Colleges and Universities spend a significant portion of their operational spend with non-contract vendors.1 The remaining spend is often difficult to manage, presents compliance issues, and is a challenge to analyze and track given the diversity of vendor data. In addition, higher education institutions, on average, work with over 1,200 unique vendors – with over 1,000 of these vendors in the long tail (represented by low average spend and large numbers of low-value transactions). Approximately two-thirds of vendors account for less than $1,000 in spend per year. Managing each of these suppliers can be time consuming and expensive, and the costs of processing the small dollar orders can be cost prohibitive.
As with many large-scale public sector organizations, Virginia Tech began to realize that consolidating these vendors to reduce time spent managing contracts for non-strategic purchasing was an opportunity to simplify on behalf of their end users.
Real-World Challenges: Virginia Tech
Virginia Tech manages hundreds of new and existing vendors annually at a significant cost – both in time and money. Virginia Tech was struggling with one-off purchases with vendors and was experiencing difficulty standardizing purchases across categories – even with a mature e-procurement system in place. In addition, the University wanted to take advantage of features that allowed the university to restrict categories, use their preferred payment method of Pay-by-Invoice, and meet competitive requirements. These challenges are what brought Virginia Tech to Amazon Business, through OMNIA Partners, for a solution.
“Our campus buyers wanted to utilize the many benefits of Amazon Business in their academic, research and administrative purchasing,” Mary Helmick, Director of Procurement at Virginia Tech explained. “They depend on it, so we chose to incorporate it into our purchasing options through our e-procurement system.”
Amazon Business offers a one-stop-shop for many of the day-to-day purchases while standardizing to a single source for procurement as an alternative to managing single purchases with individual vendors. By centralizing sourcing to Amazon Business where hundreds of thousands of sellers are competing to offer the university the best price, they were able to simplify the approach.
“The volume of university spend on Amazon Business greatly enhances our ability to analyze and report on purchasing trends and volume cost savings at the university with a single preferred and trusted contracted vendor.” Helmick said.
