From buying paper and furniture to defibrillators and health insurance, consortia of higher ed institutions are saving up to millions of dollars annually on items bought in bulk-while at the same time breeding greater, long-term relationships built on trust. That adds up to saved time, fewer headaches.
Consortia processes can vary, but a constant for many of these groups is procurement-finding and buying much needed products for a super (or at least good) price, avoiding aggravation, and offering a healthy and strong communication link among the various administrators, particularly purchasing agents, at institutions of higher ed. And where there is networking and camaraderie, there is power.
"I've always worked in private industry where people don't share their knowledge," says Jeff DiCiaccio, director of Purchasing at the University of Massachusetts Medical School. "Here, we're all feeling the same pain and we're sharing ways to do things better. And when you get together with these people, it feels like family."
Sure, disagreements could pop up about the type of products that need to be purchased or the timing, but the next day's e-mail usually has a note from a consortium member asking, "Still friends?" Of course we are, DiCiaccio assures.
Consortia Life
As in virtually any type of consortia, purchasing directors and other administrators at member IHEs decide what they want and the consortia does it.
Case in point: The Board of Directors at Wisconsin Association of Independent Colleges and Universities, a 45-year-old nonprofit, is composed of member college presidents from Catholic and secular, large and small schools statewide. Members express their needs to WAICU staff, who then find a way to take action.
The focus for WAICU is on reducing purchasing costs. For example, its board members decided several years ago to purchase an enterprise resource planning (ERP) system, which would integrate everything from course registration to human resources in a single piece of software.
It involved 54,000 requirements, which WAICU staff took out for bid to various vendors. The first phase is being implemented in July.
"Far too many people resist collaborative buying because they see it as a sign of weakness" in management.
-Ralph Maier, University of Pennsylvania
WAICU also helps Wisconsin members save money. "We say to vendors, you have to beat the price of our largest member, Marquette University," Rolf Wegenke, WAICU president and CEO, notes.
A dedicated staff does the research and brings vendors to the table. It's a labor intensive process, beginning with WAICU's 20 members contemplating, among other topics:
What is a big cost item?
Are prices running away?
What is the quality of service?
From the dean of students to the staff of the Registrar's office, members brainstorm on what they want. Once a priority is identified, WAICU asks members what the ideal outcome is for them, not just in price but in terms of a useful product. The formal bidding process commences by WAICU staff, with all the major vendors bidding. A representative advisory task force will review the bidders' proposals and WAICU selects a recommended bidder. Members then decide to go along with the bid, or not.
"They have a very strong sense of ownership and that is a good thing," says Wegenke, who in the past served in the administrations of five Wisconsin governors on business, technology, and community development efforts. "They know we are working for their best interests."
WAICU aims for continuous quality improvement, such as adding new items to an office supplies contract. Existing programs are also periodically rebid, with standards updated to fit the realities of how colleges are using a service.
WAICU's research and diligence pay off, says John Nicholas, vice president for Administration and treasurer at Beloit College, a member of the Wisconsin group. "They are the ones that do all the work and bring all the projects to the members for evaluation. That is the beauty of it all. The formality relieved us of doing all the research. Now, the members are the evaluators, judges, and ultimately the owners of the project."
Beloit's biggest pricing win has been in risk management; in the area of employee insurance, for example, the institution has realized cost savings of probably $100,000 a year, Nicholas adds.
