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Observatory Case Study: Anne Arundel County Public Schools

Anne Arundel County Public Schools used our services to deliver improved spend and contract visibility. We talked to Debbie Groat, Supervisor of Purchasing, about her experience to date.

"Spikes Cavell demonstrate a real shining example of how spend analysis should be done."

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Tell me a little bit about your agency?

Anne Arundel County Public Schools is among the 50 largest districts in the nation and consists of 125 schools, 12 of which are high schools. In the 2011-2012 school year, we educated 76,303 students. Like any other school district, we are very interested in achieving a high level of student success across the wide range of programs we offer. Our aim, across all departments, is to work to provide the best opportunities for our students.

Can you describe your procurement function and where and how it fits into the organization?

Purchasing at AACPS is centralized and takes care of everything from construction to commodities. It doesn’t consist of just the direct teacher and student needs either. We take care of over 140 buildings in the county and, when you consider maintenance, facilities, logistics, operations and food services, the responsibility is very large. Our expenditures total approximately $200 million a year.

The Purchasing Office consists of a staff of 15, and is structured under the Division of Budget and Finance, which reports to the Chief Operating Officer. The office deals with all procurements above $25,000 and processes around another 350 quotable procurements under $25,000.

In a program of this size we do have some things we need to delegate. Delegated activities include open requirements contracts, a procurement card program, and small procurements that are valued under $1,000, that authorized employees can work with directly.

We utilize a CGI Advantage ERP system and carry out electronic quoting through eMaryland Marketplace. This is the State of Maryland’s procurement portal where request for quotes are advertised to bidders and bidders can respond electronically. It’s a “one-stop-shop” that you won’t often see in other states. We also have a procurement card program which we use for our small procurements and textbook purchases. We’re not using our ERP system to manage our contracts – we have some home-grown tools for doing that.

Would you describe the procurement function's role as mainly tactical or mainly strategic?

Our approach is mainly strategic. We have centralized our operations to best provide value-added services. If we cannot add value to a procurement process, we reevaluate our services or we delegate that responsibility.

We are constantly evaluating our procurements and how we handle them. We monitor best practices across the nation and are very integrated with our colleagues on a national level. We participate in a number of national purchasing consortiums, and through that active involvement we are able to find the best price, best quality, and best service to support our teachers and students.

We want to make sure schools have everything they need for the classroom while simultaneously trying to stretch the dollar as far as it will go.

What do you see as the top three challenges for procurement at Anne Arundel County Public Schools over the next 12 months?

The first thing that comes to mind, in these difficult economic times is that with money as tight as it is, there’s obviously going to be a great interest in the procurement team working to stretch every dollar in the budget. Therefore, we’re looking for new points of leverage and are using the Spikes Cavell Observatory to do that. We’re looking at rebidding or renegotiating contracts that we already have with contractors to improve upon the value and services that we get from those relationships. With our larger contractors, there is some relationship management and partnering that goes into that process in order to make sure we’re getting the best product, service, and price.

Additionally, we’ve found that in this tight economy the state legislative process focuses a lot more on regulatory issues than new projects and new spending because there isn’t any money to spend. In Maryland, we’re seeing new regulations on green spending, eProcurement, and on what types of products can be used in schools. Those regulatory changes certainly can create some systemic changes in a district and have an impact on the contracts you have in place.

Lastly, in the K-12 environment, schools are looking for assistance with certain procurements that they handled on their own in the past. One source of income for schools is the percentage they receive from vending machine sales. The schools have lost one source of fund raising because kids aren’t spending as much at the vending machines as they used to and are more likely to “brown bag” their lunch and drinks. For the schools, it is like getting hit from both sides. They lose some appropriated funds due to tighter district budgets and they’re losing vending commissions at the same time. So they’re looking to us in the central purchasing office to find out what else they can do to improve their fund-raising efforts.

You've been working with Spikes Cavell to deliver improved spend visibility. What were you hoping to achieve when you undertook the data transformation and spend analysis project?

We try to do things cooperatively as much as possible and I use my connections to the Metropolitan Washington and Baltimore Regional Cooperatives as much as I can. In order to do that more effectively, I needed to know where the opportunities for collaboration in our region are that I didn’t think of because we didn’t have the spend visibility across multiple organizations before. One of the first things that came out of the Spikes Cavell data was the possibility of working with universities and colleges. We do piggy-back on some of their contracts, but we don’t currently sit at the table with that consortium to discuss opportunities. It became obvious that there were areas of overlapping spend where we need to sit down with that group and have some conversations.

The second reason for undertaking the spend analysis project was the belief that once the data was transformed and in front of us, savings opportunities would quickly become apparent. We felt that there must be other opportunities but we didn’t have the data in front us before to see or to take advantage of them. We made assumptions from the more limited information we had previously and it was nice to have some of those assumptions confirmed. Now we have the factual evidence to support our assumptions and are therefore able to more easily identify opportunities and make decisions and change for the better.

What has better spend visibility enabled you to achieve to date?

It started a number of conversations with community colleges in our county and neighboring counties regarding quick win projects that we could do together.

As more schools districts and other local organizations get added to the Observatory, we hope to collaborate further across the region. In the meantime, the data from the Observatory supports the collaborative discussions we are having with Montgomery, Baltimore, and Wicomico County school districts.

What are you anticipating better spend visibility will help you achieve in the future?

This is where the tail wags the dog. Legislators are pushing for more transparency in Maryland’s K-12 districts. Baltimore, Montgomery and Howard County schools are all required to publish their spend data online already. We’re not regulated and we’re not required to do it yet, but it is the right thing to do and we want to provide this information to the public as quickly as possible. Baltimore County Schools is already working with Spikes Cavell to publish their spend data to spotlightonspend, and we are pushing to publish ours on the same platform.

Transparency wasn’t the initial reason why we wanted to transform our spend data with Spikes Cavell, but it’s a competitively priced way to accomplish it quickly. In addition, you’re going to get more people involved in the spend analysis side of things and looking for savings opportunities.

Very approximately, how much ($) has better spend visibility enabled you to save Anne Arundel County Public Schools to date?

I don’t think we could actually put a number on that yet, but it has most definitely made it 100 percent easier to see where the money is spent and to identify the opportunities. However, it may take weeks if not months to determine the total dollar value of savings found.

In particular, when we put up spotlightonspend, we feel that alone is going to pay for itself compared to what it would have cost us to create and maintain a spend transparency website ourselves.

Do you think you could have undertaken the data transformation and spend analysis project without external help?

In order to bring together data from multiple school districts as we have, I think it would have required a champion for the cause through one of our consortiums. However none of them are staffed or have the resources to hold or transform the data the way Spikes Cavell has. It’s always a possibility but it’s not probable that it would have occurred.

As an individual organization, we have some reports where we can look at our spend data, but it’s not presented in as easy to access or understand format as Spikes Cavell presents it. I would say, dollar for dollar, it would cost more for us to transform our data ourselves than it was to purchase a finished, polished product from Spikes Cavell.

How did you find working with Spikes Cavell?

I think that Spikes Cavell is a shining example of how spend analysis should be done. Our relationship with Spikes Cavell is very open, honest, and collaborative.

The training was particularly useful. We didn’t just get trained to use the tools and then left alone. It was a little bit at a time, as you needed it, when you were ready for it, and there was always more advanced training available.

The staff is 100 percent accessible, so if there are any questions, if there’s any need to run anything, there’s somebody there to help you. I think the entire staff is top-notch.

You have one word to describe Spikes Cavell to a colleague or peer. What would that one word be?

The first word that came to mind was “partner.” In the purchasing world, the use of that word has a heavy weight attached to it. When you work with contractors you don’t always get treated like a partner, and you particularly don’t get treated like a partner by all the people that you’re in contact with at a company. It’s clear that all of the people that I’ve worked with are vested in the success of Spikes Cavell and the relationship that we have.

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About Anne Arundel County Public Schools, MD

Anne Arundel County Public Schools is the public school district serving Anne Arundel County, Maryland. The AACPS school system is the 5th largest in Maryland, and the 43rd largest in the United States. The district has over 5,000 teachers supporting a comprehensive curriculum from Pre-K through 12th grade.


Published: 6/14/2012

TAGS: spend visibility, observatory, anne arundel county, schools, procurement, case study

"So far we’ve delivered savings in the region of $500,000 and our analysis indicates that there’s plenty more to come."

Bill Ward, City of Lee's Summit