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It's Time to Realize Procurement's Potential
10/8/2008
If you ask leaders in higher education about the role the procurement department plays in higher education, one thing is clear: As a business function, procurement's potential is largely under-utilized. While numerous, well-known institutions have proven that a more strategic approach delivers significant benefits, many continue to manage their spending just as they did before the advent of the Internet.During these challenging economic times, it is crucial that our leaders realize the role procurement can play in their efforts to generate savings, accomplish more with the same resources, and work more efficiently. Few functional areas have the potential to make a greater impact, not just on the bottom line, but on faculty, staff, and the pursuit of academic excellence.
Colleges and universities are facing unprecedented financial challenges. Costs continue to escalate, funding remains static, and tuition isn't able to fill the gaps; however, higher education must do more than clear financial hurdles to succeed. It must be capable of embracing new opportunities as they arise while supporting core educational goals. This requires a support and service-oriented infrastructure with the technologies, people, and processes in place needed to address changing needs.
Secrets in Plain Sight
To fully appreciate the impact procurement can make when the right technologies, people, and processes are put in place, one must first ask "Why do schools still rely on outdated approaches that handicap them in an increasingly competitive marketplace?" For the answer, one has to first look back. For decades, procurement was the department that administrators and faculty did their best to circumvent--the office that required just enough paperwork and signatures to make the experience tedious.
Unfortunately, this "red tape" reputation often held true. Limited by the tools at their disposal, many procurement professionals had little time to pursue strategic goals. For many, processing purchase orders and routing approvals through the chain of command was an all-encompassing task. Those on the outside knew little of the value-rich activities, including contract negotiations, occurring behind the scenes.
In recent years, radical improvements in technology, such as electronic procurement solutions that automate the entire purchasing process, have transformed not only the role procurement plays, but also the very nature of the profession. Freed from processing tasks, procurement's ranks are now filled by a new breed of professional--individuals whose business acumen and negotiation skills are more often associated with the Fortune 500 than higher education.
With these new technologies and people in place, procurement has a new label and role. It is the strategic partner--the leading edge of institutions' efforts to deliver millions of dollars to the bottom line without the pain of budget cuts. Costly and time-consuming paperwork is, for the most part, eliminated and savings can be dramatic.
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