Before making a major IT purchase, Michigan State’s David Gift says it’s wise to “calibrate your sense of the market.”

Feb 18 2008

Be a Better Buyer

Campus officials share their tips for making smart technology purchases.

Campus officials share their tips for making smart technology purchases.

Purchasing information technology products is no easy task — especially for those working in higher education.

Procurement officials are constantly challenged by the need to deftly balance conflicting demands — low cost, high performance, and difficult faculty and student requirements — while fostering academic freedom and meeting the architecture needs of the enterprise.

Being an effective IT buyer is getting more difficult, CIOs and procurement officials say. “Technology is becoming more complex and difficult to deal with, but at the same time users have higher expectations. From their point of view, technology has gotten easier to deal with,” says William Morse, CIO of Oglethorpe University in Atlanta. Applications and infrastructure are now harder to configure correctly, maintain and operate, Morse notes, and viruses, spam and spyware are constantly challenging the overall computing enterprise. “It makes for a tough balancing act.”

Still, those responsible for purchasing IT are rising to the challenge, in large part because they rely on tried-and-true best practices that help them procure state-of-the-art products cost effectively, while remaining constantly on the lookout for new and better techniques to get the job done faster, cheaper and more effectively.

Here’s what IT and procurement officials at colleges and universities around the country say works best for them when it comes to smart buying techniques.

Get a Reality Check

David Gift, vice provost for libraries, computing and technology at Michigan State University, says he often will turn to industry analysts when his team plans complicated or state-of-the- art purchases.

In many cases, Gift will seek out white papers and other research that industry consulting firms offer to gain a broader awareness of industry trends and related contract terms. “By relying on their expertise, you get an opportunity to calibrate your sense of the market,” Gift says.

Occasionally, though, he will ask for more specific help — for instance, when the East Lansing, Mich., university was investigating a mirrored storage solution. An analyst can be expensive, but in this case, Gift says, it provided the essential information his department needed to set up a success­ful purchase.

With an analyst’s help, he learned what types of applications and architectures were available, how to match a technical architecture to the university’s functional needs and what has worked well and not so well among the available products.

“When you think about working through design and initial estimation for a project and then working with the purchasing department to construct a request for proposal that gets complete information in a bid, that kind of background is remarkably important to help make sure that you set the bid process in a way that’s going to be most useful across all that risk portfolio space,” Gift says.

The decision to use an analyst appears to have been a sound one. After taking the consultant’s advice under consideration, Michigan State successfully purchased a mirrored storage system that has been up and running for some time.

Make the Most of Technology

Since the mid-1990s, Purdue University in West Lafayette, Ind., has seen its technology transaction volume balloon significantly. At the same time, its procurement staff has dwindled. What’s the secret to effectively handling this teeming workload? Rely on a Web-based electronic ordering system.

The system, which uses a supplier management application, contains the product catalogs and service-level agreements of 44 vendors. Any of the school’s 4,000 authorized buyers can log onto the system, compare such things as features and cost of available products and then make their purchase. The orders then go out to the contracted vendors, who send the purchasing department invoices to be processed by accounts payable.

Douglas W. Sabel, Purdue’s director of procurement operations, says that the system has cut the time involved in getting orders out the door from five days to less than a day and lets him keep a staff of five people and still effectively handle 220,000 technology purchase transactions annually.

“Without it, we’d be awash in paper,” he says, noting that about 200,000 of the transactions occur automatically and never see the inside of the procurement office; the 20,000 orders that do make their way into the department are projects that need to be bid out or involve new vendors.

An electronic ordering system is not without its challenges, Sabel says, noting that such an approach is neither cheap nor easy to implement. In Purdue’s case, accurately calculating the return on investment is nearly impossible because the ordering system is part of a larger enterprise resource management system.

But he estimates that the system will have paid for itself in three to four years on administrative savings and discounts alone, citing 10 percent to 30 percent discounts the department has been able to negotiate on contract purchases.

The major benefit of this practice, however, according to Sabel, is that “we’ve enabled end users to be good buyers by providing them tools that allow them to find exactly what they want, buy it and receive it quickly.”

Do the Same With Less

To reduce refresh and maintenance expenses, Carleton College’s Joel Cooper recommends standardizing end-user systems.

The desire of students and faculty for academic freedom extends to not having to standardize on a single computing platform, a fact that has forced IT purchasing departments to double up on their hardware buys to ensure that Macs and PCs (and, more recently, Linux systems) are available for public use.

That was certainly the case for Carleton College in Northfield, Minn. Joel Cooper, director of IT services, says the requirement is an especially expensive proposition for his department, which had to provide both Mac and PC hardware loaded with all the requisite applications not only in public computing labs but also in classrooms, so faculty would have access to whatever system they might need to effectively teach their students. “Then we had to replace all of those machines on a regular basis,” he says.

More recently, Cooper and his colleagues have discovered a way to do more with fewer resources. Carleton is now standardizing the systems in its public computing facilities.

This lets “us to do a lot more with the facilities that we have, because we’re doing more with the money that we have available,” Cooper says. He adds that the new systems also allow booting to Linux, which lets the college easily add a Linux environment to its public labs and classrooms. “Some of our students really want that, and we’re now able to give it to them without needing more resources,” he says.

The benefits go beyond cost savings. “I can basically provide a richer computing environment for my students with the same amount of seats,” he says, which is compelling even if the initial cost for the new machines was expensive.

Think Total Picture

One of the biggest myths that higher education institutions can buy into is the idea that technology is a commodity, says Morse of Oglethorpe University.

“The fact is, if you think that all products or all vendors are created equal and you put something out to bid based on the bottom line, you may end up with the lowest price,” Morse says. “But you may also end up with the lowest quality and technology that in the end not only doesn’t work but ends up costing you more.”

For this reason, no major IT purchase is made through his office without a three- to five-year total cost of ownership study — not only for long-term critical items, such as phone systems and server infrastructure, but also for routine purchases, such as PCs and printers.

Without this best practice, product service — including service charges, service level agreements and service capabilities — can be overlooked, Morse says. “Service in particular is not equal across vendors,” he says. “With service charges, for example, there are some vendors that have very high charges for services and some vendors that are much lower. If you look at the cost of the item over a three- or five-year period, you’re going to catch that and really understand the full expense of buying and owning that item.”

At Oglethorpe, looking beyond the tech specs and price is the standard for doing business. It’s a best practice, Morse says, that guards against wasting money. In addition to conducting TCO studies, his office always insists that at least two vendors are considered for every purchase and takes into account the reputations of both hardware manufacturers and service providers.

“The most important thing as a computer organization that you can do is to make sure that those projects are successful and work,” Morse says. “We never want users to pick up the phone and not get a dial tone or turn on the computer and find that the network is down. Making mistakes like that in an educational institution can be extremely costly.”

Come Together

Students at Villa Julie College in Stevenson, Md., can purchase Microsoft Office 2007 Small Business Full Version for just $15 at the campus bookstore. The software program, a must-have for serious academics, costs over $400 at an office supply store.

This low price isn’t a marketing ploy or a donated subsidy from a wealthy alumnus. Rather, it’s the result of Villa Julie’s membership in a purchasing consortium, a best practice that the small college uses to realize huge savings on technology.

Of course, many higher education institutions have joined purchasing consortia, which leverage the size and volume of their membership to negotiate lower prices with IT vendors on various products and services. What makes Villa Julie’s experience so fiscally beneficial, however, is the school’s eligibility to join the Maryland Education Enterprise Consortium (MEEC), a unique state program that pools the buying power of not only higher education institutions but also primary and secondary school systems, libraries and museums.

“It’s a nominal fee to join, but the benefits are astronomical,” says Villa Julie CIO Steve Engorn.

The consortium, which now has hundreds of participants across the state of Maryland, got its start in 1999 with an enterprise licensing arrangement with Microsoft. Currently, the consortium offers a range of hardware, software and training tools at discounts through various negotiated deals with vendors.

As a consortium member, Engorn can provide technology to cash-strapped students at an affordable price while maximizing his own budget. “It allows me to use my technology dollars as effectively as possible,” he says. “So by buying licensing upgrades for, say, Microsoft Vista at a considerably lower price, I can then take and put those dollars into academic classroom software or administrative software.”

Keeping Up

To stay abreast of technology advances is no easy chore given the many tasks and small size of most higher education IT procurement staffs. Still, there are plenty of effective strategies. Here are some offered by CIOs:

  • Hire student interns and student employees with a passion for technology and quiz them about cutting-edge and bleeding-edge breakthroughs.
  • Assign each staff member a specific area of technology to research and study.
  • Include short discussions of new technologies at regular staff meetings.
  • Make field trips to other colleges and universities to see new technology in action.
  • Network and consult with other education CIOs and technology purchasing executives.
  • Hold informal conversations with vendors about their soon-to-be-released products.
  • Take advantage of the wide range of resources offered by industry analysts, including trend papers and consulting services.
  • Join online forums, sign up for e-letters, read trade publications, surf the Internet and attend conferences.

Leaning Green

Like Carleton College, many higher education institutions are under self-imposed mandates to become more carbon-neutral.

As such, those responsible for information technology purchasing at that small Northfield, Minn., private institution won’t accept anything that hasn’t received an Energy Star rating. They have replaced CRT monitors with more energy-efficient flat-screens and are greening up campus data centers by adopting server virtualization and server consolidation technologies.

In addition, says Joel Cooper, director of IT services at Carleton, his department is becoming more involved in facilities management by pulling the energy management system onto the main college network.

The decision allows technology officials to excise data from building sensors and then mine it and analyze it to determine, among other things, the energy consumption levels in each room of a building. “It’s something that’s fraught with all sorts of interesting possibilities in terms of being more aware and having a window into energy use on the campus,” Cooper says. “Then we can figure out where and how to be more energy efficient.”

(To read about a school that merged its facilities management and IT services from the get-go, turn to the feature about Ave Maria University, on Page 20.)

On the Horizon

Purchasing departments are adept at squeezing every possible nickel from the budget by finding new procurement and acquisition methods that make the IT buying process more efficient and cost-effective. Here are a few trends that are gaining popularity:

  • Reverse Auctions — Unlike traditional auctions, where buyers bid up prices, a reverse auction involves sellers bidding down prices. Some universities, including Pennsylvania State University, are investigating these auctions, which are typically held online. The benefit? Buyers are assured of rock-bottom prices. But reverse auctions require a lot of up-front work in terms of pre-qualifying vendors and removing every variable except price from the purchase. Some purchasing officials are enthusiastic about reverse auctions, while others doubt their staying power. “I think it’s possible that some vendors will just stop participating because they can’t make any money,” says Doug Sabel, director of procurement operations for Purdue University.
  • Doing More With Less — The dual-boot solution used by Carleton College is a prime example, but there are other ways to get the most from available computing resources. For instance, server virtualization not only allows departments to maximize server capacity but also can help schools physically consolidate data centers and save on overhead costs, such as electricity and server maintenance.
  • Removing the Bulk — If a university orders 500 computers, all configured exactly the same way, it often would receive 500 computers in 500 boxes with 500 manuals. Not only does that kill a lot of trees, but it requires a lot of time to open boxes and dispose of manuals. Some computer manufacturers are taking measures to reduce the waste by giving buyers the option of receiving their goods in large multimachine packs with just one manual.

Focus Your Attention

At Purdue, the IT and procurement staff give hands-on attention to only 9% of buys, allowing the other 91% to flow through an e-procurement system.