What are some of the costliest mistakes HEIs make when buying ICT?
In my professional experience, redundant, unsupported software is the biggest waste of money and poses the greatest security threat to any organisation.
The 2017 WannaCry cyber attack cost the NHS an estimated £92m in cancelled appointments. The NHS was criticised for using a 17 year old operating system called Windows XP.
The second issue is a silo departmental purchasing mentally which often excludes procurement. In the future a University often faces interfacing issues e.g. the software will not talk to other software or integrate without costly development. This can make vertical integration difficult.
In your experience, how much should HEIs outsource?
The opposite to outsourcing is known as insourcing. Insourcing shares the wealth, it provides opportunities to strengthen local supply chains and boost local economies by working with more small and medium sized businesses, potentially providing more local jobs for graduates.
Stoke on Trent City Council reviewed their contracts in terms of cost, quality and productivity and recognised a negative impact on local supply chains. The Council invited 400 local businesses to a meet the buyer event and offered framework agreements for four years, rather than the previous 3-6 months.
The Council was prepared to pay a fair price to its local suppliers, rather than unreasonable low prices, which can place supply chains at risk of failure. Moreover this benefited the local economy.
It's reported that seventy-seven per cent of councils in England are planning to bring their outsourced services back in house to cut costs and improve quality.
The golden rule is only ever outsource your non core business functions. Universities must decide how dependent they are on ICT to answer the core non-core question.
The full article is available in the May 2020 edition of University Business.
About the author
Naomi Clews is an independent procurement consultant find out more about how to save money through procurement by visiting our website.
Naomi Clews Consultancy
Procurement, Tendering, Business Skills