Most Bursars or school Business Managers realise that they need a greater focus on getting better value for the school’s Indirect (non-core) spend but don’t have the resources to concentrate on them. On numerous feasibility studies for independent schools we’ve found that there are multiple suppliers providing the same goods or services to a school, or suppliers providing to different departments without each knowing about the other’s requirements, or hundreds of low value orders where the cost of administering the order is greater than the value of the good ordered and so on. All are missed opportunities for leverage and all drive up the school’s operating costs unnecessarily.
ProVantage will provide the resource for you and your staff enabling you to focus on your value-adding activities.
SHOULD YOU OUTSOURCE YOUR SCHOOLS PROCUREMENT?
Avoiding the costs of full-time qualified staff, ProVantage can act as an outsourced procurement function for your school, engaging as-and-when required to give dedicated commercial support and guidance in the tendering, negotiating and implementation processes to ensure that your money always delivers the best value possible.
Clearly that having this can bring some very tangible benefits such as an emphasis on the importance of procurement; empowered staff; greater control of spending; better supplier management; and a clear understanding of the value provided. It also allows you to consider procurement within a strategic context and focus on contract management and supplier performance.
We can provide Procurement resource for specific projects or to cover a temporary shortfall in resources. We can provide short term Procurement support to keep pace with demand fluctuations and we can provide training to staff with ongoing procurement responsibility.
DO YOU KNOW….?
- Do you know how much your school is spending externally – and with whom?
- Do you know how much is spent by category – vehicles, temporarily staff, buildings maintenance, utilities, IT etc?
- Do you know who your critical suppliers are – those that without supply you’d have an issue?
- Do you regularly tender or benchmark your suppliers for cost and service?
- Do you have the resources to hand to be able to really demonstrate ‘Best Value’ to parents, Trustees or Audit?
PROCUREMENT BENEFITS FOR SCHOOLS
- Your key staff freed up, to carry on with day to day running of the school
- Cash savings – seen on the bottom line
- Improved control, visibility and accountability
- Improving working capital
- Improving working processes and performance
- Improved spending and performance
FREQUENTLY ASKED QUESTIONS
What Are The Steps?
1. Initial discussion with your business manager or bursar and define the objectives to the review – including identifying key suppliers/relationships in your supply chain that may be particular to your school.
2. Data mining; identify what is being spent, where and by whom. This is key to getting a clearer picture of your purchases, suppliers, relationships and processes. On many occasions in the past this has identified numerous instances where schools have had the same suppliers delivering to different departments or departments buying the same ranges of goods from multiple suppliers. All missed opportunities for leverage!
3. Present findings & recommendations and agree strategy.
4. Working with the key stakeholders, (including budget holders and department heads) we’d implement the agreed actions. We can support and do as much or as little to facilitate the process as you want.
There are no costs to any of these steps; we only cover our costs from a small, agreed percentage of any savings that result from the work. Savings are agreed, signed off and received before any invoicing. There are no other costs, no upfront charges – and no savings, no fee.
Real Life Examples of Where Costs Are Incurred By Schools...
We worked on a spend analysis piece with a top-10 Independent school to see where we could identify areas for savings – direct and indirect.
Taking a full 12 months’ worth spend and filtering out salaries, rates etc;
• £18M supplier spend
• 1141 Live suppliers – all of whom had to be managed, negotiated & contracted with and invoiced to
• 1461 Orders placed – meaning almost 80% of those were one off Contracts
• 0.5% of the Orders placed accounted for nearly 30% of the total spend. Not an issue in itself but this meant that there was a very, very long ‘tail’ of suppliers and having them on the system costs the school money in resources and increases risk
• 10% of the Orders placed were for a value of £60 or less. According to the Chartered Institute of Procurement and Supply the average administrative cost of raising and paying for a single order is around £70. This means on around 300 occasions it actually cost more to administer the Order than it did for the goods themselves!
• ‘Common’ goods were found to be ordered by different departments with different suppliers in a number of areas such as stationery, telephony, travel and vehicles. A total of 68 different suppliers were identified as being available to reduce to 4 for the same items. Four points of ordering, four points of invoicing and 64 less suppliers to manage. The additional Orders placed with the winning 4 suppliers meant considerable leverage over price and quality for the school.
• Common suppliers were also identified – multiple orders with the same suppliers for different departments or budget holders resulted in lost leverage opportunities, the School signing up to different sets of T&Cs with the same suppliers and greatly increased administration time taken up as a result.
Working with you Bursar or Business Managers our free Spend Analysis will identify all those areas where costs can be reduced, then we’ll work with you and your key stakeholders to realise those savings and process improvements.
What Other Areas Can We Help In?
Often overlooked are the internal costs that schools carry in simply administering the day to day supply of the goods or services that you need to keep operating. Being in a competitive market the focus, naturally, is on ensuring the highest standards possible of the education and all the peripheral services for your pupils, but this can lead to those Indirect costs being seen as a necessary evil that go too often unchallenged.
Aside from benchmarking and (re)negotiating those spend areas like utilities, vehicles, telephony, grounds maintenance and so on, ProVantage will support your staff in embedding more efficient processes to ensure that any savings made are sustainable year on year. This can include CONTRACTS REVIEWS – We provide ongoing Contract Management, Supplier Relationship Management and reviews, all of which are key to keeping the resources costs to a minimum, and PROCUREMENT STRATAGIES – We can provide guidance on the Procurement Processes that best fit our your needs and can create the relevant Policies, Procedures & Guidelines for your staff to keep the savings embedded. We can help roll out those Procedures with your budget holders and give them the training and guidance to get them implemented effectively.
SEE HOW PROVANTAGE CAN SAVE YOU MONEY