University of Massachusetts - October 2021

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UMass: Unifying Procurement to Drive Change

DIGITAL REPORT 2021

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UMASS: Unifying Procurement to Drive Change WRITTEN BY: RHYS THOMAS PRODUCED BY: GLEN WHITE

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SupplyLogic: Driving Procurement Innovation at UMass Phil Schoonmaker, CEO, SupplyLogic discusses why to leverage partner services and how these services are helping UMass to modernize their procurement function There are two sides of marketing –the go to market strategy and the execution of that strategy. The business critical execution management is where SupplyLogic comes in.Phil Schoonmaker, CEO, SupplyLogic explains that it is vital for organizations to look to a provider such as SupplyLogic for its services. “The only way to truly optimize marketing execution is to partner with an expert like SupplyLogic. Given the events of the last couple of years especially, more and more companies are coming to this realization. Organizations are frustrated by supply chain disruptions, disorganized data, inadequate technology, and most recently a dramatic reduction of internal staff to manage these categories,” says Schoonmaker. Working With the University of Massachusetts “Anytime an organization changes the way that it manages an important aspect of their business, one of the biggest challenges is the transition from the status quo to the new model. We are working with David Cho, Chief Procurement Officer at UMass and the stakeholders across the university system on implementing a phased approach so that this new model, while innovative, is not disruptive. As a company, we

are dedicated to a client-first approach and continually seek and incorporate feedback, in this case from all the campuses, to ensure we are exceeding expectations,” explains Schoonmaker. SupplyLogic began its partnership with the university in early 2021 and at the most fundamental level is helping the university manage one centralized procurement strategy, rather than individual procurement silos. This includes an optimized and right-sized supplier panel; previously UMass worked with over 400 suppliers, which made it very difficult to aggregate spend to get the best pricing. The new panel includes a mutually agreed-upon set of suppliers with priority on MA-based businesses, diversity, and sustainability. Additional aspects of the solution include onsite client services, program management and state of the art technology to automate previously manual tasks and workflows. SupplyLogic’s managed services enable organizations to do more, with less, by providing an innovative, data-driven, transparent, and truly optimized solution. This ‘do more, with less’ mindset and capability helps partners like UMass achieve their goals quickly with less budget, time and risk.

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David Cho, Chief Procurement Officer and Managing Director, UMass

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CPO David Cho on transforming the University of Massachusetts’ procurement functions, and the ‘better, faster, cheaper’ philosophy to deliver value

T

1863

Year Founded

24,163

Employees including students

18,615

Employees excluding students

$3.4bn Revenue

he University of Massachusetts is a world-class public research university committed to advancing knowledge and transforming lives. Through its world-class educational programmes, groundbreaking research enterprise, and its impactful community service and industry engagement activities, UMass harnesses the revolutionary spirit of Massachusetts to deliver an unparalleled student experience. With four comprehensive campuses, a top-ranked medical school and a missiondriven law school, each campus offers a dynamic educational experience in a uniquely Massachusetts location, from the coastal town of Dartmouth to the international hub of Boston, from the vibrant mill cities of Lowell and Worcester to the bucolic hills of Amherst. Though separated geographically, the campuses are unified through a central goal of preparing students to contribute to their communities, thrive in a new economy and change the world by providing a broad range of rigorous academic programs and opportunities. However, not everything shared this central spirit. Until 18 months ago, the university’s procurement function was fragmented, with each campus responsible for its own procurement, accounts payable, sourcing, and contract management activities. That began changing in fall 2019, when David Cho, who was the CPO of BlackRock, was recruited through a national search to join UMass as the first-ever system-wide Chief Procurement Officer. Hiring a CPO followed the recommendation massachusetts.edu

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WEI: Value Added at Every Step of the Procurement Process Value-added reseller WEI strengthens its partnership with UMass and how it is empowering procurement organizations to unlock value beyond just price More than an IT solution supplier, WEI is a valuable problem solver and key supplier to the University of Massachusetts’ procurement organization. WEI has worked on several projects with the university’s newly appointed CPO David Cho. “I met David close to 18 months ago when he started,” says Greg LaBrie, VP of Technology Solutions, WEI. “The pandemic slowed that project down, but fortunately we were invited to participate in the UMass procurement process that we’re now involved in.” Cho unified the university’s procurement function and processes under the Unified Procurement Services Team (UPST), and enacted a new strategy to work more closely with suppliers to extract more value - a philosophy wholly aligned with that of WEI. “When organizations that we work with open up and collaborate with us, that’s when we’re at our best,” says WEI COO Todd Grubbs. “Now

we’ve created a regular cadence to meet with the UPST, and have a vision going forward that is not a hunt-and-peck type of model, but has a cohesive strategy. Our pre-sales group and our architects will meet with them frequently to discuss price, lead times, strategy and vision all at the same time. And that’s how UMass is going to get the technology solutions they’re looking for.” Together, WEI and the UMass procurement organization are unlocking value that goes beyond price, LaBrie adds: “UMass’ new vision, to standardize the procurement process, and standardize technology and procedures across the campuses, allows students and faculty to go from campus to campus and benefit from the same technology. That makes a big difference to their people, and it also provides all that data back to the procurement organization about the devices, people and how they’re leveraging the environment.” The partnership between WEI and UMass has also been an emphatic win for promoting spend with diverse suppliers, says Grubbs. “When UMass supports someone like us, who are a minority business enterprise, that helps us scale, that helps us hire from the minority community, and that helps us support minority suppliers ourselves,” he adds. “The effect of UMass making that commitment is exponential in the diversity community.”

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of a comprehensive shared services plan, a collaborative, system-wide, cross-functional project that was released in April 2019 and endorsed by the UMass Board of Trustees. “The outcome was very similar for each of these separate functions at the campus level, but business was conducted in six different ways, with different operating procedures, and even the same technologies were configured differently,” Cho says. His first challenge was to unify these disparate organisations and harmonise a “patchwork” of policies, procedures and technologies into a standardised system for conducting business. The new centralised organisation driving procurement efficiency for UMass is known as the Unified Procurement Services Team (UPST). “The premise of this was to create a shared services environment to support the campuses,” says Cho, whose newly unified team now manages close to $1 billion in annual spend and more than 17,000 active suppliers. “The good thing is we had the opportunity to deepen the

procurement competencies of the folks in these legacy organisations, who can now go deeper, instead of being generalists,” he says. The team reduced in scope from 70+ to 50 specialists, but “we built competency frameworks specific to the function, and we can plan training paths for each individual and role to build more domain expertise”. With the mandate to create a functioning shared services organisation while still maintaining business-as-usual support for campus procurement activities, the UPST had their work cut out for them. Unfortunately, within three months of becoming operational they had to face the COVID-19 pandemic and its ripple effects on the system. UMass experienced a $240m revenue shortfall. They shifted their focus to supporting UMass in meeting specific short-term objectives, such as health and safety goods and services, and remote learning equipment, that needed to be addressed instantly. But when the initial dust of the pandemic had settled, so too did Cho’s focus. “Better, Faster, Cheaper” The procurement harmonisation project is underpinned by a philosophy to derive more value at every point, something Cho characterises as “Better, Faster, Cheaper.” “It’s about ensuring that we have more strategic partnerships, and that we're getting the best value in reducing operational risks,” Cho says. “We’re faster by using catalogues, for example, and pre-negotiating a lot of framework agreements so that people can point, click, and buy, just like we do every day in our personal lives. To be cheaper, we’re using market intelligence benchmarks that come not only in the form of price points, but operating procedures, best practices, and really using that market intel to its full extent.”


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“ We are now closer to being a datafirst organisation”

David Cho

DAVID CHO

TITLE: CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

EXECUTIVE BIO

COMPANY: UMASS Cho is the Chief Procurement Officer for the University of Massachusetts, Unified Procurement Services Team (UPST) that provides strategic sourcing, contracts, supplier management, procurement operations, accounts payable, travel services, and customer services to the various campuses within the UMass system. Before joining the UMass System, he was the former Global Head of Sourcing and Vendor Management at BlackRock where he led Sourcing and Vendor Management (SVM) for the World’s largest Asset Management firm. SVM covers all third-party sourcing for technology, HR, marketing, L&C, professional services, and corporate services. Over Cho’s 25+ years of work experience, he has maintained COO roles for emerging alternative asset management companies, and also provided strategy and operations management consulting services to regional, national, and global companies during his stint at KPMG, Archstone Consulting, IBM, Deloitte Consulting and JP Morgan Chase. Cho is a graduate of Boston College and completed the MIT Sloan Executive Program in Technology, Operations and Value Chain Management.

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UMass: Unifying Procurement to Drive Change

“ We're capturing this low hanging fruit, but once we realise those recurring savings, we need to continue to optimise and extract costs and inefficiencies out of the system so that it's something that we can confidently harvest year over year” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

The results of Cho’s and the USPT’s efforts have been immediate. An initial target of achieving $16.5m in annual cost reduction was eclipsed within the first 18 months of operation. The UPST delivered $33.9m in savings through 100+ initiatives, within those 18 months, across each of the five UMass campuses. “The key to that is data, and we are now much closer to being a data-first organisation,” Cho says. “We are utilising techniques that private equity firms might use for optimising their portfolio companies. We're factoring in methods that you would use for mergers and divestitures, and all these different tools and approaches.” Cho expects to see twice the amount of financial benefits in the next year, but the ultimate goal of his initial five-year plan will not necessarily follow a linear path. “It doesn't mean we have to continue to double the output that we're getting from massachusetts.edu

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a cost reduction standpoint,” he says. “We're capturing this low hanging fruit, but once we realise those recurring savings, we need to continue to optimise and extract costs and inefficiencies out of the system so that it's something that we can confidently harvest year over year. We may not necessarily maintain that growth trajectory annually, but I am confident that it's something that we're going to be able to benefit from on an ongoing basis.” 83

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Procurement with Purpose Beyond the mechanics of cost-saving, Cho and his team are driven by their contributions towards the UMass mission of providing affordable and accessible world-class education. This is procurement with purpose. “That’s why I think many of the leaders who joined us, particularly from the non-higher-education verticals, are so excited about this, because the mission really resonates,” Cho explains.


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MICHAEL E. DURKIN TITLE: DIRECTOR OF STRATEGIC PROCUREMENT Michael describes himself as a “dynamic procurement leader, educator, manager and coalition builder”. These attributes have helped him establish and grow the capabilities of the UPST strategic sourcing team which handles, category management, strategic sourcing, contracts and supplier management needs. He is passionate about adding value to people and processes through efficiency, effectiveness, and driving best business practices. Prior to rejoining the UMass System as a part of the UPST Leadership Team, he held a variety of leadership positions with the University System of New Hampshire, University of Massachusetts Lowell, Merrimack College, Stonehill College and with the National Association of Educational Procurement (NAEP) of New England.

BRIAN L. GIRARD

MEET THE TEAM

TITLE: DIRECTOR OF PROCUREMENT OPERATIONS Brian is a leader known to have the proven ability to influence and manage stakeholders, innovate and drive process improvements throughout the supply chain to capture optimised cost benefits and budgetary control. Brian continues to leverage his over 25 years of experience in Procurement and Supply Chain within both the public and private sectors, to lead harmonisation of UMass procurement operational processes.

He currently oversees the Procurement Operations function which encompasses Accounts Payable, Bank Card (Procurement Card Operations), Travel and Expense, Process Improvement, and Procurement Compliance teams. With his team, he continues to focus on streamlining internal business practices to ensure operational process efficiency and effectiveness.

AMANDA ONWUKA TITLE: DIRECTOR OF SERVICE & QUALITY Amanda’s focus is to ensure that UPST continues to put its best foot forward as it progresses in its maturity journey as the harmonised procurement services centre for the University of Massachusetts system. Within her UPST portfolio are the Customer Services, Procurement Technology, Data Analytics, and Training & Communications teams. They support the operationalisation of the harmonised processes while ensuring resources are available to support enhanced change and communications management. Prior to joining UMass system, Amanda worked as a management consultant with KPMG leading and providing strategy and business transformation services to global and national companies.


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“ We are utilising techniques that private equity firms might use for optimising their portfolio companies” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

Technology adoption and an overarching digital transformation have been crucial to UPST’s results. The organisation leverages tools like Jaggaer for daily procurement activities, Salesforce for case management,

and Tableau for business intelligence, among others. But in Cho’s mind, technology alone will only get you so far. More important is to prioritise, harmonise, and modernise policies and targets, upgrade procedures and processes to align with the policies, and ensure the team has the core competencies to operate within them. “When you have all those pieces together, the rollout of technology enablement becomes much more elegant, and it gets you to the outcomes and the output that you're looking for,” Cho says, pointing to ensuring applications are uniform across both desktop and mobile devices to enable flexible work, as an example. “The more important thing is being able to leverage your suppliers’ technologies, as well. We can't be

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“ The good thing is we had the opportunity to deepen the procurement competencies of the folks in these legacy organisations, who can now go deeper, instead of being generalists” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

everything to everyone. It’s not just about building the catalogue, for instance, but how do we leverage their platform? Some of our partners’ data on the things we buy is better than the data we have in-house. So we can leverage that kind of intelligence.”

The Power of Partnerships A good example, Cho says, is the partnership with Huron, with which UMass’ investment has risen over the past 18 months. “They've been terrific in looking at where we are today and where we want to be tomorrow,” Cho says. “What’s really vital is that it's not just what they know, it's how they deploy. It's how the team we work with at Huron take in that input from us and understand the particular outcomes that we're looking for. To be able to factor in change management, very gracefully as part of the underlying sense of processes and services that they're delivering, has been tremendous.” Another key supplier, SupplyLogic, provides “intelligence that we can't build,” Cho says, which is helping the organisation towards its supplier diversity objectives. Taking print services as an example, the UPST can leverage SupplyLogic’s platform to discover veteran-owned suppliers, massachusetts.edu

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CONGRATULATIONS David Cho & The UMASS Procurement Team Thank you for your business over the last 35 years!

WCA: World Class Service, First Class Experience. www.wca.com

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“ We're also incorporating inclusion and equity into all of our competitive processes” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

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minority-owned businesses, womanowned businesses, and other diverse partners in the local community. “This is really valuable to us,” Cho says. “That's an area where we can leverage our partners’ technologies to get that visibility, and to make those kinds of important decisions.” Enhancing the diversity of suppliers is a key objective of the University of Massachusetts, and by extension the UPST, and although the central procurement organisation is barely 18 months old, Cho is happy with the progress it’s already made. The university’s spending with diverse suppliers is “trending in the right direction,”

LISA A. CALISE TITLE: SENIOR VICE PRESIDENT FOR ADMINISTRATION & FINANCE AND TREASURER

EXECUTIVE BIO

COMPANY: UMASS Lisa A. Calise is the Senior Vice President for Administration & Finance and Treasurer for the University of Massachusetts. She has been with UMass since February 2017. In her role, Lisa oversees the University’s financial and operational departments including Treasury, Insurance and Operations, Budget and Planning, Enterprise Risk Management, Human Resources, Controller’s Office and the University-wide Unified Procurement Services Team (UPST). Lisa was most recently the Chief Financial Officer at Watertown-based Perkins School for the Blind, focusing on global services and education for those living with blindness and deaf blindness. Before joining Perkins in 2010, Lisa served the City of Boston for over a decade, most recently as the Director of Administration

with both a short and long-term plan to build a more robust diverse supplier base. “We're also incorporating inclusion and equity into all of our competitive processes,” Cho adds. “That’s not something that was mandated by any government programme. We have imposed those requirements on ourselves to build accountability. We're also pushing strategic providers that act as primes to provide more visibility into their second-tier level spend, so that as dollars flow to them, they also make their way to diverse suppliers. That is very impactful.” The UPST has performed above expectations throughout its first 18 months,

and Finance, and previously as Chief Financial Officer and CollectorTreasurer and Budget Director, implementing efficiency improvements and managing the City’s finances through challenging economic times. Prior to coming to Boston, Lisa served in the White House Office of Management and Budget as a budget examiner. A Massachusetts native, Lisa obtained her B.A. from Boston College and a Master's Degree in Public Management from the University of Maryland. She recently served as a member of both the MBTA Finance and Management Control Board and MassDOT Board.


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“ We're also incorporating inclusion and equity into all of our competitive processes” DAVID CHO

CHIEF PROCUREMENT OFFICER AND MANAGING DIRECTOR, UMASS

and as it matures further, Cho is confident that procurement will provide further savings, and reroute vital value and resources into the university’s educational programs. But Cho is quick to highlight that the work of UPST, its future ambitions, and its ability to deliver transformational results is a holistic effort, achieved through collaboration with various UMass stakeholders. “Being able to promote this level of change in coordination with the campuses couldn’t have been done without leadership sponsorship,” Cho says. “We've been 93

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empowered. We have UMass President Marty Meehan's backing, the support of all the campus chancellors, the campus Administration & Finance (A&F) Vice Chancellors and the UMass Senior Vice President for Administration and Finance (CFO) and Treasurer, Lisa Calise.” “I’m so proud of all that we’ve been able to accomplish in such a short time, and under such challenging and unprecedented circumstances,” says Calise. “The collaborative approach between the system and campuses, especially between


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the A&F leadership, has been paradigmshifting for the university, and enabled us to leverage the university’s buying power to benefit the campuses. Our team – driven by exceptional leaders like David – will continue to experiment, innovate and push the organisation to realise every efficiency and ensure that we are delivering on our mission in the most competitive manner possible.” According to Cho, the UMass campus leaders are “encouraging us to do more and continue to move the agenda forward. With 75,000 students and

24,000 employees, UMass is the largest university and third-largest employer in the state of Massachusetts. So there are many priorities, and being able to have that one vision that leadership endorses, is just tremendous. What really makes this incredibly powerful is that egos are checked at the door and it's all about just doing the right thing.”

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