Successfully operating a public sector group purchasing consortium is difficult. NEO|SO has identified five critical processes that must be executed flawlessly to effectively develop, manage, and grow each group purchasing program. These processes include:
Identifying spending categories to source
NEO|SO has implemented a rigorous approach to identifying the spending categories to
source. This discipline is crucial as there are literally hundreds of potential group
purchasing opportunities for public sector entities that the organization could pursue.
NEO|SO created and now utilizes a sophisticated Idea Generation Filter, which scores
potential offerings in approximately 40 areas, and enables the organization to identify
the best opportunities to pursue.
Securing committed spends
NEO|SO will only initiate the sourcing process for a new spending category when it has secured a significant level of Committed Spend from Participants, typically at least $2M. Committed Spend is a commitment on behalf of a group of Members that they will purchase through the new contract once it is developed. This approach provides ensures that:
- Potential suppliers know that they will have a minimum amount of revenue, which establishes NEO|SO’s credibility and improves the pricing, and
- The Members who commit their spending generally serve on the committee that leads the development of that category, become fully committed to the program, and recruit other entities to use the program once it is launched.
Conducting public sector bid solicitations
NEO|SO follows the procurement process that is outlined in Chapter 125 of the
Ohio Revised Code. This process includes specific instructions as to notifying
the public of bidding opportunities, language that must be included in bid
documents, contracting requirements, etc. By following this process through
NEO|SO’s Council of Governments legal structure, the organization ensures that
public sector entities that utilize NEO|SO’s programs maintain compliance with
the laws and rules governing public sector procurement.
Managing group purchasing programs
Once NEO|SO has established a contract with the winning supplier, the organization works with the supplier to understand the supplier’s steps to implement their offerings with a new customer.
NEO|SO designs an implementation process that meets the needs of both the supplier and the Members.
NEO|SO incorporates that implementation process into its customer relationship management software to establish real time
reporting capability for each step of a Member’s evaluation, implementation, and ongoing utilization of a program.
NEO|SO is in regular contact with all program participants to confirm that they are receiving the pricing and service
levels documented in the contract with the supplier. The organization actively encourages Members to turn to NEO|SO with
any supplier issues as soon as they arise so NEO|SO’s customer service team can resolve the issues before they become
significant problems.
NEO|SO also requires regular monthly supplier meetings. In these meetings, NEO|SO and the supplier work through a list
of current prospects, current customers, and current issues to ensure that the program is going as smoothly and
effectively as possible. NEO|SO’s team of experts reviews the monthly activity reports from each supplier to identify
any unusual behavior patterns or trends that require intervention.
Growing program participation
NEO|SO has created a wide range of techniques that the organization employs to grow participation in a program over time beyond the initial Committed Spend, including:
- Matching. NEO|SO works with Members to evaluate which programs are a good fit for that Member, including facilitating an apples-to-apples price and service level comparison.
- Demand Management. NEO|SO reviews participant spending patterns and applies industry best practices to identify opportunities to improve participants’ buying patterns and save more money.
- Early Adopters. The organization identifies the small group of Member thought leaders most likely to be the early adopters of a new program. NEO|SO develops highly personalized strategies to recruit the early adopters, who will then become advocates of new programs.
- General Communication. NEO|SO also develops a wide range of both general and targeted communications to Members, including letters, post cards, faxes, emails, and ezines, to notify Members about new program opportunities and the successes of existing programs for other Members.
