Menu
It seems like everyone working in education is being tasked with doing more with less. Smaller budgets, fewer staff, and yet an increased workload. Sound familiar? Procurement teams are being asked to balance quality, volume, and cost while working within tight budget constraints and a mandate to reduce spend.
At the same time, prices are rising, and there are increasing goals to meet, such as sustainability and supplier diversity. It can feel a bit overwhelming at times.
So, procurement teams are having to be more strategic about purchasing.
Working with an education cooperative commune, a group of academic institutions working together, can provide a tangible return on investment and help you meet your goals. A group purchasing organization (GPO) can leverage buying power across institutions to lower costs and streamline processes.
Cooperative agreements produce tangible benefits. Here are a few examples.
The biggest benefit is the money you save. Combining the purchasing needs of multiple institutions produces larger volume discounts. You can often save 10% to 15% (or more) of the costs of goods and services by leveraging cooperative agreements.
There are hidden savings, too. With a cooperative, schools often have access to a broader group of suppliers that might not respond to individual RFPs. This creates a more competitive approach to procurement, resulting in more favorable pricing.
Because the education cooperative commune manages the RFP process, competitive solicitation, and contract negotiation, you significantly reduce the administrative overhead of procurement. By streamlining the process, you can remain compliant and save time, which translates directly to the bottom line by freeing your team up to handle more strategic tasks.
Because working with a cooperative creates an economy of scale for suppliers, they can offer lower prices. Many also offer additional incentives, volume discounts, or rebates when they enter into cooperative agreements.
For example, a GPO might secure a 5% rebate on technology purchases through a cooperative contract. A university buying $500,000 worth of laptops and desktops could receive a $25,000 rebate at the end of the year.
Educational purchasing cooperatives have deep insight into the unique needs of academic institutions. This often produces contracts with more favorable terms, such as:
This flexibility can produce significant cost reductions. For example, software licensing agreements can add up quickly, and overspending is common. With shifting enrollment, however, it’s often challenging to know how many licenses you need. Rather than paying for software you will not need, some suppliers working with cooperatives will offer flexible licensing agreements that are based on actual usage rather than a definite number.
Because suppliers are working with a larger number of institutions, they are more likely to invest in the relationship. This often produces a more collaborative approach to procurement—leading to more innovative solutions that are tailored to the education sector.
This ongoing relationship produces greater value. For example, suppliers may be more open to renegotiating terms or pricing depending on market conditions or new regulatory requirements.
There is only one cooperative dedicated to the education sector. E&I Cooperative Services is a non-profit, member-owned organization that focuses solely on education. Another tangible ROI of working with E&I Cooperative Services is in the form of patronage refund.
E&I Cooperative Services reinvests proceeds into the organization and also shares them with members. Patronage refunds take the form of cash or certificates of equity, turning member procurement activities into revenue generators.
Patronage refunds are based on a member’s purchasing volume through the cooperative and can be substantial. For 2023, the E&I Board voted to distribute $3.35 million in cash to its members.
Another way that E&I Cooperative Services provides a tangible ROI is through Strategic Spend Assessments (SSAs). At no cost to members, the procurement specialists at E&I Cooperative Services will analyze your spend and compare it to cooperative contracts to look for ways to reduce costs or consolidate purchasing to achieve volume discounts.
These SSAs often produce significant savings.
So, what are the benefits of cooperative agreements when it comes to ROI?
With E&I Cooperative Services, you can take advantage of patronage refunds and Strategic Spend Assessments for additional savings. Since there is no cost to become a member or any minimum purchasing requirement, any savings you get go right to your bottom line.
View available contracts at E&I Cooperative Services or learn more about the benefits of becoming a member.
