Roundtable: Purchasing Power – Zena Dhanak
In the second in our series, Steve Wright quizzes five experts on the key issues, pitfalls and best practice in university procurement
Zena Dhanak is Director at General Technology Ltd.
Q. What exactly constitutes effective procurement? Is it simply about getting the best price-to-quality ratio in each sector of university life or is there much more to it?
Many universities have a standard approach when it comes to procuring software or technology systems, which usually involves a tender process. This enables a specific department – for example, the payroll team – to set out a list of requirements that the desired product should address. However, this process becomes complicated when a university needs to use a specialist, cross-functional software product – such as our own VT2000, which manages multiple functions such as payroll, HR, curriculum scheduling, finance and compliance processes.
In this instance, it is not sufficient for the tender process to be led solely by one department because this will only reflect the needs of that department, instead of having a broader view of needs across the university.
This approach can lead to departments operating in silos.
Q. What are the common pitfalls or misconceptions around effective procurement?
A common misconception we see in universities procuring software solutions is a ‘one-size-fits all’ approach. For example, if a university payroll department is seeking a software solution to improve how they pay their hourly staff, they may enter the procurement process without assessing the wider needs of the organisation. This results in universities buying software that doesn’t integrate with other functions.
This, in turn, can lead to universities trying to adapt their technology systems to try to do a job for which the product is not designed – for example, trying to adapt a payroll system so that it also performs employee contractual compliance checks. Not only is this not cost-effective, it results in flawed processes. After all, you would not want to run the risk of paying an employee to find out that the terms of their employment are not compliant or using a budget tracking system after the payroll has run!
Q. How much of the procurement process can be carried out in-house, and how much benefits from specialist external oversight?
When it comes to procuring specialist software, using external oversight alone is not always the most effective approach. This is because external experts may not have sight of the nuanced processes within an organisation – and, ultimately, they won’t be the end-users of the product. We believe that the best approach to effective software procurement is that of co-creation, which involves the end-user, so that their specific challenges are reflected in the procurement process. In our experience, if the end-users are involved in the process, the university ends up procuring a better solution for their needs.
Q. Should universities be looking to source goods and services with small and medium-sized enterprises (SMEs) wherever feasible?
Universities often prefer to source their enterprise systems from large software companies, despite the high costs. These large companies tend to outsource the software development to offshore teams, resulting in disproportionately high costs to maintain and alter software. Working with SMEs, conversely, UK universities will benefit not only from lower costs, but from knowing that the company building their solution understands UK legislation and processes with which the software must comply.
It’s important to remember that true innovation in technology starts in SMEs. It is not uncommon to see big technology giants acquiring smaller enterprises who are producing one-of-a-kind, smart solutions. This is because SMEs are often able to work quickly and nimbly to develop products that are adaptable and resilient to change – no mean feat, in an ever-evolving sector.
Q. Does it make sense in certain cases for universities to approach procurement as a group rather than individually?
In the case of procuring specialist software, it makes most sense for a university to approach this at an individual level rather than through a buyers’ consortium. Every university will have a unique way of working and different needs to each other, which should be reflected in the procurement process.
Q. With all these variables and factors to weigh up, it’s clear that universities need a competent, well-trained procurement team. Do you think the expertise is there, in most UK HEIs?
When it comes to software procurement, there is still room for improvement to make this process as effective as possible. Often, the procurement of software needs to involve a range of stakeholders from within the organisation: the procurement team alone will not have all the insights required to purchase an effective solution, and we often see questions on a tender application that aren’t appropriate for the solution they are seeking. This generic and disconnected approach results in the procurement team having a falsely simplistic view of the problem they are trying to solve – when in reality, the challenge is more nuanced and requires a more tailored solution.
To find out more about General Technology visit: gentec.co.uk