Higher education is in flux. Tightening budgets, talent shortages, and growing expectations for transparency and sustainability are forcing institutions to deliver more with less. Procurement leaders are now at the center of this shift, balancing fiscal responsibility with mission-driven goals in research, inclusion, and innovation. While funding cuts, compliance changes, and fragmented operations continue to challenge the sector, they also present an opportunity to redefine procurement’s role as a strategic driver of resilience and efficiency. In the year ahead, institutions that embrace digital transformation, automation, and stronger supplier collaboration will be best positioned to thrive amid uncertainty.
From Cost Containment to Value Creation
For years, higher education procurement has focused on cost containment, including cutting contracts, freezing hiring, and stretching every budget line. But as Deloitte’s 2025 Higher Education Trends report notes, the conversation has shifted from “how do we cut costs?” to “how do we create value?” That value now comes from aligning procurement with institutional strategy: supporting academic innovation, promoting sustainability, and enhancing the student experience. The universities leading this change are treating procurement not as a gatekeeper but as a growth enabler, one capable of delivering both efficiency and impact. According to Brad Micciche, the SVP, Global Indirect Procurement Advisor at JAGGAER, “Procurement is no longer just about savings. It’s about helping institutions preserve their mission in times of disruption.”
The Fiscal and Policy Squeeze Tightens
Policy uncertainty and fiscal tightening continue to reshape higher education landscape. The American Council on Education warns that proposed federal budget cuts could reduce student and institutional support while new tax measures increase operating costs. Deloitte’s 2025 report similarly notes that universities are “caught between funding scarcity and rising expectations for transparency and impact.” The impact is clear: workforce reductions and funding constraints at the U.S. Department of Education are delaying research grants and student aid, while limits on indirect research reimbursements are straining research-heavy institutions. Visa policy shifts and declining international enrolment are further eroding revenue streams. Faced with these pressures, universities are deferring projects, consolidating departments, and renegotiating supplier contracts. In this climate, smart spend management isn’t optional but essential to institutional survival.
AI and Data: The New Drivers of Procurement Resilience
As spend data in higher education grows in volume and complexity, procurement teams face mounting pressure to manage supplier performance, contracts, and pricing across multiple departments, far beyond the limits of manual processes. Artificial intelligence (AI) and advanced analytics are changing that. Modern platforms like JAGGAER ONE empower universities to:
- Consolidate and analyze spend data in real time to identify inefficiencies and duplicate contracts.
- Use AI forecasting to predict and prevent supply chain disruptions.
- Automate routine tasks such as purchase orders and contract renewals.
- Maintain compliance and transparency through unified digital workflows.
With automation and data-driven insight, universities can maximize every dollar, strengthening research and student outcomes without expanding budgets.
Visibility as a Strategic Advantage
Procurement in higher education is often fragmented, with departments making independent purchases that obscure spend visibility and weaken negotiating power. Centralizing operations on a cloud-based platform creates a single source of truth for spend, unlocking economies of scale while improving risk management, compliance, and sustainability reporting. The University of Virginia, for instance, used JAGGAER to centralize purchasing, automate invoice reconciliation, and boost catalog adoption. The result: a 70% drop in off-catalog purchases, faster supplier payments, and stronger contract compliance, allowing staff to focus on strategic initiatives. Ultimately, visibility isn’t just about control but about empowering institutions to invest more in education, research, and student success.
Procurement as a Catalyst for Ethical and Sustainable Growth
Procurement is increasingly viewed as a lever for both institutional integrity and cost efficiency. As universities commit to sustainability goals and DEI (diversity, equity, and inclusion) priorities, purchasing decisions have greater moral and operational weight. Rather than being a side function, procurement is becoming a conduit for embedding values into supply chains. In practice, procurement teams are beginning to incorporate supplier screening based on environmental or social standards, prioritize diverse or certified vendors, and track related metrics in their sourcing decisions. This shift echoes broader trends identified by Deloitte, which highlights that higher education institutions are under growing external pressure to align their mission, values, and operations, pushing functions such as finance, operations, and procurement to support environmental, social, and governance objectives. This evolution reframes procurement from a transactional role into a strategic bridge, making every purchase an opportunity to reflect the university’s long-term values and social responsibility.
Empowering the Procurement Workforce
Even the best technology depends on people. Deloitte’s research shows that the most resilient institutions are those investing in reskilling and cross-functional collaboration to navigate digital disruption. JAGGAER’s Source-to-Pay Digital Transformation report emphasizes that real transformation goes beyond tools and requires stakeholder buy-in, clear governance, and effective change management. Procurement leaders play a key role in aligning finance, IT, and academic units to ensure digital initiatives drive both efficiency and strategic value. As automation handles routine tasks, procurement professionals are focusing on higher-value work such as supplier management, data-driven negotiation, and ethical sourcing. Human insights remain crucial for managing risk, building effective partnerships, and driving innovation. The next generation of procurement leaders won’t just manage costs; they’ll help shape institutional strategy.
Preparing for What Comes Next
By 2026, the universities that thrive will be those that reimagine procurement as a driver of resilience, ethics, and innovation. They’ll invest in digital infrastructure that integrates financial, operational, and sustainability data into a single ecosystem, empowering leadership to make faster, smarter decisions. They’ll also rethink the role of procurement within the academic mission, utilizing technology to strike a balance between efficiency and empathy. Because ultimately, every dollar saved in procurement can become a dollar invested in research breakthroughs, student success, or community partnerships. In uncertain times, that’s the kind of value that endures.
