A new five-year strategic partnership between Hewlett Packard (NYSE: HPQ) and Hamilton’s McMaster University launched this spring will see all university departments receive preferred pricing on HP products through solution provider Audcomp Computer Systems.
It’s not an exclusive arrangement, and the university hasn’t committed to purchasing a set level of product from HP over the course of the agreement. But all university departments at McMaster will be able to purchase HP products through Audcomp at discounted prices. The agreement includes desktops, peripherals and monitors; essentially all the products in the HP product line.
“The idea was for us to have a relationship with a supplier that would bring us best value pricing in terms of products,” said Karen Belaire, vice-president, administration at McMaster. “HP has great products, and we wanted to match that with best prices.”
With over 20,000 students and an active research program, Belaire said McMaster’s need for technology resources is high.
“We have a significant amount of research that requires high performance computing, and we’ve put significant technology into the university for students in libraries, in learning commons,” said Belaire. “Everywhere you look you see technology. We have wireless on the campus. You just see technology everywhere.”
The structure of the university administration, which sees each department make its own IT purchasing decisions to suit its own unique needs, doesn’t allow McMaster to go exclusive with HP technology, said Belaire.
“Because of the complexities of the research environment, we leave the decisions around IT at the departmental level,” said Belaire. “In administration, there are obviously efficiencies to be gained through standardization and we do like to standardize in labs. But between labs it would be different. An engineering lab would have different requirements, so there’s no standard across the entire university.”
Hamilton-based reseller Audcomp Computer Systems, an HP partner, has worked with McMaster for 13 years and all HP purchases under the strategic partnership will flow through Audcomp. Gary Sohal, Audcomp’s president and founder and a McMaster engineering grad, said he expects strong business growth through the partnership.
While McMaster has been looking to streamline its procurement process and standardize on equipment as much as possible to enable easier management and service, as well as cut costs by taking advantage of cumulative purchasing, Sohal noted university purchase patterns don’t fit well within traditional discount program parameters.
“They don’t buy large quantities all at once. It’s very random and it’s based on funding for the faculty, for the university, and each department is different so they have different buying patterns,” said Sohal.
To get around this, what Audcomp and HP did was look at McMaster’s historical buying over the last few years, and provide a discount based on that historical annual spend.
While there’s no guarantee McMaster will hit a certain level of annual spend, Sohal said he’s confident that the price advantage Audcomp can now offer on HP products, as well as the enhanced services and simplified procurement process it can also offer, will ensure that many departments will select HP as their vendor of choice.
“It’s been a win-win situation,” said Sohal.
Under the agreement, departments no longer need a purchase order to acquire HP equipment. They just place the order online and it’s delivered the next morning by Audcomp, who will even handle the set-up and remove the packaging and old equipment if requested, and then bill the department.
With other vendors, Sohal said the department still needs to call the purchasing department and make a request. Purchasing asks for the price, gets other quotes, decides which is lowest, and then issues a purchase order, at which point the department can finally get its product. It’s a lengthily process that gives HP and Audcomp a speed and price advantage, he said.
“People will fall into standardization and see no reason to go elsewhere,” said Sohal. “That’s how we’re driving the adoption here.”