The National Association of Educational Procurement (NAEP) surveyed chief procurement officers, chief business officers, and higher education procurement managers or directors about their top focus areas in 2021. Here are the priorities they found:
What is most interesting about this list is that while the order may shift, the same items are driving higher education procurement strategies in 2024, with one overriding change. Budgets are shrinking, and educational institutions are being forced to examine spending more closely and implement cost-cutting measures wherever possible. With significant budget deficits, enrollment decline, and an end to pandemic relief funds, many colleges and universities are cutting programs and services. As such, procurement teams are under increasing pressure to reduce costs.
Here are some of the key trends and ways higher education procurement is evolving in 2024.
Even in major universities, procurement responsibilities are still often spread among departments, preventing the leverage of bulk buying and economies of scale to produce better pricing. For example, one recent report said just 9% of higher education leaders say finance and IT functions are aligned regarding procurement.
With obvious benefits from consolidating procurement, why haven’t more higher education institutions done so? Often, the culprit is legacy systems and processes that make it difficult to manage spending efficiently. Universities and colleges are increasingly looking at eProcurement systems that can centralize spending and help maintain tighter cost controls.
Centralization can cause conflict, though, as department heads feel they are losing control of their budgets. Modern eProcurement systems can allow spending by authorized individuals, directing them to pre-approved vendors and contracts while applying controls.
Part of streamlining the procurement process requires deploying automation to reduce or eliminate manual tasks. This can significantly reduce the burden on procurement teams while also reducing error rates, using automated rules to:
Advanced reporting creates greater efficiencies in spending management. Real-time data provides tracking of current and future spending against budgets and can help identify areas for improvement. The right eProcurement solutions can generate automatic alerts for non-compliant spending or budget overruns.
There is often a disconnect between procurement vs. purchasing in educational institutions. Purchasing focuses on the ordering of goods and services. Procurement takes a broader, more strategic view of the entire procurement lifecycle, from sourcing, negotiation, supplier selection, managing contracts, and managing vendor relationships.
It is incumbent on procurement teams to make sure those involved strictly in purchasing understand the importance of this broader procurement process. With tight budgets and cost-cutting at the center of many institutions’ operating goals for 2024, procurement teams can provide significant support for departments trying to streamline costs. Rather than being seen as gatekeepers, the procurement team can act as consultants to help department heads manage their budgets more effectively.
Many schools and universities are finding significant time and cost savings by leveraging cooperative or GPO contracts. Cooperative contracts can provide even greater purchasing power and supplier diversity.
Cooperatives negotiate master agreements on behalf of their member institutions, often delivering superior pricing and cost savings. Members can take advantage of these pre-negotiated contracts and compare their pricing to ensure they are getting best-in-class pricing on items. They can use the cooperative contract or work directly with their suppliers.
E&I Cooperative Services can help save money, streamline procurement, and enhance your eProcurement strategy. E&I’s eProcurement platform is custom-built for educational institutions, helping overcome some of the challenges associated with higher education procurement. It is the only member-owned cooperative focused exclusively on education.
EqualLevel, sponsored by E&I, serves as a secure, private marketplace for schools and universities preloaded with supplier contracts that are ready to use. You can also add any number of your supplier catalogs for increased flexibility.
Strategic Spend Assessments (SSA) are also available to E&I members. Through the SSA process E&I reviews and analyzes your spend data to proactively find opportunities to reduce costs and maximize spend controls.
Learn more about E&I Cooperative Services and how you can evolve your higher education procurement efforts in 2024.