Ohio has the potential to gain substantial savings through pooled purchasing and shared services. The Shared Services Survey of Ohio local jurisdictions clearly shows a great potential for savings through shared services in administration. In most cases, the frequency of sharing is less than half of the entities surveyed, even among traditional school districts, which had a very high return rate on the survey. This potential is across all administrative services, including the services such as purchasing, where there are ample providers now offering discounted prices through joint or shared purchasing. For instance, only 49 percent of traditional Ohio school districts reported purchasing office supplies through shared services.
There is no shortage of providers for joint purchasing, and Ohio has had purchasing cooperatives for nearly 40 years. Today, Ohio school districts can belong to one of ten purchasing cooperatives, most of which are linked statewide and nationally to additional purchasing cooperatives. These in turn link together more than 20 states to try to leverage the buying power of thousands of governmental entities on common purchases.
Administrative services that can be accessed by entities across Ohio include grant administration, joint purchasing, human resources, staff contract negotiation, business services (such as payroll, accounts payable, budgeting), benefits management, state or federal grant administration, insurance (general liability or worker's compensation), printing services, audit RFP and contract, food service RFP and contract award, food service purchasing and other administration.
Insurance, General Liability Programs
Workers' Compensation Programs
The Department of Administrative Services is evaluating existing purchasing consortia and pooling to determine additional best practices and identify what efficiencies have been gained through economies of scale. The department may develop regional pools of employees to allow local governments and schools a more efficient delivery system of quality health benefits.
A study by the Mercer Group indicated potential savings from pooling health care insurance purchases among Ohio school districts and institutions of higher education could result in savings of up to $318 million, or about 6 percent in costs.
Staff Contract Negotiation Program
The Stark County Educational Service Center offers a general counsel to its 18 affiliated districts to reduce overall legal expenditures and to eliminate overlapping work and expenses among districts. The program has resulted in an average annual savings of $8,000 per participating school district.
Across the state, schools and local government are sharing top management staff. The practice not only results in immediate salary savings, but shared management staff learn the operations of multiple organization and the resulting efficiencies and collaborative projects yield even greater savings.
Business Services are those commodity type, transactional processes that can often be more efficiently delivered through collaborative arrangements. The increased economy of scale also allows for automation and the development of online access or software to further drive down transactional costs and increase the ease of use for staff and the public.
Printing Services Programs
Grant Administration Programs
Business process re-engineering is a common strategy for rethinking and redesigning routine business functions with the goal of achieving improvements in cost, quality, service or speed of a business function. Common techniques include LEAN/Six Sigma and Kaizen.
Business process re-engineering typically requires assessment and management by a crossfunctional team of leaders with intimate knowledge of the business and process-improvement strategies. Information technology often plays a critical role in both assessment and processimprovement stages of business process re-engineering effort.
The City of Toledo's Continuous Improvement Officer is charged in evaluating a wide variety of fiscal, personnel, and operational processes, policies, and procedures to find ways to improve operational revenue and cost savings. Duties include performance audits, purchasing audits, training, supplier integration into the City ERP system, benchmarking with municipalities of similar size.
The LeanOhio Program Office supports efforts to overhaul core business processes in Ohio state government. Working directly with leaders of State agencies, the LeanOhio Office brings specialized expertise relating to Lean, Kaizen, and Six Sigma. They can lend their expertise to helping local government and education leaders understand more about these processes.