The cost squeeze: Now is the time for strategic sourcing in higher education

• Financial pressures are growing in higher education and research, and rising costs and hidden fees are making strategic sourcing an urgent necessity.
• Strategic sourcing relies on data-driven analysis to identify inefficiencies, prevent future price increases, and implement both quick wins and sustainable improvements for lasting impact.
• When procurement shifts from a transactional function to a strategic role, it helps colleges, universities, and research institutions consolidate contracts, standardize rates, and manage total cost of ownership more effectively.

Higher education and research are facing growing financial pressures, and institutional budgets are becoming harder to manage. Traditional sourcing approaches are not keeping pace. What were once optional procurement improvements have now become essential tools for controlling costs and maintaining quality. Navigating these challenges requires colleges, universities, and research institutions to implement a more proactive procurement strategy. Strategic sourcing is no longer a future goal; it is a current priority.

Procurement teams are feeling the effects of today’s shifting economic landscape. Tariffs, once transparent in supplier contracts, will likely become less visible and increasingly embedded in overall pricing. What was previously a distinct line item (e.g., $50,000 + 25% tariff) will likely now be presented as a single inflated cost, reducing both clarity and negotiating leverage. As inflationary pressures persist, procurement leaders are beginning to question whether traditional benchmarks like the Consumer Price Index (CPI) remain reliable tools for managing cost expectations. These internal pressures influence purchasing behaviors. Strategic sourcing provides the expertise to help faculty and staff find the best way to get the supplies and services they need to do their work effectively.

Moving from a transactional approach to strategic sourcing offers institutions a clear path forward — but it also requires a cultural shift. Procurement must evolve from being an order-taker to becoming a strategic partner that actively shapes and guides the spending process. This shift enables institutions to step back, evaluate their total spend, and identify opportunities to consolidate contracts, standardize rates, and streamline operations. In this role, procurement becomes a trusted advisor — helping select supply sources that meet the right specifications while delivering the best total cost of ownership.

Strategic sourcing is about more than reducing costs — it helps prevent future price increases and fosters smarter, more intentional purchasing decisions. It’s a high-impact, low-risk strategy that strengthens procurement capabilities without requiring extensive structural changes.

The key is a disciplined, data-driven approach. The process starts with gathering and organizing spend data to gain a clear view of where resources are allocated. Careful analysis reveals trends, inefficiencies, and areas of redundancy. With this insight, institutions can pinpoint high-value opportunities where strategic sourcing will deliver the greatest impact. The next step is to develop and implement a plan that blends quick wins with sustainable, long-term improvements. Leaders who take this approach position their institutions for meaningful, lasting change.

The success of strategic sourcing depends not only on data and process improvements but also on building trust and alignment across the institution. Faculty and staff may be hesitant to change purchasing behaviors, especially if they perceive new processes as restrictive or disruptive. Proactive communication, clear demonstration of value, and early involvement of stakeholders in decision-making can help overcome resistance and foster collaboration. When procurement leaders position strategic sourcing as a way to support academic and administrative missions — rather than simply reduce costs — they create buy-in that accelerates adoption and ensures lasting impact.