Purchasing Directors’ Meeting May 13, 2004

Purchasing Directors’ Meeting May 13, 2004

Purchasing Directors’ MeetingMay 13, 2004 Agenda • Welcome / Meeting Overview • How Are We Doing? • Open Floor / Strategic Issues for Upcoming Year • Florida Government Conference • Center for Efficient Government • Strategic Sourcing • Operations Update • Next Meeting Location / Time

DMS/State Purchasing Mission DMS Mission To be a customer focused agency providing effective and efficient services in order to better enable state agencies and employees to deliver the Governor’s priorities to the people of Florida. State Purchasing Mission To gladly deliver useful and innovative purchasing services in order to be a customer focused agency providing effective and efficient customer services.

State Purchasing FY 03-04 Mission Tasks FY 03-04 • Amend purchasing statutes • Amend purchasing rules • Improve contract management • Reorganize division • Deliver state term contracts that provide the right commodities and services at lower cost • Consolidate purchasing into MFMP • Training for division • DMS customer satisfaction survey • Support Facilities’ ITNs Upcoming Year?

State Purchasing Mission Goals (Measures) FY 03-04 • Purchasing statutes and rules improved before May 2004 • Recruit at least four employees highly esteemed by their peers before October 2003, and reduce annual turnover by 50% • Increase customer satisfaction by at least 15% before January 2004 • Successful delivery of innovative purchasing solution that reduces costs and saves time – MyFloridaMarketPlace adopted by all initial users before July 2004 Upcoming Year?

Florida Government ConferenceSeptember 21-23, 2004 • Co-sponsored by DMS and the FSU Center for Professional Development • Combines the Government Expo and the Government Technology Conference • Send purchasing-related program ideas and requests to Fred.Springer@MyFlorida.com • See www.floridagc.com for more information

Governor’s Center for Efficient GovernmentOversight Board • Secretary Bill Simon Department of Management Services • Dr. Jim Zingale Department of Revenue • Secretary José Abreu Department of Transportation • Dr. John Agwunobi Department of Health • Director Susan Pareigis Agency for Workforce Innovation

Governor’s Center for Efficient GovernmentInitial Goals • Develop statewide outsourcing standards and a business case template applicable to any proposed outsourcing project. • Review existing outsourcing plans within the state agencies to ensure compliance with Center standards and business case, execution of effective contract language with vendors and implementation of successful change management. • Propose for the Governor’s consideration by July 1 an initial list of specific outsourcing projects and initiatives that can be developed over the next 3 years.

Governor’s Center for Efficient GovernmentProject Gate Management Process Current Projects Gate 1 Gate 2 Gate 3 Gate 4 Business Case Procurement Contract Management Change Management Post Implementation Monitor Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 New Projects

Center for Efficient GovernmentRecent Developments • Business Case Standards Published Next Week • Developing On-line Resource Center • http://dms.myflorida.com/administration/ center_for_efficient_government

Develop Selection Factors & Screen Vendors Profile Internally & Externally Prepare Value Proposition & Award Kick - - Off Screen Screen Shape & Shape & Conduct Competitive Event Kick-Off & Assess Opportunities Profile Profile Conduct Conduct Develop Strategy Implement Agreements Develop Develop & Suppliers & Suppliers & Negotiate Negotiate Implement Internally & Internally & Auctions & Auctions & Strategy Strategy Selection Selection Assess Value Value Agreements Externally Externally Opportunities Factors Factors Propositions Propositions Strategic Sourcing Methodology Develop Value Proposition Around Options Prepare Fact Prepare Fact - - Level High High - - Fast Track to Value Fast Track to Value Fast Track to Value Measure Measure Measure Based Based Data Data Complete Complete Complete Results Results Results Negotiation Negotiation Collection & Collection & ITB/ITN/ RFQ/RFP & Trends & Trends & Trends Build Build Build “Packages” “Packages” Analysis Analysis Build Total Build Total Build Total Validate & Validate & Validate & Supplier Supplier Vendor Key Worksteps - and / or - Cost of Cost of Cost of Profile Profile Profile Selection Selection Selection Ownership Ownership Ownership Segment Segment Make Award Decision Category Category Category Decision Decision Decision Negotiate Negotiate Model Model Model Purchases Purchases Develop Develop Vendors Develop Matrix Matrix Matrix Value Value Conduct Conduct Conduct Propositions Propositions Form Form Auctions Auctions Auctions Conduct Conduct Conduct Develop Develop Develop Conduct Conduct Conduct Cross- Cross - Industry Industry Industry Category Category Category Supplier Supplier Vendor Functional Functional Analysis Analysis Analysis Strategy Strategy Strategy Analysis Analysis Analysis Sourcing Sourcing Teams Teams Value Propositions Benefits Category Profile TCO Model In-Scope Categories Selection Decision Matrix ITB/ITN/RFQ/RFP Typical Deliverables Realization Industry Profile Category Continual Vendor Improvement Strategy Auctions Award Decision (ITA) CFSTs (Cross-Functional Sourcing Teams) Ariba Analysis Ariba Contracts Ariba Analysis Ariba Sourcing Ariba Sourcing Ariba Contracts Ariba Analysis Tools Source: Accenture Best Practices

Strategic SourcingPreliminary Prioritization Matrix Easy 1 2 • Office Supplies-$33 • Office Machinery-$14 • Food Products - $67 • Janitorial Supplies & Services-$24 • MRO Materials-$87 • Motor Vehicles – Other - $3 • Motor Vehicles – Passenger - $33 • Food Services - $0.09 • Telecom-$153 Ease of • IT Hardware-$73 Implementation • IT Software-$23 • Financial & Insurance-$90 • Agricultural Supplies - $18 • # of Agencies • # of STCs • STC Penetration % • Competitive Demand • Vendors = 80% Spend • Sourceability • Building & Fixed Equip. - $44 • Fuel-$21 • Furniture&Equip.-$72 • Temp. Employment - $16 • Postage&Freight-$35 • Printing-$20 • Other Prof. Svcs.-$11 • Advertising-$98 • IT Svcs.-$150 • Property Svcs.- $5 • Consulting Svcs.-$214 • Utilities-$71 • Engineering Svcs. - $585 3 • Other Rental Equip.-$3 • Other Construction - $0.7 • Prof. Dev.-$28 • Travel-$21 • Ind. Contractor NEC- $1,360 • Legal-$48 • Medical Equip. - $2 • Medical Svcs. - $75 • MRO Services-$185 • Medical Supplies - $183 4 • Const. Svcs. - $199 • Structures - $1,671 • Building/Const. Material-$23 Difficult Benefit Potential Low High • Sourceable Spend • Savings Potential ($) = Spend in millions Source: FLAIR data extract FY 01-02

Strategic SourcingPreliminary Approach and Projected Savings

Office Consumables DMS – Tom Butler MRO Materials DMS – David Comer Printing DMS – Charles Day DOR DOH DCF DHSMV Facility Services DMS – Chuck Beall DOT DOH DJJ Medical Supplies DMS - Susan Barr DOH DCF DOC Uniforms/Officer Equipment DMS – Mark Lovell DHSMV DOT DEP FDLE FWCC DOC Strategic SourcingWaves 1 and 2

Strategic SourcingOther States’ Approaches DE: Furniture, Office Supplies, Packaged Food, Janitorial Supplies, Paper, Copiers, Electrical Supplies, Uniforms, Lab Supplies, IT Hardware, Software, LD Telephone Service, Cell Phone Service, Network Services CT: Police Cruisers, Office Supplies, Office Equipment, Trash Hauling, MRO, Food Service, IT Service, Pharm., Advertising, Printing PA: Cleaning, Autos, IT Hardware, IT Hardware Maintenance, Software, Copiers, Furniture, Supplies, Food, Roadway Materials

Strategic SourcingImplementation Criteria • Multiple agencies involved • Status of current STC • Current and future spend is anticipated to be large enough to warrant resources/effort • Top spending agencies are willing and able to devote resources to support process

Strategic SourcingWave 3 and Beyond? IT Hardware IT Software Fleet Other?

Operations Update • New Bureau Chief – Don Poorman • State Purchasing Agreement for Quick Copy • Summer Hours • Legislative Update • **SB 1678 enacted (public records)** • HB 1898 not enacted (ch. 287 overhaul) • HB 1533 not enacted (in-state residents on service contracts) • HB 1211/SB 2756 not enacted (privatization and oversight) • Training Update

Purchasing Directors’ MeetingNext Meeting Time: 3:00 pm to 5:00 pm Date: Thursday, June 10, 2004 Location: Department of Corrections Blairstone Road

Purchasing Directors’ Meeting May 13, 2004