Developing collaboration Down Under

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Universities in Australia are taking giant leaps to better collaboration in the procurement of goods and services, a meeting of the Australian Universities Procurement Network was told, which I attended this week in Sydney as a guest of AUPN.

Roughly half of the sector has signed up to an exciting collaborative sourcing programme run jointly with a major consulting firm, while many more are developing a best practice sharing model under the AUPN banner, including a procurement capability assessment programme quite similar to our own in the UK.  I’ll write more on the best practice endeavour in a later blog.

Australia’s University Procurement Hub went live on 4 April this year.  Seventeen of Australia’s 39 institutions, supported by their partner Accenture, who were selected following a rigorous procurement process, are aiming to save around AUS$300m NPV (£172m) over an ambitious five-year programme (see their striking promo video here).

As Executive Board Chair and director of procurement at the University of Sydney Richard Allen set out the programme, it was obvious that the Australians certainly mean business. They plan to attack an addressable spend of AUS$1.2billion in four waves of collaborative procurement exercises across no fewer than 60 spend categories.

The first wave, Allen believes, will be the easiest to master as they seek to optimise the operating effectiveness of the Hub, ready to tackle the trickier categories later on. These initial categories will sound familiar to LUPC Members: IT, office supplies, furniture, travel and accommodation and laboratory consumables.

The programme has three principal objectives:

  • to achieve savings by aggregating the buying power of its members;
  • to achieve end-to-end effectiveness through innovation and the use of technology; and
  • to uplift organisational procurement capability through process improvement.

Governance is important to the programme.  An Executive Board (EB), made up of finance directors and CPOs in equal measure, oversees the project, while a Program Committee (the “engine of the Hub”, according to Allen) consists of representatives of 8 or 9 universities nominated by the EB.  This group, in turn, co-ordinates five Category Councils, involving 50 participants drawn from all seventeen participating institutions. Their task is to plan sourcing and contracting milestones, provide legal support and work in tandem with the Accenture team.  A single point of contact (SPOC) ensures that each university’s requirements are met throughout the programme.

It doesn’t look easy, though, as they will need to be equal to some hefty challenges if they’re to succeed.  Clearly the deal with Accenture is a complex one.  The good news is that Accenture’s minimum participation level, its critical mass, has been achieved.  This means the project is viable as a commercial proposition.  I understand that the project aims to achieve purchase cost savings of between 8 and 12%, with additional commercial incentives available to Accenture if they perform beyond that.

More universities are considering signing up, but there is a sizeable investment to be considered first.  Between them the seventeen will part with in excess of AUS$20m (£12m) in fees spread over the five years and front-end loaded (incrementally reduceable if sufficient further institutions join).  For that, they will receive all the technology (proper spend analysis, procure-to-pay systems and so on) and the services of a 15 FTE-strong highly skilled and motivated Accenture team.  Even with systems included, this still works out at a weighty daily rate for our sector and especially for such a big chunk of work.  Of course, it’ll look small if the savings get delivered, but I do hope they’ll be good for it.

And, of course, not every institution is going to be able to enjoy the benefits of every deal that’s done, as presumably some will be locked into existing contracts, for a while at least. For the first wave of (less contentious) categories, there’s just about complete participation from every institution – and that’s good news.  But in the later waves, fewer appear quite as interested.  Indeed, for the management consultancy category, hardly anyone has shown a strong interest in participating, but perhaps that’s not such a surprise given the nature of the relationships involved.

I also wonder about the wisdom of a model where the partner is incentivised purely by savings at a time when we are seeking to extol the virtues of good procurement as a value-adding discipline.  It might be a challenge building in safeguards to ensure that targeted savings aren’t delivered at the expense of quality.

But you can’t fault the collective ambition or the steely Aussie resolve on show here.  The project clearly has momentum and the CPOs I spoke to whose institutions have signed up are dedicated to the project and to its success.  In my next blog I’ll describe how AUPN plans to complement this activity with a different kind of collaboration, one about raising standards of professionalism and providing support for one another, for the greater good.

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Five Important Reasons to attend the LUPC Conference

collaborate_webOur hugely popular annual conference is this year scheduled for Wednesday, 15 June at Mary Ward House in Bloomsbury and, once again, it’s completely free for our Members to attend.

It’ll also be the first time we’ve staged the conference in close collaboration with our colleagues at Southern Universities Purchasing Consortium.  But why would you and your team bother to attend Collaboration in Action, when you’re so busy in the office?

Well, here are five (we think) pretty good reasons for coming along:

  1. Network with colleagues who are interested in the same things as you.  We’re running special category-specific workshops at conference so you can hear the latest supply chain developments in the Estates, ICT, Professional Service and STEMed categories.  They’re essential if you want to stay informed and get the best deals for your institution.
  1. New to framework agreements?  Find out how to get the best out of them for your institution.  Many people don’t realise that with the application of a few tips, Members can improve on the already advantageous terms offered through our supply agreements.  Roll-up at one of our workshops to find out how.
  1. Hear how Brexit could affect procurement for your institution.  Would it mean the end of EU procurement rules?  Hear the experts debate how the vote may – or may not – mean a fundamental change in the regulatory landscape for procurement in our sector.  Remember, the referendum will be just over a week away by then!
  1. Learn what you need to do to comply with the Modern Slavery Act 2015 and hear what a difference campaigns like Electronics Watch can make with your support to tackle labour rights violations in your supply chain.
  1. Meet with over 50 suppliers that have beaten off intense competition and passed rigorous selection processes to offer goods and services to our Members at advantageous terms.  Try doing that in a single day without coming to an event like this, laid on especially for you, our Members!

Don’t delay!  Reserve those free Member places for you and your team (as many as you like) by registering here.

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Ensemble Purchasing launches and announces fourth member

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Ensemble Purchasing’s first procurement professional Kat Humphries MCIPS (2nd right) is flanked by finance directors (L to R): Barry Douglas (Trinity Laban Conservatoire of Music and Dance), Ensemble Purchasing’s Chair Judith Barber (Royal Academy of Music) and Marcus McDonald (Royal College of Music)

Last night London’s new shared procurement service, Ensemble Purchasing, was formally launched at a reception hosted by the Royal College of Music (RCM).

Honoured guests were invited from participating institutions RCM, Royal Academy of Music and Trinity Laban Conservatoire of Music and Dance, from the Board and senior staff of LUPC, from legal advisers to the project Veale Wasbrough Vizards, tax and financial advisers Knox Cropper and close friends and colleagues.

The project is the brainchild of retired London School of Economics Director of Finance and former LUPC Board member Mr Andrew Farrell, who was also in attendance.

The highlight of the evening was the announcement of the election of Ms Judith Barber, Finance Director of the Royal Academy of Music as Ensemble Purchasing’s first Chair and the admission of the cost sharing group’s fourth member, the Royal College of Art.

Ensemble Purchasing is now looking to appoint a second procurement professional to work alongside Ms Kat Humphries, already enjoying her role at the company.  Kat’s first contract award at Ensemble Purchasing was for RCM’s new €1m organ for the Amaryllis Fleming Concert Hall at the College, which will be built in the autumn of next year.

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CIPS Ethical Procurement eLearning becomes essential

At the weekend, I undertook CIPS’s eLearning course on ethical procurement and supply.  It gives a sound, basic grounding in just a couple of hours and, because it has a fairly tough test at the end of it, you get a certificate.

This is a fee-earner for CIPS in that continued certification requires the test to be re-taken each year.  I’m hoping this will mean that CIPS will update the course materials from time-to-time as effective practice in tackling modern slavery and labour rights violations develops.

There are two compulsory modules, each with a case study and a 10-question assessment, followed by a mandatory 30-question test.  The first deals with the eradication of unethical behaviour to the human race, which includes an excellent introduction to labour standards and human rights.  The second deals with personal conscience, compliance and influence.  There’s also an optional module, which is in fact a very useful collection of CIPS knowledge papers on a range of ethical procurement issues.

I didn’t find the test easy, even though you might have expected some of the material to be fairly intuitive.  But the best thing is that the course is free to CIPS members until October 2016, while non-members need to pay a fee, currently £38 plus VAT.

I’d say that as ethical matters are climbing the public procurement agenda right now, especially following the introduction of the Modern Slavery Act 2015, this sort of training is going to become essential for public, private and third-sector buyers alike.

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Science Meets Art: Two South Kensington Exhibitions

On Friday, I made time to visit two exhibitions that I’d been wanting to see for ages. Firstly, LUPC Member the Science Museum has been showcasing the Russian space programme since Sputnik I launched the space age in October 1957.  This one closes on 13 March, so you will have to be quick if you’re not to miss it.

The other is next door at the Natural History Museum, also an LUPC Member, where a stunning series of large images is on display of the Earth, Moon, planets and other celestial bodies in the solar system, accompanied by haunting, atmospheric music by Brian Eno.

But what unifies both Cosmonauts and Otherworlds is the way they successfully fuse science with art.  I expected the former to have on display models, schematics, photographs and artefacts, but I didn’t expect a sociological history, one that described the Soviet/Russian space effort as a cultural event as well as a scientific one.  Of course, we knew about the propaganda war fought by America and the Soviet Union that was the Space Race, two ideologies wrestling for supremacy, but somehow I didn’t expect an exhibition at the Science Museum to feature poster art, sculpture, even a tea set commemorating Gagarin’s first flight.  This is exhibition-making at its best.

Continuing the theme, Michael Benson has assembled a photography show with a big difference in that none of the images has been captured by a human photographer.  The Natural History Museum puts these shows on just as well as the great galleries, experience no doubt gained from the Wildlife Photographer of the Year.  But herethe artists are robotic – satellites, space probes and planetary rovers.  And yet Benson believes the images deserve their place in the history of photography as an art form.   You can see what he means – a particular Martian dunescape stood out for me, encrusted with frozen CO2 – ‘dry ice’, and the studies of Saturn’s rings are breath-taking.  Well worth a visit.

Cosmonauts: Birth of the Space Age is on at the Science Museum in London until 13 March, while Otherworlds: Visions of our Solar System runs at the Natural History Museum until 15 May 2016.  Admission fees apply.

 

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Navigating the Future in the Rainbow Nation

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I am delighted, honoured and excited to have taken part this week in the annual conference for members of PURCO SA, our sister purchasing consortium for universities in southern Africa.  This year’s event, which included a supplier exhibition, was held in Durban in the beautiful KwaZulu Natal province of South Africa.

Universities in the Rainbow Nation in particular are facing what people I met described as “a national crisis”.  Right now, students across the country are protesting on streets and campuses under the banner #FeesMustFall.  They’re fighting what they see as a system that continues to exclude talented youth among South Africa’s most disadvantaged and, in some cases, against outsourcing of support services.  The country’s ruling African National Congress (ANC), led by President Jacob Zuma, responded last week by declaring that student fees would be frozen this year, but higher education minister Blade Nzimande has also admitted there is no money to fund the ANC’s ultimate aim of free tertiary education.  University managers, already facing a growing cash shortfall, are concerned about losing some autonomy if further government funding comes with conditions attached.

20151029_164411To their great credit, none of this got in the way of our colleagues putting on a terrific conference in a splendid hotel setting on Durban’s vibrant ocean front (pictured).  Its theme, Navigating the Future, seemed sharply prescient given the circumstances, and in presentations and debates on the floor, speakers and delegates showed a steely determination to face the challenges ahead, knowing that professional procurement is going to have a crucial part to play.

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Purco SA CEO Selvan Govender

An exciting and elaborate “launch” to the conference was followed by a welcome from my opposite number, PURCO SA’s energetic CEO Selvan Govender and Mangosuthu University’s Professor Stephen Khehla Ndlovu, who has a very clear view of the strategic positioning of procurement in his own institution in Durban.  It was then highly appropriate to start proceedings with motivational speaker Dr Steve Harris, whose message was that the difference between success and failure was often marginal, measurable in inches.  He argued that the inches we need for success are available to us everywhere, can be gained with passion and lost when we lose composure.

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I took this picture on my free day at the stunning Hluhluwe-Imfolozi Game Reserve near Durban

Suleman Jhavary is Partner at PricewaterhouseCoopers in Durban.  He outlined the severity of the cash shortfall facing universities and set out the leading options available to secure cost reductions.  He called upon delegates to focus on demand management techniques in addition to effective sourcing.

It was good to see our professional body CIPS out in force at the conference.  CIPS Africa had a stand in the exhibition and its Managing Director Andre Coetzee led a breakout session on Day 1.  Coetzee said that it was time for Africa to drive its own economy, rather than be driven by the West or by China, as it had in the past.  Of 2.5m procurement professionals worldwide, some 650,000 are located in sub-Saharan Africa, but only a third of CEOs believed that they are ready for the strategic challenges ahead.  Referring to the student demonstrations, he called for an alternative campaign to demand that “#CorruptionMustFall” in Africa, and underlined CIPS’ controversial policy that procurement professional be licensed to practice.

Back in the main hall, Lillian Karuri-Magero, Chief of Staff at Barclays in Johannesburg and Chairperson of CIPS Gauteng, highlighted that, in a survey, only 56% of procurement functions measured stakeholder satisfaction.  Neglecting to do so was akin to reviewing a restaurant “based solely on the food and ignoring the service”.

On Day 2, professor of astronomy Dr David Block described the “Power of Visions” and how successful people had a clarity of vision about where they were, used their imagination to envision where they wanted to be and combining both to help make achieving their goal a reality.  His style was eccentric, to say the least, but nonetheless compelling and entertaining.

Later that morning, I delivered my talk on the ethics of supply chains in the electronics industry, with a particular focus on alleged labour rights violations in ‘low-cost’ countries.  I gleefully began by greeting my audience successfully in the Zulu language, and then managed to botch my pronunciation of the equivalent phrase in Afrikaans and in so doing (I was told, after the gasps has subsided) threatened everyone with violence!  Not quite the good will I’d hoped to convey!  But I was delighted with the positive reaction of delegates to my main message and about the work of Electronics Watch.

Charleen Duncan leads the Centre for Entrepreneurship and Innovation at the University of the Western Cape.  She advocates the Entrepreneurial University, arguing that the enterprise mindset can be adopted by all institutions, even schools of arts and humanities.  You might say that these behaviours might hold the very key to their survival, or it might just be the very essence of the philosophy that the student protestors find anathema and that has caused further disruption at Wits University.

20151029_210832A splendid gala dinner on the final evening, attended by Purco SA Chairman Mr Chris Liebenburg of the University of the Free State, saw much prize-giving and entertainment (pictured) and a wonderful time was had by all.  In the morning, on Day 3, futurist and scenario planner Guy Lundy painted his picture of the trends that are shaping the world of the future.  And it is an uncertain one.

This was a conference with a crisp, clear purpose, a mission that was fully subscribed to by both speakers and delegates.  And its timing was perfect.  Higher education in South Africa is calling to her procurement professionals and they are responding.  They know the scale of their task – and their warmth and generosity of spirit will be matched only by their commitment and enthusiasm for it.

My congratulations go to the Purco SA Organising Committee on producing a conference of the very highest quality and my sincere thanks for inviting me to take part.

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COUP2015: One of the great ones

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Hasmita Umaria-Gomes (Birkbeck), Sue Weston (Jisc), David Davidson (Interuniversity Services Inc of Canada) and Minesh Shah (Royal Veterinary College)

After the refreshing libero conference on Liverpool’s stunning waterfront back in ‘13, it was comforting, almost nostalgic, to be back on campus: a COUP that actually felt like a COUP.   The University of Kent boasts a majestic setting overlooking the city of Canterbury.  Many of us had doubts about this location’s suitability for a national conference, but we were reckoning without the fast train from St Pancras that whisked us there inside an hour.

Like many universities of its kind, Kent is undergoing significant expansion, with a new building for the performing arts and an ambitious student accommodation programme.  The accommodation, incidentally, is stupendous and the build quality is excellent.  My guess is I was the first person to sleep in my room!

I was informed, however, that Kent’s newest scheme is late.  Perhaps it is one of the 17 over-running residential projects that Tony Forbat was talking about in Understanding Construction Procurement.  Forbat’s principal theory was that unrealistic timescales are being set by management in the sector, leading some first-year students to spend late September in hotels.

The other worry I had was that Jay Rayner’s opening address wouldn’t be relevant.  I was even wider of the mark with that one.  Naturally, as you’d expect from the Observer restaurant critic his talk was focussed on food, but his revelation that everything we thought we knew about global food markets is wrong was so very right for this conference, being both informative and hugely entertaining.

Rayner’s oration marked one of only two or three occasions when the whole conference gathered, social events aside.  I wondered whether this might be a missed opportunity.  Many people have strong views about university procurement – wouldn’t this be an ideal way of sharing and debating them?  Simon Wilson’s discourse on developments in the Crown Commercial Service came close to this, but shouldn’t a conference be a bringing together of views and opinions, mimicking the universities we serve?

That said, the conference programme, was, in my view, exemplary, in fact the best COUP line-up I’ve seen.  It was well thought out, varied and illuminating.  John Glen’s electrifying lecture How the Global Economy affects HE Procurement made us view our daily meanderings through a macro-economic lens – and made me envious of economics students enrolling at Cranfield this month.

Henry Swan, CPO at Kent County Council, put a new slant on the debate as to whether social value conflicts with value for money.  He reckoned we could count student placements or research opportunities as social value – anything offered by a supplier that brings value to the university, in fact.  The trick though, is knowing how to evaluate them in a tender process.

And did anyone know that, as commercial operators turning over in excess of £36m, a new act might well require universities to publish a statement about modern slavery in their supply chains?  Cindy Berman of the Ethical Trade Initiative does, and now so do those who were assembled for her talk.

The sports hall served particularly well for the exhibition, and our exhibitors threw themselves into it with enthusiasm, making for a lively atmosphere.

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Mitch Dalgleish (University of Westminster) succeeded in his quest to engage with every single delegate at the conference!

The brewery tour at Shepherd Neame was excellent and put me in just the right mood for the delights to come.  Sadly I wasn’t able to stay for the gala dinner.  It would have been a tall order to upstage the extravaganza that was Liverpool’s St George’s Hall last time around, but those that were there told me they’d enjoyed it immensely.

I do wonder if the COUP format, generally, is due for an overhaul.  Three days is a lot of time out of the office in these busy times.  But I’d say COUP2015 was a great one, and Susan Wright and her team may feel justly proud as they pass on the torch to our Welsh colleagues for 2017.  The super programme and a fantastic venue were the highlights for me.  Of course, it’s the people that really make it.  It would take weeks to renew all those contacts separately, with both buyers and suppliers alike, and that’s where the value of COUP really lies.

If you couldn’t be there, you’ll find slides from most of the presentations here.

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