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Amazon brings its heft to school procurement

Amazon also offers extensive analytics capabilities to track purchases
University Business, June 2016

Administrators, faculty members and campus staff have been ordering all sorts of supplies from Amazon.com for years, but it was only recently that the e-tailing colossus jumped formally into the higher ed and business-to-business procurement market.

And some in the procurement world see benefits ahead.

“If they are bringing a new level of service and pricing and breadth of products, then the providers in that space today are going to have to get better,” says Kevin Juhring, the executive director of U.S. Communities, a national purchasing co-op comprised of schools, colleges and other public agencies. “They’re going to have to compete.”

Amazon Business launched last year and thousands of higher ed institutions have created accounts, says the service’s vice president, Prentis Wilson.

“Serving educational institutions is different than serving consumers,” Wilson says. “Educational institutions need a broad range of supplies to operate and the right mix of procurement tools, analytical insights and engaged partnerships to do so efficiently and effectively.”

Set up as a single marketplace, the service can relieve higher ed purchasers of having to manage hundreds of vendors who supply necessities such as books, lab equipment, software and office products, Wilson says.

Amazon Business also integrates with 31 procurement systems and offers customers an analytics dashboard, with charts and graphs, that shows all the purchases an institution’s employees have made, Wilson adds.

But Amazon Business still has some work to do. The company must assure colleges and universities that it can meet public procurement policies and security standards that vary from state to state, says Tom Fitzgerald, chief executive officer of E&I Cooperative Services, whose owners include 2,000 educational institutions.

And purchasers may still find lower prices by negotiating traditional contracts with big suppliers, says Jeremy Schwartz, director of cooperative contracts and procurement of the National Joint Powers Alliance, another public purchasing co-op.

“Amazon’s entrance into this space will have some appeal but may have limitations with larger projects that have a higher dollar spend,” Schwartz says.

Amazon’s extensive analytics capabilities could also provide schools with a deeper level of reporting and thus, higher transparency for the public. All of this could help make institutions more efficient without having to expand procurement departments.

“Many schools have the opportunity to leapfrog ahead of where they are by a decade,” Fitzgerald says.

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