OECM Savings | Choice | Service

Savings | Choice | Service

OECM Background Information Package

Introduction

The purpose of this package is to provide background information to candidates seeking to become members of OECM’s new Customer Council Committee.

The information will help candidates:

  • Understand the strategic business context for OECM;
  • Assess the scope of and expectations of their role on the Committee;  
  • Determine if they have the interest and the qualifications and experience to make an effective contribution to the work of the Committee;  
  • Be better prepared to participate in the selection process.

This package includes:

1. The strategic business context
2. History of OECM
3. Mandate
4. Business model
5. ECM’s Vision 2020 Strategy and Business Transformation Plan  
6. Mandate of the Customer Council Committee
 

For more information regarding OECM, please visit www.oecm.ca.

1. Strategic Business Context

OECM’s business strategy and priorities are informed and influenced by:

  • Ontario Government’s priorities, as articulated in provincial budgets, throne speeches and special reports related to value, accountability and transparency;
  • Ontario’s public sector procurement landscape supported by legislation: e.g., the Broader Public Sector (BPS) Accountability Act, policy frameworks: e.g., the BPS Procurement Directive and budget initiatives: e.g., collaborative spending targets, related to generating savings and efficiencies, and fostering an open business climate;
  • The challenges of the education sector and other BPS organizations in meeting their business needs;
  • Continued focus on shared services type of organizations in taking a leadership role to foster collaboration across the BPS and rationalize back-office functions to achieve:
    • Efficiencies in administrative costs;
    • Reduction in goods and services costs through coordinated buys;
    • Heightened controllership over contracting activities.
  • Other public sector supply sources for products and services, such as:
    • Ministry of Government and Consumer Services’ Vendor of Record Program;
    • Regional Purchasing Co-operatives;
    • Shared Services Organizations;
    • Not-for-profit organizations;
    • Group Purchasing Organizations (GPOs).  (Note that some US-based GPOs are attempting to establish a base in Canada, which will create more choice in the “competitive public sector landscape”.)

2. History of OECM

OECM was launched in 2006 as a Broader Public Sector (BPS) Not-For-Profit (NFP) Group Procurement Organization (GPO) by a board of directors comprised of members of the education sector.  OntarioBuys (Broader Public Sector Supply Chain Secretariat) (now moved to the Ministry of Government and Consumer Services) facilitated the start-up by providing funding through a Transfer Payment Agreement to find administrative savings that could be reinvested into modernizing Ontario’s education system. Ontario Buys now reports to the Ministry of Government and Consumer Services.

Ontario’s 118 publicly funded education sector institutions — school boards, colleges and universities — spend an estimated $4 billion annually on products and services. Their collective goal is to promote a strong and vibrant education system that is focused on helping Ontarians build their careers and enhance learning throughout their lives.

3. OECM’s Mandate

OECM’s goal is to provide supply management and other administrative, management or support services on a not-for-profit basis to educational institutions – including universities, colleges and school boards, and to any other organizations that may wish to benefit from OECM’s services: e.g., Broader public sector organizations and not-for-profits. Its core business is collaborative sourcing and customer and supplier partnership management, the goal of which is to generate savings and process efficiencies for public sector and not-for-profit organizations – particularly Ontario’s education sector, resulting in more funds being available for core academic and administrative commitments.

Customers purchase products and services through OECM’s Marketplace of collaboratively-sourced and competitively-priced products and services, from OECM’s 150 supplier partners. Participation in OECM’s Marketplace is voluntary.  

OECM is fast becoming a premier strategic sourcing partner in Ontario’s public procurement landscape. We offer a Marketplace of collaboratively-sourced and competitively-priced, products and services from over 150 supplier partners in a wide range of categories: facilities and operations, finance, human resources, information technology and marketing. We also offer value added services, such as advisory, business analytics and knowledge sharing.  

OECM has a track record of success defined by our relentless pursuit of excellence in collaborative sourcing that promotes value for money – resulting in more funds being available for core academic and administrative activities for Ontario’s publicly-funded education institutions (school boards, colleges and universities) and other broader public sector (BPS) organizations. We are passionate about building strategic partnerships, enhancing our customers’ experience and growing our business to ensure financial sustainability.

4. Business Model

A sustainable business model is the key to OECM’s success in creating and delivering new and innovative services to meet customers’ changing and complex demands. The opportunity for more growth and savings is significant, in addition to enhancing compliance with the BPS Procurement Directive.

However, there are challenges in sustaining OECM’s current business model:

  • Participation in OECM’s marketplace is voluntary and requires no volume or spend commitment; hence the estimated $195.3 M that customers spent through OECM’s marketplace in 2016 represents only 4.9% of the estimated education sector $4B addressable spend;
  • A financial model comprising solely of supplier partner Cost Recovery Fees (CRF), without commitment to participation from customers, does not guarantee a stable revenue stream or create reserves, which are “must haves” to sustain and grow OECM as a viable long-term business.

5. OECM’s Vision 2020 Strategy and Business Transformation Plan

OECM’s board believes that there is significant opportunity to generate:

  • More savings for customers at a faster pace, for the education sector in particular, to meet government budget constraints;
  • More spend under management, by increasing the percent capture of addressable spend, and thereby meeting government collaborative spend targets.

With the assistance of Deloitte LLP, OECM undertook an extensive year-long strategic planning initiative to develop a Vision 2020 business strategy.

As part of OECM’s Vision 2020 Business Transformation Project undertaken in 2015-16, Deloitte LLP, conducted extensive consultations with customers to gain insights for input into the strategy, and identified gaps related to Board governance and customer services, particularly OECM’s products/services, processes and Value for Money.

Addressing these gaps became the catalyst for establishing a new leading practices governance framework, which included establishing a new competency-based Board  and Customer Council Committee, comprising both Board members and senior leaders from customer communities.  This new Committee would embed OECM’s strategic priority of “Customer-Centric Services” at the board level to help address the service gaps identified through the Deloitte consultations and have a direct conduit for engagement and influence at the Board level related to the customer.  

6. Mandate of the New Customer Council Committee

OECM’s competitive advantage will be enhanced through strategic advice, input and recommendations related to providing an unparalleled customer experience.  OECM’s Board anticipates that customers will receive a greater degree of transparency, accountability and reporting on business performance related to business results, customer-centric performance metrics and service delivery, to help ensure that OECM delivers the right messages, to the right customers/stakeholders at the right times, and through the most appropriate channels.

The Council is a conduit for Service Governance at the Board level and provides a forum for executive-level leaders from OECM’s various customer communities to provide strategic input and recommendations regarding:

1. OECM’s business priorities and plans and delivery of products and services, ensuring alignment with customers' business priorities and plans;
2. OECM’s integrated Service Governance Framework:
  • OECM’s customer relationship and service delivery plans;  
  • The relevance and effectiveness of OECM’s products and services;
  • Rationalize and integrate roles and responsibilities of executive and operations level committees, and to narrow the gap between the perceptions of end-users and decision-makers;
  • New lines of business or services,
  • Business performance related to what matters to customers.

 

Check out the Customer Council Committee Terms of Reference for more information.