Learning to Adapt: Five Procurement Trends for Education in 2023

The education sector in Australia has always been a significant contributor to the nation's socio-economic growth. According to Universities Australia, in 2022, even with a considerable impact to the sector due to Covid-19, educational institutions contributed over $29billion to the Australian economy through channels like international students and online studies.

According to Australian Bureau of Statistics over four million students were enrolled into schools, and over 350,000 in higher education across the country in 2022. And with education institutions in Australia aiming to improve access to facilities and enhance student and teacher learning, the procurement of goods and services is a considerable and ever-evolving task.

In 2023, as the industry continues to rebuild, the education sector is set to undertake a shift in its procurement trends and focus. Numerous factors influence these changes, including the need to adopt technology, have visibility over changing regulations and policies, and the increasing demand for sustainable practices.

In this article, we explore five emerging procurement trends we expect to see in the education sector in Australia in 2023.

1. ESG and Sustainable Suppliers

Many sectors in Australia are becoming much more aware of who they are buying from and making a conscious effort to make better procurement decisions. According to a recent article ESG is not a strategy, but a requirement for the modern-day organisation. It may not win an organisation many sales, but it loses them when they get it wrong – and the cost of brand reputational damage can be huge.

And in line with the Australian Government’s Sustainable Guide, education institutes (especially public entities) should look to incorporate ESG and sustainability requirements in their procurement policies, including working with suppliers who meet certain environmental and social standards.

ESG is a term that we are hearing more and more when it comes to procurement, and its importance cannot be denied. PwC notes ESG as one of the most important problems facing Australian companies across all industries today.

With the considerable footprint the education sector has across Australia institutes need to consider how their decisions enhance and protect students and facilities while also considering their environmental and social impact through procurement. Sourcing from ESG suppliers also improves supply chain efficiency and reduce costs, waste, energy use and pollution.

Additionally, research has shown that green schools can actually be healthier and more productive places to learn and teach. With this in mind it could be expected that education institutes in Australia will continue to increase the procurement of eco-friendly goods and services, including solar panels, green energy, and devices that are energy efficient.

2. Strategic Procurement

Strategic procurement is the alignment of the procurement function with the organisation's overall goals, objectives, and vision.

In recent years, education institutes have realised the necessity of strategic procurement planning and execution. The significant supply chain disruption caused by Covid-19 shed light on the importance of procurement in many businesses, with a survey by McKinsey and Company showing that 86% of participants believed that procurement plays an influential role in leading their organisation’s recovery post-pandemic.

Disruptions to supply chains and a lack of resources forced many organisations, including educational institutions, to look internally at their procurement processes, from planning to supplier discovery and contract management.

Education institutes in Australia who want to continue to improve sourcing will be expected to embrace strategic procurement to achieve value for money, reduce supply chain risks, and enhance the quality and source of goods and services they procure.

3. Increased Focus on Supplier Management

Supplier management is a critical aspect of procurement in the education sector. Successful procurement is a two-way street and suppliers are essential to ensuring smooth supply chain operations. There is an ever-growing importance on maintaining great supplier relations, especially in the wake of the pandemic when we saw a significant increase in local supplier engagement.

According to an article by IBM, a strong dependence on manual, paper-based processes, as well as double entry of digital events and form filling exacerbates challenges when it comes to effective supplier management ultimately slowing execution, enabling human error and hindering agility.

Timing is paramount in the education sector, with hard deadlines placed on procurement in line with term dates and essential resources to ensure safety and security of students and staff, putting even more emphasis on good supplier relationships.

The industry will be expected to focus on improving and nurturing supplier relationships to ensure timely delivery of goods and services, maintain quality standards, and guarantee compliance with regulations.

4. Collaborative Procurement

Collaborative Procurement helps enable significant time savings, value for money and administrative efficiencies on the purchase of goods and services that can be achieved by all participating organisations. It also allows more expertise and knowledge sharing to take place in crucial planning and award stages of procurement events or projects.

Not all necessary procurement events are large-scale projects, and with lower than threshold spend it can be prudent to collaborate with similar organisations that will have the same requirements. Collaboration among schools and universities is becoming more common in Australia, with an aim to pool vital resources through shared supplier lists and contracts, enabling economies of scale.

Organisations like Australian Universities Procurement Network are designed specifically to drive collaboration across the higher education sector in the hope of minimising the duplication of activities and associated costs across individual universities, including risk assessment, implementation of systems and remediation.

VendorPanel client Department of Training and Education (DET) in Victoria designed a pilot program called the Small Schools Facilities and OHS Initiative that allowed 21 schools to coordinate sourcing of OHS and Maintenance services. This program was implemented to reduce administrative burden, engage with local suppliers in a meaningful way and achieve better value on bulk-purchasing.

5. Adoption of Digital Tools

Political parties across the country have announced their plans to dedicate significant budget to improve access to education facilities for communities in Australia that need it. The Labor party in NSW recently revealed plans to build 100 new preschools in the state as well as offer permanent positions to thousands of teachers currently in temporary roles.

In addition to this, Covid-19 shifted the way we do many things, including how we work and study, with processes put in place to enable efficient online work and learning. University students are increasingly shifting towards hybrid learning, and schools are using digital tools to boost learning and access to resources.

To facilitate these kinds of large-scale projects education organisations could turn to digital tools to help manage procurement and deliver best value. Like many of their peers, educational institutions would benefit from procurement software to help automate the sourcing process, allowing faculty and staff to easily requisition supplies and equipment, receive automated approvals, and accurately track procurement spend.

Technology is a fundamental part of our lives. Procurement functions need to jump onboard or risk getting left behind.

These five emerging trends will enable the education sector to achieve value for money, manage supply chain risks, and meet regulatory requirements. Procurement professionals in the education sector need to prepare adequately to stay ahead of the trends and ensure that their procurement functions meet changing demands.

Why VendorPanel

VendorPanel offers a full range of solutions to manage all aspects of your procurement, risk and governance activity. Our solutions enable improvement to the entire procurement lifecycle from policy guidance, procurement planning and supplier management, through to evaluations and contract management.

Our digital tools are designed to enable efficiency, value and oversight across procurement and contract management functions, arming Buyers with the tools to make positive impact while remaining compliant with your specific policies and regulations.

Chat to one of our team today to learn how our platform can help you succeed at these 2023 procurement trends for the education sector.