County Outsources Services and Saves, and more

With cost savings of more than a quarter-million dollars since 1998 in hand, America’s fastest-growing county has renewed its contract to provide cost management services for the county’s monthly telecommunications service expenses on a business process outsourcing basis.

The one-year renewable contract represents the fifth year in which Douglas County (CO) has outsourced the bill processing and cost management of its telecommunications expenses.

On a monthly basis, MSS*Group, Inc. will process nearly 1,000 local, long-distance, data, and wireless telecommunications bills generated from Douglas County—approximately a 33 percent increase over 2001.

With savings of nearly $267,000 since 1998, the outsourcing benefits “are more than worthwhile,” says Bryan Richison, financial analyst for Douglas County. Each month, the company uses proprietary software and processing systems to analyze each telecommunications bill from the county to identify errors and correct inaccuracies and reconcile all invoices with their respective carriers. The company then provides electronic updates to the county’s accounting systems, prepares Web-based management reports, and makes recommendations on rate optimization.

Outsourcing, according to Richison, provides a way to get a firm grasp of fast-growing telecommunications needs, service inventory, bill processing, and overall cost management. Prior to its initial outsourcing agreement, Richison says that the county followed a time-consuming process, and had no systematic way to verify charges.

Today, Douglas County can track telecom service expenses not only to the department level, but to the division level within departments and for additional special projects. “In hard savings alone, the services are worthwhile,” says Richison. Hard savings are those cost savings that result from correcting errors in bills, eliminating incorrect charges, locating missed credits, and resolving issues such as slamming.

In addition to hard savings are indirect and intangible savings. Richison estimates that the telecommunications expertise saves a minimum of 15 to 20 hours of Douglas County staff time each month in manual processing—and more when it comes to the time needed to research complicated tax, surcharge, and regulatory issues.

Procurement Organization Recognized for Excellence
The Purchasing and Supplies Division of the Allegheny County (PA) Department of Administrative Services has been awarded the Achievement of Excellence in Procurement award from the National Purchasing Institute (NPI), an affiliate of the Institute of Supply Management.

Allegheny County is one of 75 winners nationwide and the first municipality in Pennsylvania to win the award.

The award is given to organizations that demonstrate excellence in procurement by obtaining a high score on a rating of standardized criteria. The program is designed to measure innovation, professionalism, productivity, and leadership.

Allegheny County received points for its use of electronic commerce— electronic posting of bid invitations and for the use of reverse auctions, which have saved the county thousands of dollars, while enhancing customer service and professionalism.

Thomas E. Youngs, Jr., C.P.M., Chief Purchasing Officer, says, “We are very pleased to accept the award and the recognition that the county is striving to save the taxpayers money, increase the level of customer service for the various county departments, and increase the level of professionalism of the County Purchasing and Supplies Division.

The award was presented at the NPI’s 34th annual conference in October in Albuquerque, NM.

“Green” Cleaning Products Meet National Criteria
Who says we can’t get along? That’s the question a group of state and local government purchasers from across the country are asking, after working together to endorse a single, national standard for environ-mentally friendly cleaning products. Controlling more that $15 million in annual cleaning product purchases, these state and local governments are using their purchasing power to protect the environment and employees while saving taxpayers money.

The group of government purchasers, organized by the Center for a New American Dream and funded in part by the U.S. Environmental Protection Agency (EPA), includes all the government purchasing pioneers that first attempted to define and purchase effective, safer, and more environmentally preferable cleaning prod-ucts—Massachusetts; Santa Monica, CA; King County (WA); Minnesota; Seattle, WA; and the Pacific Northwest National Laboratory—among several others.

Massachusetts is the first of the work group members to issue a request for proposal (RFP) using the agreed-upon criteria. The environ-mental criteria are based on Green Seal’s Industrial and Institutional Cleaners Standard (GS-37). While products do not have to be certified by Green Seal, they must meet its GS-37 standard and a few additional criteria agreed upon by the work group.

The Commonwealth of Massachusetts’ officials expect to spend at least $500,00 over the next four years purchasing safer, more environmentally preferable cleaning products. Some industry experts anticipate the commonwealth will actually purchase several million dollars worth as word spreads throughout the state’s user community.

“While governments spend millions of dollars on environmental products every year,” explains Marcia Deegler, Environmental Purchasing Manager for the Commonwealth’s Operational Services Division, “this is the first time we have worked so closely with so many other government purchasers across the country. It makes it easier to share environmental, health, and product performance information, which makes the process more efficient, more cost-effective, and more beneficial for all of us.”

To learn more about Green Seal’s GS-37 standard, visit: http://www. greenseal.org./standards/industrial cleaners.htm.

Advisors Can Add Success to Private-Sector Outsourcing
“If companies are looking to out-source and want to achieve the highest probability of success, it appears to be essential to have a sourcing advisor involved throughout the outsourcing process,” concludes a re-search report released entitled, “Getting an Outsourcing Deal that Works: Buyers’ Perspectives on the Value of Using External Sourcing Advisors.”

The study, conducted by outsourcing market research firm Ross Re-search, commissioned by TPI, Inc., a sourcing advisory firm, details and analyzes the opinions of 26 global companies—such as DuPont, Bank of America, AstraZeneca, Bank of Montreal, Trinity Industries, West-pac, and American Airlines—about the qualitative and quantitative “value” of the services provided by sourcing advisory firms. All study participants—located throughout the U.S., Canada, Europe, and Asia Pacific region—have used at least one sourcing advisor within the past five years for the evaluation, negotiation, implementation and/or management of an outsourcing transaction. Some study participants used TPI as their sourcing advisor, while other respondents engaged a different outsourcing advisory firm.

“Study participants named clarifying objectives, developing financial models, and negotiating terms and conditions as the top three most helpful deliverables from sourcing advisors,” according to Lisa Maio Ross, principal of Ross Research. “These are the drivers behind the many benefits—cost savings, reduced time-to-contract-signing, risk mitigation, better contract terms, and instilling disciplined processes—that sourcing advisors deliver to their clients.”

Key findings in the report include:

• 50 percent of companies that used a sourcing advisor saved between 6 and 10 percent of costs relative to the cost of in-scope services prior to outsourcing;
• 21 of the 26 respondents achieved the business results they expected by using a sourcing advisor;
• 50 percent of companies that used a sourcing advisor got a payback on their advisor’s fees through cost savings gained from outsourcing within six months or less; 31 percent received a payback within 4 to 6 months;
• The percentage by which companies say sourcing advisors help to reduce their business risks; and
• How much time sourcing advisors can help companies trim off the sourcing process.

Pay Site Features Improved Customer Service Online
A new online pay account management system debuted Oct. 15, 2002, and promises improved service and information security to military members, DoD civilians, military retirees, and annuitants.

The Defense Finance and Accounting Service (DFAS) system, called myPay, replaces the previous Employee/Member Self-Service online system. The site requires users’ Web browsers be equipped with 128-bit encryption to conduct secure transactions. A revamped page design helps myPay users find information and complete transactions more quickly, officials noted. They receive clear confirmation messages.

Self-service online pay management systems like myPay let service members focus on their mission by eliminating worries and hassles associated with pay and benefits, said DFAS Director Tom Bloom.

Through myPay, he says, authorized customers can use existing Employee/Member Self-Service personal identification numbers to:

• View, print, and save leave and earnings statements,
• View and print tax statements (military members will have this service available in January 2003),
• Change tax withholdings,
• Update bank account and electronic funds transfer information,
• Manage allotments (service varies according to military branch),
• Edit address information (service varies according to military branch),
• Purchase U.S. Savings Bonds,
• Control Thrift Savings Plan enrollment (military only), and
• View and print travel vouchers (service varies according to service branch and travel status).

Using myPay saves the military and taxpayers millions of dollars in printing, postage, and customer service costs, DFAS officials noted. In fact, they said, DoD could save nearly $6 million a year if all its civilian personnel received electronic leave and earning statements.

DFAS officials say answering common questions and allowing account updates online could save an estimated 17 percent of costs associated with traditional customer-service activities.

Customers who use myPay can do anything online that they previously had to stand in line to do, Bloom points out.

Customers needing new personal identification numbers can access the myPay Web site at: https://emss. dfas.mil/mypay.asp. Civilian employees, active Air Force and Marine Corps, all reservists, and military retirees and annuitants receive PINs by mail. For a new PIN, click “need new PIN.” Log on to myPay once the PIN arrives in the mail.

Customers with questions about myPay can call customer support toll-free at 1-800-390-2348, Monday through Friday between 7 a.m. and 7:30 p.m. Eastern time.