Higher education buying departments expect to save hundreds of millions of rands through PURCO SA Online, their new e-procurement and travel management platform. Purchasing Consortium Southern Africa (PURCO SA), the higher education procurement consortium, concluded an e-procurement Master Agreement with e-solutions provider mymarket.com in February. The system is scheduled to go live in June.
PURCO SA represents 42 member institutions including all South African and Namibian public universities, as well as FET colleges, private higher education providers and related institutions such as the SABS, CSIR, NRF and others. In 2013 PURCO SA helped its members save almost R100-million through collaborative contracts.
After evaluating more than 40 local and international e-procurement solutions, PURCO SA selected mymarket.com to power the new PURCO SA Online platform. mymarket.com is a fully integrated, customisable e-procurement and
travel management solution used by some 150 of SA’s top corporates. The solution facilitates more than 21 000 buying transactions daily, from more than 15 000 suppliers.
PURCO SA CEO Selvan Govender is confident the new platform will contribute immeasurably to leveraging the collective buying power of PURCO SA’s members to drive tangible cost reductions. As the platform gains momentum and more institutions adopt PURCO SA Online he also expects it to deliver significant process efficiencies, a reduction in off-contract (maverick) buying and improved financial compliance.
Dawood Tagari, MD at mymarket.com says in their experience buying organisations can achieve savings of 25% or more. Case studies suggest Tagari is being conservative. The University of Pennsylvania attributed millions of dollars in direct product savings to their e-procurement system, as well as significant administrative efficiencies.
Penn saw a 484% improvement in contract compliance, while average purchase order cycle time fell from 18 days to less than one for more than 92% of orders. An analytical research paper prepared for North Carolina University reported procurement process cost savings of 50% or more.
But it’s not just buyers who benefit. The platform is free to suppliers until they make a sale and Tagari notes that the small transaction fee is offset by the benefits. PURCO SA Online offers exceptional access to education buyers, and experience indicates that buyers typically halve their off-contract procurement and double their spend with contracted suppliers.
Statistics from the respected Aberdeen Group reflect that suppliers typically achieve a 67% increase in buyer visibility, 47% more orders, a 24% reduction in customer servicing costs and a 26% improvement in their order to cash cycles.
Govender will be pushing suppliers to sign up for PURCO SA Online, and plans to make adoption a prerequisite for all contracts the Consortium concludes for member institutions.
PURCO SA Board Chairman Chris Liebenberg, Senior Finance Director at the University of Free State, says institutions are very aware of the need to maximise the public funds with which they are entrusted. He says PURCO SA members are committed to achieving savings that can be directed to improve academic programmes and facilitate access to upskill the next generation of young South Africans.
PURCO SA Online provides tools that arm institutions with better control, governance and greater visibility into supplier relationships and purchasing practices. And by automating backend processes staff are freed up for more strategic, value-creating work.
While leading institutions already have systems that underpin process efficiencies, PURCO SA has identified many opportunities for improvement, not least savings through greater collaboration with peer institutions. For institutions with less developed systems PURCO SA Online promises to be a process, efficiency and savings godsend.