OMNIA Partners Blog

Benefits of a Modern Group Purchasing Organization vs. a Traditional GPO

Posted by Ara Arslanian on September 26, 2016


At the core, a traditional GPO provides value through three main elements: money, time and resources.

  • GPOs save you money by providing access to the cost savings they negotiated with their supplier partners
  • GPOs save you time by giving you immediate access to a finished contract; they conduct the sourcing process for all their agreements so you don’t have to
  • GPOs save you resources by freeing your procurement team from managing nonstrategic, indirect spend, giving them time to focus on areas that are strategic to your business

However, when you consider the benefits of joining a group purchasing organization, these three should be just the beginning.

Benefits of a GPO: What’s Required and What’s a Value-Add

A GPO that saves you money is doing its job. One that consistently sources new agreements is able to address more of your spend.

By definition, a GPO should free up your team resources. But one that has relationships at multiple levels of the supplier organization can better mitigate risk.

Modern GPO -vs- Traditional GPO

When you’re comparing GPOs, there are easy quantitative measurements to use:

  1. Number of agreements offered
  2. Number of members
  3. Total spend volume
But as with most things, the qualitative elements complete the story. You can easily conduct a quantitative study to cover what a traditional GPO offers. But if you rely purely on numbers, you’ll miss the real benefits of a modern group purchasing organization, like OMNIA Partners.

Download a report by The Hackett Group on how indirect group purchasing organizations help increase spend influence.

A traditional GPO is similar to a diligent employee with a “check the box” mentality. They do their job in a timely manner and in a “meets expectations” sort of way. But checking the box means missed opportunities and missed savings.

A modern GPO is akin to a promising employee vying for a promotion. While successfully managing their main responsibilities, they also undertake extra, forward-thinking projects. Their focus is on creating sustainable value, not just making a quick savings buck. Modern GPOs strive for the “exceeds expectations” review.

Be it Modern or Traditional, a GPO is a Necessity

If your procurement team is responsible for managing any piece or all your indirect or direct spend, you're missing out on that saved money, time and resources. Working with a modern GPO like OMNIA Partners will help you excel to the next level, not savings alone. OMNIA Partners is no cost and no order obligation, so there is no risk in finding out what strategically makes sense for your unique spend needs. 

Transform your spend by becoming a member today!

 

Topics: Group Purchasing Organization, Procurement

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