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Governors are making serious cuts this year to balance state budgets – and one of the biggest items on the chopping block is higher education. So far, proposed budgets for states such as Illinois and Wisconsin have suggested reductions in university funding of up to 31.5%. As such, these universities will need to find ways to patch their fiscal wounds. Before cutting courses or activities, though, universities should attempt to realize as much cost savings as possible through smart procurement processes. Last year, Cornell University saved $30.1 million by making better-informed purchasing decisions. Likewise, from 2013 to 2014, the University of California system saved $120.0 million by implementing a new procurement plan. Other schools can follow in the footsteps of these forward-thinking institutions to reduce the costs of their purchases and maximize the efficiency of their buying processes. To achieve this goal, universities can pursue a number of strategies, including tracking prices, timing purchases, bundling orders and capitalizing on favorable market characteristics such as low product specialization. The specific strategy a school should use depends on the purchasing environment for each product or service they need to acquire. IBISWorld has identified specific products and services in the key areas of construction, campus services and furnishings and equipment, where expenses can be reduced without limiting funding for a university’s core activities.

Full Report

http://media.ibisworld.com/2015/03/24/scholarly-savings-strategic-purchasing-universities/