Let's face it, the education sector has had a long history of belt tightening and things aren't likely to change any time soon. Yet coupled with this drive for cost control comes an ever louder cry for quality improvement. To do more when you have less money will always come down to smart planning and deft decisions.
The demand for highly skilled individuals is rising and so too must the capabilities of educational bodies across the globe. Changes in funding and new development opportunities are challenging the way spending has traditionally been managed. The old way no longer makes the grade.
As with any other industry and social sector, education needs to embrace a digital and flexible cost-conscious culture. This transformation is no mean feat given the decentralized nature of most educational bodies.
The cost of fraud
The core functions for spend control - purchasing and finance - tend to be spread across different locations or indeed, centralized in a head office without vital visibility over the actions of distributed centers. Both setups are equally lacking when it comes to efficiently controlling spend.
Using different software/tools across locations, an excess of paper and even varying purchasing processes have led many institutions into a vulnerable state defined by a lack of transparency, no spend intelligence and an increased risk of fraud.
A recent investigation by the BBC showed educational institutions across the UK were being charged up to 10 times too much for laptops and other IT equipment through mis-sold agreements. This is a flagrant and not uncommon problem and one that needs addressing.
Many other examples of fraud in education include forged changes to suppliers' bank account details documentation. Examples have used headed supplier stationery, included the university's customer reference number and also been supposedly signed by the supplier's Director of Finance.
One institution recently reported to the Higher Education Funding Council that approximately $755,000 was fraudulently obtained by a member of the Finance Office from the time when the individual joined the institution. Payments from suppliers were diverted into an account controlled by the staff member. The fraud was identified when the individual's bank became suspicious and notified the police.
All these losses are due to antiquated processes and no real time control over regular spend. Critical data is lost daily because of poor controls and a non-unified, paper heavy setup. Without strategic sourcing agreements and the real time management of purchases, these situations could happen to any educational body.
Through digital transformation and bringing disparate systems into one, spend control and fraud safety can be secured and transparency restored. This will in turn ensure compliance and drive costs down. Applying a system of record and engagement across all departments will not only save on software licenses, but also drive value on investment (VOI).
The time and resources saved will enable funds to be directed to the right areas, safeguard capital from fraudulent attacks and empower staff to perform at their highest levels.
Avoiding waste, duplication and overspend
These are the three key drivers for digital transformation and the ones that matter the most to the bottom line. Leaving aside the other benefits of digitization and spend control, these three factors are more than enough reason to get all stakeholders on board for transforming current processes.
By powering up a digital framework you can easily expand your collaboration with other institutions and aggregate demand to increase your collective buyer power to further reduce costs. By connecting your suppliers into your digital platform, you can easily track their performance, any price fluctuations and their levels of service throughout the contract. This will ensure you are always working with the best and at the best rates.
Cost saving through change
Change is happening all around us and businesses of all shapes, sizes and from all industries are realizing they cannot continue with processes setup 10-20 years ago. Even five years is a long time considering the rapid pace of technological advancement. Recent spikes in fraud and an increased push toward electronic finance processes are a sure sign that a digital spend management framework is needed. And the sooner it's planned out, the better.
For education, the drive to operate vast facilities more efficiently, improve services and enrich students' experience can become reality through digital spend control transformation. Managing institution-wide purchase-to-pay processes with real time control of supplier management, purchasing, invoice processing and payments is the goal.
Automating the accounts payable process through machine learning and AI will not only remove unnecessary costs but protect institutions from fraud. Sourcing and contract management across departments in real time will enable consistent pricing and a dramatic decrease in uncontrolled spend.
Four areas to focus on:
Supplier Management Increasing the effectiveness and transparency of your supplier management can very quickly drive greater value, greater savings and lower risk across all your spend categories.
Purchase-to-Pay Process Your current process may be managed across different systems, in varying degrees of control and manual application. By switching to a digital platform, you can immediately improve control on authorized items and prices, approval levels and budgets for all kinds of goods and services.
System of Record By tracking all interactions with suppliers and within your own organization, new levels of efficiency and transparency become available. With easy access to all transactional data across all departments, locations and even currencies, your ability to make informed decisions and protect against fraud is immediately boosted.
System of Intelligence Understanding what you’re spending, with who at any given time allows for a level of data intelligence that's simply unachievable using disparate systems and manual processes. Being able to take informed action based on data driven insights will not just reduce costs but will ensure a safe and empowering environment for your entire organization.