How accurate spend information is helping schools identify savings

The UK’s education sector remains under significant pressure, particularly when it comes to balancing the books. With teacher salaries increasing and not all of this covered by central government funding, rising inflation and a desperate need in many establishments to upgrade facilities, every penny counts when it comes to saving money on day-to-day costs.

The problem for many schools, however, is twofold. First, they are unlikely to have dedicated procurement resources or a procurement professional who can devote time to getting spend under control and manage what is spent and with which suppliers.

While some schools may be part of broader multi-academy trusts or consortia that have access to more expertise, these are generally few and far between. In most cases, purchasing equipment and other items such as furniture, IT, stationery or sports equipment is left to secretaries, officer managers or teachers themselves, with purchases typically made on a company credit or corporate card, or paid for out of personal accounts and reclaimed through expenses.

Spend visibility

Linked to this, the second issue is that schools do not have sufficient information on what they are spending, making it difficult for them to look for more effective ways of acquiring what they need.

This lack of information makes it harder to negotiate with suppliers and consolidate spend with fewer of them, using economies of scale, and also more difficult to review the market and choose from a range of similar items which may retail at different prices.

In some cases, spend could be avoided altogether, for instance by identifying purchases which may have already been made by someone else in the business, or suggesting alternatives to a particular item.

On a more practical level, schools won’t be able to understand if people are purchasing items correctly, in line with organisational policies. A lack of process and information also makes it difficult for accounts teams to reconcile payments and keep effective audit records.

This issue is highlighted in Amazon Business’s State of Procurement Report, which finds that 34 per cent of senior procurement leaders see improved reporting and analysis as a top area where they want to see their teams spend more focus – an 8 per cent increase on the previous year.

Digital procurement

The rise of digital marketplaces, however, is helping organisations overcome some of these issues. Using artificial intelligence (AI), platforms such as Amazon Business include spend analysis technologies that can help identify anomalies, evaluate suppliers in particular criteria, and automate routine tasks.

AI can also help with customer onboarding, such as streamlining the importing of delivery addresses and bulk user uploads, and intelligent mapping of UNSPSC and higher education category codes. Better information on spend, meanwhile, can help schools identify areas where they may be spending money unnecessarily or failing to use the cheapest or most appropriate supplier, as well as helping predict future demand so they can ensure items are ordered in good time.

More organisations, including schools, are now waking up to the potential of using technology to better understand their purchasing habits and improve these. More than half (65 per cent) of businesses already use analytics or tools to understand performance, trends, data and insights, while 42 per cent make use of AI-optimised purchasing decisions.

In the next two to three years, 38 per cent plan to use AI to help with demand forecasting, spend analysis and even to automate elements of the procurement process.

Improving efficiency in schools

Unity Schools Partnership is a group of 39 secondary, primary, middle and special schools based in Suffolk and the south-east of England. Having struggled with a haphazard approach to purchasing equipment, which meant many hours were being spent by teachers and staff making purchases with multiple suppliers, the organisation implemented Amazon Business. This integrated with its existing financial software, IRIS Financials, providing a single platform through which users can make purchases within boundaries set out by the organisation.  

The new system has led to a much more effective system, freeing up time for both teachers and accounts teams. “We use Amazon all the time,” says Michelle Curtis, senior finance officer at Unity School Partnership. “Whether it’s stationery, cleaning equipment, safety equipment – you name it, if we can buy it from Amazon we will.

“We previously had lots of purchase orders to load into IRIS Financials each week, which, across the trust, could take several hours. When IRIS contacted us about trialling the pilot, it seemed like an easy decision for us. It’s an obvious time-saver and has simplified the process completely.”

Unity Schools Partnership also signed up to the Spend Visibility feature, which allows it to analyse spending on pre-built dashboards. This means those tasked with overseeing spending can drill down into specific details, looking at spend by supplier, spend category and analyse orders over time to identify ways in which money can be saved.

To find out more about how Amazon Business could help your organisation get more control over spend, visit  https://business.amazon.co.uk/en/work-with-us/education