3 Ways to Make Procurement Inflation-proof

It’s no secret that everything costs more these days. From sticker shock at the pumps to higher price tags at the grocery store, inflation is on the rise. And the rises are significant. Gas prices jumped over 60% year-over-year from June 2021 to June 2022, while food prices increased more than 10% during the same time period. The last time we saw increases like this was during the early 1980s.

Unfortunately, colleges and universities are not immune to rising inflation. And as we approach a new academic year with inflation at a 40-year high, procurement teams need to consider new strategies to balance rising costs with flat or declining budgets. The truth is, inflation and cost increases will never go away. That's why procurement teams need to figure out how to manage costs, drive efficiencies, and maintain strong supplier relationships regardless of trends in the market. Here are three tips for procurement teams to consider.

1. Drive price stability through structured sourcing arrangements

Having the right sourcing arrangements is key to maintaining price stability. When you have an efficient, collaborative sourcing experience, you can make better purchasing decisions faster.

The best place to start is by defining—or redefining—your sourcing strategy. What needs to change in order to navigate rising prices? How do diverse suppliers fit into the mix? Identify the criteria that matters most to your institution and ensure that every bid aligns with your overall strategy.

Once you select your suppliers, make it easy for them to engage with you. Supplier portals are a great way to drive engagement and manage responses quickly and easily.

Finally, ensure your team is partnering with others across campus to discover new opportunities for innovation and collaboration that can help to drive down spend. Provide them with insights so that they can spot opportunities to drive greater efficiencies or stabilize costs.

2. Make it easy for your buyers to shop for the resources they need

Maintaining a holistic view of your institution’s budget is key to controlling it. By providing a single marketplace for your buyers, not only will you have control over what they purchase, but also who they purchase it from.

Prioritize the suppliers who best align with your sourcing strategy and promote their products during the shopping experience. This type of intelligent influence not only helps you allocate spend more efficiently, but enables you to promote diverse suppliers, champion sustainability, support local businesses, or encourage cost savings.

You’ll also want to provide your procurement team with visibility into supplier usage, order approvals, and transaction processing. This insight allows them to work more intelligently, improve compliance management, and gain better real-time control. 

3. Use a modern procurement solution

It’s amazing how many institutions still rely on outdated, paper-based processes to manage procurement. These systems are inefficient and they hinder your team from taking advantage of better sourcing strategies and competitive costs.

With a modern spend management system, you’ll be able to manage spend more intelligently, ensuring that you get the most out of every dollar. You’ll be able to build a more resilient supply chain and you’ll increase transparency into spend so you can spot ways to drive better efficiencies across campus.

These modern procurement solutions transform your manual, paper-based processes so you can make smarter, faster decisions about sourcing, procurement, and overall spend. They enable you to build a sustainable and diverse supply chain and manage the full contract lifecycle to drive improvements in spend management.

Navigate rising inflation through strategic procurement

Keeping costs stable is difficult, but necessary. When you structure the right sourcing arrangements, make it easy for buyers to shop for what they need, and use a modern procurement solution, you’ll be able to realize cost savings and efficiencies.

This post was written by Valerie Kennon on behalf of ESM, the procurement engine that powers Ellucian Purchase, an intuitive online shopping solution that automates the entire procure to pay process. Learn more about ESM.