B2B Payments

Is Efficient Procurement The Answer For Iowa Colleges?

Business of all sizes want to be as efficient as possible and make a profit. Why would colleges and universities be any different? However, three schools in Iowa are questioning the results of a Deloitte study that suggested that a better sourcing and procurement process could be the best way for them to remain profitable.

A little competition between colleges and universities is hardly a novel concept. However, three schools in Iowa are concerned that suggestions from Deloitte on a new funding model will turn the three state universities against one another.

According to a recent Iowa City Press-Citizen article, the University of Iowa in Iowa City, the University of Northern Iowa in Cedar Falls and Iowa State University in Ames are under review by Deloitte consultants. Preliminary results from the report were presented during a public forum last week, and officials said that it could save between $30 million and $80 million across the Iowa state Board of Regents system.

However, several university officials are concerned, and that while some proposed changes for a better procurement process could be beneficial, they might also result in staff cutbacks, larger class sizes and contract cuts with local vendors.

Jeannette Gabriel, a doctoral student in UI’s College of Education, is questioning the survey findings. Gabriel is president of UE Local 896 COGS – the union that represents graduate students.

“This is a corporate model being imposed on a public university,” she said. “It is disingenuous to the people of Iowa.”

The state higher education system’s method for the purchase of goods and services was identified by the reports as the area with the greatest potential for savings. In total,  an estimated approximately $16 million to $40 million could be saved.

Deloitte’s Gary Sutton explained at a forum on the report that improving the way contracts are negotiated and how orders are placed with vendors are key to cost savings in this area.

“Some savings have been negotiated with vendors, but there are opportunities for more,” he said, as reported by the Press-Citizen. Additionally, Sutton stated that the schools might need to hire more people in order to experience the greatest long-term savings benefits.

Nothing however has been set in stone. Phase two of the study is expected to be rolled out this fall. That portion of the study will include developing business cases for each of the 17 areas the board’s task force selected for further review.

Developing a stronger B2B procurement process is something that many businesses are working to achieve. Earlier this month at the technology conference SAPPHIRE NOW, SAP CEO Bill McDermott announced that his company’s Ariba Network is teaming up with eBay and its B2B marketplace for streamlined approach to indirect purchases not covered by contracts and formal invoicing.




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