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cityoftampalogoObservatory Case Study: City of Tampa, FL

The City of Tampa, FL used our services to deliver improved spend and contract visibility. We talked to Gregory Spearman, about his experience to date.

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Tell me a little bit about your agency?

The City of Tampa has about 335,000 residents and is a pretty decent size city, especially for Florida. Our purchasing department has about 40 purchasing staff, and we are always looking for ways to be more innovative, creative, more efficient and effective in the way we execute the purchasing function.

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

At the moment, our purchasing function is quite tactical and procedural, but we're becoming more strategically focused. There are two main components to our purchasing operation in Tampa. The first is our Goods and Services Division which is responsible for acquisition of materials, supplies, services and equipment. The second is our Inventory Division which manages the items used regularly by various departments on a day-to-day basis.

We oversee the procurement of the vast majority of the goods and services for the city. The value fluctuates from year to year, but our department is responsible for overseeing between 175 – 200 million dollars of spend annually. The only city expenditures that we don't directly oversee are in construction and construction related services..

What do you see as the top three challenges for procurement at City of Tampa over the next 12 months?

There are many challenges we as a procurement team face, some we can plan for and others we cannot. Our main challenge is to continually improve the way that we govern and manage the dollars the city has to spend, especially in light of decreases in revenues we've experienced over the past few years. We are constantly challenging ourselves to look for better ways to make our acquisitions, understand how we use and can improve our PCard program, and how we can best leverage ourselves within the market place to do more with less.

This year we have an additional challenge in the Republican National Convention coming to the City of Tampa. Our purchasing, police and fire departments are tasked with providing all that is necessary to ensure public safety for the event including everything from police protective equipment through the feeding and accommodation of the additional police officers coming from all over the state to provide support. We also have to complete the acquisition of a CCTV camera system to cover the entire perimeter of downtown.

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?

In a city our size, there are hundreds of people who can make purchases, with thousands of vendors, across hundreds of thousands of transactions every year. Prior to working with Spikes Cavell, our systems weren't providing us with the visibility we needed to really get our arms around our expenditure data. We expected Spikes Cavell and their Observatory to help us overcome our spend visibility challenges and provide us with visibility over all of our spend. We wanted to better understand how many vendors we were spending with, get an aggregated view of how much money we were spending with those suppliers across multiple transaction methods, and if there were improvements we could make to the procurement process to deliver savings and efficiencies for the city.

When we looked at what Spikes Cavell did with our data and the spend visibility they were able to provide us, we were convinced that having them carry out a thorough spend analysis was exactly what we needed.

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

We learned a lot from the analysis that would have been difficult to find out without it. When we started the spend analysis project, we invited the city's accounting department to work with us. They helped us get the data out of our systems to be processed by Spikes Cavell. Understandably, they were eager to know how they could benefit from the analysis.

When we got access to the data, they were amazed at what the opportunities were now that they had better visibility. The accounting department quickly saw a number of opportunities to reduce invoice volumes through consolidated invoice payments. This gave us the opportunity to considerably reduce the number of invoices and checks that we process through Accounts Payable which made our staff much more efficient.

One of the big things we all noticed was that our spend with our top suppliers was higher than we originally thought, mainly because the analysis brought together multiple payment methods, and reduced the incidents of vendor duplication in and across our various purchasing systems.

It was very informative to see all of our PCard spend classified and aggregated with our other transaction methods. We've used that data to drill deeper into our spend by vendor and by category where PCards were used. That has enabled us to identify opportunities to put new contracts in place in order to get better pricing through aggregation, which just wasn't possible when we didn't have this level of visibility.

We also looked at the relationship between different vendors who supply the same types of goods or services. Once we had all of our spend data in one place, we could see clearly that we were buying supplies from several different hardware companies. We've begun using this visibility to do better category management and consolidate our purchases into a single contract and therefore get better pricing.

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

In addition to the above, the other thing we are looking forward to is getting other entities engaged in doing a spend analysis exercise with us. We know that other public organizations near us are buying similar goods and services and frequently from the same suppliers. Having visibility of spend in one place, across a group of organizations, presents an opportunity for us to do some very strategic cooperative purchasing that will help us all meet the challenges our agencies are faced with. Being able to collaborate with other entities within Florida and pool together these purchases saves everybody time and money.

Very approximately, how much ($) has better spend visibility enabled you to save to date?

I cannot say yet because we are in the early stages of deciding how we want to tackle the recommendations that are coming out of the reporting and analysis. We met with our accounting department earlier this week to go over some of the things that have come out as a result of the analysis. We're putting together our target list of a few specific contracts and vendors we want to engage with to improve our processes. Specifically, we want to get rid of some unnecessary purchase orders and use the PCard data in the Observatory to keep tabs on what we're buying. This all goes towards lowering our "soft dollar" cost and making our staff more efficient on both the accounting and purchasing side.

One of the exciting opportunities for savings of this kind is in our Inventory division. They are also really excited about the prospect of identifying and then reducing their low dollar invoicing. We identified a supplier for which we were creating a PO then processing and paying for items that cost $2.95 on a single order. In those instances it costs us more to process the payment than the goods purchased. We've changed those to be more automatic transactions that go through our PCards. We'll also be providing a benefit to the vendor as they'll get paid faster. It's always great to create a win-win situation all around for the purchasing department, suppliers and accounts payable.

Do you have a sense of what you might save?

It's probably going to be in the hundreds of thousands of dollars saved. I can really see great potential, however I don't have a definite number yet as we're going to have to first look at what we are spending today, establish a benchmark using the data provided, and revisit the numbers in a few months to quantify the value we've gotten from improved processes. We do know what our costs are to create a PO and process and pay an invoice today so in 6 to 8 months, we will identify the reduction in those areas and calculate the savings gained.

We will also be looking at how much we're paying for certain goods and services compared to what we were paying before we did the spend analysis project.

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

We did not have the tools or the technology to do this ourselves and we are very happy that we were able to work with Spikes Cavell and use the Observatory. Without it we would have not been able to get to the level of visibility we have today, with access to information to inform decisions that make us more efficient, effective and save us money.

How did you find working with Spikes Cavell?

Spikes Cavell have been extremely easy to work with. They have been very professional throughout and they understand the challenges that we face. They supported us from getting our data extracted at the beginning and have been very responsive in answering our questions. It was a very seamless process.

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

That's a difficult question and I can think of several words which would apply. One word doesn't do the company justice. So in two words, "Outstanding Service". They are truly a top-notch company to work with.

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About City of Tampa, FL

The City of Tampa is the largest city in Hillsborough County, is the county seat and is the third most populous city in Florida. It is located on the west coast of Florida, approximately 200 miles northwest of Miami. Tampa's economy is founded on a diverse base that includes tourism, agriculture, construction, finance, health care, government, technology, and the port of Tampa. Contributing to the success of our community is the way businesses, City government, and citizens work together to make Tampa a better place to live.


Published: 2/13/2012

TAGS: city of tampa, spend visibility, observatory, procurement, case study, purchasing, contract

"So far we estimate that we’ve delivered around $120,000 and, with the initiatives that the Observatory has helped us to identify, our forecast is that we’ll multiply our initial savings by a factor of four by year end."

Mike Bevis, City of Naperville