https://www.americancityandcounty.com/wp-content/themes/acc_child/assets/images/logo/footer-logo.png
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcast
  • Resources & Events
    • Back
    • Resources
    • Webinars
    • White Papers
    • IWCE 2022
    • How to Contribute
    • Municipal Cost Index – Archive
    • Equipment Watch Page
    • American City & County Awards
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Privacy Statement
    • Terms of Service
American City and County
  • NEWSLETTER
  • Home
  • Co-op Solutions
  • Hybrid Work
  • Commentaries
  • News
  • In-Depth
  • Multimedia
    • Back
    • Podcasts
    • Latest videos
  • Resources/Events
    • Back
    • Webinars
    • White Papers/eBooks
    • IWCE 2022
    • How to Contribute
    • American City & County Awards
    • Municipal Cost Index
    • Equipment Watch Page
  • About Us
    • Back
    • About Us
    • Contact Us
    • Advertise
    • Cookie Policy
    • Privacy Stament
    • Terms of Service
  • newsletter
  • Administration
  • Economy & Finance
  • Procurement
  • Public Safety
  • Public Works & Utilities
  • Smart Cities & Technology
  • Magazine
acc.com

issue_20060401


Calculator Validates Savings

Calculator Validates Savings

Calculator Validates Savings The combination of taxpayers' demands for a more efficient government, a shrinking government workforce, and years of budget
  • Written by Katherine Frisch
  • 19th April 2006

Calculator Validates Savings

The combination of taxpayers’ demands for a more efficient government, a shrinking government workforce, and years of budget shortfalls forced many entities to revise procurement operations. The results are in, and all levels of government are reporting savings, savings, and more savings.

Strategic sourcing alone has saved entities millions of dollars annually. One such entity realizing return on investment in strategic sourcing is the State of Illinois. Not only has Illinois saved, the state has taken efficiency initiatives to the next step–savings validation.

“Validating $529 million in savings required an enormously complex process,” says Paul Campbell, Director, Illinois Department of Central Management Services (CMS). “We had to create the savings validation ‘calculator’ and then run more than 100 efficiency initiatives through it to validate and document more than half a billion dollars in savings.”
The process met with such success that CMS chose to share the methodology.
“For other states to really understand and take advantage of what we learned in Illinois, we realized that we’d have to ‘walk them’ through our process–which led us to the workshop idea,” says Campbell.

On March 9, 2006, CMS held the “Measuring and Sustaining Government Efficiency Conference.” Procurement professionals from eight states, as well as a number of counties and municipalities, met in Chicago to benefit from the CMS experience and share their own strategic sourcing stories.

To begin, documenting and supporting savings measurements with evidence has allowed Illinois to establish a clear link to financial transactions. In measuring financial and non-financial benefits produced by the state’s efficiency initiatives, Illinois sustains its change efforts through an accountable, transparent communications tool.

From one-time vs. recurring savings to capturing incremental cost categories, a detailed process contributed to Illinois’ successful validation process.

Meeting efficiency goals in Illinois and other entities raises the question of what to do with the savings?

By reducing margins paid to suppliers, many entities are using savings as a tool to fund operational budget cuts.

Others are faced with the decision of where to deploy surplus funds created by strategic sourcing initiatives.

The savings achieved in Illinois are helping Governor Rod R. Blagojevich increase investments in education, public safety and health care–without making cuts elsewhere or raising sales or income taxes.

New savings measurement methodology proves that entities are no longer merely staying afloat, and that sustainability is critical to strategic sourcing initiatives. The idea that sustained savings may lead to adjustments in future budgets causes concern in agencies and departments.

So far, most entities do not have a good mechanism in place to arrive at equitable budget adjustments. This raises a second question: How do entities continue to drive savings in agencies and departments?

To encourage buy-in of savings efforts, entities are looking at various incentive programs, including performance-based models that allow departments and agencies to retain a portion of savings for other investment.

Incentive programs face a number of challenges including initiating policy changes, developing and validating baselines, as well as identifying savings opportunities, fixed share ratios, and payback periods, but the extensive due diligence may pay off in future savings.

Entity-wide collaboration, starting with elected officials and including finance, procurement, legal, departments, agencies, and end users, is necessary to create a culture of savings innovation. Maintaining existing programs that matter to the lives of constituents proves the enormous effort is invaluable. The funding of new initiatives is an added bonus.

Tags: ar issue_20060401 mag

Most Recent


  • What’s my truck worth?
    Truck Value VIN Decoding & Make/Year/Model Lookup
  • Calculator Validates Savings
    Calendar of events
    A list of NIGP courses, conferences and webinars for NIGP members held in December 2012 and January 2013.
  • Calculator Validates Savings
    UPPCC new certifications
    The Universal Public Purchasing Certification Council announces that 208 individuals successfully completed the spring 2012 UPPCC certification examinations administered in May 2012.
  • Calculator Validates Savings
    Performance data on the latest certification exams
    The UPPCC has released key performance data from the May 2012 examinations.

Leave a comment Cancel reply

-or-

Log in with your American City and County account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Calculator Validates Savings
    Take a Long, Hard Look at ROI from RFID
  • Calculator Validates Savings
    New Online Applications Allow Agencies to Collect Opinion and Comment
  • Calculator Validates Savings
    Project Management: Partnering With Procurement
  • Calculator Validates Savings
    Study Results Include Steps to Achieve Small Business Contract Goals

White papers


Modern American Perspectives on Law Enforcement

14th July 2022

Reimagine the Employee Experience

12th July 2022

How to Assemble a Rockstar Website Redesign Steering Committee

7th June 2022
view all

Events


PODCAST


Young Leaders Episode 4 – Cyril Jefferson – City Councilman, High Point, North Carolina

13th October 2020

Young Leaders Episode 3 – Shannon Hardin – City Council President, Columbus, Ohio

27th July 2020

Young Leaders Episode 2 – Christian Williams – Development Services Planner, Goodyear, Ariz.

1st July 2020
view all

Twitter


AmerCityCounty

When spending federal stimulus dollars, local governments should consider long-term, community impact dlvr.it/SWXJWZ

12th August 2022
AmerCityCounty

In Nevada county, data underpins efforts to address climate change dlvr.it/SWTGHy

11th August 2022
AmerCityCounty

$52B semiconductor investment intended to rejuvenate American manufacturing dlvr.it/SWPqHQ

10th August 2022
AmerCityCounty

How capital improvement project prioritization helps secure infrastructure funding dlvr.it/SWLQB7

9th August 2022
AmerCityCounty

Climate bill lauded; predicted to reduce nation’s carbon foot print by 40% within decade dlvr.it/SWHGQL

8th August 2022
AmerCityCounty

Partnership launches no-cost wastewater monitoring service for local governments dlvr.it/SW7N74

5th August 2022
AmerCityCounty

Investing in America’s onsite wastewater treatment systems for equity and sustainability dlvr.it/SW4Mb9

4th August 2022
AmerCityCounty

With passage of PACT Act, veterans service officers are preparing for an influx in applicants dlvr.it/SW4KTg

4th August 2022

Newsletters

Sign up for American City & County’s newsletters to receive regular news and information updates about local governments.

Resale Insights Dashboard

The Resale Insights Dashboard provides model-level data for the entire used equipment market to help you save time and money.

Municipal Cost Index

Updated monthly since 1978, our exclusive Municipal Cost Index shows the effects of inflation on the cost of providing municipal services

Media Kit and Advertising

Want to reach our digital audience? Learn more here.

DISCOVER MORE FROM INFORMA TECH

  • IWCE’s Urgent Communications
  • IWCE Expo

WORKING WITH US

  • About Us
  • Contact Us

FOLLOW American City and County ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookies Policy
  • Terms
Copyright © 2022 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X