The education industry has suffered from the effects of a weak economy, and this means procurement is now in a key position to generate savings for all types of academic institutions, from elementary schools to universities. Although it may seem counterintuitive, government funding cuts, increased regulations, higher operational expenses, and an overall lack of resources have created opportunities for process improvements within the education industry. However, before procurement can function at its maximum capacity, it must first address several specific challenges, including a lack of collaboration, a decentralized operating system, and maverick spending.
This report provides an overview of these challenges, in addition to customized solutions for the education industry. Organizations that take advantage of procurement software have assurance against the consequences of a fragile economy.
The first challenge in the education industry involves a lack of collaboration between those responsible for purchasing and those who actually use the items being purchased. Although this situation isn’t unusual in the education sector, it limits opportunities for a streamlined ordering system. It’s critical that all employees in an organization have open communication, as this promotes improved decision-making and preferred end results. When employees operate in isolation, poor purchasing patterns cannot be identified and eliminated. It’s important to note that the education industry is similar in structure to government agencies; independent departments frequently use shared budgets. As a result, collaboration becomes all the more necessary.
The education industry is decentralized – individual schools manage themselves with a remarkable amount of autonomy. Unfortunately, this results in the fragmentation of procurement teams (even across a single school board) and chances to secure economies of scale are lost. To exacerbate this problem, unfocused procurement leadership makes coping with a wide range of stakeholders even more complicated – no one is able to determine their role and contributions. When this occurs, suppliers are unable to deliver the best products and services, and all parties suffer.
The education industry is extremely susceptible to maverick spending, due in part to poor (or nonexistent) category management of items being ordered. Academic institutions often make an effort to stretch their budgets, but without a system in place to organize and harness their purchasing power, these efforts are typically in vain. The same items might be ordered from different suppliers by multiple employees within one organization. Under these circumstances, purchasing power disappears. Co-workers are unable to communicate effectively with each other (or with their suppliers) resulting in confusion, repeat orders, and/or incorrect deliveries.
- Poor purchasing patterns are difficult to identify when employees operate without collaborating.
- Unfocused procurement leadership is problematic, especially if a wide range of stakeholders are involved.
- Budgets cannot be optimized without a system to facilitate purchasing power.
A lack of collaboration in the education industry, particularly when it comes procurement, can be easily corrected. Tradogram’s feature for Requisitions allows buyers to combine an unlimited number of items in a single order to achieve economies of scale and reduce the likelihood that purchases will be unnecessarily duplicated. This feature recognizes when multiple buyers order the same item – no additional tracking effort required. Employees are immediately aware of who is buying what, when, and from which suppliers. Collaboration is critical in the education industry, considering the high potential for multiple orders of the same, and/or very similar, items.
A decentralized operating system doesn’t have to impair an organization’s procurement process. Multi-level Management and the ability to set Permissions & Approvals can be extremely helpful for attaining a streamlined workflow, irrespective of institutional structure. An organization’s hierarchy (including branches and departments) can be customized to suit purchasing requirements – even by grade, section, subject area, etc. A system for approvals ensures that an individual in a leadership role can oversee items to be purchased (and approve or reject accordingly), while establishing permissions enables employees to have specified tasks. When these features are used collectively, the challenges associated with a decentralized operating system become manageable.
Maverick spending can be addressed with tools for Category and Budget Management. Category management standards can be set according to an individual school’s procurement requirements – a one-size-fits-all approach isn’t useful for anyone. A system for grouping items minimizes the possibility of duplicate and/or incorrect orders; employees have access to an application that is customized to meet the demands of the standard academic year (with an influx of students and a spike in ordering requirements during certain months). Additionally, Budgets can be set at any hierarchy level to cap spending based on the department, course, grade, etc. Monitor and analyze spend data with ease.
Tradogram Understands Education
The education industry is in an ideal position to take advantage of procurement management software. Institutions using Tradogram have improved their overall operating efficiency and communication methods while putting a stop to unnecessary purchases.
Tradogram is beneficial for a wide range of academic facilities. Savings can be generated regardless of the size of the institution, especially considering no organization in the education industry is safe from funding cuts and operational expenses. Tradogram is procurement software for schools that currently have an unorganized, inefficient ordering system.