Observatory Case Study: City of Lee's Summit,
MO
The City of Lee's Summit, MO used our services to get
visibility of their spend and to help deliver savings for the city.
Not only this, but to be able to identify opportunities to develop
spend with the city's local businesses. We talked to Bill Ward,
Purchasing Manager, about his experience to date.
"So far we’ve delivered savings in the region of $500,000
and our analysis indicates that there’s plenty more to
come."
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Tell me a little bit about your agency?
The City of Lee’s Summit has a population of around 93,000
people and an annual budget of around $300 million.
My agency buys all the goods and services that we need to
operate the city - from the salt needed for when it snows to the
light bulbs that keep our streets well lit at night. In total we
spend around $45m each year on goods and services.
Can you describe your procurement function and where
and how it fits into the organization?
My team is comprised of five people that includes three
procurement officers, a procurement assistant and myself. I report
directly to the City Deputy Manager and it’s my team that buys
everything the city needs to run smoothly.
The City’s Purchasing Division has been recognized for the
first time in 2011 with the Achievement of Excellence in
Procurement award from the National Purchasing Institute Inc.
(NPI). Lee’s Summit is one of only three government agencies in
Missouri and one of only 57 cities in the United States to receive
the award.
Would you describe the procurement function's role as
mainly tactical or mainly strategic?
It’s a mix of both. Tools like the Spikes Cavell Observatory
are helping us to operate strategically - we now have the
information we need to help us identify how and where we might
improve the way we do things.
This is increasingly reflected in the way the rest of the
organization sees the procurement function. It wasn’t that long ago
that all that was expected of procurement was ‘three bids and a
cloud of dust’. We now spend time working with each department to
help them understand where their spend is and how they might spend
it better.
What do you see as the top three challenges for
procurement at City of Lee's Summit over the next 12
months?
The focus for us is on saving money and saving time. A lot
of our systems are still paper-based so the next most important
challenge is increasingly automating as much of the procurement
process as we can.
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?
My initial priority was to leverage the Observatory to do
what I had been struggling to do myself and quickly analyze all of
the City’s spend. I was particularly interested in identifying
where we might be spending money with the same suppliers across
different departments but not necessarily getting the terms from
the vendor that reflected our level of spending.
I also wanted to be able to upload contracts, join it to the
spend data and assess where we were using contracted vendors and
where we weren’t but should have been. We wanted better visibility
of our spend and that’s exactly what we got.
What has better spend visibility enabled you to achieve
to date?
The most significant achievement to date has been the
identification of opportunities to initiate bid processes in
several previously overlooked categories. We’ve already started to
deliver savings by rationalizing the number of vendors in a
category and getting better terms from the smaller number of
vendors from whom we’re now purchasing.
What are you anticipating better spend visibility will
help you achieve in the future?
To help us to get more and more into the detail. The better
we know how much we spend, who we spend it with and what we spend
it on the easier it will be to identify ways to drive out cost and
deliver savings.
It will also help us to support the making and monitoring of
policy. At the moment we’re being asked to support the local
economy in any way that we can. Knowing how much we spend with
local businesses, and particularly small local businesses, is
helping us to support policy making but also to ensure that we know
how we’re doing over time. Before we implemented the Spikes Cavell
Observatory that was a difficult, time consuming and expensive
undertaking.
Very approximately, how much ($) has better spend
visability enabled you to save to date?
So far we’ve delivered savings in the region of $500,000 and
our analysis indicates that there’s plenty more to come.
Do you think you could have undertaken the data
transformation and spend analysis project without external
help?
In a word, no. It was proving problematic getting the
procurement information we needed from our finance systems. I was
spending upwards of a day a week extracting and then cleansing and
categorizing data and I always felt that there had to be a better
way. It turns out there was – the Spikes Cavell Observatory. It was
as if I’d been given four days a month of my life back.
Not only that the Observatory did everything we
needed.
The Observatory has been instrumental in helping me educate
my staff on the importance of data and to get them thinking about
how we can analyze it and what conclusions we can draw. Now, my
staff don’t come into the office unless they know how much we’re
spending and with whom!
How did you find working with Spikes
Cavell?
You guys are phenomenal. If I have a question about
anything, there’s always someone to answer it. Our account manager
is excellent to work with and spends time teaching us how to get
value from the data in the Observatory - we’re always picking up
new tips and new ways to deliver savings.
You have one word to describe Spikes Cavell to a
colleague or peer. What would that one word be?
Awesome!
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Download your copy of the Case Study |
About City of Lee's Summit, MO
Lee’s Summit is a city in the U.S. state of Missouri, and is
contained within the counties of Jackson (primarily) and Cass. As
of the 2010 census found the population at 91,364 making it the
sixth-largest city in the Kansas City Metropolitan Area and the
sixth-largest city in Missouri. In 2006 CNN/Money and Money
magazine ranked Lee’s Summit 44th on its list of the 100 Best
Cities to Live in the United States. That ranking improved to 27th
on the 2010 list.
http://cityofls.net/
Published: 11/4/2011
TAGS: city of lees summit, spend visibility, observatory, procurement