Seventeen universities worked with Accenture to develop a flexible University Procurement Hub (UPH) that would deliver enduring value by adopting a laser-focus on cost-effectiveness. Through this approach, Australia’s universities would be able to invest more in research and education.
In 2014, the UPH began its first wave; aggregating sourcing for indirect categories including fleet and furniture. With collective purchasing power, the UPH was not only able to negotiate savings, but also establish better terms, such as yearly rebates. In wave two, the UPH challenged supplier dominance. With 80% of the sector’s wallet controlled by two suppliers, spend on laboratory gases was a prime target. To improve its position, the UPH invited four suppliers to tender and savings of 35% were achieved ($5.7m), compared to just 10% offered by the incumbents.
At wave three, the UPH represented the entire Australian university sector in some categories, including travel. Airline negotiations yielded significant value, far beyond anything individual institutions could achieve. In the fourth wave, the UPH emphasised its focus on supplier relationship management and market intelligence, rather than simply aggregated sourcing activities.
In total, the procurement hub has targeted spend across 16 categories – from security services to telecoms – delivering savings of $45m for the universities. Further opportunities are continuing to be identified.