Procurement in Universities – challenges and opportunities

I facilitated a workshop recently for the London Universities Purchasing Consortium, (LUPC), during which their senior team and four of their Board (CPOs from member academic Institutions) came together to consider future strategy. Our picture is Andy Davies of LUPC at their recent conference, by the way.

Collaborative procurement bodies aren’t always loved by their customers, so it was good to see just how engaged and positive those four members were on the day as we looked at how LUPC could develop in the future.

It’s a fascinating and challenging time for the Higher Education sector. With students having to fund more of the costs themselves, directly or via student loans, more  competition from various sources, including new technology-driven alternatives to University education, there is plenty to think about for the traditional Unis and colleges.

So procurement has a key role to play, both in driving efficiency and in helping their organisations develop some competitive advantage in this changing marketplace. And for bodies like LUPC, it is vital to understand the balance between those areas where collaboration makes perfect sense, and those where their members might want to compete.

We’ve also got the target defined in the Diamond Review recently, suggesting Universities should put 30% of their third party spend through collaborative deals. But of course each individual organisation has to focus on their own objectives, so the 30% will only happen if it makes sense for each institution.

Having said that, it seemed from the workshop that there is plenty of further opportunity for collaboration. But that needs LUPC and procurement people in their member organisations to have influence over the other key budget holders within the member organisations. We seem to come back to this so often in procurement – how do we get the Estates / IT / HR people on board with our ideas? Not to mention academics, professors and so on, who may feel even less inclined to follow what they see as tedious procurement process!

Yet with greater pressure on costs, procurement is showing it can help in this sector. And when it comes to how Universities might differentiate themselves, we had interesting debate around issues like how procurement can support local economies better, a feature of some institution's “market positioning” now. There’s also the growing expectation of students in terms of better living facilities, the latest IT and so on. (Not like in my day...  we lived in a cardboard box on the rubbish dump next to the University open sewer*).

All of this means procurement has to be agile, close to the internal stakeholder, and to have a good understanding of the wider organisational goals.

By the end of the day, and despite the challenges, I was genuinely thinking that this sector is a great place for procurement people at the moment. Really interesting, challenging certainly, but with a real chance to make a difference and to feel that you’re doing something worthwhile. Onwards and upwards, procurement people!

(* thanks to  Monty Python and their "four Yorkshiremen " sketch...)

Voices (3)

  1. Ian Burdon:

    This is an interesting article in the context of the Diamond Review of 2011. That review recognised that, although substantial progress had been made and efficiency targets exceeded in the sector, nevertheless there was much else that could be done, particularly in procurement and e-procurement. Diamond then drew particular attention to the achievements in the sector in Scotland which he treated as an exemplar.

    Subsequently HEFCE picked up on this in their 2012 Procurement Strategy which stated that “The relevant sector bodies should work together to establish a model for England based on the Advanced Procurement for Universities and Colleges (APUC) in Scotland. English National Procurement (ENP) provides a good basis for developing this and ENP should, in consultation with the regional purchasing consortia, develop a rigorous action plan and time-line for how this objective could be achieved. This objective should be monitored and directed by the reconstituted SPG.”

    My point is that, although the potential challenges noted in the article are real, they have already successfully been addressed both in the sector and in the UK. The approach in Scotland was also, by the way, underpinned by the widespread adoption of a common e-procurement solution – PECOS from Elcom

    1. Phoenix:

      Interesting. Except, of course, that the Diamond Report neglected to mention that APUC in Scotland has had proper government funding (as much as £2m annually in recent years), has an effective mandate and serves only 19 universities and some colleges. Meanwhile the English purchasing consortia have survived without a penny of regular funding from government, share about the same level of resources between them, and yet serve 130 universities and a lot of other institutions. Neither does it tell you that a lot of the deals used by Scottish universities were, in fact, made in England. Oh, and representatives from APUC sat on the group that wrote the report…

  2. Nigel Clifford:

    Hi Peter

    A great topic. Good news is that there are bright spots where Universities are taking an imginative and commercially sound approach to combining technology and buying power to support their students. We have been working with the University of Arts London (UAL) and they use their buying power to create great deals on the standard and specialist materials needed by their students – which they then make available to students through their campus shops.

    This is done via Procserve – which avoids ‘tedious procurement process’ by being a simple online tool for anyone to use! Given this success we are also rolling out a specific service for schools and academies which are arguably in greater need than larger university bodies given the absence of specialist / dedicated buyers and the scandals reported on by Panorama (www.buy4my.com)

    So, do not despair – there is hope!

    best wishes

    Nigel

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