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