University of Birmingham Makes Spend Control Strategic
One of the UK's largest universities uses PROACTIS to create
a transparent purchasing process that regulates spending and
encourages budget holders to become more accountable.
Profile
With around 26,000 students and almost 6,000 staff, the
University of Birmingham is one of the UK's largest universities.
Last year it generated more than £70m from research projects and
with a total annual income of over £350m, the University of
Birmingham has also become known as one of the world's most
respected research universities in several important fields of
study.
Challenge
The purchasing process in the University of Birmingham was
previously handled using a variety of different software packages
and paper-based procedures. In some cases these were integrated,
but often the process relied upon fragmented systems operated by
individual departments with no common information processing. Often
staff bypassed correct procedures in pursuit of a 'quick buy' and
the financial autonomy of academic departments meant that few staff
were focused on adhering to process. The resulting paper chase had
become unmanageable, producing a staggering two million pieces of
paper each year for administration alone.
With increasing pressure from Government for universities to
improve financial management, the University set out to find new
ways to get costs under control. Many of the University's large
research budgets were managed by academics, not all of which were
financially aware, and there was no ability to track budget
progress, so it was not uncommon for departments to overspend.
The University's Assistant Director of Finance, Tim Fuery,
explains: "We had great accounting and financial reporting systems
but we were really only capable of capturing historic information.
We needed a way to regulate spending and also to encourage budget
holders to become more accountable."
Why PROACTIS?
The University set out to streamline this process by
implementing a procurement system to control the buying process,
and feed information about costs and commitments into its
accounting solution. Three goals were defined for the project: 1.)
Take control of expenditure and the management of budgets; 2.)
Create a transparent purchasing process that makes information
available at the point-of-decision; and 3.) Save money by
consolidating the University's substantial annual spend with
preferred suppliers.
A formal OJEU tender process then followed to identify a
suitable solution, engaging a wide array of software vendors. These
included the supplier of the University's existing financial
system, CODA, procurement specialists like PROACTIS, as well as a
number of leading software vendors such as Oracle and Agresso.
Tim Fuery: "PROACTIS stood out as the only solution capable of
delivering the level of control we needed without being too complex
to extend to such a large number of non-financial users. The other
systems we looked at offered extensions to a financial platform,
but PROACTIS was designed specifically to streamline purchasing and
manage expenditure before it occurs, so it was the obvious
choice."
Results
To date PROACTIS has been rolled out to several hundred users,
with the planned eventual user community totalling 3,000. The
system is used by the University's Procurement team for
establishing and managing preferred supplier agreements, making it
easy for any staff to buy against those agreements with little
administration. PROACTIS streamlines the supplier invoicing process
too, automatically reconciling invoices against orders and delivery
information and streamlining the process of troubleshooting problem
invoices.
The system also handles the University's complex virement
process and has streamlined a paper-intensive internal trading
environment in the University. The current stage is well underway
with adoption of the PROACTIS stock control and employee expenses
modules and the University is now considering a project to roll-out
complementary technology from PROACTIS for managing supplier
relationships and contracts.
Has PROACTIS delivered against its goals for the University? Tim
Fuery certainly thinks so: "We now have layered control over the
vast majority of non-payroll expenditure and we are capturing
valuable information and delivering it to our staff to support
decision making. Perhaps the biggest win for the University,
however, has been the ability to give our academics powerful tools
for managing budgets and finances without requiring them to be
financially aware, and without distracting them from their day
jobs."
