For years, SciQuest has prided itself on being the leading provider of procurement solutions for higher-education institutions. Although by using our solutions, each of the many schools with which we work with have seen increased efficiency and cost-savings, the University of California (UC) system is a shining example that stands out as a university transforming spending into cash flow.
The UC system comprises 10 campuses spanning a total of 500 miles from north to south. The second largest employer in California, with 234,000 students and 210,000 employees and faculty members, calling the system big is an understatement.
In July, the university announced that it had crushed its savings goal of $120 million in fiscal year 2013-14, bringing its total savings to $131 million. UC is already well-positioned to surpass its 2015 goal of $140 million.
Let’s take a look back to where it all began.
The UC system was faced with several major challenges that would have a significant impact on each respective campus. In addition to state budget cuts and sequestration, the cost of benefits was rising and philanthropy was suffering.
Responsible for managing the fiscal and business operations of the university, in 2012 the UC Office of the President (UCOP) initiated the Working Smarter initiative, intended to redirect $500M from administrative costs to the academic and research missions within 5 years. Although this effort crossed all administrative departments it was readily apparent that the system-wide Procurement program presented the greatest opportunity for major revenue generation.
Thus was born the P200 Challenge, which would annually contribute $200M (some 40 percent) of the Working Smarter initiative’s goal through the development and implementation of system-wide strategic procurement processes and state-of-the-art technology to optimize the value of funds expended on the acquisition of goods and services.
The Procurement Leadership Council (PLC), comprised of the System Chief Procurement Officer and the Campus Materiel Management Leaders, was formed as the shared governance structure that would design, develop and deliver the program initiatives.
To achieve this, the PLC looked to SciQuest’s Supplier Information Management, Spend Radar and eProcurement Consortium products as a solution to drive collaboration and change across the system. Previously, UC’s purchasing departments did not make competitively sourced contracts electronically available to end-users or track spending through their existing contracts.
SciQuest provided a comprehensive, easy-to-use purchasing system that enabled users to achieve deeper visibility into their spending, negotiate more strategic contracts and increase overall savings.
Using a new, robust procurement platform coupled with the ability to source contracts through the expanded buying power of multiple institutions, the schools increased communication and collaboration. In addition to weekly calls, the participants routinely share insights on marketing the value of procurement best practices to the greater campus community.
With this newly found collaborative spirit, the University came together to create new ways to save. For example, UC San Diego, Riverside and Santa Barbara identified vendors who provide high-quality fresh produce at the most competitive price for their on-campus dining halls, saving the UC System a projected $2.3 million over a three-year contract term. Following this success, UC Merced and Davis established a similar agreement with projected savings of $1.2 million in the same time. In addition, UCOP and campus procurement teams collaborated to establish a new supplier relationship that is projected to save $2.9 million annually over the next five years on overnight and ground shipping costs.
The P200 program has delivered on nearly all major components of its five-year plan, designed to transform the university’s procurement practices and operational capabilities. UC is on the forefront of maximizing resources and minimizing spend with SciQuest’s state-of the art technology, and we’re excited to see what they can accomplish by the end of the P200 Challenge in 2017!
To learn more about the University of California’s P200 Challenge, please visit their website.
