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The landscape in education is changing rapidly. Colleges and universities are dealing with declining enrollment and lower tuition fees. While overall enrollment rose in the fall of 2023, freshman enrollment numbers continue to drop. Inflation, higher supply costs, and staffing challenges are all eating away at budgets. For everyone involved in procurement and purchasing, there is a renewed emphasis on streamlining processes to wring out efficiencies and deliver substantive cost reductions.
Over the past few years, supply chains have also been unstable, resulting in significant fluctuations in pricing. For many items, there was no choice but to pay the going rate. As supply chains normalize, however, it is time to focus more closely on pricing and forecast more accurately.
Efficient procurement systems help educational institutions streamline purchasing, reduce costs, and improve transparency. In this article, we will explain what is procurement in education, the benefits of using higher education procurement software, the different types of software and some best practices to help you improve your procurement process.
People often confuse procurement vs. purchasing, but they encompass different things. The procurement process creates a strategic framework for sourcing, negotiating, contracting, and complying with institutional objectives. Purchasing is a subset of procurement, covering the actual buying of goods and services.
What is higher education procurement? It’s an overarching strategy to guide the purchasing process for optimal efficiency and pricing.
Modern procurement teams at higher education institutions deploy eProcurement systems, automating procurement activities using digital tools and cloud-based platforms to streamline processes and reduce manual work. By bringing together all of your information into a centralized platform, you can automate interactions between colleges, universities, and suppliers while eliminating paper.
While every college or university may have its own procurement process in place, all of them need to focus on three distinct areas: process, people, and paperwork.
Each of these three P’s must work efficiently and collaboratively to create an effective higher education procurement system.
There are different types of procurement methods, including:
Some educational institutions use spreadsheets and POs for procurement. Others use software tools, including enterprise resource planning (ERP) platforms or other eProcurement tools.
Thousands of schools also receive eProcurement solutions from E&I Cooperative Services®. E&I offers a few different tools for its members, including EqualLevel, sponsored by E&I. This is a secure, private marketplace for schools and universities preloaded with supplier contracts that are ready to use. You can also add any number of your supplier catalogs for increased flexibility.
Educational institutions implement eProcurement solutions for a variety of reasons. Some of the more common objectives of eProcurement include:
Achieving these objectives creates a more efficient system for procurement and provides a long list of benefits.
Implementing an eProcurement system significantly improves the speed, accuracy, and compliance of procurement workflows using digital purchasing. eProcurement also provides real-time visibility into pending orders and budget status. Compliance is ensured by built-in approval workflows and policy enforcement.
It is not uncommon for educational institutions to see cost savings of 8 -12% when adopting eProcurement solutions. Savings come from sourcing economies of scale by consolidating spending, boosting competition through bidding, earning rebates, reducing non-compliant spending, and eliminating paper/postage costs. Higher education procurement software and data analytics can also provide greater insight into spending to identify pricing opportunities and inefficiencies.
Consolidating all purchasing data in a central procurement system improves spending visibility. Procurement software provides an overview of purchases, monitors spending against budgets and forecasts, and helps flag potential budget issues.
eProcurement enhances financial oversight and governance by centralizing purchasing data and digitizing approval workflows. Transaction details like purpose, approver, date, and amount are part of an automated audit trail. Procurement teams can set policy controls and limit purchases by category, dollar amount, or approved vendors.
Besides institutional guidelines, it is also easier to follow Department of Education procurement guidelines.
Standardizing your vendor data and centralizing supplier management make it easier to quickly identify preferred supplies, pricing, and contactor details. You can also create digital communication chains with vendors to keep detailed records of interactions.
Educational institutions, procurement and purchasing managers, school leadership, and suppliers all benefit from eProcurement.
Academic institutions benefit from more cost-efficient purchasing, faster processing, and centralized policies to match strategic objectives.
Everyone involved in procurement, like purchasing managers, accounting staff, and department administrators, benefits through faster approvals, reduced paperwork, and easy access to data.
CFOs, Provosts, Board of Trustee members, and other executive leaders benefit from consolidated spending data, analytics, and oversight on policy compliance. This enables data-driven strategic decisions and more informed governance.
Suppliers get streamlined order processing, allowing them to reduce time in the sales process, working digitally to accelerate fulfillment.
While your process may vary, typically, the six steps involved in eProcurement include the following:
The procurement process in colleges and universities starts with identifying needs across departments. Procurement teams conduct assessments to determine specifications and requirements to be met. As budgets are set, funds are designated, and spending is approved.
With needs established, procurement sources potential vendors. This may involve matching requests to existing contracts, finding new suppliers, issuing RFPs/RFQs, reviewing proposals, or sourcing with cooperatives.
Vetting suppliers is key to ensuring they meet institutional goals and requirements. Specific risk analysis may be done. Contracts are negotiated to agree on all terms — pricing, timelines, conditions, and performance. Once contracted, purchases can proceed. Higher education procurement teams verify the delivery of goods and services per the agreement. Compliance is checked. Invoices are then processed for payment after confirmation.
eProcurement streamlines the entire process. By enabling cross-contract searches and punchouts to vendors’ websites, finding and buying exactly what you need is faster and easier.
Getting the most out of your types of procurement methods requires consistent application of best practices across your campuses. Here are a few of the practices that lead to greater efficiency and standardization.
To ensure consistency and oversight, centralize procurement under one office. While individual departments may make purchases, having procurement professionals manage spending policies and contract management provides uniform purchasing that aligns with institutional goals.
Reducing the number of suppliers in common spending categories streamlines procurement and can lead to better volume discounts. Regularly evaluate contracts and suppliers for further consolidation potential.
As part of this review, look for inaccurate or duplicate records. As most systems have developed over time, it is not unusual to find multiple entries for suppliers under slightly different names or spellings. By eliminating duplicates and standardizing supplier records, you can manage your procurement process more efficiently.
Well-documented procurement policies and protocols are vital for compliance. Outline preferred processes and systems for tasks like purchase requisitions, approvals, POs, and workflow.
Schools should also have guidelines for what can be purchased through contracts and what items need a competitive bidding process. Standardizing eProcurement helps ensure everything complies with institution policies.
Getting support from stakeholders is crucial for procurement success. Communicate regularly on the benefits of leveraging preferred suppliers, optimizing spend, and following purchasing protocols. Demonstrate how it leads to better budget outcomes for their department and helps them manage their budget more efficiently.
Training on policies and procedures reduces non-compliant and maverick spending. By providing guidance and education, procurement teams can be seen more as consultants providing helpful tips rather than gatekeepers for departmental purchases.
Analyzing spending data and procurement metrics against benchmarks can uncover opportunities to improve. Data can uncover ways to streamline procurement through consolidation, contract optimization, and more.
Reporting functions can also help track compliance with specific initiatives, such as environmental, social, and governance (ESG) criteria and the use of certified diverse sources.
Joining a cooperative procurement group aggregates volume across institutions for better pricing and supplier options. For example, E&I leverages the combined spending of 6,000+ academic institutional members, providing competitively sourced contracts at significantly lower pricing than academic institutions could get on their own.
Contracts include pre-negotiated terms and conditions, so you will want to ensure they align with your policies and needs.
Vet suppliers thoroughly to ensure they meet requirements. Use contracts to outline expectations and verify performance. Ongoing oversight builds relationships and ensures satisfactory fulfillment.
When you become a member of E&I Cooperative Services, you get access to tools and strategies from a team of education procurement specialists. Designed specifically for schools, districts, colleges, and universities, E&I understands the educational landscape to provide significant benefits.
By aggregating spend across thousands of members, E&I leverages bulk-buying power for lower pricing. Combining purchases produces savings individual institutions may not obtain alone. This significantly reduces the costs of goods and services. E&I contracts also significantly reduce the administrative time to source, vet, and negotiate with suppliers, producing additional savings.
Cooperative contracts let you quickly compare pricing to current suppliers. If there is a better deal already in place, you can opt-in immediately instead of running a full RFP process. eProcurement streamlines purchasing, especially for emergencies or tight deadlines.
Many E&I suppliers offer exclusive rebates or incentives. Some even have programs that meet your needs and become revenue-producing. E&I also provides patronage rebates to members annually based on transaction volume. You share in the cooperative’s success, as evidenced by the $12 million that E&I has returned to members in patronage, rebates, and incentives.
E&I maximizes subcontracting to certified diverse suppliers while optimizing savings. This aids diversity goals without sacrificing cost benefits from cooperative purchasing.
You can also tap into experience from a broad cross-section of higher ed peers. Members provide insights on improving operations and overcoming procurement challenges. E&I is staffed by a team of procurement experts, including procurement leaders at large educational institutions, who can provide expertise and recommendations.
Available to members, E&I’s Strategic Spend Assessments (SSAs) analyze data against contracts to uncover potential savings. This helps refine future sourcing and purchasing while finding immediate savings across pre-negotiated contracts.
SSAs are made up of various components, including:
E&I Cooperative Services is the only nonprofit, member-owned organization that specializes in procurement for schools. Membership is free and provides access to exclusive member pricing, spend assessments, and eProcurement software. There is no obligation to use pre-negotiated contracts, although most members find significant savings by doing so.
E&I can help improve your procurement process in:
E&I has more than 150 competitively sourced contracts with vendors available to use. 13% of the portfolio features diverse supplier contracts. As a cooperative, E&I has helped member institutions make $2.8 billion in purchases, leveraging cooperative buying power to generate cost reductions.
Learn more about E&I Cooperative Services and how you can evolve your school’s procurement process today.
