Procurement is evolving in today’s marketplace. While procurement remains recognized for its core functions of reducing and avoiding purchasing costs, it has taken on a more value-oriented approach to help businesses drive growth.
This means that the relationship between buyers and sellers for exchanging goods and services in procurement has transformed beyond a transactional function. Instead, procurement has become a centralized source of business strategy and innovation to the enterprise.
Procurement as the Driving Force Behind a New Form of Innovation
According to Spend Matters, “Specifically, by 2020, procurement will not be just “the group that focuses on sourcing raw materials, goods and services, but rather [one] sources ideas. As such, Creativity will involve engaging stakeholders in new, innovative ways (not just delivering new capabilities to the business through external resources).”
Of course, as procurement becomes an integral part of the innovation process, it will require a fundamentally different way of working – stemming from the role in innovation teams all the way to how procurement organizes itself. This will include early adoption of new and innovative tools and systems, setting up supplier diversity and collaboration, and managing continuous involvement.
3 Ways Group Purchasing is Paving the Way for Added Value in Procurement
One way that procurement is advancing their business practice of innovation is through the use of group purchasing organizations (GPOs). Not only do GPOs negotiate on behalf of its members to deliver the lowest price and greatest value, but they also provide better operational efficiency within procurement and mitigate risk.
GPOs are gaining momentum as an approach for businesses of all sizes: small to midsize and enterprise to drive value because of the greater advantages it offers. These are the 3 ways that GPOs are adding value beyond cost in procurement:
|1.||GPOs are Advancing New Technology and Innovation
Membership through a GPO provides an opportunity to leverage its pricing, scale, and innovations. OMNIA Partners, Private Sector has an extensive portfolio of innovative solutions in direct and raw materials, indirect materials, and value-added services covering all strategic spend categories offered to its members. This allows for member companies to satisfy all internal and external stakeholders, regardless of category.
GPOs Promote Supplier Diversity
Our diverse portfolio of Indirect Materials category offerings, which includes Women Owned (WBE) and Minority Owned (MBE) categories, gives you access to high quality and thoroughly vetted suppliers.
|3.||GPOs Encourage Collaboration
Procurement professionals can often become disconnected from their stakeholders. Utilizing networking experiences to leverage collective group knowledge can maximize returns and ROI. GPO members can make the most out of their networking opportunities by learning and expanding their knowledge through each other. OMNIA Partners offers a variety of conferences and events throughout the year that encourage best practice sharing, community networking, and ongoing education with the goal of promoting supply chain excellence.
While cost savings will likely always be near the top of the priority list for procurement professionals, the additional ways to demonstrate value to a business mentioned above can increase procurement’s overall excellence and competitiveness.
Fortunately, over the last couple of years, procurement has become more impactful as it evolves from its traditional cost savings function. The more ways that procurement brings innovation solutions to the table, the more value it will add to the enterprise it serves.
From Tactical to Transformational: A One-Stop Shop for Group Purchasing Procurement
At OMNIA Partners we are passionate about empowering our members to streamline their purchasing processes, drive more efficiencies, and gain more spend under management.
We specialize in assisting purchasing professionals achieve greater savings with timely turnarounds and better category management through: Power. Access. Trust.
Understand why thousands of businesses already trust OMNIA Partners to solve their procurement challenges.