With increasing pressure to reduce costs amid tight budgets, more colleges and universities are turning to higher education GPO programs to save money. Group purchasing organizations can often achieve significant savings by aggregating demand across members for big volume discounts.

But GPOs are about more than just cost savings. Today’s procurement leaders know they need to improve efficiency, reduce their administrative burden, and improve spend visibility—often doing more with less.

“Mere cost savings or avoidance are no longer the sole priorities,” said Public Sector Procurement Executive Tharshini Markandaier. “The primary emphasis now revolves around delivering value. Achieving a value proposition demands a fundamental change in perspective, which in turn, fosters increased efficiency and the adaptability necessary to meet the continuously evolving needs and expectations of internal stakeholders.”

Leveraging GPO provisions for higher education helps you produce that value, enhancing efficiency.

10 Ways Higher Education GPO Programs Improve Efficiency

1. Streamlined Procurement

GPOs manage competitive solicitations, sourcing, and contract negotiations, alleviating a significant burden from procurement staff. This allows institutional teams to concentrate on more strategic initiatives rather than spending time on transactional processes.

2. Access to Specialized Expertise

Higher education GPO programs employ procurement experts and category specialists, who provide insights and resources. Their in-depth knowledge helps craft better deals with more favorable terms, helping you get greater value from your suppliers.

3. Reduced Administrative Burden

A big challenge for procurement teams today is managing their workload. There’s a growing list of initiatives and regulations, all of which must be balanced around budget constraints. Minimizing the time and effort spent on purchasing activities is crucial to success. Higher education GPO programs reduce administrative tasks that are, in effect, outsourced to your group purchasing organization partners. This frees up time to work more strategically.

4. Improved Spend Visibility

You get better visibility into all of your spending. For example, higher education GPO programs like E&I Cooperative Services offer members a no-cost Strategic Spend Assessment (SSA), comparing spending data against available cooperative contracts to look for savings. For example:

· Evaluating the impact of moving to cooperative agreements

· Looking for opportunities to bring more spend under contract

· Finding options to consolidate suppliers to achieve greater volume discounts

5.Enhanced Supplier Diversity

Another area where you can improve efficiency is sourcing suppliers that prioritize sustainability and diversity. Because of the volume of business that cooperative contracts represent, they are highly attractive to businesses, making them more likely to respond to competitive solicitation than RFPs from individual schools. This makes it easier to source and find minority-owned businesses and environmentally responsible sourcing.

6. Simplified Budget Planning

GPO provisions for higher education typically include multi-year contracts with set pricing. While there may be price resets during the term of the agreement, you are less prone to unforeseen price increases. This helps you budget more effectively and plan for any forecasted price adjustments.

7. Reduced Maverick Spending

A study by the American Council of Trustees and Alumni reported significant concerns about excessive or unnecessary spending on non-core activities. One area where GPOs can help is reducing maverick or rogue spending. These purchases, typically made at the department level, fail to leverage contract rates. Consolidating purchasing through GPO contracts and eProcurement platforms can help reduce costs and ensure compliance with procurement policies.

8. Quality Control

Many GPO provisions for higher education include service level guarantees and quality standards—making sure you get the high-quality products and services you expect. This provides built-in quality assurance that reduces the risk of subpar purchases.

These cooperative contracts can span hundreds of schools, so suppliers have a significant incentive to deliver on their quality promises.

9. Risk Mitigation

The procurement process is full of risks. Part of the procurement’s team job is to minimize these risks, many of which are mitigated by GPOs by providing layers of protection. GPO provisions for higher education typically include:

· Liability coverage

· Indemnification clauses

· Quality assurance and supplier performance standards

· Regulatory compliance

· Termination and exit clauses

· Price protection

· Audit rights

Another way higher education GPO programs mitigate risk is by providing access to a broad range of top-tier suppliers. If quality dips or there are supply chain disruptions, GPOs make it easy to find alternate suppliers to fill the gap.

10. Access to Market Intelligence

Market intelligence and the collective knowledge of other procurement professionals can be extremely valuable. With knowledge of evolving trends in particular categories, and proven strategies to reduce costs and improve efficiency, you can make better decisions about your procurement processes.

E&I Cooperative Services is the only member-owned nonprofit GPO that solely serves the education community. Join today for no-cost membership, significant savings, and improved efficiency.