 Delivery Excellence - Develop, maintain, and execute standardized,
 repeatable procurement processes and procedures
 Compliance and Accountability - Enforce compliance with statutes,
 administrative codes, executive orders, and policies

 Operational Efficiency - Align people, processes, and technology

 Workforce Excellence – Build and maintain the right knowledge and skills

 Strategic Planning - Strategically plan procurement activities
Six Cross-functional Teams


 Change Management and Communications
    eight members representing six agencies

 Contract Management and Compliance
    nine Members representing seven agencies

 Policies and Procedures
    nine members representing seven agencies

 Staff Organization and Training
    sixteen members representing ten agencies

 Strategic Sourcing
    eleven Members representing six agencies

 Governance
    eight Members representing five agencies
Contract Management and Compliance




 Establish a standard contract management process

 Create standard contract templates such as:
      • Contract close-out checklist
      • Contract file checklist
      • Contractor performance checklist

 Develop and deploy a revised contract administration/monitoring guide

 Finalize contract monitoring requirements, per SB 1213
Change Management and Communications



   Consider communications best practices

   Create standard communications vehicles

   Ensure timely information sharing

   Conduct readiness survey to gauge the effectiveness of initiatives, and
    identify issues

   Closely align the change management effort with program leadership

   Leverage Change Agents as a way of formalizing peer-to-peer
    information sharing

   Leverage various forums to share successes and leading practices
Policies and Procedures



  Responsible for recommending improvements to North Carolina
   procurement related statues and administrative codes to improve
   consistency, streamline processes, and encourage best value
   procurement

  Consolidate and streamline relevant statutes and administrative
   codes

  Clarify rules and exemptions to statutes

  Review and modify IFB/RFP/RFQ templates where appropriate
Staff Organization and Training


 Charged with assessing current procurement training, organizational
  structure, job profiles, titles and existing career paths

     Establish a Strategic Sourcing Group within State Procurement

     Establish an Open Market Group within State Procurement

     Establish an Operations group within State Procurement

     Deploy standardized job titles and job profiles

     Create a single purchasing manual for use by all state procurement
      organizations

     Deploy a comprehensive procurement training program
Strategic Sourcing



  Responsible for implementing a statewide strategic sourcing
   methodology

        Focus on the initial commodity and service groups which will be
         sourced
        Assess opportunities and prioritize Wave I, II and III categories
        Solicit input from end users
        Develop category strategy
        Negotiate and develop sourcing recommendations
        Implement agreements
        Monitor and manage agreements proactively
Governance


 Charged with recommending a structure, processes, and
  measurements to govern the procurement function after transformation

 Recommend a Procurement Governance Team with representatives from
  State agencies, community colleges, universities, LEAs, and local
  governments

 Develop a set of key procurement performance metrics

 Continue oversight and guidance through use of a diversified steering
  committee
Technology Upgrade


Online catalog Improvement

 Initiative began in October 2011 and had three primary
  objectives

       Improve catalog content

       Refine the processes utilized to develop new catalogs

       Establish a continuous improvement program
Summary: Current Priorities:


 Develop standard contract administration/monitoring guide
 Develop standard procurement manual
 Develop standard templates and memo’s
 Deploy training and update websites for refresher training and reference
 Establish tools for continual communication among agencies
 Identify and recommend procurement related changes to General Statues,
  Administrative Code and Operating Procedures
 Develop key performance indicators
 Prioritize categories for sourcing; statewide contracts (goods & services)
 Methodology to save dollars and improve processed for tax payer
 Develop modernized job classifications for purchasing positions
 Outline purchasing professional career path
Conclusion



  Long term process 2 – 3 years to implement numerous initiatives

  No longer a project – Just how we conduct procurement
QUESTIONS




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