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Key trends shaping university procurement

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Campus News recently interviewed Marc Diaz, Director Strategic Procurement for Curtin University and Chair of the Australian University Procurement Network (AUPN) Executive Committee, for his perspective on recent and emerging trends in university procurement.

What is the focus of your role at AUPN?

Marc: As the Chair of AUPN's Executive Committee, I am currently focusing AUPN's energies on three key areas:

  1. lifting the profile and standard of procurement in the university sector, through a standing committee that's dedicated to helping strengthen the procurement capabilities of universities. Some have done a great job in establishing procurement units, while the level of procurement experience in other universities remains low. So AUPN has developed a program to help build the level of expertise through education and training. We're also trying to promote the profile of procurement in universities so procurement managers can have higher level input into executive decision making.
  2. sustainable procurement with a triple bottom line focus. We have a standing committee that is helping university procurement managers better understand the importance of sustainability in what they procure eg. from financial, environmental and social responsibility perspectives.
  3. collaborative agreements, which involves identifying opportunities for universities to work more efficiently as a collective to approach supplier markets together and achieve better prices. For example, AUPN's discussions with Qantas have led the airline to consider airfare pricing for the university sector as a whole. This will hopefully drive airfare discounts for our industry.

Over recent years, what have been the major trends in university travel procurement?

Marc: There have been two key trends.

  1. More focus on value - many universities have been looking for more 'bang for their buck'. The 39 universities Australia-wide would collectively spend around $200M a year alone on airfares (one quarter on domestic and the rest international). So one of the main changes we've seen is in classes of travel, with many universities now stipulating that business class can only be used for certain purposes. Many of these universities have moved to the use of a single TMC to achieve better mandates. Three years ago the use of travel policies and mandating would have been very low, whereas now it is possibly as high as 50% of universities.
  2. The other main trend has been a stronger focus on duty of care, particularly in light of recent natural disasters and other emergencies. Some universities have steered away from traditional travel agencies and worked with TMCs to put systems in place so they can always know where their people are located. This is resulting in a gradual shift away from individual bookings to mandating the use of contracted TMCs, which in turn is producing less leakage in some universities.

What will be the dominating trends in university procurement over the next 12 months?

Marc: I think value and duty of care will continue to be the two key drivers of change. More universities will move to a single TMC and introduce better systems to manage their travel and control costs.

Curtin University has made significant changes to its travel procurement over recent years. What have been the main achievements?

Marc: We moved to a sole TMC contract with Campus Travel so we could target and achieve common objectives. For example, we've implemented an online booking tool and taken our usage level from zero in 2008 to over 80% today. This and other initiatives have helped us achieve savings of hundreds of thousands of dollars over the past four years. Working with Campus Travel, we were able to introduce daily downloads of all our bookings to better track where our travellers are at any point in time. So we now have a robust travel risk management system and a much higher level of duty of care.

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