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State of South Carolina Budget & Control BoardObservatory Case Study: State of South Carolina Budget & Control Board

The South Carolina Budget & Control Board used our services to deliver improved spend and contract visibility. We talked to Norma Hall, Program Manager, Strategic Planning, about her experience to date.

"Like many other states we’ve been struggling with how to access spend analysis data and contract visibility economically statewide. Once we saw the Spikes Cavell Observatory it was obvious to us that it had the potential to solve the statewide visibility issue."

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Tell me a little bit about your agency?

I work for the SC. Budget and Control Board (BCB) which provides administrative, technical and consulting services to South Carolina’s state agencies. The BCB is responsible for setting broad policy for and through its ten divisions. One of those divisions, the Division of Procurement Services, Materials Management Office (MMO), is responsible for procurement services.

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

The MMO oversees all procurements in the state of South Carolina. Most of the state agencies have a level of delegated procurement authority - anywhere from $50,000 to multiple $m’s depending upon their certification. Our interest is principally in procurements for states agencies that are above their certification level and procurements that have the potential to benefit all agencies within the state, as well as all political subdivisions.

What do you see as the top three challenges for procurement at South Carolina Budget and Control Board over the next 12 months?

Addressing the opportunity presented by more effective statewide collaboration is at, or near, the top. Deployment of the Spikes Cavell Observatory across an initial seven of the state agencies has already established beyond any doubt that the opportunity to deliver savings has the potential to be very significant.

Beyond that we’ll be continuing to invest time and effort addressing ‘maverick spend’ - we’ve begun using the Observatory to upload contracts and join it to the spend data. Not only does this have the potential to deliver a statewide register of contracts that includes local as well as state contracts, we can quickly and easily identify the categories where there is a contracted vendor but a lot of spend with other vendors. Understanding why that is and taking corrective action where appropriate will not only save money but will reduce the administrative burden too.

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?

Like many other states we’ve been struggling with how to determine spend and contract visibility economically statewide. We’ve been implementing SAP for a while now and have made good progress. The implementation statewide was conducted over several years with the majority of agencies not being on the system for a full year to date.  However, while SAP is a great ERP system, since it is in its infancy in data collection, and the fact that prior to its implementation each state agency had its own system we didn’t have a central repository to gather the information we needed to really drive procurement improvement. We have hundreds of state agencies and bringing all that spend together in one place and then being able to leverage it remains a priority.

Once we saw the Spikes Cavell Observatory it was immediately obvious to us that it had the potential to solve the statewide visibility issue within minimal time. We invited a small number of state agencies to participate in a pilot deployment and our first priority was to analyze common spend.

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?

As well as identifying a number of savings opportunities that we’re now pursuing it has helped in an unexpected way. Analysis of spend with contracted vendors threw up an apparent $1m spend with a furniture contractor with whom it appeared we didn’t have a contract. After some investigation we discovered that there was a statewide contract but our ERP system wasn’t collecting all of the data that was needed. Without the Observatory we wouldn’t have known that this was something that needed to be addressed.

We’ve also made some progress identifying opportunities where the common spending is specialized and likely to mean that a cooperative (multi) state agency contract for higher education located in a specific area within the state  may be negotiated  and might be more effective than something statewide.  Higher Education in particular has always maintained that what it buys is different than the rest of the agencies in the state. Analyzing the data for Medical University, Trident Technical College and Citadel (who all participated in the pilot as a group) was illuminating. It was clear that there are areas where a locally established cooperative multi-agency contract would be better. Equally though it illustrated that there were was also plenty of scope for Higher Ed to benefit from statewide contracts already in place.

The state is now working with the CHEPA (the Charleston Higher Education Procurement Authority) group and delegating authority on a case by case basis so that CHEPA is able to leverage the data in the Observatory to identify common spend and contract as a group of four (the College of Charleston didn’t participate in the pilot but it plans now to deploy the Observatory).

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

It’s a little early to have formally assessed the value of $’s saved but what is clear is that it has that improved identifying statewide spend and contract visibility and  has the potential to deliver many, many $m’s of savings for the state.

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

We understand that this functionality is available with SAP, however, the immediate concentration has been on implementing the system statewide and data is just beginning to be collected.  Until enough data is collected and all agencies have been on the system for at least one year, the data will not be comprehensive.  While the SAP system will give us data on all state agencies it will exclude all of the colleges and Universities in the state, as they are not participating in the SAP system.  So in short, no. There are solutions out there that are quicker and can aggregate data from multiple systems and are very reasonable in cost.

How did you find working with Spikes Cavell?

Very easy. The data requirements weren’t challenging so we were able to get the extract done quickly and with a few man-hours effort on our part. The cleansing, classification, enrichment and collation was done in around 6 weeks without any need for input from us. The next thing we know we’re being presented with our transformed spend data in the Observatory.The Observatory is intuitive and easy-to-use, we were running reports and analyzing spend within minutes of publication.

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

Reliable. Very reliable. You do what you say you’re going to do, when you say you’re going to do it.

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About the State of South Carolina Budget and Control Board

South Carolina borders Georgia to the south, North Carolina to the north, and the Atlantic Ocean to the east. According to the 2010 United States Census, the state is ranked 24th among the U.S. states by population, at 4,625,384 people. South Carolina contains 46 counties and its capital is Columbia.

www.bcb.sc.gov

Published: 12/9/2011

TAGS: state of south carolina budget and control board, spend visibility, observatory, procurement

"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