CASE STUDY. City of Tucson implemented the Spikes Cavell Observatory to deliver improved spend and contract visibility.
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1 CASE STUDY City of Tucson, AZ City of Tucson implemented the Spikes Cavell Observatory to deliver improved spend and contract visibility. We talked to Marcheta Gillespie, Interim Director of Procurement, about her experience to date.
2 ObSERVATORY CASE STUDY CITY of TUCSON, AZ CIty of Tucson implemented the Spikes Cavell Observatory to deliver improved spend and contract visibility. We talked to Marcheta Gillespie, Interim Director of Procurement, about her experience to date. So someone like Spikes Cavell comes along, and whether it s transforming our data for spend analysis or our transparency initiative, it s great to have someone else do work that we simply don t have time to do and that benefits us directly. TELL ME A LITTLE BIT ABOUT YOUR ORGANIZATION? The City of Tucson has about 685,000 people within the city limits. The City itself employs about 5,000 people, and our total budget is 1.3 billion dollars. The city operates under a Mayor and Council form of government with a City Manager who runs the organization overall. How is procurement organized at the City of Tucson? We are unique in that the Department of Procurement and I report directly to the City Manager s Office. So, unlike some local government organizations, Procurement is a separate department on the same level as Finance or General Services. Further to this, the Mayor and Council are not involved in any contracting role or decisions. This provides for an independent function, distinct contracting authority and removes any appearance of influence on decision making. We have a staff of about 37. Responsibility for surplus, auctions, materials management, contracting, mail services and the pcard program all sit in Procurement. We ve centralized management and procurement oversight, but we ve de-centralized the buying function to a degree. So we establish all the contracts, and then push out the actual spending on those contracts to our client departments.
3 Seriously, Spikes Cavell did a great job up front of helping me articulate the benefits to the City of this initiative in a fashion that I could convert into a framework to sell to my city executives. Would you describe the procurement function s role as mainly tactical or mainly strategic? I think all procurement departments are a little of each, but we always strive to be more strategic. Over the last several years, I ve noticed the City Manager s office engaging us far more on strategic projects than ever before. We ve always had that seat at the table with all of the other Directors at the City. But when the economy started declining several years ago, I noticed that the rest of the organization looked to and engaged with our department to find ways to save money. What challenges HAS the city FACED over THE LAST FEW years? As far as the City goes, our challenges have been financial, and that immediately and directly affects our department. There have been a lot of changes financially which have impacted resources available. In our heyday, the procurement team had 84 employees and 7 warehouses that ran materials management, auction and surplus. Over the course of 10 years we have had slow cuts and then cuts on top of cuts to where we now have 37 staff. So just having the people we need to run effectively has been a challenge. And the City s financial challenges meant our client departments also experienced cuts. Whether that was through attrition or layoffs unfortunately the City has had layoffs, which means fewer people are now doing more. So even our client departments have a more difficult time with contracting; fewer people, less time to write a good scope of work for a contract, and certainly less time to look at new initiatives. Our department used to be really good about running new and innovative projects and initiatives to create efficiencies, but even that has had to be narrowed down over the past few years because we ve had to put a lot on the back burner so that we can deal with the immediate and in-your-face issues. With so many positions lost, you re whittled down to dealing with the bare-bones basics. So someone like Spikes Cavell comes along, and whether it s transforming our data for spend analysis or our transparency initiative, it s great to have someone else do work that we simply don t have time to do and that benefits us directly. So we can take the hard work that s already been done for us by Spikes, and more easily tackle the projects we want to do to help deal with the City s financial challenges.
4 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? I m kind of odd because I happen to like dealing with data. I ve always had the interest in whether or not the organization has access to data and how it utilizes that data. Most people don t care about that kind of thing. So when I tell people, We re going to have our spend data cleaned up and in this database to track it they look at me like I m crazy. We have struggled over the years to centralize where our data sits so I had a pretty good comfort level with data based initiatives. So as far as expectations go, I really didn t know what to expect, but I knew I wanted more access to more data so that I could do something with it, and with a minimal impact on staff. It needed to work without burdening our staff with entering or manipulating the information. When I first saw a demonstration of the Observatory, my expectation was that Spikes Cavell would make it easy for us, and that s what my experience was. You guys came in, did your thing, and it was very easy on us. What has better spend visibility enabled you to achieve to date? We re still in the infancy of using the data. One immediate benefit was in helping us respond to the many enquiries we get from citizens, Mayor and Council, the media, internal operations, and the City Manager s office for information. They might ask how much we ve spent on something or how much has gone to a specific contractor. Prior to the Observatory, we had to rely on our finance staff who would assemble the raw data, then we would have to merge it with some information from another source, then we d marry it all up together and manually make this nice little report, and finally turn that over. That sometimes took a week, sometimes longer. And a lot of that process was reliant on people outside of our department who are also busy, so a lot of times we ended up waiting because they had their own priorities to deal with. Now I can just go into the Observatory and get the data, or have one of my staff go in and get the data. It s reduced the amount of time it takes for us to respond by many hours per request which has been one immediate benefit. The City is still in a financial pinch and our budget is short for the next fiscal year. We ve squeezed and squeezed and squeezed, and so now we re really trying to find more needles in the haystack. In the last few years, I think we ve exhausted all of the obvious opportunities. We re looking for new efficiency and contracting projects that can save the City some money. We re looking for places where there is a lot of spend, but where it is spread widely across the city so we need to create niche contracts with vendors, and also where we could go back in and renegotiate better deals for the city. We are also using the data for is to look at our mandatory pcard spend. Anyone in the city purchasing something that is not on a contract $5,000 and under should be going through a pcard. One example we are looking at right now is that budget approvals are required at $10,000, and we have the $5,000 pcard limit. So our clients have to remember all of these different levels for different things so we are talking about raising the mandatory spend on pcard to $10,000. So, one of the things we are looking to do is figure out which departments do a lot of spending in the $5,000-$10,000 range, and what kind of contract categories that spend is in. When we re having these discussions, we need data to make decisions. With the Observatory, we have a place to go and get lots of different angles on our data. We can easily look at our spend by department or commodity area to see which have the greatest spend in $5,000-$10,000 range, and tackle those first. And getting this right means increased efficiencies for the City as well as increased revenues through the pcard program. Another thing we are working on is that the Mayor and Council passed the local preference ordinance in June 2012, giving local contractors a competitive preference. Now we have to track our spend with local businesses and our small business enterprise program. So again, because there is a certification process that sits outside of our department, we have a lot of data points that we have to pull together so that we can report back to Mayor and Council on the progress of that initiative. For that, we have to be able to pull out our local and small business spend which the Observatory has made much easier. We also get a lot of enquiries from outside the organization about our procurement efforts and spending in the metropolitan area, in the region and in the state compared to spend going to other places. That s another area we frequently have to report on and the Observatory has been useful there also.
5 Without Spikes Cavell, we d still be operating with our multiple sources of information, compiling things every time there was a request for information or when we look at new initiatives. Do you think you could have undertaken the data transformation and spend analysis work without external help? Could we have done it with enough people and enough money thrown at it? Sure. Is it at all likely we would have? Nope. Without Spikes Cavell, we d still be operating with our multiple sources of information, compiling things every time there was a request for information or when we look at new initiatives. Given our fiscal difficulties, I knew asking for funding would be difficult and that we would need to convince the decision makers that the outcome was well worth the small investment. Data is not something that most people appreciate and it s not at all glamorous, so it was very positive to have the funding approved for the Observatory and spotlightonspend. Any approach we looked at other than Spikes Cavell s required more resources, more money and more time. For those reasons, they weren t something that the agency would have invested in. Working with Spikes Cavell was not very costly. It was also quick and had very little impact on our staff which made it a much easier sell within the organization. Those three things made it even easier to justify. How did you find working with Spikes Cavell? Wonderful. Fabulous. Those are my one-word descriptions. Seriously, Spikes Cavell did a great job up front of helping me articulate the benefits to the City of this initiative in a fashion that I could convert into a framework to sell to my city executives. You were also very patient. As you know, working through government structures, the wheels can move very slowly. You were all great about being persistent, and continuing to push us. I don t know how much easier it could have been. You guys pretty much did everything. OK, so if I have to pick one word, it s AWESOME.
6 ABOUT CITY OF TUSCON, AZ ABOUT SPIKES CAVELL Tucson, too SAHN or TOO sahn, is one of the oldest towns in the United States. Tucson was originally an Indian village called Stook-zone, meaning water at the foot of black mountain. The City is home to the University of Arizona and Davis- Monthan Air Force Base. The Tucson metropolitan area supports over 750,000 residents. As metropolitan Tucson continues to grow by nearly 2,000 new residents each month, the challenge of meeting citizen expectations also increases. The City of Tucson is committed to providing quality municipal services which promote a healthy community, offer opportunities for participation and leisure and enable citizens to prosper at work and at home. Since 2003 Spikes Cavell has equipped hundreds of public agencies and higher education institutions with the business intelligence, online tools and analytical insight they need to find savings, become more transparent and benchmark procurement performance. At the heart of Spikes Cavell s proposition is the Observatory - an online platform that facilitates the delivery of spend and contract visibility quickly, affordably and with little effort on the agency s or institution s part. About NIGP The Institute for Public Procurement NIGP has been developing, supporting and promoting the public procurement profession through premier educational and research programs, professional support, technical services and advocacy initiatives that benefit members and constituents since With over 2,600 member agencies representing over 16,000 professionals across the United States, Canada and countries outside of North America, the Institute is international in its reach. OUR STRATEGIC ALLIANCE PARTNERS Spikes Cavell Analytic Inc. 151 Spring Street, Herndon, VA
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