How Rockhurst University saved over $100,000 and reduced risk with their vendors by tightening their procurement operations and maximizing their buying power.
Rockhurst University had a large and growing vendor network and was looking for ways to consolidate vendors to negotiate better pricing and reduce risk with fewer relationships. Vendor Centric took a structured and comprehensive approach to reviewing their vendor population, analyzing spend, and making changes that would have the biggest impact.
In addition to over $100,000 in bottom-line cost savings, the University experienced benefits like fewer contracts, vendor and tax incentives, increased efficiency in paying vendors, and streamlined processes. As a result of working with Vendor Centric, the University’s purchasing in various categories is now streamlined with fewer vendors, which has created more visibility, better customer service, and stronger partnerships.
Identifying Ways to Lower Costs and Maximize Buying Power
In an ongoing effort to efficiently and effectively manage resources, Rockhurst University engaged Vendor Centric to assist senior management in identifying and implementing opportunities to improve its sourcing strategies and activities. The objectives of the project were to:
- Ensure the University was maximizing its buying power in targeted areas of operations and effectively leveraging vendor relationships to lower both hard and soft costs.
- Validate that vendor contracts were fairly priced, and their associated risks were identified and mitigated.
- Evaluate opportunities to streamline the procure-to-pay process to drive efficiencies, improve data visibility and reduce the administrative costs of buying goods and paying vendors.
- Reduce third-party risk by consolidating relationships and improving contractual terms and conditions.
Strategy and Solution
A Structured and Comprehensive Approach to Cost Savings
Vendor Centric’s strategy was to evaluate potential areas of cost savings. With the Rockhurst project team, we identified 12 expense categories to analyze, including office & janitorial supplies, technology, printing, promotional products, energy, and merchant processing services. Then, we evaluated opportunities to automate the procure-to-pay process, including strategies for expanding the use of commercial and virtual credit cards.
Given the number of categories under review, it made sense to take a phased approach to the process. This enabled us to go at a pace that was not overwhelming for staff and also properly researched and explored alternatives before settling on the best strategy for each category. Our process included:
- Normalizing and analyzing spend across disparate data sources.
- Talking to University stakeholders to better understand needs and requirements.
- Proposing new strategies for sourcing the categories under review.
- Negotiating new contract terms and pricing.
- Supporting staff with the onboarding of new vendors.
Six-Figure Savings and Enhanced Efficiency
The initiatives carried out in this project produced bottom-line savings of $100,000+ annually. The University eliminated a variety of soft costs related to invoice approval, payment processing, expense reporting, and vendor management.
On top of cost savings, enhancements to Rockhurst’s sourcing strategy and procure-to-pay processes resulted in additional benefits:
- Fewer Contracts: Consolidating vendors under a single contract for office, janitorial and breakroom supplies has resulted in fewer contracts, which has reduced risk and simplified contract administration and management.
- Vendor Incentives: Establishing rebate tiers that grow with purchasing volume has incentivized vendors to increase their partnership with the University.
- Tax Incentives: An improved energy rate structure has allowed the University to recover additional tax credits.
- Efficient Payments: Implementing a commercial and virtual credit card program has allowed the University to pay vendors and third parties more efficiently.
- Streamline Processes: Automating expense reporting not only simplifies the process but has also provided better visibility into unpaid expenses.
“Gerald and his team had clear goals and a real desire to not simply save money, but also reduce risk and create stronger relationships with fewer vendors. Their commitment to mutual success for the University and their vendor partners made this project a success.”
Tom Rogers, Vendor Centric
About Rockhurst University
Rockhurst is a Catholic, Jesuit university serving 4,000 students in the business and cultural heart of Kansas City. It is a comprehensive university that offers more than 50 undergraduate and graduate programs taught by nationally recognized faculty.
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