Procurement teams often focus primarily on cost avoidance and holding the line on inflation. It’s not surprising. About 70% of procurement leaders list cost management as their biggest strategy for today and the foreseeable future. Looking at the top issues facing higher education, you can see just how critical procurement has become in achieving goals for colleges and universities.
A survey by the National Association of College and University Business Officers (NACUBO) reports the top five business issues for 2025 are:
Procurement directly influences four of these five areas. Strategic sourcing helps institutions manage unreliable funding sources by stabilizing budgets through long-term supplier contracts and predictable pricing. It contributes to amplifying the value of higher education by ensuring that every dollar spent supports mission-driven outcomes.
Procurement plays a pivotal role in supporting institutional operations, reducing administrative burdens, and providing staff with the tools and resources they need to perform their jobs effectively. And in meeting rising operational costs, procurement is at the front line, balancing financial efficiency with institutional needs through smarter sourcing and value-based negotiations.
These growing responsibilities are precisely why E&I Cooperative Services developed the E&I Economic Benefit Model™, a comprehensive, education-focused framework that helps evaluate contracts for total economic value and drive greater institutional resilience.
Higher education procurement teams are dealing with continuous pressure. Find more savings. Hold the line on cost increases. Do more with less. And don’t forget about maintaining compliance, managing supplier inclusion, sustainability goals, and achieving savings without compromising quality or service delivery. It’s a big ask.
Driving procurement cost savings alone would be a big job, but it’s just part of the workload. In fact, the real challenge for education procurement leaders is in driving total economic benefit that captures savings, cost avoidance, and measuring incentives and rebates.
The E&I Economic Benefit Model™ redefines the framework. Rather than focusing on one-time cost reductions, it evaluates the total economic impact of sourcing decisions. This model gives you a true accounting on the value each contract brings, which can be considerable. It typically delivers overall cost savings in the range of 4–10% or higher.
Understanding cost avoidance vs cost savings is important to identify the full value of any deal you negotiate.
Cost savings are tangible. It’s easy to measure by comparing quotes to past transactions, or lining up quotes vs. where negotiations end. If you find better pricing or a way to bring more spend on contract, these savings are measurable.
Cost avoidance, on the other hand, focuses on preventing expenses before they occur. This includes avoiding price escalation and the considerable time, labor, and administrative costs tied to conducting RFPs. Because cooperative contracts are competitively solicited on your behalf, your institution reaps the benefits without the resource burden.
The E&I Economic Benefit Model™ captures these values, not just recording what was saved, but what you prevent from being spent. This gives you a better, more strategic way to evaluate contracts to see a true reflection of value for your institution.
In higher education, this distinction can be especially important when it comes to cost savings strategies in procurement. Short-term savings are great, but cost avoidance also drives long-term financial stability.
Let’s take an in-depth look at how this procurement model delivers value. Every contract is evaluated across three pillars:
Each pillar is part of a robust procurement cost analysis that compares baseline data, historical spend, or market pricing against E&I’s competitive cooperative contracts. This goes beyond just measuring blanket discounts to providing a holistic understanding of total economic value. Leveraging cooperative scale, standardized contracts, built-in compliance, incentives, and transparent reporting, you can see the difference this approach makes in tangible ways.
A 2025 report from the Government Accounting Office (GAO) reinforces some of these key points, recommending that all institutions focus on:
The GAO report stresses the importance of baseline comparisons, spend visibility, and supplier accountability, all of which are core to E&I’s procurement cost analysis methodology.
Procurement cost analysis is the analytical foundation of the Economic Benefit Model™. It transforms procurement from a transactional activity into a strategic decision-making engine.
The process involves:
Through this process, you gain visibility into spending patterns that you might otherwise be unaware of. Procurement cost analysis also helps you have more focused, data-driven conversations with finance and leadership to demonstrate the real value of what your procurement team delivers.
You know the traditional education procurement process, a mix of RFPs, bids, quotes, manual evaluation against weighted frameworks, and more. This process helps secure competitive pricing, but it often misses opportunities for even more savings.
In contrast, the E&I Economic Benefit Model™ integrates cooperative purchasing benefits directly into its structure. By leveraging the combined purchasing power of 6,200+ academic institutions that are members of E&I, we can deliver education-specific contracts that are compliant and deliver savings you likely cannot achieve on your own. This also removes the need for lengthy RFPs, reduces administrative overhead, and accelerates procurement with access to pre-vetted top-tier suppliers.
Where traditional procurement focuses on short-term price competition, this model focuses on long-term procurement cost reduction strategies and how they all come together to improve your bottom line.
Traditional Procurement | E&I Economic Benefit Model™ |
Price-focused, transactional approach | Value-focused, strategic approach |
Repetitive RFP cycles and administrative burden | Eliminates RFPs through cooperative, pre-competed contracts |
Limited spend visibility and fragmented data | Unified spend analytics and total economic reporting |
Inconsistent compliance across departments | Built-in compliance with education-specific contracts |
Short-term cost cutting | Long-term financial stewardship and transparency |
Independent negotiations | Collective leverage across 6,200+ institutions |
Minimal incentive capture | Rebates, patronage returns, and measurable incentives |
Beyond cost savings, cooperative purchasing helps you manage risk and ensure regulatory compliance, two areas that can impact the true value of procurement. All of our cooperative contracts are competitively solicited and designed to comply with education procurement regulations. These contracts reduce the risk of non-compliance, supplier instability, and audit exposure.
By working with vetted, prequalified suppliers, you will have greater confidence that their contracts align with your standards, pricing structures, and service-level expectations. This consistency helps you avoid disruptions that can get expensive. At the same time, however, you maintain strong internal controls and can customize elements of the agreement to fit your needs.
You also build in resiliency. Cooperative contracts that span multiple academic institutions represent a significant piece of business for suppliers. As such, they are more likely to offer greater discounts, added incentives or rebates, or added value.
Procurement cost reduction strategies require data, commitment, and consistent execution. The E&I Economic Benefit Model™ can help you deliver sustainable improvement through targeted strategies such as:
These strategies transform the E&I Economic Benefit Model™ from a measurement framework into a continuous improvement system, helping you uncover new procurement cost savings ideas. E&I’s cooperative contracts amplify these efforts by combining sourcing scale with education-specific requirements. Whether it’s technology, facilities, or instructional materials, you gain immediate access to volume discounts and a clear roadmap for sourcing cost savings.
This framework can deliver consistent, measurable improvements in cost efficiency, process visibility, and supplier accountability. It can also help with burnout by transforming the procurement process from transactional to strategic, elevating the role and importance of your procurement teams.
Key outcomes include:
The biggest benefit is financial stability. Only 76% of those surveyed in the 2025 Annual Higher Education Outlook from Forvis Mazars and NC State believe their institution will be financially stable over the next 10 years. While this may give you pause, consider the number of colleges that have already shut their doors over the past few years. Now, couple that with the fact that successful institutions today typically maintain an operational net income of just 2% of total revenue, and you can see why financial stewardship is more important than ever.
The E&I Economic Benefit Model™ provides a clear framework for navigating financial uncertainties and deriving greater value.
Procurement leaders are increasingly expected to justify their investments and demonstrate measurable ROI. This model helps you do exactly that. With clear procurement cost analysis and visibility into your procurement activities, you can clearly demonstrate the value of your work beyond just reducing costs on contracts. You can talk in terms that executive leadership and governing boards understand.
When you shift focus from tactical purchasing to cost saving initiatives, procurement emphasizes total economic benefits and highlights your team’s contribution to the financial sustainability of your academic institution.
What is cost avoidance in procurement?
Cost avoidance is all about preventing unnecessary expenses through efficient sourcing and leveraging cooperative contracts. Avoiding the time and cost of RFPs, minimizing price volatility, and reducing staff time on administrative processes can make a real difference.
How do you calculate procurement cost savings?
Procurement cost savings are calculated by comparing baseline costs (historical or market pricing) against actual spend achieved through negotiated or cooperative contracts. The E&I Economic Benefit Model™ integrates cost savings, cost avoidance, and revenue options for a complete analysis of total value.
What percentage can educational institutions save on procurement using cooperative agreements?
Savings vary based on category and contract usage, but cooperative agreements consistently produce measurable financial benefits by reducing sourcing time, capturing incentives, and leveraging pre-negotiated contracts. With the E&I Economic Benefit Model™, we are seeing sourcing cost savings of 4-10% or higher for contracts.
Discover how your institution can quantify total economic benefit and transform procurement into a strategic advantage. Learn more about the E&I Economic Benefit Model™ and how it can benefit your academic institution, leveraging cooperative contracts and savings solutions built exclusively for education.