ArcBlue Consulting www.arcblue.com.au @PMMSgroup

Realising the True Benefits of Regional

Collaboration

Chris NewmanDirector ArcBlue Consulting

Chris.newman@arcblue.com.au

0412 318 384

20th November 2015

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What you need to know about

procurement?

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Who are my top suppliers?What is my cumulative spend with suppliers?

How much spend is under contract? Are they good contracts?

How much do I spend with local suppliers?

How many purchase card transactions?

Which are my top categories?Do I have category strategies in place?

What is my savings plan?

How many invoices am I processing?How many invoices are worth less than $100?

When is most of the spend happening? By whom?What are other councils buying? From whom? When and how should we collaborate?

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How much procurement does

Council do?

“On average, Council procurement spend represents

40% - 60% of overall expenditure. It is commonly

greater than salary expenditure.” ArcBlue Benchmarking 2014.

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How does Local Government get the

best out of procurement?

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Savings BenchmarkingCompliance

Local Economic Develop-

ment

Shared Services Sustainability

EfficiencyCollaborationSocial

Procurement

Category Strategies

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Case Study – Barossa Region

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Barossa Regional Procurement Development Program

Objectives & Process

Program Objectives:

Make sustainable savings & create efficiencies

Stimulate economic development

Improve probity and reduce risk

Build staff and organisational capability in procurement

Strengthen regional collaboration

Joint Council Kick-off

Data Collection

Individual Council

Workshops

Detailed Joint Spend

Analysis

Opportunity Analysis

Workshop

Regional Roadmap Develop-ment and Validation

Final Roadmap Workshop

Progress Reviews

and Support

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Barossa Regional Outcomes to date

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Regional Collaborative Procurement Program - 13/14

Regional Governance MOU in place – October 2014

Regional Resource engaged – February 2015

Standardisation of process and documents

Development of regional procurement website

Agreed priority regional procurement program being delivered

through 2015 (5 – 10% savings ongoing – over $800,000 so far in Year

One)

• Property maintenance

• Audit Services

• Road Re-Seal

• Stationery

• Line Marking

Evolving into expanding structured shared services program – data

capture, opportunity analysis, priority action, governance, delivery.

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Barossa (Northern) Region

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Barossa Region

No. of Councils 5

Procurement Spend $55.1 M

Regional Spend 25% ($13.8M)

Total no. of suppliers 2,553

No. of local suppliers 1,006

Population 74,000

Regional Procurement Shared Service

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10% increase in local/regional spend = $1.38M additional to

the local economy

Barossa region did not have a governance structure in place – ROC/ JO structures present new opportunities.

5% saving = $2.5m

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Barossa Region – Regional Spend

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Barossa Region – Shared Services

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Expanding model to shared services investigations Correlating spend data against service, output and

demographic data Using opportunity analysis to structure and

prioritise shared services development projects

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Barossa Regional Program

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“We now have a solid program and processes in place, rather

than relying on the goodwill of a few active people…But the

Program is more than that. The support that comes from

ArcBlue and the regional program has led to transformative

change and a targeted program of improvement that is

taking us to procurement best practice.” Martin McCarthy, CEO Barossa Council

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Next Generation of Regional Programs

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G21 – Regional Program (24 Partners)

Incorporating largest regional buyers (Local Government,

Education, Health, State Agencies, Private sector).

Regional spend analysis, opportunity analysis and priority

regional program – focus on economic development

Developing economic impact model – category specific

Regional Water Authorities Program (12 Authorities)

Category specific focus – Chemicals

Regional data analysis and opportunity analysis

Regional Procurement Plan in place and being pursued

Savings plan to deliver $0.5M - $1M in savings

NSW Programs already underway for 2015/16

Southern Councils Group/ Canberra Region JO/ RAMROC

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Regional Workshops

Regional Programs

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Kick Off Meeting

Data Collection

&

Assessments

Procurement

Shared

Services

Economic

Development

Latrobe

South Gippsland

Bass Coast

Baw Baw

East Gippsland

Wellington

Council Workshops

Council Dashboards

Individual Council Action

Plans

Regional Collaborative

Procurement Program

Regional

Dashboards

=

EXPANDED OPTIONS

1. Shared Services

Program

2. Regional Economic

Development Program

3. Regional Governance

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Fit for the Future

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Demonstrating Savings

Practical approach to identifying, measuring and delivering

savings

Structured analysis and programmatic approach to delivering

efficiencies

Supporting Amalgamation

Structured analysis, integration and aggregation of multiple

Council spends (and other data)

Structured approach to reviewing contract structures,

organisational design and change management

Preparing for CHANGE