HOW DID THE IDEA FOR NEOSO ORIGINATE?

The founding team conceived NEOSO in early 2004 through observation and simply asking, "Why?"

• Observation: Northeast Ohio has a large number of local governments.
• Observation: These local governments engage in many of the same activities.
• Observation: Sometimes, local governments come together to buy an item (e.g., salt and energy) or jointly procure a service (e.g., the collection and distribution of income taxes or creation of multi-jurisdictional S.W.A.T. teams).
• Observation: Usually, these collaborations are very focused on a particular product or service.
• Observation: Usually, these collaborations (if they actually get to the point of execution) are successful. They save participants money and time.
• Questions: Why don't these collaborations branch out into other operational areas? Politically, they are proven to work. Operationally, they are a success. Why not implement a model that is flexible, one that can be used to create leverage and provide value in many areas instead of just one?
• Observation: Systematically creating leverage needs to be the full-time job of a neutral, third-party entity.
• Result: The Northeast Ohio Sourcing Office.

TESTING THE CONCEPT THROUGH A PILOT PROJECT

The founding team approached First Suburbs Development Council ("FSDC") in early 2004 as a potential partner. The parties agreed to join forces and conduct a pilot project to test the NEOSO concept. The founding team conducted the pilot during the September 1, 2004 and May 31, 2005 time period in conjunction with the 14 FSDC communities. The project was funded through a $195,000 grant obtained from The Cleveland Foundation to FSDC and approximately $200,000 in contributed time and expertise from private sector partners. See Funders for more information.

The pilot project was an overwhelming success.

THE PILOT PROJECT: OBJECTIVES

The Pilot Project launched with the following key objectives:

1. Engaging at least five FSDC communities to work together in the procurement of two goods and/or services (e.g. information technology services and road repair improvements).
2. Identifying and capturing measurable savings and/or improvements in service for each participating community.
3. Developing a sustainable methodology and process through which multiple goods and services can be procured and combined over time on behalf of participating communities.

PILOT PROJECT: OFFERINGS

Following an extensive interviewing and research phase, the founding team presented 11 different opportunities to the FSDC communities, including 3 procurements, 6 assessments of potential shared service business processes and 2 discounted business process assessments. The founding team developed the legal entity of NEOSO as a mechanism to achieve cost reduction and enable cost avoidance in the operations of local governments.

PILOT PROJECT: PARTICIPATION

The FSDC communities responded to the opportunities overwhelmingly. Fully 13 of the 14 communities (93%) signed up for at least one opportunity. Seventy four percent (74%) of the communities signed up for the combined procurement opportunities, with an average of over 10 sign-ups for each of the three alternatives. FSDC members also signed up for 76% of the available slots in the assessments of potential shared service business processes.

PILOT PROJECT: FINDINGS

In total, the pilot project produced readily achievable savings of at least $2,216,500. The pilot project identified substantial savings opportunities, which are summarized in the pilot project Executive Summary. Contact us to receive a summary of the pilot results.

The communities that participated in the pilot project committed to continue the work of the pilot project by joining NEOSO. The founding team pledged to launch NEOSO as an ongoing operation. NEOSO's geographic platform was expanded to be truly regional and the team returned to the foundation community to secure additional operating support.