Universities closely monitor major construction projects, enterprise technology investments, and other high-value purchases. Yet a large share of institutional spending occurs through routine transactions that may receive far less strategic oversight.
Office products, facilities supplies, temporary labor, consulting, printing, shipping, travel, maintenance items, and technology accessories can be purchased by hundreds of departments across multiple campuses. Individually, these transactions may appear insignificant. Collectively, they can create substantial cost, compliance, and operational risk.
Taking control of indirect procurement requires giving procurement teams enough visibility, structure, and influence to guide decentralized purchasing toward better institutional outcomes.
Indirect categories often support day-to-day operations rather than an institution’s primary academic mission. Because the purchases are dispersed across departments, they may be treated as routine expenses rather than strategic sourcing opportunities.
This creates several common challenges. Departments may buy similar items from different suppliers, use inconsistent product specifications, negotiate separate agreements, or purchase outside established contracts. Transactions may also flow through P-cards, reimbursements, purchase orders, and online marketplaces, making the complete picture difficult to assemble.
Departments aren’t acting irresponsibly. They’re likely just responding to operational needs or choosing familiar suppliers because approved options are unclear, unavailable, or difficult to use.
Procurement needs to examine both purchasing behavior and the systems surrounding indirect procurement. Stronger oversight should make compliant buying easier rather than simply adding more approval steps.
Indirect procurement becomes expensive because it often leads to higher costs, especially when you are fragmenting demand. That’s why about half of those surveyed in the most recent Indirect Procurement Report planned to reduce the number of suppliers they used, more than double the percentage reported from just a year earlier.
Supplier fragmentation weakens your institution’s ability to use its full purchasing volume. One department may negotiate pricing based on its own limited demand while several others buy comparable products elsewhere. The institution may then maintain multiple supplier records, contracts, invoices, payment processes, and service relationships for essentially the same need.
Reducing unnecessary supplier duplication can improve your pricing leverage, simplify administration, and strengthen contract management. It can also make it easier to monitor performance, resolve service issues, and obtain consistent purchasing data.
Before changing suppliers or introducing new controls, procurement teams need to understand where money is going. Spend analysis can group transactions by category, supplier, department, payment method, and contract status. It can reveal categories with high transaction volume, significant price variation, low use of preferred agreements, or an unusually large number of suppliers.
Procurement teams can then prioritize categories based on financial opportunity, operational risk, and institutional importance. A category with moderate spend (but thousands of transactions) may deserve attention because of its administrative burden. Another category may require intervention because inconsistent purchasing creates cybersecurity, safety, or compliance concerns.
Visibility also helps procurement distinguish isolated exceptions from institution-wide patterns. Rather than imposing broad restrictions, teams can focus their efforts where stronger guidance will create measurable value.
A category-by-category approach moves procurement beyond individual transactions and toward long-term planning. Effective category management in procurement examines total demand, market conditions, supplier capabilities, internal requirements, contract performance, and user behavior.
For example, managing facilities supplies as a category may include reviewing commonly purchased products, delivery locations, emergency ordering patterns, supplier service levels, inventory practices, and sustainability requirements. The resulting strategy might consolidate routine purchases while preserving alternate sources for specialized or urgent needs.
Category strategies should also incorporate input from the people who use the products and services. Facilities teams, information technology leaders, researchers, faculty, and administrative departments can identify service requirements that may not be visible in transaction data alone.
Controls are most effective when they direct users toward the right purchasing decisions at the point of need. For example:
The goal is not to eliminate decentralized purchasing. Instead, procurement should create clear pathways that balance departmental flexibility with institutional standards.
Improving oversight of indirect categories can produce benefits beyond lower prices. Institutions may reduce invoice volume, improve supplier performance, strengthen policy compliance, support supplier diversity, and gain better information for budgeting and forecasting.
A mature category management procurement strategy also allows procurement professionals to spend less time responding to isolated requests and more time shaping long-term institutional demand.
Explore E&I’s competitively solicited cooperative contracts and eProcurement solutions to strengthen your institution’s indirect spend oversight, streamline purchasing, and improve institutional value.