Working Together. Saving Together

Collaborative Spend

ISI members channelled $76,290,000 through member developed, and ISI administered shared contracts. Since 1981, ISI and its members continue to identify and promote opportunities to work together. The real benefit of cooperation results in savings for all members.

ISI members support highly efficient contracts focused on a broad spectrum of goods and services.

The members of ISI can leverage the collective buying power of 18 members to realize reduced costs for all members, large and small. The majority of the contract volume, almost $60.0 million in 2015, is derived from the employee benefits contract portfolio, with the remaining $16.6 million coming from the purchasing portfolio that administers a broad spectrum of goods and services contracts.

The overall volume of collaborative spend is impacted positively and negatively by several factors, including the rising costs of some goods and services, per unit reductions resulting from the impact of collective buying power and lower commodity prices in some areas. In addition to variances in product costs, the aggregate spend has increased as a result of the introduction of new contracts as well as an overall growth in the number of contracts (old and new) accessed by ISI members.

Savings

Universities and community colleges in Atlantic Canada save $4,294,000 annually by working together to buy employee benefits and other goods and services.

Savings are determined utilizing a combination of market assessment and cost comparisons with similar size employers and organizations.

ISI determines the annual savings by assessing the potential costs that would be realized by ISI members if they were to acquire the ISI contracted goods and services on an individual institutional basis. A national employee benefits consulting firm compiles the savings attributed to the Employee Benefits portfolio. The procurement savings are determined by ISI, utilizing a combination of market intelligence and supplier consultation.

In addition to the financial or quantifiable savings reported, ISI members realize a number of other savings resulting from operational efficiencies and process enhancements inherent in the ISI contracts. ISI’s facilitation of multi-institutional networking and information sharing within all levels of the ISI membership has contributed to the promotion of best and leading practices, further reducing costs through enhancing operational efficiency and effectiveness.

Savings as a % of Spend

Participation in shared contracts results in 5.6% in cost savings for the 18 publically funded universities and community colleges throughout Atlantic Canada. Employee benefit savings reduce costs for both the institution and its employees.

ISI, a member-funded organization, requires less than 20% of the savings to fund operations.

ISI maintains an overall financial and quantifiable savings rate more than 5.0% of the total collaborative spend. Saving as a percentage of collaborative spend is consistent within the two portfolios at 5.7% and 5.2% for the Employee Benefits and Procurement portfolios, respectively. This achievement is comparable with the savings realized by other similar group purchasing organizations operating within Canada and abroad.

In 2015 ISI’s membership fees and collaborative consulting relationships required $736,000 in member contributions. These direct member costs represent 17% of the total savings, returning more than $5.80 for every $1 invested. For 30 years ISI has reported a strong, quantifiable value proposition, maintaining a solid foundation to support the other networking and sharing benefit recognized by its members.

Unique Contracts

ISI manages 31 different procurement contracts varying from fuel to courier services and stationery supplies to elevator maintenance. The eight-employee benefit contracts enable members to customize benefit plans while realizing savings.

A single unique collaborative procurement opportunity may result in multiple supplier contracts, sub-divided by product or service categories. Although the number of actual vendor contract relationships can vary as a consequence of the public procurement process, the number of unique contracting areas represents a more accurate reflection of the scope of ISI’s collaborative procurement activity.

The contract portfolio has evolved over time from an original base of conventional products to include far more goods and services such as custom services, learning management system and corporate procurement cards.

The Employee Benefits portfolio, although in place for over 20 years remains a model of cooperation and collaboration within the Canadian post-secondary education marketplace. The comprehensive suite of eight unique contracts provides ISI members and their employees with administrative costs and risk management strategies that are more commonly available to much larger employers.

Contract Participation

Through collaboration, Atlantic universities and community colleges are taking advantage of a combined 600 opportunities to reduce costs.

A fundamental principle of ISI is voluntary participation, allowing members to select those contracts that best meet their needs. The ISI contracting process is member driven, resulting in an extremely high level of member engagement and contract utilization.

From 2013 to 2015, ISI experienced 30% growth in contract participation. This increase is a key indicator of the member commitment to the collaborative process and the value that members receive from joint procurement initiatives. The increase in contract participation by ISI members buying and working together led to a total growth in savings of over 14% from 2013 to 2015.

The Employee Benefit portfolio enjoys an extremely high level of involvement by ISI members and contains a full suite of employee benefits resulting in a limited opportunity for further growth. Future savings will come from ISI members engaged in the contract portfolio.