The procurement industry is undergoing a revolution. No longer viewed as something solely operating behind the scenes, the sector has gained increased prominence within business organizations. Ensuring businesses remain competitive, but also drive value across all operations, Vice President of Procurement Charles Leslie saw the growing potential of such a transformative industry and the opportunity to make a long-term impact within Education Corporation America’s (ECA’s) procurement operations.
Upon ECA’s acquisition of Kaplan Higher Education Schools’ 38 campus locations across the US two years ago, Leslie had the ambition to transform the organization’s procurement services to become best-in-class and deliver long-term advantages to both the business and its students, with the support of ECA’s Chief Executive Officer Stuart Reed.
“At that point in time, I said that if we're going to make this work and set up a sustainable model so that we are able to acquire new companies, then we needed to have a best-in-class procurement organization," Leslie explains. With a background in accounting, he notes that working with vendors and finding ways to gain additional savings remains an exciting challenge which continues to bring abundant rewards.
Completing a deep dive, Leslie successfully ascertained the nuances of ECAs department budgets and potential bottlenecks in its operations, alongside ongoing business drivers. “This has enabled us to therefore provide a less expensive, higher-quality service,” he adds.
The analysis has also enabled Leslie to grow from a ‘one-man procurement band’ to a strong procurement team. His launch of e-procurement solution, Coupa, also now works to support the future of ECA’s procurement transformation.
Through Coupa, past volumes of suppliers and categories have been reduced and streamlined, as it is now responsible for ECA’s data analytics and subsequent monitoring of ongoing spend from all campuses under its umbrella. The tool is also vital in centralizing data surrounding the purchasing of supplies, placed into one main portal.
“We can report off all this data and therefore start using our volume to negotiate better prices with suppliers, and we can use it to our advantage,” Leslie says.
“If we’re able to drive savings down to the bottom line in each function, this frees up additional funds to spend on better innovations and tools which allow for a better student experience at a campus level.
“Vendors are also engaged, especially where they have realized the value and savings which we could bring.”
“Simply put, procurement has an effect on our bottom line,” supports Reed. “This allows us to provide more dollars to invest in the student experience - through lower tuition, through better technology, and through refreshed curriculum.
With ambitions to strengthen its relationships with suppliers, ECA has utilized market intelligence and undertook a spend diagnostic and cost cube analysis. This has enabled its procurement team to identify not only long-term market spend, but administration and faculties related spend, as well as product order spend throughout its operations.
“We used these assessments, developed a strategic sourcing framework, then issued the RFP and determined who our best partners were,” explains Leslie. “This has weeded out a lot of vendors, and allowed us to consolidate where possible. Where we were purchasing office supplies from four or five suppliers; now we're able to use one supplier and push that down to the campus level.”
“Cost efficiency gives us the assurance that we can continue to invest in the latest technologies,” adds Reed. “The use of best-in-class procurement practices gives us the confidence that we will be able to invest in a sustained manner, rather than stop and go. In a sustained manner, we invest in the best that technology has to offer.”
Noting that every campus had previously utilized different suppliers, the use of Coupa has enabled ECA to not only centralize its supply purchases and look at the remaining spend and use of resources, and led the team to analyze the top 200 items purchased at campus level.
“I think we found that our campuses were ordering 10 different types of staplers, for example,” chuckles Leslie. “We decided to find the one stapler that's going to give us what we need, and negotiate better pricing for that one particular item." Going forward, ECA’s e-procurement solution will only enable contracted items to be purchased to steer all campuses in the same direction.
However, despite such focus on sourcing potential savings, Leslie notes that the team “tends to look beyond these price savings to adopt a more holistic approach into managing costs and come up with savings to the bottom line which will be reinvested in the student experience”.
“With these dollars, we can then take education to the next level. That is our aspiration,” supports Reed.
With an aim to reduce administrative work for its faculty and staff, content strategy and logistics company Ed Map, Inc. has also been brought on board to oversee all of ECA’s textbook orders based on its current projections as part of this student-centric drive. However, the procurement team remains responsible for the delivery of each campus’ student uniforms, which is also done without traditional orders being placed.
“We run all of the projections and modelling out of our student record-keeping system, and we're able to place a centralized order to our uniform supplier who deliver all uniforms to campus level,” Leslie says.
“We're still delivering all of the supplies and the content, but we're not having to get much involvement from the campus level as far as placing orders, we're able to do that centrally.”
This is also being developed further through the implementation of kits, which will be built for each student, rather than the procurement of single items. These bulk orders will then guarantee long-term savings for ECA and provide long-term advantages for its students.
“They are then able to move up the procurement cycle. I want to ensure that the procurement team is able to speak the language of the other business functions and are able to be transformative across the entire organization. We rotate functional assignments to deliver the most experience possible within the team. This will further develop the team into future procurement leaders.