Universities exist in that grey area between the public and private sector. They manage their resources and make many of their decisions with a committee structure familiar to those working in local authorities, but are becoming increasingly corporate and commercial as they seek to reduce their reliance on public funding.
This presents real challenges to those involved with procurement. We must ensure the organisation complies with a range of statutory (mainly public sector) obligations, including EU procurement regulations, but must also deliver value for money for every penny spent on teaching, research and the other activities that support them.
Our procurement team has shifted its approach substantially in the past couple of years and now delivers its services to the organisation as part of this wider mission to deliver value for money. It used to operate as a compliance unit and I used to consider it one of those departments visited reluctantly just to keep me out of trouble! Now it acts as a critical friend, helping managers review how they use the commodities they purchase and deploy the resources they control.
I work closely with my procurement colleagues and consider them value for money partners. We work on a number of projects designed partly to achieve better prices for the university from suppliers, but far more importantly to ensure that we get more from the resources we consume. For example, when the university sought to reduce the cost of local bus contracts (who ferry our students around),
I worked closely with procurement to achieve this by redesigning routes, service level agreements, subsidy arrangements and performance management measures. The procurement team provided far more than ensuring compliance or simply managing a tender process.
Of course, some habits die hard. Universities are still required to capture and report on financial savings achieved from procurement activities, but this exercise is now undertaken with a knowing chuckle that acknowledges it misses the value-for-money point completely. Organisations such as mine will, in the future, require their procurement teams to worry less about buying commodities and more about how we use them.
How it works at Surrey
The procurement team is part of the finance department, managing the traditional procurement processes and compliance with regulations and working with other departments to improve use of scarce resources. The latter is the more important.
1. Procurement is part of a value-for-money committee with a mission to make things work at lower cost, with greater efficiency and to a higher quality.
2. The committee commissions internal reviews of systems, processes and the way we use resources.
3. The procurement team becomes closely involved with improving the way things get done and can link this to purchasing and supplier management.
4. Procurement colleagues understand better how others work and can engage with them more effectively.
5. Departments under pressure to reduce costs can also consult procurement colleagues more productively and the university as a whole can challenge its major areas of spend more effectively.
☛ James Newby is director of traded services and business support, University of Surrey.