University of Sydney highlights spending, identifies savings with SAS®

Engaging stakeholders with evidence-based analysis of procurement trends reveals opportunities for significant cost savings – leads to immediate benefits and tighter future budgeting.

The University of Sydney is one of the leading Universities in Australia. SAS solutions have long been in use at the University for teaching and general faculty and student administration purposes but the metric that led to the most recent SAS implementation was significant – the AUD$600-700 million that annually passes through the University's general ledger as goods and services delivered by more than 32,000 suppliers. The University's total annual turnover is in the region of AUD$1.4 billion.

The immediate opportunity was that the University was able to identify where the AUD$600-700 million was going – what it bought, who was committing the spending, how it was committed and who the suppliers were.

SAS was engaged on a consultancy basis to conduct the data cleansing for a year of spend records and run it through a series of high level preliminary analyses for a diagnosis of the expenditure. This led to the purchase of the SAS solutions at the end of the year with the objective of being technologically able to support the evidenced based approach. Harry Banga, Director of Procurement Services at the University explains, "The whole purpose of the retrospective analysis was to gain a clear picture of where the money was going out of the University. When we had that all-important single picture of the truth out of SAS we were able to initiate a dialogue about spending with the key stakeholders – to socialise with those people about strategies we should put in place to bring spending under influence."

Bringing the technology platform in house allowed the University to build a data cube of cleansed data for the last five years which allowed for the exploration of strategies that were appropriate to the categories and the business attributes (policy, systems, process, procedures) associated with the categories.

The need for such strategies was highlighted by the trends shown in the five-year spending analysis. As Banga notes, "There is always conjecture about statistics and people's own understandings of what they mean to their particular operation". He added, however, that debate about the growth in spending was productive because its style was, "Not to embarrass anyone but to present them with an evidence-based approach that couldn't be argued with. That done, the irrefutable point was that – collectively across the University and across all the goods and services it buys – the upward trend in spending was above the trend of the country's official Consumer Price Index. So clearly, we had scope for considerable opportunity."

The outcome amply justified the investment in SAS. In its first full year of using the output from the SAS cleansing consultancy, the University was able to position a AUD$20 million plus saving target for the next year.

The detailed picture has also been invaluable. A small example, analysis of certain consumable expenditure revealed that a single supplier was contracted to provide products and services to multiple cost centres at different prices - without the benefit of this visibility the opportunities would not have been identified.  Thanks to the picture provided with the use of SAS, the University saw the opportunity to aggregate and standardise the rate of supply at a 7% cost saving from that supplier.

Harry Banga says, "SAS data mining and predictive analysis software solutions are powerful tools. By using them we have provided transparency for the stakeholder and from that perspective we have been able to progress an evidenced based approach on the foundation of a method practice."

The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.

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