1. PRESENTATION TO
LSU TRANSITION ADVISORY TEAM
JOINT MEETING OF ADMINISTRATIVE SERVICES,
TECHNOLOGY, STREAMLINING TASK FORCES
Presented by Marie C Frank
LSU Office of Procurement Services

2. Agenda
1. Introduction
2. LSU System Overview
3. LSU Shared Services
4. Procurement Evolution
5. Subcommittee Recommendations:
1. Pilot Procurement Code and Structure
2. eProcurement System
3. Spend Analysis and Savings Opportunity in Procurement
6. Savings Examples
2

3. Subcommittee Members
 Subcommittee members include the following:
 Marie C Frank, Executive Director of
Procurement Services, LSU
 James Frazier, Associate Director of
Procurement Services, LSU
 Wendy Simoneaux, Assistant Vice President for
Budget & Finance, LSU System
 Monica Mougeot, Director of Fiscal Operations,
Pennington Biomedical Research Center
 Larry Williams, Director of Purchasing, LSU
Alexandria
3

4. Subcommittee Members
 Subcommittee members include the following:
 Donnie Thibodeaux, Assistant to the Vice
Chancellor for Business Services, LSU Eunice
 Bill Wolfe, Director of Human Resource
Management, LSU Shreveport
 Jan Bernath, Director of Accounting Services,
LSU Agriculture Center
 Angela Neal, Acting Director of Purchasing and
Materials Management, LSU HSC Shreveport
 Rob Parker, Director of Purchasing, LSU HSC
New Orleans
4

5. Subcommittee Members
 Subcommittee members include the following:
 Ben Lousteau, Fiscal Analyst, LSU HSC New
Orleans
 Glenn Ducote, Attorney at Law
 Vic Cleveland, Manager of Contracting &
Procurement, Shell Geismar LP
 Tony Calcagno, Procurement Director, CB&I
 Ron Krajewski, Specialty Underwriters
5

6. LSU System Overview
6
# of
STAFF
REPORTS TO ANNUAL
SPEND
ANNUAL # OF
PURCHASE
ORDERS
# OF
SOLICITATION
S
SYSTEM
LSU BR (1) 19 VC of Finance &
Administration
$230 M 6,900 450 PRO
LSU AG (9) 2 Associate VC for
Administration
$20 M 784 152 PRO
LSUE (6) 2 VC Business
Affairs
$16.5 M 900 9 PRO
LSUA (2) 2 VC of Finance $4.5 M 1,075 35 PRO
PENNINGTON (3) 3 AED of
Operations/Chief
of Staff
$10 M 415 18 PRO
LSU LAW (8) 1 VC of
Administrative &
Finance
$3.8 M 59 10 PRO
LSU HSC NO 10 VC of
Administration &
Finance
$ 61.4 M 4,019 200 PEOPLESOFT
LSU HSC SHREV PEOPLESOFT
LSUS ** 2 VC Business
Affairs
$4.7 M 1,950 98 Integrow
Total 41 $350.9 M 16102 972

7. LSU Shared Services
7
Institution
Formal
Solicitations
Professional
Services
PRO
System Facilities
Property
Management
Financial
Accounting,
Payroll, and
Benefit
Administration
LaCarte
Card
LSU Y Y Y Y Y Y Y
LSU Alexandria N N Y N Y Y Y
LSU Eunice N N Y N Y Y Y
LSU Ag Center Y N Y Y/N Y Y Y
LSU Law Center Y N Y N Y Y Y
PBRC Y N Y N N Y Y
LSU System Y Y Y Y Y Y Y

8. Procurement Evolution
Administrative
Operational
Tactical
Strategic
Transaction Management Contract & Supplier Management
Low Performance Average Performance High Performance
8

9. Pilot Procurement Code
Spend Analytics – eProcurement
Pilot
Procurement
Code
eProcurement
Spend
Analytics

10. RECOMMENDATIONS10
Pilot Procurement Code and Structure
eProcurement System
Spend Analysis and Savings Opportunity
in Procurement

11. #1 – Pilot Procurement Code
and Structure
Recommendation: The Pilot Procurement Code
being created for LSU should apply to all
institutions under a “Shared Services” Model.
Challenge: Currently, LSU Shreveport, LSU
HSC New Orleans and LSU HSC Shreveport do
not currently operate under LSU’s Shared
Services Model.
11

12. UPPC
 Used in lieu of:
 Louisiana Procurement Code for
goods and services
 Laws governing professional,
personal, consulting and social
services
 Laws governing equipment and
services governed by the Office of
Information Technology
12

13. #1 – Pilot Procurement Code
and Structure
Where are we now?
 Received approval from the Board of Regents
 Received approval from the LSU Board of
Supervisors
 Received approval from the DOA as the “initial
qualifying institution” subject to approval of the
UPPC
 Received approval of the UPPC from DOA
 Issued a Notice of Intent to begin promulgation
of the code into the Louisiana Administrative
13

14. UPPC – What does it Do?
 Adopt a procurement code that is simple –
freedom from unnecessary bureaucratic
processes
14

16. UPPC – What does it Do?
 Ability to use more competitive strategies –
limits, electronic processes, selection… every
method for determining low cost and best
value
EXAMPLES: Increased Thresholds, Office
Supplies, Reverse Auctions
16

17. Office Max
 Analyzed spend of LSU and its Shared
Services Institutions to be $2 M per year
 Sought and received approval from the DOA to
issue an RFP (best value) as opposed to an
ITB (lowest cost)
 Current laws limited specifications to narrow
terms and scoring/negotiation methods
 Awarded to Office Max for a signing bonus,
volume rebate and 25-55% discounts on all
items.
17

18. Reverse Auctions
 Very similar to eBay auctions where the
suppliers bid for the contract
 The ability for suppliers to participate is
minimal and entirely in an electronic
environment
 Louisiana Procurement Code passed recent
law to allow the use of Reverse Auctions but
only to be conducted by the Division of
Administration
18

19. UPPC – What does it Do?
 Ability to solicit/contract for the most cost
effective term
EXAMPLE: Bus Transit
 Use effective methods for public notice
EXAMPLE: Electronic notification of solicitations
 Utilize new technology – eProcurement and
employ supplier technology
EXAMPLE: Cooperative Purchasing Catalog
Enablement's
 Apply commodity strategies
EXAMPLE: Scientific and IT supplies/equipment
19

20. Pilot Procurement Code
 REMAINING STEPS TO
IMPLEMENT:
 Approval of the Joint Legislative Committee
on the Budget (JLCB)
 Development and approval of Procurement
Policies which are 60% complete
 Final approval of the LSU Board of
Supervisors
 Execute Change Management within LSU
20

21. #2 – eProcurement System
Recommendation: LSU electronic procurement
system (Sciquest) should be expanded and
utilized by all institutions either under the Shared
Services Model or through the use of acquired
Business Units of Sciquest.
Opportunity: The increase of electronic
methods of procurement will increase efficiency
and savings because it serves as the tool to
bridge the flexibilities of the UPPC and the other
institutions; however, the challenge is to
dedicate resources necessary to implement
21

22. eProcurement – July 22, 2013
launch22

23. eProcurement
 Electronic Public Notice
 Electronic Solicitation
 Electronic Signatures
 Reverse Auctions
 Strategic Sourcing
 Negotiated Hosted Catalogs
 Real-time Competition at Dollar 1
23

24. #3 – Spend Analysis and
Savings Opportunities in
Procurement24
Recommendation: Identify savings
opportunities across all institutions through
spend analysis and the utilization of strategic
sourcing strategies to procure goods and
services and revenue-generating opportunities
through the optimal channels with the best
suppliers.
Challenge: The lack of tools, integration and
disparate data sources; however, the opportunity
exists for this recommendation to act as bridge
for consolidating all the data across all the

25. FY 2012 – Spend Analysis
 Total Spend ≈ $252M
 Breakdown by Institution:
≈ $189M – LSU Main Campus
≈ $25M – LSU Agricultural Center
≈ $12M – Pennington Biomedical Research Center
≈ $11M – LSU System Office
≈ $6M – LSU Eunice
≈ $5M – LSU Alexandria
≈ $4M – Paul M. Hebert Law Center
Data from July 1, 2011 – June 30, 2012
25

26. FY 2012 – Spend Analysis
 Total Transactions ≈ 181,698
 Total Purchase Orders ≈ 16,102
 Total LaCarte (Pcard) Transactions ≈ 165,596
 Breakdown by Threshold:
> $100,000 ≈ 3
> $50,000 ≈ 23
> $25,000 ≈ 77
> $15,000 ≈ 110
> $10,000 ≈ 98
> $5,000 ≈ 522
< $5,000 ≈ 164,763
26

27. FY 2012 – Spend Analysis
27
Percent Spend by
Payment Method
Percent Spend by # of
Transactions
$193,369,473
16,102
$58,369,473
165,596
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Percent Spend By Mechanism Percent Spend By # of Transactions
PO LaCarte

28. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
LSU Spend Detail (FY2012)
$251.9M Spend Base
28
Taxes /
Permits / Fees IT / AV PassthroughUtilities
Facilities &
Maintenance Scientific
Scientific
Supplies
&
Equipment
Prof.
Services –
General
Financial
Services
IT
Services
State
Local
Federal
IT / AV -
General
Software
Licensing
AV
Eqpt
Computers
General
Foundations
Other
Universities
Electric
Gas
Telecom
Water
General
Industrial
Components
&
Fabrication
(MRO)
Electrical
HVAC
Landscaping
General
Specialty
Vendors
Building
Systems
Professional
Services
Other
Vendors
Construction
Travel
Library
Transp.
Marine
Gases
Other
Vendors
General
Gen.
Contractors
Constr.
Eqpt
Travel
Agents
Hotel &
Lodging
Commercial
Airlines
Elevator Maint
Jan. Labor
Plumbing
Jan. Supplies
Painting
Car Rental
% of Category
Spend ($M)
0 25025 50 75 100 125 150 175 200 225
Work In Process
31.7 21.7 20.9 20.2 19.3 18.3 14.7 14.5 14.2 13.5 8.3 8.1 7.5
Bldg
Matls
• Medical
• Athletics
• Interiors
• Prof. Associations
• Food Services
• General Retail
• Logistics/Shipping
• Campus Svcs
• Agriculture
• Veterinary
• Human Resources
• Waste Mgmt.
• Insurance
• Dental
Other Categories
BusTransitVehicleAcq.FuelVehicle
Maint.
PrintingGeneralPromotional
Products
GeneralOfficeSupplies
Copiers&
MFDs
Comm /
Mktg
% total spend 12.6% 8.6% 8.3% 8.0% 7.7% 7.3% 5.5% 5.7% 5.6% 5.4% 3.3% 3.2% 3.0%
38.9
15.5%

29. Savings Potential and Costs to
Date29
Based on $252M annual spend for FY2012:
Savings Opportunities (Hard $)
• Increase spend under contract and
reduce non-competitive spend
• Utilize Office Supplies contract
flexibility
• Utilize Strategic Sourcing events
(e.g., reverse auctions)
Total Hard $ Savings Opportunity
Savings Opportunities (Soft $)
• Transaction processing costs
Total Soft $ Savings Opportunity
$1.29M
$1.12M
$2.77M
$5.18M
$1.00M
$1.00M
$6.45M
$3.63M
$13.85M
$23.93M
$5.00M
$5.00M
5-Yr ValueYr 1 Value
Total Hard Costs To Date $2.1M

30. Savings Examples
 Several commonly used items
 Lamps
 Scientific Gloves
 Lab Coats
 Towels
 Scouring Pads
30

36. Procurement Evolution:
Strategic Procurement
Pilot Procurement Code
Strategic Sourcing &
Spend Analytics
eProcurement

38. QUESTIONS?38

39. THANK YOU
MARIE C FRANK, MPA, CPPB
LSU OFFICE OF PROCUREMENT SERVICES
213 THOMAS BOYD HALL
BATON ROUGE, LOUSIANA 70803
(225) 578-2307
MFRANK@LSU.EDU