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Procure and prosper

Outsourcing key services can allow universities to concentrate on what they do best - teaching. Simon Fry reports

Posted by Julian Owen | October 26, 2017 | Finance, legal, HR

The word ‘university’ is derived from a Latin term meaning ‘community of teachers and scholars’. Suffice to say, a student’s university experience depends not just on teaching excellence, but on diverse elements such as the food they eat on campus and the comfort, cleanliness and security of their accommodation; today’s university community extending to cleaners, caterers and beyond. Universities can turn to outside firms to deliver such services, taking advantage of their expertise in their field and, hopefully, saving the university time and money. Naturally, the university must know the firm will operate in keeping with their ethos In essence, outsourcing allows universities to concentrate on what they do best – teach. 

There are several reasons they may choose to outsource provision of goods and services, with a reduction in cost without a lowering of quality often the most compelling. Many universities use framework agreements, but when it comes to high-volume, low-value items (food and drink, catering products, stationery, cleaning and chemical materials) such agreements usually represent less than 50% of the products a university buys regularly. This would mean the university having to rely on the supplier’s goodwill to price additional items competitively, putting them in a weaker position, rather than benefiting from the knowledge of a professional category buyer with market intelligence. 

External suppliers can give senior management teams greater visibility of and control over their purchasing spend across all their sites. Most in-house teams work on historical data which has to be collated manually, while outsourcing comes with the ability to track budgets instantly.

Pelican Procurement Services is an expert in the procurement market, with over two decades of experience in helping organisations in a range of sectors manage their complete purchasing, supply chain, tendering, price negotiations, invoice management and more.

Leeds Beckett University had several reasons for outsourcing its food procurement to Pelican, according to its procurement manager Lesley Carden: “The procurement team is a centralised service and lacks the specific in-house expertise when writing food product specifications or the resources to constantly benchmark prices. We do not have any dedicated resources to monitor and manage food contracts ourselves, which is so important when trying to maintain cost efficiency. Food prices fluctuate regularly and due to the volume of product lines and suppliers we work with, Pelican are much better placed to manage our food procurement and have the resources, expertise and systems in place.”  

Other universities have identified significant cost savings as a result of using Pelican. As part of the tendering process, starting in early 2015, Keble College (one of the largest of the constituent colleges of the University of Oxford) domestic bursar Nick French broke down his organisation into manageable lots to assess the needs of areas such as fruit and vegetables, fresh butchery, dairy, fish, laundry and non-foods. “We chose Pelican as they were not only able to provide a cost saving of around 16% but could also meet our strict SLAs regarding delivery timeframes and overall quality.” 

Keeping things local was also vital, as Nick had to consider the demands of his 600 students requiring the college to act as ethically as possible. “Many companies will say you can save money, however this will be achieved by enlisting a national supplier miles away. Price is not the only remit – it’s important to always consider the bigger picture.” 

At Queen Mary University London, Pelican was chosen because, among other reasons, it offered the financial and back-office system providing the transparency the university sought. After a tendering process covering all catering categories, including meat, seafood, disposables and confectionary, cost savings of over £117,000 on the exact items the University was buying already were realised.  

Universities must protect their reputation – and brand – at all times, and falling foul of the law could prove costly beyond any financial penalty. As they receive public money they must comply with EU Procurement Law (Public Contract Regulations) but many will lack the dedicated team or in-house expertise to manage this complex legislation process. Being accountable to the UK Courts and the European Commission, they must demonstrate they have obtained the best price for goods and services at all times.

Universities considering embarking upon the outsourcing of services should be sure of their own organisation’s needs and what they seek to achieve from the relationship when searching for suppliers. “Think of your own reputation!” said Kelly Fry, Pelican’s senior tender & procurement manager. The vetting process should be rigorous and comprehensive. Among other considerations, universities are recommended to obtain case studies, talk directly with other clients and, if possible, meet their team at the company head office. 

Kelly also stresses the need for impartiality in outsourcing and of finding a company not aligned with any suppliers (i.e. not working as a broker). “It is important a procurement partner is totally transparent and provides recommendations based on sound purchasing principles and practices which are fully auditable. Impartial advice allows you, the client, to make informed decisions based on these recommendations.” 

Chartwells, part of Compass Group, is an education division focusing on university partnerships across the UK and globally. With over 25 UK university partners and a further 320+ worldwide, Chartwells deliver a wide range of services supporting their partners across catering, purchasing and facilities management. With a strong focus on catering, Chartwells have many successful partnerships and work hard to ensure each is built upon what is important to that individual institution whilst also being able to leverage the scale and insights of being a part of the world’s largest food service business. 

For many universities, innovation and the development of a great student experience is key to the partnership. For others it is access to employment opportunities, great research and insights from operations in other countries, given the increasingly international nature of higher education.

“In practice, it is the students who benefit and their improved experience supports the university to achieve its own vision,” said Chris Franc, Compass Group’s university partnerships director. Simple touches such as USB charging ports within their restaurants through to a new pizza delivery app for students living in accommodation on campus are recent innovations but will soon be standard practice. Additionally, universities benefit from employment opportunities for their students through the wider Compass business, including events management students supporting the Brit Awards or sports development students engaging with Twickenham and The Oval.

Sodexo’s Student Living by Sodexo offer provides catering, hospitality, facilities management and accommodation services. By completing asset surveys and lifecycle plans for the university buildings they maintain, they save universities money over time. They also work with universities seeking more ‘added-value’ services. 

Establishing unity of purpose is vital for universities seeking suppliers, according to Jo Cash, European marketing director for schools and universities at Sodexo. “For a partnership between a supplier like Sodexo and a university to be successful, it is really important to share the same goals, to be aligned in strategy and build a strong working relationship built on trust and open communication.”  

By trusting firms specialising in fields such as catering, accommodation and security to deliver the relevant services onsite, universities are placing their brand in the hands of another company. Providing the university has done its homework, these relationships should benefit the university and its students and staff alike. Indeed, where outside companies can prevent universities from inadvertently breaking the law, their input can be vital.  

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