College saves big online

South Staffordshire College saves big on its IT budgets with online benchmarking application KnowledgeBus

South Staffordshire College has an annual turnover of £30m. Its IT team supports more than 20,000 students and 850 staff who are based over four campuses. This includes the college’s new state of the art Cannock campus, which opened in January 2014.

As a further education institution, South Staffordshire has ambitions to be ‘best in sector’ and strives to provide students and staff with the highest standards of learning environment possible. With budgets contracting in education, however, the college is increasingly under pressure to justify every investment it makes. When the college needed to kit out a new campus fit for the digital age, with the highest specification IT equipment and infrastructure, it had to find a way to ensure it achieved best value on each and every purchase.

Jamie Smith, Director for Strategy and Infrastructure, said: “South Staffordshire is a pioneering college and the pace of change is formidable. The Chief Executive wants us to be in the vanguard of development across all areas – the learner experience, the campus buildings and this also includes procurement.

“If you want to be this progressive when budgets are contracting you need to be innovative as there is pressure to deliver the best possible return on every pound.”

South Staffordshire adopted the IT Edition of KnowledgeBus, from Mercato Solutions, a CIPS accredited online application that automates benchmarking of purchases against daily trade guide price and stock levels on over 150,000 ‘live’ products from more than 2,500 manufacturers. Users simply input supplier product lists or conduct spot checks to see what margin their supplier is proposing. A range of spend analysis tools also help users identify, track and forecast market developments for more strategic procurement. 

The IT Edition of KnowledgeBus has enabled the team to save tens of thousands of pounds by better understanding historical reseller margins they were paying and negotiating better deals as a result. Jamie Smith, explained: “With the information KnowledgeBus IT provided, we have been able to negotiate supplier margins down from 30.9% to less than the best practice 3%. For the new Cannock Campus, this has translated into more or better IT for a better learning environment. 

“When we ran our historical data through this application we found we had been paying average margins of 30.9% – we now pay less than 3% and in some cases it is closer to cost plus 1.5%.

“For example, we recently required seven laptops, which would cost about £900 each from major suppliers. We bought them for £420 each and made a saving of almost £2,000 on that purchase alone.” 

Further to reducing margins, the college has been able to make additional savings on IT procurement by using KnowledgeBus management and spend analysis tools to forecast seasonal price trends and variations.

This foresight has seen the college adjust its purchasing behaviour to ensure it pays the lowest prices possible over the course of the year. Smith said: “We have fundamentally become more strategic. Powerful big data functionality allows us to view historical stock and pricing levels to spot and analyse trends. We have set alerts to provide early warnings on any fluctuations, which can be dramatic. These insights have led us to both delay and bring forward purchases.”