Pennsylvania's State System of Higher Education Builds Value with Procurement Shared Services

Jun 29, 2023   |   OMNIA Partners

The 14 distinct campuses in Pennsylvania's State System of Higher Education (PASSHE) span across the state, from West Chester University near Philadelphia to Slippery Rock University among the rolling hills of Western Pennsylvania. Each school is unique in size and student body, but they are all bound together by the promise of a quality education at an affordable price.

Evolving From a Regional Procurement Model to a True Centralized Commodity Team Model

To offer students a cost-effective education and improve customer service, PASSHE implemented a centralized shared services model to gain more value with the same budget. They launched collaborative sourcing methods supported by shared technology and data analytics to optimize university spending and gain significant cost savings.

Centralized Efficiency Balanced with Local Needs

The procurement shared services model began with proof of concept for collaborating purchasing functions due to staffing vacancies. The shared services model centralizes and manages the purchasing of materials, products, and services in balance with the unique needs of local campuses.

“Procurement Shared Services continues to develop its collaborative approach to strategic sourcing and procurement in expanding collaboration between and among universities,” said Jeff Mandel, Director of Procurement Shared Services. “There is a continued challenge to align multiple universities to common suppliers, systems, and other offerings. Challenges also include merging varying business practices and implementing a new eProcurement system (SAP Ariba).”

Procurement was not alone in its efforts to leverage the collective power of the entire state system. Human resources, labor relations, procurement, data analytics, IT and finance were consolidated to varying degrees and are finding success. PASSHE procurement staffing has declined by approximately 24% from fiscal year 2018/19 through 2022/23.

Long-Term Value Beyond Cost Savings

The transition from localized transactional purchasing to a more centralized strategic model offers an opportunity to optimize workflow, speed approval and reduce redundancy. Shared services offers the potential for greater staff expertise, standardized processes and supplier relationships.

“Procurement Shared Services has expanded its application of spend leverage across various commodities, developed commodity expertise, and shared best practices among procurement staff,” said Mandel. “A cost to serve model that in totality costs less than the former procurement support model.”

How Cooperative Purchasing Fits In

The biggest supplier challenges are the lengthy sourcing process and protracted contract negotiations. Multiply sourcing across 14 campuses and the staff hours can be substantial. Cooperative contracts from OMNIA Partners shortened the contracting cycle time and provided savings by applying spend leverage with key suppliers.

PASSHE Testimonial

We find value in cooperatives where the State System does not have significant leverage in the respective market and where another lead agency has already taken on the solicitation process and contracting legwork. Co-op contracts offer a much more streamlined and timely sourcing option.

– Jeff Mandel, Director of Procurement Shared Services, Pennsylvania State System of Higher Education

The OMNIA Partners Program

As your ally in the purchasing process, OMNIA Partners is dedicated to optimizing procurement for higher education institutions. Our goal is to improve the way your organization identifies, evaluates, and procures what you need at the best value. With free membership, you will gain full access to our portfolio of leading national supplier contracts, spend visibility, analytics, and subject matter experts to help you identify more strategic and efficient ways to procure. We are here to help you achieve your procurement goals while saving you time and money along the way.

Ready to learn more? Click below to see how your higher education institution can benefit from leveraging a cooperative purchasing program.