The future of HigherEd Purchasing: Collaborative, Data driven and online

Analysts and experts agree: the future of education is about online resources,
collaboration, and data integration. Just ask the New Media Consortium (NMC), a
community of experts in education technology. Their recent 2012 Horizon Report
highlights what schools can expect in the near future. And what they predict seems
awfully familiar to us here at RecoVend.

According to the report, one of the greatest challenges to schools today is competition
and economic pressure. New models of education are challenging the old, and everyone
in the education industry is struggling to carve out—or defend—their niche. This aggressive competition creates even more pressure on schools to control costs, at a time when every penny counts already. Since its inception, RecoVend has been providing schools with the resources they need to reevaluate their budget. With our collective purchasing database of over 5 million transactions, schools can see precisely in which fields they’re spending too much and where other schools are buying their materials for cheaper. RecoVend’s tools enable schools to cut costs without sacrificing anything! That big, bloated budget for administrative and operating costs? We help trim it down, so you can direct the savings into more student focused initiatives like expanding capacity and improving the student experience. Buh-bye inefficiency….sorry we’re not sorry.

Systems of analyzing purchasing data like ours were also referenced in the report.
Following the concept of heightened competition, schools are looking for every
advantage they can get. But at a time when increasing the budget isn’t an option,
schools must cut costs to make ends meet. This presents them with a choice: take some
valued programs to the cutting board, or restructure the current budget. Through data
analysis, schools can essentially make more money by finding smarter purchases from
better vendors. It’s the idea of working smarter, not harder: cutting needless costs will
always trump cutting something that will be missed. RecoVend’s business is analyzing a
school’s data to identify the areas where they can save money. Again, we’re not trying to
brag, but…

In a recent article for Forbes, Jeremy Friedman, the CEO of Schoology, mirrors the
sentiments of the NMC’s 2012 Horizon Report. In his opinion, the future of education
involves both transitioning to online resources and an increase in collaboration. His
ideas make a lot of sense: cloud-based services allow a new level of collaboration among
schools that removes geographic location from the equation. Not only will students be
able to work with other students through the internet, but school facilitators will be able
to compare notes with other facilitators. Through the collective wisdom of a community
of educators, each individual participant will be able to utilize the best strategies, find
the best vendors, and ultimately get the most out of their budget. Friedman predicts that
these types of collaborative environments will be mainstream in as early as next year. Like anything in education, it can take new ideas and approaches a while to diffuse throughout the industry, with innovative schools like Southern New Hampshire University setting the bar for those who follow.

RecoVend wants to help innovative schools pave the way to a new, more sustainable cost model for their institutions, making them that much more competitive than their peers (we already are, with our pilot program schools). And we can’t wait to roll out the red carpet to HigherEd at large in the next year.

 

HigherEd Spending: Divided we fall, united we save

If you suspect you’re paying too much for something, what do you do? You shop
around, talk to your friends, or look online for a better deal. But what if you’re an
educational institution, and you’re paying too much for goods and services? Who do you talk to? How do you even know if you’re paying too much? Where is the context?

That’s why we’re creating SpendGrader by RecoVend and making it open to the public. By uploading your school’s purchasing data, we can compare it to over 5 million purchases made by universities across the country. With our combined database of school purchases, you can see exactly where you’re paying too much and where other schools are buying the same materials for cheaper! We strongly believe that all schools should have the tools they need to change their underlying cost structure, and so in the spirit of collaboration, SpendGrader will be available for free!

When we launch in November, you will be able to:
• Compare how your school’s pricing stacks up against your peers.
• Identify opportunities in departments or product categories to drive economies of scale in the future.
• Analyze the integrity of your purchasing data.

Why are we doing this? Right now, most schools are making their purchases in the dark.
They see a price tag, but have no context to determine whether the price is too much or
just right. Imagine shopping online today without Amazon, or booking a restaurant without checking out Yelp – it’s a blast from the past when we, as consumers, lacked the transparent information we needed. That’s not the best way to manage a budget, for a person or a business, but schools haven’t had a lot of alternatives in this department…until now.

Through RecoVend’s SpendGrader we can also help you make sense
of your spending data. We will help you identify the product categories with a high
volume of purchases, where—chances are—you can cut costs. Instead of making these
purchases at random intervals throughout the year, we can help you create a Master Level
Agreement that pools the purchases from the entire year into one overarching contract.
You save you money by consolidating, without sacrificing anything!

This service couldn’t come at a better time, with most schools using ERP systems that are out-of-date and confusing. Without the right ERP system, it’s almost impossible to see
which areas are doing well and which have room for improvement. And what’s worse,
most schools are only looking at their own data, not the collective pool of hundreds
of schools. This myopic perspective blurs the insights we’re able to derive from such data, especially if it isn’t entered and categorized in a uniform manner within the ERP system. That’s why SpendGrader will also focus on showing you the underlying integrity of your data, highlighting the areas that need improvement in order for you to leverage that data into actionable intelligence.

No institution is an island. We’re all in this together. It’s time we start taking advantage of that.

But this is just a preview. SpendGrader will be up and running soon, so check back soon for your chance to join. If you can’t wait, feel free to drop us an email at Support@RecoVend.com to get on the early access list for SpendGrader and help your university start saving today.

Happy Birthday RecoVend!

This was RecoVend, one year ago, when we first launched our service at the HighEdWeb Conference in Austin, TX. In the middle of the Cardinals improbable run to the World Series title, we stood up on the roof at Upper Decks and announced that we were taking the leap. We were lucky to have so many incredible supporters in the crowd that night as we launched the uber-Alpha version of RecoVend (then just a ratings platform like Yelp for HigherEd products and services!).

It’s been an amazing year of growth and discovery – finding out more about the problem of inefficient purchasing in higher education, finding out how we can continue to improve RecoVend to meet our users needs and how we can continue through the beautiful struggle of a startup.

We just want to take a quick moment to thank everyone who has supported us over this insane year: our friends, family and loved ones who always helped pick us up after one too many late nights at the office. Our colleagues and peers in HigherEd for always pushing us to do more, better and faster for the most rewarding industry in the world. The incredible folks at Betaspring and our mentors/advisors for helping us understand how to build a game changing company with integrity. The schools, organizations and companies that were crazy enough to stand next to us at the edge of the precipice, and who weren’t afraid to grab on, and jump.

Here’s to another year as amazing and eye opening as this one.

How to Lower Costs Without a Chopping Block

What does it take to make a successful school? Hardworking and dedicated students, a respectable and sophisticated curriculum, and a whole lot of moolah! If only all higher education institutions could hire the best teachers, acquire the best textbooks, and build the best classrooms; but the reality is that schools must often choose one over the other. Luckily, school systems are now starting to realize that, with a few minor adjustments, they can afford what they need without losing a thing.

Many schools are looking to new technologies and out-the-box solutions to provide
the best for the students. A little digging in the right spot can sometimes unearth the
answer to their money troubles. So, where’s a good place to start digging? Right here at
RecoVend.

Have you ever bought something, and then later found out from a friend that they bought
it for much cheaper? What if that was the case with everything you were buying?
Imagine how much you would save by simply buying those same products from a
cheaper source. By leveraging buying power and driving economies of scale, you would save so much and lose nothing.

If you’re looking to cut costs but don’t want to sacrifice anything, focus on efficiency.
A little reorganization, some consolidation, maybe a little reevaluation. Administrative
costs can be killer, especially when they are superfluous. But if cutting unnecessary costs
is the easiest way to save money, why doesn’t everyone do it? Because not only is change hard, but everyone doesn’t always know where to look, especially when systems are just focused on the end transaction instead of identifying opportunities to consolidate contracts early on.

And that’s how RecoVend can help. Our software allows administrators and schools to communicate with each other while we analyze their purchasing data. We then compare the individual school’s purchasing data to our global data sets, which contains the data from all the schools in our system. From there, we tell you what areas you’re paying too much in, and where you can find the best deals! No tricks, no confusing methodology—just a friendly piece of software telling you where to find the cheapest prices, and connecting you to people within your organization and across others to work together to share services. Who says no one values education anymore?

Schools that using collaborative purchasing systems like RecoVend have reported cutting costs from 5-10%! That’s up to 10% of your budget that you can use for new resources, new staff, new facilities, and recruiting new students. And that doesn’t even include the time you save by not having to research vendors and prepare RFPs.

With the education industry, the stakes are always high. A person’s entire life can be
made or broken by their education, and that’s why no one takes a school’s budget lightly.
Here at RecoVend, we get it. We created this system to free up schools’ time and money
so they use it where it’s supposed to be used: providing the best for the students.

How SUNY Saved Millions through Consolidating

Despite cleaning up after dirty children all day, your kindergarten teacher was a financial genius. Sharing IS caring… caring about the bottom-line. Just one year after implementing a shared service initiative, the State University of New York System is reported an impressive savings of $2.5 million across just four of their regional campus networks, with more than $6 million being redirected back towards academic instruction and student services. SUNY, the largest system of universities, colleges, and community colleges in the country, has cut needless spending by sharing the costs associated with administrative salaries, IT functions, procurement, and the like. And what’s the big picture goal of all this? “Freeing up funds for what matters most, our students,” says SUNY Chancellor Nancy L. Zimpher.

This collection of 64 campuses across the state of New York was the perfect testing
ground for the shared service initiative. SUNY campus united with SUNY campus
to ease the financial burden and “share the load.” So just how did they scourge up
the millions of savings? Here are the shared initiative’s greatest strengths in moving
forward.

The cost of elevator and escalator maintenance won’t go down with the push of a
button, but it will with an Invitation for Bid. This IFB is expected to reduce the
cost of 27 individual contracts across 27 campuses to just four regional contracts.

Alfred State College will provide SUNY Fredonia and SUNY Geneseo with
printing services for letterheads and envelopes. The idea is so inviting that SUNY
is considering a Print Shop Utilization Project that would consolidate the printing
services for the entire school system with only a handful of regional print shops.

Two presidents for the price of one? SUNY Delhi and SUNY Cobleskill have
established a joint cabinet including a shared president and vice-presidents
for advancement, college relations, business and finance, and operations.
With the addition of a shared culinary worker, an assistant vice president for
enrollment management, and a director of research and sponsored programs; this
administrative merger freed up more than $700,000. The SUNY Delhi-SUNY
Cobleskill partnership has also had success with their shared course management
system, online course offerings, IT and human resource services, and outside
contracts for services like waste disposal and health inspections.

Originating as a good Samaritan story, SUNY Potsdam first began to assist
SUNY Canton with their payroll when one of their employees became ill. Now,
the two campuses are on their way to a shared payroll office to service both
institutions.

The University of Buffalo renegotiated its contract with LRG, a trademark
management group that specializes in collegiate licensing and branding. From
now on, all SUNY campuses will receive the same price deals that the University
of Buffalo receives, a great benefit for SUNY’s smaller campuses.

The re-inspired unification of SUNY’s campuses isn’t all about money.
Administrative groupings from the University at Buffalo have met with
their counterparts at Buffalo State to help generate new ideas. This friendly
brainstorming session has created almost 100 new ideas spanning shared software
contracts, library storage, improved internet access, and policy and procedure
development.

Based on the success of SUNY’s shared initiative, businesses big and small would
do well to review their lessons from the schoolyard. Aside from sharing, what other
childhood wisdom can be carried over to the world of business? Play well with others,
get back up if you fall, and most important of all, don’t eat the paste.

Smart Procurement Drives Cost Reductions

We’re so blessed to have Google Alerts in our lives, because it allows us to catch beautiful nuggets of information like this without missing out.

This past summer, mega-research firm IDC began surveying procurement officers at manufacturing companies about their supply chain issues and priorities going forward. After gathering more than 300 data points, the single biggest area of focus for cost saving activities is reducing procurement related costs. In Higher Education, roughly 30-35% of a school’s budget is spent on purchasing goods and services for us throughout the campus – and this is a key area where schools can increase efficiency and reduce costs. The other 70% is made up of staff salaries and debt servicing -making it nearly untouchable without affecting quality or stability – that’s why we call it the Sacred Seventy. This means that the Purchasing Department is usually the first, last, and only place a school can look to for meaningful cost reductions in times of tight fiscal restriction.

IDC highlighted 5 major themes impacting supply chain and purchasing efforts:

  1. More Empowered Consumers
  2. Complex, Global Supply Networks
  3. Volatile Demand
  4. Growing Regulation
  5. Rising Input Costs

If you look closely, you’ll see several similarities with many of the issues faced by Higher Education these days: More informed/knowledgeable/selective students(1*), Global Networks targeted to new students(2*), Volatile enrollment demand(3*), Growing regulation around accreditation and for profit colleges(4*) and of course, rising input costs of their own(5*).

The same IDC Report suggests a few ways to address these challenges:

  1. Buyers need to focus on exploring profitable proximity options. This means that universities should expand their locally sourced initiatives beyond the dining halls and across the rest of the campus. When it comes to saving time, money and hassle, sometimes the better vendor is just down the road.
  2. If your school’s focus is on providing a high quality product, then you need to invest in improving quality and customer service instead of reducing costs. A school cannot continually try and trim costs in the Sacred Seventy before it begins to affect the quality of the education and experience offered.
  3. And I quote, “With IT-based solutions for demand planning and forecasting… viewed as key to business performance… over the next year, this could signal a genuine shift to a more holistic approach to truly integrated business planning” Seriously. Their words, not ours!
  4. Big data is one of the most important new technologies for purchasing management. By using large data sets of spending history, demand planning, pricing and a number of other variables, we will be able to more accurately predict the cost schedules for everything from a single department to a statewide university system. The power that this data provides is enough to help kick down the silos plaguing university administrations, so we can all work together to made Higher Education more efficient.
What other issues and ideas are you seeing on your campus for effective cost saving campaigns?


Hubspot Brings Their A-Game, Gives Back

There’s horrible customer service

There’s good customer service

And then there’s awesome, next level customer service that makes you feel like the company is shouting “WE GIVE A DAMN!” from the rooftops. Hubspot is this kind of company.

You might have missed our post on Wednesday – a memetastic response to a cold email from a Hubspot recruiter reaching out to Jason. It got a variety of feedback: good, bad and straight up, geek hating Looney Tunes. But the best comments and feedback came from senior leadership at Hubspot – from CMO Mike Volpe, Founder/CTO Dharmesh Shah and VP of Engineering Elias Torres (Don’t believe me? Check the comments here).

Their responses were so classy, so earnest and heartfelt that we felt really touched that they would time time away from their company to reach out, connect and apologize. They did everything right when caught in a tough spot, bringing their A-Game for Customer Service:

  1. Acknowledge the mistake head on
  2. Apologize for the poor experience
  3. Ask if there is anything they could do to rectify it

They went so far out of their way that Elias Torres, the VP of Engineering for Hubspot, reached out to us over email at 11PM with his personal response. He was even cool enough to agree to come down to Providence to give a tech talk to the next cohort of teams entering the Betaspring startup accelerator next week.

Other companies take note: this is how you do it the right way. This is the kind of honest and caring service that RecoVend and any other company out there can aspire to. Well played Hubspot, for taking a negative and turning it into the opportunity for a big positive

What other examples of awesome/bad customer service have you seen and loved? Share it with us in the comments below!

When Hubspot Tries To Recruit Your CTO by Cold Emailing

We’re nice guys here at Team RecoVend. We’re all about collaboration, changing the old guard in stagnant industries, and making Higher Education more efficient and affordable for every student and their family. These are big lofty goals – goals which we do not shy away from despite all of the hurdles we will have to overcome on the way to the finish line.

We are working to transform an industry and disrupt inefficient incumbents, which is bound to cause some pain and discomfort. Even through this pain and discomfort, we try and run our business with one simple philosophy: Be a Mensch. This extends to our recruiting philosophy as we look to add ambitious, hungry talent to our team. Sravish Sridhar, the excellent CEO of Kinvey, sums up startup recruiting etiquette perfectly in his post Startup Poaching Etiquette: Be a Richard, Not a Dick.

Unfortunately not all startups have such an admirable ethos for their recruiting efforts. This past weekend, RecoVend co-founder Jason Woodward was sent the following cold email by a recruiter from Hubspot, the company renowned for their inbound marketing strategies (and yes, the irony of that sentence is not lost on us).

 

Since we figured this deserved a response, we did it in the only way RecoVend knows how – with memes!

While we joke around, we don’t bear too much ill will towards Hubspot. They’re a cool company, and if any of our loyal readers want to work there, by all means let us know and we’ll make the intro – after all, we’d love the $10,000 Referral Bonus.

How’s that for inbound marketing?

RecoVend Equals Data, Data Equals Awesome

 

“Data is a precious thing and will last longer than the systems themselves.”
-Tim Berners-Lee

There is much ado about data these days. Whether it’s Boston starting a Big Data Cluster or Big Data startups raking in crazy amounts of money, data crunching and analysis is where it’s at. Now what does this have to do with RecoVend and collaborative purchasing, you might ask?

Great question. It’s one of our big differences with other e-procurement software out there, and it’s where we really deliver the most value to schools and vendors. Since RecoVend takes a holistic approach to the purchasing process, we’re able to gather a wealth of data around the activity stream behind every purchase – searching for vendors, researching them, connecting to peers, need identification, etc. We can crunch these numbers, turn around and offer real time insights and analytics around purchases.

Being able to source and purchase with real time information is critical – doing the same with asymmetric, outdated info is akin to running with scissors… while blindfolded.

By comparing a single data set (one university’s purchasing process and habits) and comparing it to what we’re seeing across our global data sets, we’re able to accurately identify when schools are paying too much for products and services compared to their peers. We help rescue your budget – and give you peace of mind knowing that RecoVend has your back every step of the way.

What could be more awesome than that?

How Collaborative Purchasing Can Save Healthcare

Our good friend Philosoraptor ponders a good question: If they don’t really care about health, why do they call it healthcare? He’s probably referencing the recent news story from the London Free Press talking about how hospitals in Ontario are facing close to $40 Million in budget cuts when the new government budgets are released next month. This is part of the Canadian government’s efforts to address an estimated $15 Billion deficit, and with healthcare nationalized, controlling costs in hospitals is that much more important.

Just like collaborative purchasing in education, there are three main things these hospitals could do to help drive existing savings without resorting to large scale layoffs or decreases in quality.

1) Go Paperless – Shift to online procurement
Going paperless with your purchasing alone can help save over $150,000 a year on paper, ink, storage and shredding of documents. There are plenty of companies that can help hospitals shift their purchasing online: SciQuest, Ariba(now SAP), GHX…. and of course, RecoVend. This helps put some cash back in your pocket (minus the cost of the enterprise procurement system if it isn’t free like RecoVend) and can save a ton of time for administrative staff

2) Trust in God, Everyone Else Bring Data
It’s time for hospitals and similar organizations to begin employing data driven decision making when it comes to purchasing. Now that Big Data is coming into the limelight, especially in healthcare, it’s time we applied these same innovations into not just patient care, but also how these organizations operate. By accessing competitive bid analytics in real time to see how their spending compares to their peer institutions, hospitals can begin dynamically selecting product categories in which to be more/less price sensitive. So next time they know they’re entering a month when they typically use an above average number of needles, they can really push to get volume discounts direct from the vendors, or piggyback on a peer hospital’s bid to get better pricing.

3) No Organization is an Island – Sharing is Caring
In these tough macroeconomic times it’s easy for an organization – hell, an industry – to stick their head in the sand. But we’re at that point where the rubber meets the road, where convention starts breaking apart and where the better organizations take drastic – dare i say, innovative – moves to keep their heads above water. Collaboration in business isn’t a new idea, but it’s generally enacted in vague platitudes like “purchasing consortia” or “best practice sharing”. This is nice fluff and filler for annual reports to the Board of Directors, but it isn’t having any real, tangible effect. When non competitive organizations – like schools, hospitals and municipalities – begin working together to share information, open channels of communication and begin collaboratively purchasing products and services together the benefits are enormous: 5-10% of cost of goods, 30% of the time spent bidding, and 40% of the implementation time for that purchase.

The question then should rather be…. what’s taking so long?