A year after a consultant told Harvard it could be saving millions by buying in bulk, the University is moving forward with a number of cost-cutting measures and is contemplating streamlining other administrative functions.

Officials leading the effort say it’s being received well across the University, but several prominent alums continue to argue Harvard could be saving more.

At issue is Harvard’s traditionally decentralized structure, in which each of its schools operate independently.

The consultant’s report confirmed what some had been saying informally for years—that by making purchases on a school-by-school basis Harvard was pulling its punches and not using its size to negotiate better deals.

Now, in the wake of a recent deal with IBM that will save around $3 million a year, officials are negotiating deals on a host of other purchases from airline tickets to cement, travel and construction materials.

The Savings

University President Lawrence H. Summers says that when he took over two years ago, he realized Harvard was headed for tougher financial times and began to take steps to save money.

He commissioned a report by consulting firm McKinsey—at an educational discount—to suggest where potential pork could be cut from the University budget.

According to Vice President for Finance Ann E. Berman, the report said Harvard could save $15 to $30 million a year by combining its purchasing power. Particular areas of focus included information technology, construction and printing.

Though relative to its $17.5 billion endowment, these sums sound like pocket change, Summers and others say that they would actually make a tremendous difference, as the University aims to only spend the interest it earns on the endowment.

“Every million dollars per year we save is the equivalent of $20 million for the endowment, so it’s a very high leverage activity for the University to realize,” Summers says.

In the PC deal—the first to be completed under this new effort—Assistant Provost Daniel Moriarty brought together IT officers from each school to plan a discount deal on laptops, desktops and servers. IBM, he said, offered the sharpest discounts in a competitive bidding process that involved other prominent manufacturers.

“Different schools were potentially cutting deals with different companies,” Provost Steven E. Hyman says of the pre-IBM era.

Every dean has signed on to the new deal, and Moriarty, who is Harvard’s chief information officer, estimates the savings for the University will be between $2.5 and $3.5 million a year, depending on the volume of purchases.

Berman is working on negotiating discounts on travel arrangements and says she hopes to conclude a deal on construction materials within a year.