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4 Quirks of EdTech Purchasing

February 15, 2020

By: Mandi Andrejka

I’ve written a previous blog about the edtech market’s unique selling cycle, but the calendar isn’t the only aspect of the education industry that requires a combination of research and follow-through. As schools and districts around the country work to keep up with the latest technology and resources to help their students, their needs change—and so do the logistics of how they find and purchase that technology.

 

EdTech Purchasing

 

Here are four (of the many!) quirks of the edtech purchasing process that your company should keep in mind:

  1. Centralized versus decentralized purchasing
    In education, centralized purchasing means that purchasing decisions are made at the district level, with most decisions being made by either a single person or by committee (depending on the nature and size of the purchase as well as the size of the district). However, principals are also often given a discretionary budget to make specific types of purchases for their own building. An example of centralized purchasing would be a new curriculum that the chief academic officer is implementing for all schools at the elementary level. There’s a specific process with this type of purchasing. It lays out what can be purchased, how it gets billed, and more. The goal is to make sure that everyone involved is on the same page as far as costs, needs, and how a purchase fits within the district’s mission and other operations.

    Decentralized purchasing, as the term suggests, is decentralized from the district and done at the school level by the principal. Exact responsibilities for principals in decentralized purchasing may vary from district to district. Sometimes all decisions about curriculum, hardware, professional development, systems such as SIS or LMS, and more are the responsibility of the principal. In other cases, the district may make decisions about major purchases like curriculum, hardware, and PD, while the principal makes decisions about specific products or services for the school. Decentralized purchasing allows for the principal to make decisions that fit the unique needs of their specific school. Recently, more and more districts have been making the move to decentralized purchasing.

    Knowing which type of purchasing a district uses is essential in deciding how (and to whom) you will reach out. Doing your research on any particular district you are contacting will build your core knowledge and show them that you’re willing to go the extra mile just for them.


  2. Requests for information
    A request for information (RFI) is slightly different than a request for proposal (RFP). The differences between these two types of requests should inform your company of what a school or district is looking for from you.

    An RFI comes before an RFP might come through, and it’s meant for a school or district’s information-gathering stage of the buying cycle. They might send out an RFI to learn about all the products and services your company has available before an RFP, which would look to address the school’s specific needs.

    Smart edtech companies use an RFI as a chance to share information about opportunities a potential customer may not even know they have a need for. Yes, it’s more paperwork, but it’s also a chance to show potential customers how your products or services fit within their broader ecosystem.

    Responding to RFPs can be extremely time-consuming and the juice may not always be worth the squeeze, so PRP strongly recommends getting your entire company on board before you dig in.


  3. “Use it or lose it” dollars
    Many schools have some untapped budget available at the end of their fiscal year, which is usually around the same time as the end of the school year. Commonly, the cutoff date for “use it or lose it” is June 30. Unused funds at the end of the year may go toward a variety of areas, from technology and other student resources to school supplies or clubs and groups.

    Because of the “use it or lose it” approach to budgeting, on average most schools spend nearly five times more in the last week of the fiscal year than they do to the rest of the weeks in the school year. School and district leaders will be looking to make the most of that remaining budget, so make sure your sales team is continuing their outreach well into June!


  4. Buckets of funding
    The broad categories of funding vary among districts as well as states, but some of the most common ones for edtech companies to be aware of include:

    Maintenance and Operations;
    Instruction;
    Curriculum and Professional Development;
    Special Education;
    Federal Title dollars; and
    Library Services.

    Perhaps more important than knowing what the buckets of funding are, however, is knowing what can and can’t be done with them. A key point for edtech companies and sales teams to be aware of is that, in many cases, these funding buckets are not interchangeable or transferrable. No matter how much a district may be interested in purchasing a new resource, if they don’t have the budget for it that year, they usually aren’t able to pull from another fund. Another challenge is that some funds are released at different times of the year from the typical cycle. Special Education funding, for example, renews in October rather than in July. Having this core knowledge will help you connect with administrators, who are sometimes open to working with sales reps to find funding for a product or service that they see as a real need.

    If you aren’t already, start tracking what buckets your current customers are using to purchase your products. You may find patterns that can be replicated or creative ways that administrators are pulling from several buckets to invest in your product.

 

What other bumps in the edtech purchasing road have your company had to navigate through? How did you make it through? Let us know in the comments below!

 

Thanks for sharing!

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