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Strategic Tech Purchasing

9/25/2006

By Linda L Briggs

Buy in Bulk, and Standardize!

One obvious way to save on tech purchasing costs is through volume purchasing, and according to WSU’s Camp, there are a number of techniques administrators can use to negotiate the best prices for volume deals. First, he suggests, look for purchasing consortiums that have already done the pricing legwork for you. Then, compare their prices to your offers in hand. If you’ve narrowed product selection down to a specific vendor, educate yourself about the different sales channels the vendor offers. At WSU, Camp says, “we’ve found that the government/education price is not always the lowest price.”

Also, be aware of deals being offered elsewhere at your institution before engaging in any negotiation, Camp says. That ensures that you’re informed about the potential size of the volume-purchase deal before engaging in any negotiation. Be aware, too, that bulk deals offer opportunities for creativity. For a better price, Camp suggests agreeing to serve as a reference site or success story for the vendor, if either is in your best interests.

Buying any item in bulk can have a hidden benefit as well, says CDW-G’s Sartin. Beyond the obvious savings up front (because of the volume buy), there is a second benefit, often even more significant over the long term: the back-end cost savings inherent in managing a single software application, computer platform, or other item, he points out.

Rein in Maverick Spending

Curtailing “rogue spending” that can lead to off-contract purchases and non-standard equipment can be a challenge indeed. One approach yielding success, Sartin reports, is the eProcurement website. Typically, such a procurement site is set up for access via the school’s intranet, and it offers users a complete online catalog of products preapproved for purchase by the university—items that can range all the way from computer CDs to autos. This kind of procurement control method is catching on because reporting and tracking is greatly improved.

“Now administrators are able to go to the site and track all the orders,” Sartin says, including “which credit cards were used, and who made the purchases.” And because shopping information is consolidated in one place, purchasing is easier for users, which helps to curtail trips to the local Best Buy for off-contract equipment. The online catalog method also is a cost-saving strategy because it reflects prices that the university has already negotiated with each vendor, typically giving buyers a choice of items at reduced rates.

Issuing credit cards with limits, as both Drexel and WSU do, can also be successful, Sartin says. And the cards can be used as part of a more comprehensive eProcurement system. One drawback to credit cards: They can encourage the very kind of rogue buying that you’re trying to control. “Often, administrators will set a daily limit, but they don’t indicate where you need to purchase products, or what brand or type of product should be purchased,” Sartin adds.

Camp agrees that institutions can better manage their general-purpose IT environments by controlling off-contract purchasing, but is careful to draw a distinction between discipline-specific IT equipment used by a single department, school, or college, and general-purpose IT equipment such as computers, servers, printers, and productivity software used throughout the university. The former types of purchases are managed locally, and that is appropriate, he explains. For general-purpose IT equipment, however, “purchases should be managed globally to reduce costs and improve the quality of support,” he says. To reduce off-contract spending and move toward better management of resources, Camp suggests establishing standards committees (for both hardware and software) that can recommend products that adhere to general industry standards. It’s important that committee members represent key constituencies, he stresses, “including IT leaders, key customers, and purchasing representatives, all of which have a vested interest in improving IT services across campus. To encourage university personnel to follow committee recommendations, he adds, make it easy to access the appropriate product catalogs, enlist the support of the Purchasing department, and become an advocate for the reasons behind simplifying IT environments.

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