Getting Smart About Sourcing: How One Educational and Resource Institution Rebuilt Its Procurement Organization

Getting Smart About Sourcing: How One Educational and Resource Institution Rebuilt Its Procurement Organization

The ability to track suppliers and spending is critical for all organizations but even more so for those that receive millions of dollars in federal funds. Aware of certain pain points and inefficiencies, this educational and research institution reached out to Protiviti for help reviewing its supplier master file and accounts payable processes. A broader, but less clearly articulated, concern of the institution was the lack of spend visibility: each department used its own processes and suppliers to obtain goods and services, making it difficult to leverage spend volume and control the institution's overall budget.

Initial meetings with the institution's head of procurement revealed systematic problems that were adversely affecting the entire procurement process. While schools and departments did use a common online portal to buy office supplies and other day-to-day basics, spending for more substantial items was largely decentralized. For example, only about two percent of the institution's annual spend was managed under contracts or strategic agreements. Additionally, individuals involved in procurement activities were primarily focused on tactical procurement and lacked a more strategic focus to drive savings and efficiencies.

Change drivers

The uncovered systemic problems led the client to recognize the need for broader reform of its sourcing and procurement practices and an opportunity to create a holistic end-to-end solution.

Over 12 weeks, Protiviti led an institution-wide effort to analyze spending, view the organization's procurement procedures and capabilities, and design recommended solutions to optimize processes and leverage automation where possible.

Using data analysis, for example, Protiviti reviewed every purchase and payment transaction that took place throughout the organization. We used surveys and interviews to understand the current state process and existing pain points, identify bottlenecks and improvement opportunities, perform time studies and activity analysis and conducted a skills assessment of the procurement organization to develop a tailored and comprehensive training program. This detailed diagnostic revealed how many of the activities were automated versus manual, which of these added significant value to a department or school and which did not, and how much time staff spent in meetings, developing reports or applying to internal requests outside of their core job responsibilities.

Over 12 weeks, Protiviti led an institution-wide effort to analyze spending, view procurement procedures and capabilities, and design recommended solutions.