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Most higher education institutions have made meaningful progress in developing a formal procurement strategy. Cooperative contracts are in place, sourcing events are documented, and category plans exist for major spend areas. Yet many procurement leaders still struggle to translate those efforts into consistent results.
Even with the best intentions, there’s often a disconnect in purchasing behavior.
Strategic purchasing turns procurement intent into realized value. Without it, even well-designed contracts may fail to deliver the savings, compliance, or performance you need.
Some companies throw around the term strategic purchasing as justification for a reorganization. In other cases, it’s just a buzzword that creates little difference into how procurement teams operate. However, applied effectively, the answer to the question, “what is strategic purchasing?”, is that it’s an operating discipline that governs how buying decisions are made day to day. It’s a formal approach for sourcing, choosing, and negotiating contracts based on institutional priorities.
Strategic purchasing takes a measured approach, helping procurement teams to balance conflicting goals and emphasizing:
For example, purchases are made under contract by default, and exceptions are limited with justifications. This can be a significant challenge in decentralized purchasing environments where department heads may prefer to use certain suppliers or bypass procurement strategies. So, it’s incumbent on procurement teams to make it easy for stakeholders to support strategic purchasing decisions. This might include:
People are very good at figuring out how to work around rules, so the easier you make it for them to buy-in to your strategic purchasing strategy, the more success you will have.
Transactional purchasing is common across campuses, particularly in decentralized environments. Departments initiate purchases independently, often based on convenience, familiarity, or short-term needs. Procurement becomes involved only after decisions are made, usually to process paperwork rather than shape outcomes.
This model creates several challenges:
Over time, you start to see supplier counts increase, requiring more management challenges and reducing the impact of volume discounts. Service levels can vary, and audit risks get bigger.
A transactional purchasing approach also puts a bigger burden on procurement teams, making it more challenging for them to meet a broad range of institutional initiatives. Plus, you have to spend more time resolving exceptions. That means less time on strategic activities that provide greater value.
The gap between approved contracts and actual usage is one of the most persistent issues in higher education procurement. Even strong sourcing outcomes lose value if departments don’t follow your protocol, and it’s more common than you might think. As many as 70% of organizational contracts are not followed by the departments that use them. Strategic purchasing solves this by moving away from decentralized, transactional buying toward more centralized visibility and contract adherence.
Strategic purchasing works better as a structure than as enforcement. Institutions that succeed focus on three foundational elements:
Visibility and Standardization
Purchasing pathways must be clear and consistent. Standardized processes help streamline procurement and make it easier for departments to comply. At the same time, procurement teams need visibility into spend to ensure compliance.
Policy, Process, and Technology Alignment
Your policies must reflect category strategies, and processes must support them. Your system and technology should guide users toward compliant options and capture the data you need.
If systems are misaligned, even users who want to follow your guidelines can get frustrated and default to old habits.
Stakeholder Enablement
Communication is always important, but if you want to accelerate adoption, you need to explain your framework and the logic behind it. Departments need to know these aren’t arbitrary rules, but a well-designed framework to meet overall institutional goals.
Strategic purchasing represents a critical step in procurement maturity by bridging the gap between sourcing strategy and operations. Institutions that invest in purchasing discipline are better positioned to benefit from category management, analytics-driven decision-making, and continuous improvement, the keys to creating a mature procurement strategy.
E&I Cooperative Services is the only nonprofit, member-owned sourcing cooperative with hundreds of competitively solicited cooperative contracts to save you time and money and support your strategic purchasing goals. Contact your E&I rep to discuss your procurement needs.