Concerns about financing higher education have likely never been higher. The enrollment cliff, rising prices, and new threats to funding mechanisms have all of us worried about the future. The pressure on finance and procurement teams to reduce costs without sacrificing quality can be overwhelming.
The decisions you will be forced to make can have long-term implications for your college or university. Higher education procurement teams that navigate through these challenges effectively will have a greater opportunity to succeed. Unfortunately, not every academic institution will be able to do so. Some colleges have already closed their doors. A study by the Federal Reserve Bank in Philadelphia predicts that another 80 higher education institutions will be forced to shut down in the next five years.
Institutions must take a closer look at every procurement decision and align strategy with broader financial planning goals. Streamlining operations, cutting costs, and improving financial stability must be an overriding goal in this new era.
Procurement influences everything from daily operations to long-term infrastructure investments. However, many institutions struggle with inefficiencies in their procurement, leading to unnecessary expenses and budget overruns. Common challenges include:
By addressing these inefficiencies and aligning procurement with financial strategies, you can maximize your purchasing power and reduce spending.
One of the most effective ways to align procurement with financial goals is by partnering with an educational cooperative like E&I Cooperative Services. E&I pools the purchasing power of nearly 6,000 institutions to access better pricing, improve compliance, and streamline procurement.
By aggregating demand, cooperatives can secure lower prices, better contract terms, and improved service levels, which you likely would not be able to achieve on your own.
Long-term relationships help you maintain cost stability and predictability. Through cooperatives, you can access pre-negotiated contracts with trusted suppliers, ensuring you get the best value while reducing the administrative burden of contract negotiations.
As an example, The State University of New York (SUNY) System leveraged an E&I contract with Grainger to reduce pricing on every line item in the company’s portfolio. Over two years, this resulted in a savings of $1.4 million on spending of $7.6 million—more than an 18% reduction in costs.
The University of Pittsburgh partnered with E&I for medical and surgical supplies to dramatically reduce non-contract spend on campus. In one large research department alone, 90% of spend was off-contract. Through E&I’s Medline contract, they were able to reduce spending by $100,000 per year. In one department, they were able to reduce the cost of freight charges by $40,000.
Procurement compliance is a critical concern, especially when dealing with public funds and grant-based financing. Educational cooperatives offer contracts that align with regulatory requirements, reducing the risk of non-compliance issues. While you still maintain the ultimate responsibility for compliance, standardized agreements minimize legal complexities and risk.
By leveraging competitively solicited cooperative purchasing agreements, you can reduce the workload associated with bidding, negotiations, and contract management. This allows your higher education procurement teams to focus on strategic initiatives rather than transactional tasks—aligning purchasing with institutional goals for financing higher education.
To maximize savings, universities must integrate procurement decisions with broader financial planning. This requires a strategic approach that considers both immediate cost reductions and long-term financial sustainability.
A data-driven approach to procurement helps universities identify opportunities for cost savings and budget optimization. For example, E&I Cooperative Services offers a no-cost Strategic Spend Assessment (SSA) for members to identify spending categories where cooperative contracts could generate savings and consolidation achieve greater volume discounts.
Aligning procurement with financing strategies can save millions and go a long way toward overcoming today’s extreme challenges in financing higher education. However, academic institutions must rethink their strategy and ensure that procurement aligns with overall financial goals to meet (and overcome) this challenge.
As higher education budgets continue to be strained, universities must adopt a more targeted approach to purchasing. E&I Cooperative Services can help you maximize efficiency and drive long-term financial success.
View available cooperative contracts to see where you can start saving immediately and learn more about the benefits of becoming a member of E&I.
