Integrated Purchasing
What will this project deliver?
The project will deliver a single system that will be used across the University for purchasing of all goods and services. It will:
- Reduce administrative effort and the amount of time lost on paper-based approval and invoice forwarding to the Finance Office. This will not only free up people’s time, it will enable the timely payment of invoices and provide more flexibility to manage cash flow.
- Eliminate time spent reconciling local systems with those held in Support Services and vice versa, as, for example, the system will enable commitments to purchase as well as actual purchases to be recorded in one place.
- Improve value for money and enable the University to take advantage of new services such as e-procurement and electronic marketplaces.
- Provide timely management information (possibly through a wider financial reporting tool) to support both budget-setting and budget management.
- Facilitate compliance with legislation, which will reduce the University’s exposure to financial penalties.
Why are we doing this?
The University spends around £100m per annum purchasing goods and services. In 2002-3 some 173,000 separate purchasing transactions took place, 57% for less than £100 and 89% for less than £500. There were 192 different purchasing units across University departments.
The 2002-3 Purchasing Process Review identified much inefficiency in the underlying process, for example:
- There was no standard approach taken by the 192 purchasing units
- A sample of invoices showed that a significant number of invoices were paid more than a month later than the agreed payment date
- In the same sample, unapproved suppliers were used by a small number of purchases where a contracted supplier should have been used (this is known as ‘maverick spend’)
- There were around 12,000 active suppliers, significantly more than is used in other similar-sized higher education institutions.
The 2002-3 Processing Review made ten recommendations to improve the purchasing process at the University. While progress has been made towards delivering many of the recommendations a significant recommendation has yet to be completed. Recommendation 9 was that ‘the University should initiate a project to look in detail at the potential benefits of implementing an integrated purchasing system, compatible with e-procurement arrangements likely to be offered by an increasing number of suppliers’.
This project has now been prioritised by the University and a project team has been established to take forward preparing a statement of requirements, tendering for a supplier of such a system, and finally implementation of the system across the University.
For progress reports relating to this project please see the news page and if you have any queries please contact us.