Here’s a stark warning from your peers: According to Strata, 56% of senior leaders in higher education believe their academic institution won’t be viable in the next five to 10 years. They simply don’t believe the current business model is sustainable.
That’s frightening. As colleges and universities face unprecedented (and increased) pressure to reduce costs, the expectations on procurement and finance teams have been elevated. Procurement can no longer be seen as transactional. It’s now strategic, and critical, in solving budget issues and aligning with institutional goals. The emphasis must be on long-term savings rather than one-off purchases. Every procurement decision becomes crucial in meeting these goals.
By setting clear strategic procurement objectives and learning from real-world strategic procurement examples, institutions are transforming procurement from a back-office function into a driver of value and impact. Let’s take a closer look at how this is done.
Strategic procurement is a long-term, goal-oriented approach that moves beyond transactional purchasing. Instead of focusing only on price and speed, strategic procurement aligns purchasing with your institution’s mission, values, and future needs.
For educational organizations, this often means:
To maximize the impact of procurement, institutions should focus on core objectives.
Strategic procurement looks beyond the lowest bid to consider the total cost of ownership. This includes net purchase price, maintenance, energy usage, warranties, and end-of-life disposal. For institutions dealing with budget issues, this approach ensures that investments deliver long-term savings.
Educational procurement teams must meet strict compliance standards, including state purchasing laws, federal regulations, accreditation requirements, and internal audit policies. Strategic procurement embeds risk management into sourcing. This makes sure contracts meet legal standards and suppliers are financially stable.
Supporting minority-owned, women-owned, and small businesses strengthens local economies and reflects the institution’s commitment to inclusion. Supplier diversity is both a compliance consideration in many states and an opportunity to demonstrate social responsibility.
The goods you buy can account for up to half (or more) of your total greenhouse gas (GHG) emissions. Strategic procurement can help you uncover products, services, and suppliers to reduce your environmental impact and align with long-term sustainability targets.
Strategic procurement prioritizes partnerships with suppliers that bring innovation, whether that’s in facilities management, cloud-based platforms, or EdTech solutions that enhance teaching and learning.
A few strategic procurement examples can help us see how these objectives play out in the real world.
You partner with regional suppliers who prioritize locally grown produce and sustainable packaging. The program reduces environmental impact, supports local farmers, and aligns with the school’s sustainability mission.
Rather than simply buying the lowest-cost laptops, you might choose a supplier offering device leasing, warranty coverage, and e-waste recycling. This approach could reduce your upfront costs, extend equipment life, and support responsible disposal.
You enter into a long-term contract for energy-efficient HVAC systems and LED lighting. Though the initial investment is higher, energy savings and lower maintenance costs create significant cost savings over time and reduce your campus carbon footprint.
You leverage a cooperative contract to source lab equipment, EdTech platforms, and digital library databases. By aggregating demand across institutions, you get greater volume discounts to reduce costs without sacrificing quality.
Strategic procurement must be integrated into institutional planning. Here are three practical ways to align with broader goals:
By setting strategic procurement objectives, you can make sure you are driving greater value for your college or university.
Align your procurement objectives with data-driven insights. Request a no-cost Strategic Spend Assessment (SSA) from E&I Cooperative Services to uncover hidden savings and build a roadmap for long-term success.