Episode 3: Redefining cooperative purchasing in higher ed

Host:

[00:00:00] Hi there. Welcome to the Amazon Business Podcast, the podcast that helps you stay up to date with the latest trends, tools, and stories in smart business buying. I'm your host Brit Moorer. And today I'm joined by Jamon Hill, Associate Vice Chancellor and Chief Procurement Officer at the University of North Texas System.

[00:00:20] In today's episode, we'll discuss innovative sourcing solutions, including cooperative purchasing and how they impact higher education. Jamon, it's a pleasure to have you here as Chief Procurement Officer and being in university leadership, what has been your experience with sourcing solutions and why is innovation this area so important to higher education?

Jamon:

[00:00:42] Well, I think higher ed, just like everybody else is facing, shortages in resources, certainly in financial resources, but definitely in human resources as well. So finding qualified people who have experience to do the type of strategic sourcing that we need is getting harder and harder.

[00:00:59] So I think through being innovative with, with both the solutions that we use, meaning platforms and systems, but also our approaches and how we look at sourcing, sort of philosophically can help us mitigate some of those factors on difficulty with both of those kinds of resources.

Host:

[00:01:16] Let's dig into those approaches a little bit more. How has cooperative purchasing really played a role in your university's procurement strategies and what benefits have you noticed or seen from this approach?

Jamon:

[00:01:29] Yeah, I think cooperative procurement is a term that means different things to different people. Obviously, there are cooperatives, GPOs that exist that are out there, some for profit, some not for profit, some that are affiliated with different associations that run their own sourcing efforts, some of them do lead agency models where schools will do the sourcing efforts and things like that, and most people in higher ed are familiar with who those folks are and use those awards, but there's also cooperative purchasing where schools get together and do those kinds of things on their own.

[00:01:57] We've, we've done some of that at UNT, at my previous university we did that as well, partnering with other folks who are like minded, other CPOs, other procurement teams at universities around the country to really target specific things and what we're looking for as a group. And I think the nature of higher ed being pretty non-competitive other than I would say athletics, of course, you know, we work together pretty well and having the ability to not have any competitive environment through those processes really makes cooperative procurement from, from that angle very valuable for everybody.

[00:02:32] Obviously there's a little bit of work that you have to put in. Collaboration sometimes can lead to extra meetings and additional reviews and things of that nature, but ultimately it puts you in a better position, certainly, from combining volumes and frankly getting noticed by large providers who may not respond to an RFP that is a single school, but you get, you know, five or 10 or 20 schools together and that starts to now look attractive to get both better pricing, but also more responses.

Host:

[00:03:01] Gotcha, can you share a specific example of a cooperative purchasing initiative that has really positively impacted UNT?

Jamon:

[00:03:09] Yeah, and Amazon Businesses is one of those. And we did, when I was at Arizona State University, we did cooperative procurement, partnering with some other schools, just naming one or two, but there were more, University of Illinois System and University of New Mexico and Washington and some others.

[00:03:24] We all got together and collaboratively did an RFP for a marketplace solution. I think when Amazon Business came into the marketplace, and this is a number of years ago, most people were looking at it as how do we use Amazon Business from a procurement method? What, what methodology do we use to say that we awarded them and you know, what RFP can we use?

[00:03:42] And most people were looking at it from a commodity perspective, which is difficult with Amazon Business because there's so much different product that's on the platform. And then if I award you, for example, for paper or for peripherals, then how do I turn everything else off because you're only awarded for that.

[00:03:58] So we got together myself and those other schools and said, hey, let's look at this a little bit differently. And let's look at a marketplace concept, meaning we're able to use a tool, a software platform or website to buy from multiple suppliers. And Amazon Business was positioned or to be a seller directly, but also to have other sellers advertise their wares and, and us buy from them. And so we ran it that way. That was pretty successful and it was available for other schools and other municipalities and other public entities to use. And, that one's coming up for expiration pretty soon. So we recreated that process again, recently, at the University of North Texas System and did an RFP and award Amazon Business there.

[00:04:39] So we're, we're recreating that. So I think for us. It opened up the ability to use Amazon Business for our customers internally who want access to, I mean, everybody knows how Amazon works and they use it at home, so I think there's a certain comfort level with our, with people who are shopping to use that tool. And that gives us now an ability to have a methodology to award that business in a good way.

Host:

[00:05:01] That’s really interesting. We talked about the tools and we know technology is a huge piece to all of this. How has technology really helped improve sourcing and your procurement process across the board?

Jamon:

[00:05:14] Yeah. I think a lot of people have some sort of technology in and around their procurement processes. Some people may not have it. Specifically for sourcing, some people have a combination where they're still maybe using the technology or the sourcing platforms to solicit bids from potential providers, but then, you know, they get that information and still use sort of an older fashioned, method of sending those emails around and doing evaluations and those kinds of things. And some people are more mature in that process and are using those tools interactively within their procure to pay system as well as sourcing. I think the next iteration of that, and one of the things that I'm hoping to be able to do is to work with providers of those solutions to give us additional things that will help streamline those processes.

[00:05:59] And one area that is problematic, I think, for higher ed, just because of the speed that is sometimes required, is you know, it's a multi-step process. You go through a sourcing effort, and then once the sourcing effort is over, and you've done the award, now you can work on a contract. I'm hoping to work to a place where we're doing contracts in the process, and red lines, and terms and conditions, and those things are negotiated as part of the sourcing process.

[00:06:25] So, you're doing those concurrently as opposed to in a straight line, chronologically, which hopefully will save time at the end. And then, you know, secondarily, I think in the sourcing process, often times we don't really look at risk too much other than, the risk associated with, you know, we get financial statements. and often times, you know, we'll look at terms and conditions, but there are other things certainly since the pandemic, understanding how there is supply chain risks, certainly for goods and being able to evaluate risk in how you award.

[00:06:58] So, awarding to a single provider, for example, may not be the best option for you if it's a critical product that you need. Certainly, for some of us who have medical schools and have hospitals, that supply chain becomes even more important because you actually have patients and lives at stake. So, making sure that your supply chain is intact and those sourcing efforts. Being able to have a risk evaluation process built into that sourcing effort, I think is the next iteration of making it easier for us on the sourcing side.

Host:

[00:07:25] Sounds like it's a huge moment in terms of moving away from the more traditional procurement process, especially in the university system, to something a little more innovative. It feels like this is kind of a groundbreaking moment for higher education. Would you say that?

Jamon:

[00:07:40] Yeah, you know, for most public procurement, I think for a long time, it was very established on how processes worked and how we did things. You know, I started off talking about resource constraints, and I think that is becoming even more and more pressing, you know, if you look at, especially for public higher ed, if you look at the funds that come from states and the state, how much funding the state provides to schools that has steadily decreased year over year, it is continuing to do so at extreme numbers and schools are struggling to come up with money and resources and those kinds of things.

[00:08:12] So that pressure then comes to us as well as procurement professionals, not only in our own departments and our own staff, but being able to assist. And then we have a lot of other departments who are resource constrained with better products, better services, and better solutions that then help them mitigate those things too.

Host:

[00:08:28] Curious, what are the main considerations when it comes to making sourcing decisions for your campus, giving of course the evolving needs of your students and the university's larger community?

Jamon:

Well, certainly, you know, the easy answer is price, but I think, that is becoming sort of more secondary.

[00:08:47] Even though I, you know, I've talked about financial constraints, but the total cost of ownership is something that we've talked about for a long time. So, the price on the line on the invoice isn't the price, right? You have to look at cost of change and you have to look at potential resource impacts and how it helps business overall. You know, for us continuing to look at value adds and, and other things that those potential partners can bring to us is really, really important.

[00:09:16] One of the things that we've started to do a little bit more is not just if somebody comes to us and says, hey, we need to source X product or X service. We start to look at, okay, what other services are peripheral to that? And if we know this vendor and this vendor and this vendor may respond to that, what other kinds of services or goods those same vendors provide?

[00:09:34] And do we need to source those as well? So combining that with you know, value added services or other things that aren't even necessarily related to the service. Can we partner with them on sustainability programs? Can we partner with them on research? Can we partner them, with them on sponsorship programs or with internships for students?

[00:09:51] So there's a lot of things that you can look at other than just saying, I need to buy X product or service. And I think that's how you add value in the procurement and the sourcing process for your university.

Host:

What advice would you give other universities looking to adopt something similar, something more innovative, when it comes to their sourcing practices?

Jamon:

[00:10:10] So, I think, ultimately, getting advice and learning from other institutions. I spoke a little bit earlier about collaboration and, and cooperation between universities. You know, other associations and things and getting time to meet with other procurement professionals from across higher ed is a tremendous way to learn about what's happening.

[00:10:30] We all have different priorities. We all have different things that are driving us to make change. And oftentimes innovation happens out of necessity. So just because you haven't innovated it doesn't mean that you can't do it. It just hasn't been put to you in a way that made you innovate in that area.

[00:10:45] But some schools have already. And you don't know that's really happening. There are some associations: National Association of Educational Procurement. NAEP is a great resource as well to be able to meet with other folks within higher ed procurement and trade war stories and figure out what's going on and talk about innovations and things that are on the horizon.

Host:

[00:11:01] Thank you Jamon for joining me and for sharing your insights. Your point on collaboration with other institutions is a great reminder of its value across all industries. Thank you all for tuning in to the Amazon Business Podcast.