Educational Procurement Journal - December 2007 - (Page 9)

Value 3. Supplier Incentives Another important area of proof deals with incentive programs offered to Institutions by suppliers. This category can be especially important where the cash ﬂow to fund sourcing and procure-to-pay programs is often in short supply. This category can include a variety of incentives derived directly from the suppliers including: P-card Rebates Catalog Fees Electronic Transaction Fees (i.e., EDI) Prompt Payment Discounts (i.e., 2/10 net 30) Volume-Based Patronage/Earned Incentives Retroactive Supplier Payments Signing Bonuses 4. Process Savings, Compliance and Risk-Reduction Conclusion Additional in-depth information from NAEP’s Ad Hoc Cost Savings Committee will be provided in the upcoming March issue of the Journal and detailed ﬁndings will be presented at NAEP’s 87th Annual Meeting in April in Austin, Texas. An electronic procure-to-pay (P2P) system will greatly streamline procurement and payment processes, reduce errors to substantially lower a supplier’s processing costs, enable increased capture of spend through online access to supplier catalogs, and signiﬁcantly compress the payment cycle, which reduces a supplier’s working capital requirements. Though traditionally considered “soft,” these categories of savings/beneﬁts are nevertheless real to end-users, auditors, and funding sources. Reporting Cost Savings and Beneﬁts By using these various methodologies, a total savings can be recorded for speciﬁc date ranges to determine a reasonable estimation of the savings achieved from contracts or sourcing transactions. The use of a basic database or spreadsheet can enable calculations to be adjusted as needed to report for any date range. Responding to the Campus Community In order for a cost savings and beneﬁts program to have endorsement, the campus community must understand and embrace the methodologies used. Often the campus community is not aware of current market conditions or other economic factors that may affect pricing. It is vital for the campus community to understand what they may have paid without Procurement’s assistance. Critical Success Factors A successful cost-savings and beneﬁts program must be both reasonable and solidly documented to withstand audit and demonstrate value. Critical success factors should be considered including: Documentation, Documentation, Documentation Date-Driven Cost Savings Linked to Actual Supplier Spend Price-Point of Comparisons Report Losses and Savings Staying Conservative The seven procurement professionals who contributed to this article have volunteered their time to build a value model for our profession. Their very important work will beneﬁt the entire profession, and the full scope of their research and subsequent value measurement model will be presented at our 2008 Annual Meeting in Austin this April. On behalf of NAEP, we extend our most sincere thanks for this excellent work. — Lorelei Meeker, President, NAEP and Doreen Murner, CEO, NAEP Infield Groomer Ride-On Striper WITH EQUIPMENT 1-800-624-6706 www.newstripe.com EDUCATIONAL PROCUREMENT JOURNAL CALL TOLL FREE www.naepnet.org 9 http://www.newstripe.com http://www.newstripe.com http://www.naepnet.org

Table of Contents Feed for the Digital Edition of Educational Procurement Journal - December 2007

Educational Procurement Journal - December 2007 Contents Letter From the CEO: Sustainability in Higher Education Heard On the Streets Calculating Procurement's Value Cost-Per-Copy Contract and Site-Based Funding At a K-12 School District Bargain-Basement Solutions to Automate and Streamline Procurement Processes LEED & Leadership Certification Roamin' with Yeoman Best and Final

Educational Procurement Journal - December 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.