XRCW Procurement Alignment Training Session July 2010 XRCW

XRCW Procurement Alignment Training Session July 2010

XRCW Procurement Alignment Objective o Communicate the new XRCW purchasing process Goals of new process o o Make the buying process easier, quicker and more effective for XRCW employees – Fewer steps and a clearer process for procuring goods and services – Eliminate parts of the procurement process that waste the time of researchers and their managers – Ensure the XRCW process meets corporate policies Increase compliance with Corporate Policies Today o Page 2 Explain the new process and answer your questions July 2010 For Internal Use Only

Why change the existing process? o Currently: – Not clear how to procure– when to use PCard or IProcurement – Right people/groups are not always involved - e. g. Global Purchasing – Corporate policies are not always followed – Process is not consistent across XRCW – Information not always complete when sent for management approval – Process is not as efficient and effective as it could be Page 3 July 2010 For Internal Use Only

What are the opportunities? Time savings for both researchers and managers utilizing a simpler process o Better use of available procurement tools o Leverage Global Purchasing to help with sourcing, selection and negotiation o Increased compliance with Corporate Policies o Clearer Roles and Responsibilities for researchers, managers, and admins o – – Page 4 Have the person who is going to use the good or service responsible for the purchasing Minimize hand offs and complies to policies July 2010 For Internal Use Only

Benefits of GP Involvement GP can deliver savings, ensure contracts meets Xerox’s required terms and conditions including contract terms. Ensure that the purchase is done in the most ethical and beneficial method for Xerox and that Xerox’s assets and cash are protected. Prior to Purchase Requisition approval: • Laminator Purchase Avoided – used internal resources that GP identified $35, 000 savings • RF Plasma Etching System Purchase $1, 914 savings by negotiating more favorable pay terms for Xerox POs already in the system for approval: • Measurement System Purchaser agreed to pay terms of Net 30 days. GP renegotiated pay terms to Net 60 • Phoeson Technologies Purchaser agreed to pay terms of Net 30 days. GP renegotiated pay terms to Net 45 Xerox standard pay terms are Net 60 Page 5 July 2010 For Internal Use Only XRCW Procurement Alignment

What’s not changing? Researchers will determine what needs to be purchased and the procurement method. Utilizing: – A simplified, clearer process – The expertise of Global Purchasing • Management approval still required for all purchases • Still need to involve OGC when appropriate • Commonsense is still encouraged. Decisions must be ethical and make good business sense • Page 6 July 2010 For Internal Use Only

XRCW Procurement Alignment Roles and Responsibilities Researcher / Requisitioner: • • The expert on the item being procured Obtains and completes the checklist Owns the PCard being used or creates the PO request in i. Procurement Completes the Expense Report or Invoice Validation Managers (Program, Area, Lab, Center): • • Ensures purchases meet the organizational needs and are within current operating constraints Verifies purchases comply with Corporate policy via Checklist • • Page 7 Global Purchasing Involvement Correct Purchasing Tool used July 2010 For Internal Use Only

XRCW Procurement Alignment Roles and Responsibilities Admins: • • Provides assistance to requisitioners Guide requisitioners through the process Financial Analyst: • Checks accounting information (Budget Center, Capital vs Expense, etc. ) Global Purchasing: • Supports procurement activities • Sources negotiates and establishes terms & conditions • Helps resolve issues and supplier concerns at anytime during the purchasing process • Answers questions • Provides Market intelligence and industry expertise • Leverages purchasing resources and synergies organizationally and globally Page 8 July 2010 For Internal Use Only

XRCW Procurement Alignment Preapproval Process Changes • Current procurement process in XRCW requires an informal email preapproval for all purchases • The new process: • • Page 9 Standardized Checklist replaces informal email approval – PCard purchases under $500 require Direct Manager verbal preapproval – Preapproval via checklist for PCard purchases over $500 Email Preapproval is not required for i. Procurement purchases – Standardized Checklist is attached to purchase requisition in i. Procurement system July 2010 For Internal Use Only

Overview of Process: Need to Procure Who, What & How Much Purchase Method & GP Involvement Complete Checklist and obtain Preapprovals via email Document GP Interactions GP Involvement Required Page 10 July 2010 Attach Checklist to Purchase Requisition i. Procurement Purchase For Internal Use Only PCard Purchase

XRCW Procurement Alignment Checklist– replaces current email approval • Email approvals did not include all information required, not always part of i. Procurement documents; not consistent across the labs • Shows what needs to be done and in what order to document compliance • Checklist has five parts: Who, What & How Much Determine if GP Needs to be Involved and how to Purchase Get Pre-approval for PCard Purchases Page 11 July 2010 For Internal Use Only For i. Procurement: Document Global Purchasing involvement Processing Flowchart

DEMO OF CHECKLIST Page 12 July 2010 For Internal Use Only XRCW Procurement Alignment

XRCW Procurement Alignment No <$500 Start >$1, 000 Approval Hierarchy Yes add Yes XRCW Financial Analyst No Requisitioner acquires Verbal Approval from Area Manager EOE Expense No Yes End add Requisitioner's Area Manager Yes add >$5, 000 No Lab Manager End Center Manager No >$50, 000 Page 13 Program Manager July 2010 add XIG President add XIG VP Finance Yes For Internal Use Only Validate accounting & ensure capital items are correctly captured and add AP capital approvers if needed Must be ≥ $1 K to be EOE The approver is always the requisitioner’s Direct Manager. Generally, this is an Area Manager. However, if the requisitioner is an Area Manager, the Direct Manager would be the appropriate Lab Manager. i. Procurement: Add the required approvers to the purchase request and submit request for approval. PCard: Add the required approvers to the checklist and send the checklist to the initial approver.

XRCW Procurement Alignment PCard Expense Report Naming Conventions: For EOE purchases we’d like to institute a standard naming convention to help track Program Expenses: EOE Nine Digit Program Number: Expense Report Name EOE ABQ 040501: External Data Storage Device EOE ABQ 033101: Amazon Cloud CPU Cycles Program Managers must register with the PCard Expense Reporting system to be able to receive copies of EOE focused expenses. If you can’t login to the site, you’re not registered. Page 14 July 2010 For Internal Use Only

XRCW Procurement Alignment Resources: XRCW Purchasing Process Docu. Share site: http: //xww. docushareinnovation. world. xerox. com/dsweb/View/Collection-141253 Contains checklist, help guides, pointers to corporate sites and other useful sites. Current Checklist version: http: //xww. docushare-innovation. world. xerox. com/dsweb/Get/Document 609827/Checklist. dot PCard Training: http: //xww. docushare-innovation. world. xerox. com/dsweb/Get/Document 610072/p. Card%20 Training. ppt i. Procurement Training: http: //xww. docushare-innovation. world. xerox. com/dsweb/Get/Document 610091/i. Procurement%20 Training. ppt Page 15 July 2010 For Internal Use Only

BACKUP Page 16 July 2010 For Internal Use Only

XRCW Budget Centers: XIG/XRCW BUDGET CENTER LISTING CENTER ER 857 ER 856 ER 786 E 0482 ED 230 ER 228 ED 886 DESCRIPTION ORGANIZATION MANAGER MARKING ELEMENTS & INTEGRATION CAA 01 BURNS PATRICIA OPTIMAL SYSTEMS CAB 01 FURST MICHAEL XRCW EOE CAD 01 LARSON JAMES SCALABLE COMPUTING & TECHNOLOGIES CAE 01 SHARMA NAVEEN DOCUMENT WORKFLOWS & SERVICES CAF 01 PURVIS LISA INFORMATION TECHNOLOGY SOLUTIONS CAF 01 PURVIS LISA OFFICE OF VICE PRES CAG 01 LARSON JAMES XRCW EOE -- Extra Ordinary Expenses Operational expenses incurred by XIG research programs. EOE expenses differ from regular operational expenses in that EOE expenses are tied to a specific research program and not shared across a lab or multiple research programs. XIG Budget Center Listing Page 17 July 2010 For Internal Use Only MAIL STOP 147 -59 B 147 -52 A 105 -60 C 128 -51 E 128 -29 E 105 -60 C PHONE #

Xerox Policies on Procurement Purchasing Policy (PUR 001) • • • Global Purchasing must be engaged prior to any request for quote, proposal or statement of work from an external supplier that is expected to have an annualized commitment of $100, 000 or more. Employees are prohibited from signing or renewing a contract prior to Global Purchasing concurrence. Global Purchasing must concur with all contractual commitments to purchase any goods or services from external suppliers. Global Purchasing is responsible to ensure consistency of Xerox Corporation purchasing policy and practice in these agreements. Operating Unit Management is responsible for: • Setting overall Business Direction • Validating that the expenditure is necessary • Involving Global Purchasing per this policy • Utilizing the suppliers under contract with Xerox Corporation • Operating Unit Management is responsible for supplier selection with Global Purchasing concurrence For Internal Use Only July 2010 Page 18

Xerox Policies on Procurement Approval Authority (AAP 100) • • The approval signature, manual or electronic, is a representation by the Approver(s) that the action is: • In full compliance with Xerox Policies • Necessary to meet business objectives • Reasonable and accurate • Adequately documented Request for payments are initiated by a requester (usually the final recipient of the product or service) and approved by a higher level of management. Administrative Assistants will not sign as requesters unless they are indeed the ultimate recipient of product or service. For Internal Use Only July 2010 Page 19

Xerox Policies on Procurement Citi. Bank Purchasing Card Policy (CD 17) • Employees responsibilities include: • • Complying with the terms and conditions of the Purchasing Card program via Employee Agreement Form Ensuring purchases are in accordance with Xerox policies Key points from Employee Agreement Form: • • The purchasing card will be issued in the name of the employee. By accepting the card, the employee assumes responsibility for the card and will be accountable for review and approval for all charges made with the card. The card is not transferable and may not be used by anyone other than the cardholder. Xerox Corporation’s Purchasing Card must be maintained with the highest level of security. If the card is lost or stolen, or if the cardholder suspects the card or account number has been compromised, the cardholder agree to immediately notify Citibank Customer Service and his/her manager and the Program Administrator. Under no circumstances is a cardholder to give their card or their card number to another employee for them to make a purchase. For Internal Use Only July 2010 Page 20

Approver ‘Checklist’: Page 21 July 2010 For Internal Use Only

Approver ‘Checklist’ Page 22 July 2010 For Internal Use Only

XRCW Procurement Alignment A simple process that everyone can use • Process is easy to use for individuals who regularly make purchases and those who rarely make purchases • Purchase process has three major areas of focus: 1. 2. 3. Identify need to purchase Determine if Global Purchasing needs to be involved Decide How to Purchase– PCard or i. Procurement • All documents available on the XRCW purchasing process Docu. Share site: http: //xww. docushare-innovation. world. xerox. com/View/Collection 141253 Page 23 July 2010 For Internal Use Only

XRCW Procurement Alignment Procurement Flow Chart Process starts with a need to procure a good or service Determine whether this purchase should be made with a PCard or using i. Procurement Decide whether Global Purchasing involvement is required and who is the appropriate supplier GP involvement: Cost > $15, 000, Purchasing a Service, or you have questions & concerns Page 24 July 2010 For Internal Use Only

Executive Summary Why Change? • • Purchasing Process was inefficient, cumbersome and error prone Purchasing Process was not working appropriately • • • GP not involved when they should have been in sourcing, selection and negotiations Policies and procedures not followed Cost Opportunities lost New Process: • Preapproval process changed & Approval process is clarified • • • GP engagement process is defined Purchasing process flow is defined and drives compliance to policies and procedures Roles and responsibilities are defined Created consistent purchasing documentation and training • • Checklist drives the process and consistency Eliminates rework Available on docushare Process owners have been identified What We Need from You: • • Page 25 Full support and engagement Feedback and help identifying opportunities to continue to improve the process July 2010 For Internal Use Only

Process Flow Detail: Page 26 July 2010 For Internal Use Only

XRCW Procurement Alignment Checklist: Part 1 – Purchase Information Page 27 July 2010 For Internal Use Only

XRCW Procurement Alignment Checklist: Part 2 – Global Purchasing Involvement Need to use Global Purchasing Page 28 July 2010 For Internal Use Only

XRCW Procurement Alignment Checklist: A Second Purchase If this purchase were made through CDW Direct we would use i. Procurement. No need for GP Involvement in this purchase. Page 29 July 2010 For Internal Use Only

XRCW Procurement Alignment Checklist: Part 3 – Validate that the purchase can be made on a PCard and get approvals Validate that purchase fits PCard criteria. Validate accounting information Program Manager – or if Program Manager external to XRCW – Lab Manager Page 30 July 2010 For Internal Use Only