Efficiencies and IT PanelSHARP Project

UpdateTuesday 24th

January 2006

Hertfordshire County Councilwww.hertsdirect.org

SHARP – Key Drivers

Improve procurement process

Effective reporting

Support delivery of e-Government targets

Efficient working practice

Economical process

Achievements (Sept. 05 update)

System stabilised -Action Plan completed

Year end closure of accounts earlier under SAP

Various small project / pilots completed successfully /underway

[e.g. The SAP impacts of Growth and Change- Phase 1 complete, Phase 2 ready to go live; Training and Development – live – input into the ACS finance review]

Project Implementation Review completed in July 2005

Serco Contract renegotiated end of June 2005

Activities since Sept 05 Actions from SHARP Review

Reporting project Interim report due 31st Jan 06 Catalogue of prioritised Finance, HR and

Procurement reports Gap analysis and development programme Workshops with front line managers

Activities since Sept 05 Actions from SHARP Review

Forms review Completing Feb 06 Consultation workshops identified process

improvements Revised forms delivering improved efficiency

Review SHARP support framework Merging SAP support and contract management Increase number of support calls dealt with by 1st line

support

Activities since Sept 05 Actions from SHARP Review

SHARP Communication strategy New Connect pages for Purchasing live Jan 06 Revised Connect pages for SHARP Feb 06 Feedback questionnaire sent to all SAP users

Review Training Delivery SAP Purchasing training linked to contract training Developing e-learning

Activities since Sept 05 Actions from SHARP Review

Enhance key contract relationships Joint SHARP/Serco Continuous Improvement

Board Put in place more pro-active contract management

from Logica

Other activities delivering against key drivers

E-mailing key reports to schools Information delivered earlier Target reduction of 1,500 pages paper reports per

month

Support to departmental BPR projects Change management for ACS Finance re-

organisation Project management for changes to CSF Youth

Service

Other activities delivering against key drivers

Remote time-sheet entry for schools Pilot in 60 schools Plan roll out to all schools in 2006/07 Input data at source Reduce paperwork

Procurement Project update

This update will cover:

• A reminder of the project strands and objectives• Some key targets for this year• The benefits that will be delivered over the next

two years• Examples of current project activity• Specific detail on Purchasing Cards• How we will work more closely with our suppliers

Procurement Project Strands

Project Objectives1. Provide clear routes for efficient and effective purchasing in HCC

Identify the most cost effective way to purchase goods and services

2. Promote the advantages of these and set up measures to monitor themGive people the information to allow them to purchase efficiently

3. Rationalise the supplier base to allow more targeted effortCleanse data and focus with key suppliers to reduce transaction costs

4. Improve communications with suppliersPromote a 2 way exchange with suppliers re costs of doing business

5. Encourage the uptake of e-opportunitiesReduce manual intervention in the buying/paying process

Some Key Targets

Save money on stationery, postage and processing by 1. A major reduction in cheques as a payment method

Move from 70% of trade payments by cheque to 30% by April 06

2 . Automatic e-mailing of remittance advice for BACS payments

Start emailing to all vendors capable of receiving by Jan 06

Reduce Transaction Costs 3. A major reduction in ‘A14’ payments, leading to total cessation

Move from 50% use of this costly payment method to 30% by April 06

Identify efficient methods of purchasing4. Bring in purchasing cards to enhance our range of efficient purchasing

methods

Purchasing cards in by Mar 06.

Some Key Targets (cont.)

Procurement Process

5.Capture benefits from improved procurement processes introduced Using monthly monitoring, now in place, Identify, influence and

promote the savings capabilities of SAP e.g. catalogues

6. Improve training of buyers to get skilled /effective purchasing decisionsCoordinate HBS procurement training with SHARP courses by Jan 06.

Reduce Suppliers

7. Reduce the total number of suppliers Reduce total suppliers by 20% by June 2006

Benefits of Project

Target area 05/06 predicted savings (£k)

06/07 predicted savings (£k)

Reduction in A14s 100 450

Transfer from cheque to BACS

0 15

Purchasing Cards 0 100

Improved procurement processes

250 475

Business Support savings (from Managed Service contract)

45 45

Workflow (improving speed of invoice handling)

9 38

Total 404 1,123

Examples of Activities• Flyers sent out requesting BACS details with all supplier cheques

• All BACS payees have been asked for e-mail addresses for remittances (50% initial response rate)

• No new vendors set up for payment by cheque started Nov 2005

• New school milk contract specified requiring self billing, reducing invoices processed by 20,000 per year starts April 06

• Electronic invoicing solutions are being developed for stationery, computer consumables and contracted water cooler purchases

• New ‘Purchasing’ site set up on Connect for the HCC buyers (c. 2000 staff), with guidance on efficient purchasing, target areas for savings and all the ‘rules’ (e.g. financial reg./contract regs.) in one place.

Purchasing Cards

• Will be introduced by Mar 06• Visa cards, issued by Bank, under a nationally agreed

contract (the Government Procurement Card - GPC)• There are currently c.500 central and local government

organisations using 70,000 cards in the UK.• Will receive one monthly statement from Bank, but a

software package will split detail automatically into our SAP accounting system

• Will provide savings through lower transactions costs for low value purchases

Purchasing Cards (cont.)• Est. savings (Year One) = £100k

• Est. savings (Year Two, onwards) = £150k per year

• Benefits include reduction of costs, better management info, greater control of ad hoc spend, improved ability to meet KPIs for payment and a small rebate from the Bank.

• Ongoing system costs = £10k per annum

• Implementation project will include cardholder training and simplification of accounting process for low value items.

Working with our suppliers

• Further develop the Hertsdirect ‘Your Business’ area

• Promote supplier engagement with Hertfordshire marketplace

• Sponsor with HBS a “Meet the Buyer” event with suppliers this year to promote smarter ways of doing business

• Target our top suppliers to establish a mutually beneficial method of doing business

• Make suppliers aware of the portfolio of tools to enable ‘e’ transactions so that by their introduction they can become a HCC supplier of choice

Questions?

Hertfordshire County Councilwww.hertsdirect.org