Procurement Transformation
Maximizing the Potential of Procure-to-Pay Technology
Jack D. Zencheck, Chief Procurement Officer, Yeshiva University
Yeshiva University (YU)
• Celebrating its 125th year.
• YU is the country’s oldest and most
comprehensive institution combining Jewish
scholarship with academic excellence and
achievement in the liberal arts and sciences,
medicine, law, business, social work,
psychology, Jewish studies, and education.
• Students: 7,232
• Annual sponsored research: $225 million
• Operating Budget: ~$648 million
• Campuses: Locations throughout New York
City and Israel
What is Procure-to-Pay?
• Strategic rather than tactical
• Acquiring best contract pricing and
terms vs. just buying (Procure)
• Cost-effective methods of processing
payments through technology. (Pay)
Why Procure-to-Pay?
• Executive Level Support
• Strategy
• Cost Benefit
• Risks
• Separation of Duties
• Controls
o Manual vs Systematic
• Governance
YU Procurement Services at a Glance
• Purchasing
• 90,000 purchase orders processed
• 80% ≤ $2,000
• 67,000 purchase orders processed electronically
• $300,000,000 in spend
• Accounts Payable
• 179,623 total invoices processed
• 116,182 on Purchase Orders
• 27,364 not on Purchase Orders
• 36,077 processed thru EDI
Procure-to-Pay - Table of Organization
Jack D. Zencheck
Chief Procurement
Officer
A. Basilone
Receptionist
Open
Director, E-Commerce
(P Cards)(B2B)
Tova Ackerman
Director,
Purchasing
A. Butta
Administrator,
E-Commerce
B. O’Farrell
Construction
Buyer
G. Braithwaite
Systems Analyst
T. Brown
Contracts
Administrator
H. Nonnon
Acquisitions Clerk
Natalia Volodarsky
Purchasing Manager,
Scientific
R. Labrew
Freezer Program
Clerk
N. Franco
Acquisition
Clerk
R. Osi
Contracts
Administrator
R. Gandolfo
Contract Admin.
IT
V. Mew
Asst. Contract
Adm, MRO
P-2-P
G. Gillott
Assistant to
CPO
Thomas Cannon
Director of
Accounts Payable
Michael Winkler
Director of Energy
Mgmt & Sustainability
T. Singh
AP
Supervisor
L. James
Bookkeeper
E. Teehan
AP Clerk
K. Neufville
AP Clerk
A. Villamar
Bookkeeper
H. Martinez
Bookkeeper
S. Gonzalez
AP Clerk
J. Iurato
Travel &
Expense
A. Moore
Sustainability
Coordinator
P-2-P System
• Banner for Higher Markets
• SciQuest Full Suite (Higher
Markets)
•
•
•
•
•
•
Requisition Manager
Order Manager
Spend Director
A/P Director
Sourcing Manager
Contract Manager
P-2-P System
• JPMorgan PaymentNet System
• P-Card
• Enzyme Freezer Program, Alcohol
Ordering, Reporting and
Inventory System
• A/P Director e-Invoicing and
Digital Mailroom Automation
System
P2P Process
2)
A/P
DIRECTOR
3 WAY MATCH
(5k+)
2 WAY (<5K)
1B) SCAN &
CONVERT TO
DIGITAL
FORMAT
& IMPORT DIT
DIGITAL
MAILROOM
Accounts Payable Automation – E Invoicing
E-Invoice
SciQuest
Banner
ACH
3 Way
Match
Accounts Payable Automation – E Invoicing
E-Invoice
SciQuest
Direct
Data
Extraction
CXML
Conversion
ACH
3 Way
Match
Email
Fax
Lock
Box
Banner
Procurement Transformation Project
Outline
• We hired E&I Consulting to assess
and recommend the following:
• Technology Assessment
• Organization & Operations
• Marketing & Communications
• Supplier Enablement
Technology
• Performed a thorough evaluation of technology
implementation
• Banner and SciQuest full suite
• Identified post-implementation issues
• system workflow (configuration and performance)
• functionality deficiencies that impact
• performance
• client satisfaction
• Documented and categorized appropriate solutions
• Implemented recommended solutions
• Documented and categorized outstanding Banner/SciQuest issues
• Reinforced the values and benefits of compliance and utilization
Technology
• Completed process mapping of the procure-to-pay process
• Validated each process step and decision point
• Identified opportunities to:
• streamline workflow
• reduce process time and effort for the campus users
• maintain appropriate level of control and oversight
• Increase operational efficiencies by implementing reengineered
processes resulting from the following mapping exercises:
• Processing non-catalog small dollar purchases | Processing Requests greater
than $7,500
• Processing Change Orders | Vendor Set Up
• Remit-to-Addresses | Processing Invoices
• Monitoring Sub-Recipient Process
Organization & Operations
• Conducted a formal organizational review to determine alignment with
objectives of senior leadership and key internal business partners
• Determined need for more formalized strategic vision supported by senior
leadership
• Developed a 3-5 year strategic plan
• Expressed to senior management the role of Procurement to:
• Project ROI
• Address budget and staff requirements
• Identify dependencies in order to achieve the strategy
• Recommended utilization of CPO’s skills to concentrate on:
• Higher value
• Strategic objectives
• Delegated appropriate contractual signing authority to:
• Increase efficiencies
• Minimize risks
Organization & Operations
• Established standard institutional procurement terms and
conditions and a standard Master Supplier Agreement
• Obtained cooperation from the other internal stakeholders
including:
•
•
•
•
•
Human Resources
Business Affairs
Finance
Environmental Health and Safety
Insurance and Risk Management
• Established a formal Procure-to-Pay strategy and structure
with shared ownership among:
• IT
• Finance
• Procurement
Organization & Operations
• Reviewed the skillsets and capabilities of Procurement staff
and determine
• Skills and staffing levels were sufficient to meet goals and
expectations
• Technology related skills were inadequate and needed
improvement
Organization & Operations
• Performed a Procurement Customer Satisfaction Survey
• determined current level of satisfaction
• identified key areas of concerns
• Survey Results:
• 82% satisfied with content and supplier enablements in
eMarketplace
• 59% satisfied/very satisfied with service and support received
from the Procurement Services organization
• 68% understand approval levels
• 29% understand competitive bid threshold
Supplier Enablement
• Performed supplier enablement to ensure successful hosted or
punch-out catalog content for preferred contract suppliers.
• Enabled additional SciQuest science pack suppliers to
further streamline ordering process for the campus
community
• Initiated process change requiring suppliers to sign a written
agreement to pay the 1.5% technology fee upfront vs. after
the fact (current practice)
• Deactivated infrequently used suppliers to drive business to
the preferred, contract and marketplace enabled suppliers
Marketing & Communications
•
Developed a formal Marketing and Communications Plan (MCP) to communicate
•
•
•
•
•
Invested in the redesign of the Procurement Services website to become the central
repository of all procurement and disbursement related information
•
•
•
•
•
•
Vision
Direction
Goals
Collaboration
customer support resources
policies & procedures
how-to-buy
commodity and supplier information
redesigned process documents
Ensured regular communication and collaboration with key procurement
stakeholders:
•
•
•
•
•
Human Resources
Controller Office
Risk Management
Finance
Environmental Health and Safety
Supplier Enablement
• Implemented new process to formally track and report all
cost reduction accomplishments
• Developed and provided formal cost containment savings and
criteria for tracking results
• Developed formal and regular communications with senior leadership
and the campus community the monthly results of cost reduction
initiatives
General Observations
Staff
• Highly respected by peers in higher education
• Skilled and motivated
• Frustrated with pace of transition to more strategic and valueadded activities
• Burdened by non-value duties and responsibilities
• Would embrace and benefit from regular professional
development opportunities
General Observations
Impact of Procurement
• Procurement function should be elevated to the highest levels
of the organization to support its the strategic objectives of the
institution
• Designate Procurement as an institutional priority, because it:
• Represents second largest percentage of annual operating budget
• Interacts with and can positively impact operational efficiencies in
virtually every department
• Can dramatically impact the Institution's bottom-line by reducing
costs and extending the value and potential of every dollar of
available funding
• Procurement Services should be separated from non-core
procurement activities
Internal Challenges & Solutions
• This all requires change management
• “We can't solve problems by using the
same kind of thinking we used when
we created them.”
- Albert Einstein
Acknowledgement
Ralph Maier and Melánie Lund
E&I Consulting Group
(267) 207-9338
rmaier@eandiconsulting.org
www.eandiconsulting.org
Conclusion