Category Management and Strategic Sourcing Update Number 2

Further opportunities worth $43.26 million are in progress, with $26 million expected to be completed by end of 2021. Together, these represent $59.22 million in benefits, or 54 percent of the $110 million target set at the beginning of Phase 2. The City has an additional pipeline of opportunities that are yet to be started, that is expected to yield benefits of $39.10 million, bringing the total to $98.32 million. Apart from the $15.96 million of confirmed benefits, all the remaining benefits are an estimate and will need a concerted partnership with various divisions to refine and achieve the expected benefits. It is to be noted that the total benefits pipeline of $98.32 million is lower than the aspirational target of $110 million set at the beginning of Phase 2. The decline in the estimated benefits is due to a variety of reasons, including, but not limited to: - Reduced scope of work to be included in strategic sourcing by Divisions - Insufficient time to execute strategic sourcing approach due to urgent service delivery priorities - Divisional hesitation to different approaches for complex and high-spend service delivery projects - Resource constraints in the Divisions involved in strategic sourcing projects as well as Purchasing and Materials Management. Achieving the aspirational benefits target requires collaboration and partnership between Purchasing and Materials Management and the divisions responsible for the delivery of programs. It is envisaged that through the category management governance model, appropriate support will be generated on key strategies to achieve City's long-term capability uplift and procurement transformation goals. Overall Purchasing and Materials Management Division is on track to be able to continue with Category Management and Strategic Sourcing without the support of Ernst and Young by the end of the contract, post-May 2022.