Total Contract Value compared to Fiscal Year Budget Impact
We are partnering with Finance to refine Benefit reporting data.
TOTAL CONTRACT VALUE
Today, Benefits are broadly defined as the total value of the various ways procurement generates revenue while reducing the costs of goods and services. Current Benefit reporting is done through the lens of Total Contract Value, which takes into account a broad range of activities like Revenue Generation, Cost Reduction, Cost Avoidance, Incentives, and more. We will continue to report on the Total Contract Value as it demonstrates Procurement's overall value to the university. Additionally, we have created a new way to consider the value of Benefits: Fiscal Year Budget Impact.
FISCAL YEAR BUDGET IMPACT
Total Contract Value can’t be directly used in budget planning. A Total Contract Value of $5M does not equate to five million dollars in the UC coffers. By refining Total Contract Value, we determine how much impact it has on the budget on a year-over-year basis.
That refined value, Fiscal Year Budget Impact, can be incorporated into budget planning. To accomplish this refinement, Systemwide Procurement implemented a set of rules and criteria, based on industry best practices, to reveal those Benefits that have a direct impact on budgeting activities. These Benefits have a credible and verifiable fiscal impact that Finance teams can use to facilitate budget planning.
There is no action needed from the campuses!
REPORTING THE REFINED DATA
Systemwide Procurement will determine FYBI without changing our Benefit definitions or how you report benefits in Benefit Bank. TCV and FYBI will be reported in the PLC Dashboard and provided to our partners in Finance.
EMPOWERING PROCUREMENT
In addition to providing invaluable insight to finance, this new data set will empower UC Procurement to make more nuanced purchasing decisions. FYBI will provide a penetrating look at the full impact of UC agreements and the value of our relationships with suppliers. FYBI will also highlight the importance of engaging with UC suppliers after agreement execution.