The University of California has been named the recipient of MetaProcure’s 2015 Partnership and Collaboration Award. The Partnership and Collaboration award recognizes procurement leaders and teams who are transforming their organizations by creating and implementing innovative procurement strategies and business solutions. Past recipients include: The University of Tennessee (2013) and University of California San Francisco and University of California Berkeley (2014). The University of California was recognized for their achievements during the 2015 NAEP (National Association of Educational Procurement) Annual Meeting, which took place in Atlanta Georgia in April.
Great Things are happening in California
In 2012, the University of California system, which consists of 10 campuses spanning 500 miles and has a population of over 244,000 students and 138,000 faculty and staff, faced a significant challenge. The system not only had to deal with substantial budget cuts, but also the public’s outcry over tuition increases. The institution decided to focus on administrative and operational effectiveness to generate savings and increase efficiency.
UC Procurement Services, which consists of approximately 230 procurement professionals and purchases nearly $7 Billion in goods and services annually, established the P200 Challenge and set a goal of saving $200M annually by 2017. These funds could then be used by the institution to further support their primary missions of teaching, research and public service. In a truly collaborative effort, Procurement leaders from every campus were involved in the design and implementation of the P200 program, and these leaders and their staff continue to provide input regarding operational aspects of the program. Moreover, UC Procurement Services has created numerous forums for sharing ideas, hearing concerns and making decisions.
In 2013, Procurement transitioned from a decentralized model to a more centralized structure. Procurement leaders from each campus formed an innovative, collaborative governance model called the Procurement Leadership Council. This organization follows the rule of “one campus: one vote”. They work cohesively to prioritize investments in technology and processes as well as system-wide sourcing opportunities. Moreover, in 2014, a “Center of Excellence” model was introduced, where procurement personnel were re-organized into commodity and process-centric workgroups and resources were placed on campus in order to better understand business requirements and maintain client relationships. Centers of excellence are system-wide procurement savings and adoption of standards across commodities, based on “client” needs and requests.
The transition from a decentralized model to a collaborative process was not without its challenges. It took time for stakeholders to view system-wide agreements as more than just “suggestions” and truly embrace the substantial savings that could be achieved through the collaboration process. There were also some human resource related issues that needed to be overcome. However, once the program was underway and desired outcomes were achieved, the return on investment was clear and change was welcomed.
When Taking on a Transformative Change – Make Sure You Have the Support of Executive Sponsors
The P200 program has been quite successful. As of Fiscal Year 2015, Q2, UC Procurement Services has captured over $108 M in benefit or 78% of their $140 M goal for the year. When asked “what advice would you give schools trying to implement a similar program or “challenge”? the team credits much of their success to the fact that there was a “burning platform” or a reason to make a change, brought on by years of budget cuts. As a result, the Governor, the Regents and the University President launched initiatives to encourage everyone to work smarter. The team advises other schools not to take on transformative change without a similar level of sponsorship. They also advise openly engaging all key stakeholders in the design and implementation of the program, making sure to clarify roles and responsibilities, address operational issues and be ready to continuously adjust as changes occur.
MetaProcure salutes UC Procurement Services for leveraging the power of innovation, partnership and collaboration to generate transformational value and significant savings to your universities.