Higher education buying departments expect to save hundreds of millions of rands through the Purchasing Consortium Southern Africa (Purco SA), a new e-procurement and travel management platform.
Purco SA, a higher education procurement consortium, concluded an e-procurement master agreement with e-solutions provider mymarket.com in February. The system is scheduled to go live this month.
Purco SA represents 42 member institutions including all South African and Namibian public universities, as well as FET colleges, private higher education providers and related institutions such as the SABS, CSIR, NRF and others.
The organisation says it helped its members save almost R100 million through collaborative contracts in 2013.
After evaluating more than 40 local and international e-procurement solutions, Purco SA selected mymarket.com to power the new Purco SA Online platform. Mymarket.com is a fully integrated, customisable e-procurement and travel management solution used by some 150 of SA's top corporates. The solution facilitates more than 21 000 buying transactions daily, from more than 15 000 suppliers.
Purco SA CEO, Selvan Govender, is confident the new platform will contribute immeasurably to leveraging the collective buying power of Purco SA's members to drive tangible cost reductions.
As the platform gains momentum and more institutions adopt Purco SA Online, he also expects it to deliver significant process efficiencies, a reduction in off-contract buying and improved financial compliance.
Dawood Tagari, MD at mymarket.com, says in their experience, buying organisations can achieve savings of 25% or more.
Case studies suggest Tagari is being conservative, says Purco SA, pointing out that the University of Pennsylvania attributed millions of dollars in direct product savings to their e-procurement system, as well as significant administrative efficiencies.
Pennsylvania saw a 484% improvement in contract compliance, while average purchase order cycle time fell from 18 days to less than one for more than 92% of orders, it adds. An analytical research paper prepared for North Carolina University reported procurement process cost savings of 50% or more, Purco SA says.
But it's not just buyers who benefit, Purco SA notes. The platform is free to suppliers until they make a sale and Tagari notes that the small transaction fee is offset by the benefits.
Purco SA board chairman, Chris Liebenberg, says institutions are very aware of the need to maximise the public funds with which they are entrusted.
He says Purco SA members are committed to achieving savings that can be directed to improve academic programmes and facilitate access to upskill the next generation of young South Africans.
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