WHAT IS NEOSO'S PURPOSE?

NEOSO serves as a trusted adviser to our Members. Its function is to systematically create leverage for Member local governments on an ongoing basis through 1) the identification of potential product and service opportunities and 2) developing offerings to capitalize on those opportunities. Click to download a copy of NEOSO's executive summary.

NEOSO Executive Summary (44KB)

WHAT DO WE MEAN BY "LEVERAGE"?

Local governments engage in many of the same or similar operational activities. They have facilities to manage, human resources needs, information technology systems and requirements, contracts to bid and so on. Where there are operational similarities, there are opportunities to create leverage among multiple Members. Scroll down or click here for examples of three different types of leverage.

OUR MEMBERSHIP OBJECTIVES

Leverage is often a function of size or mass of requirements. To that end, we have set the growth objective of partnering with 30 new Members each year. Although all of our offerings are designed to provider Member benefit, we know that each Member will take advantage of only a percentage of the offerings developed. Therefore, it is critical that we develop a large enough pool of Members to achieve critical mass for each of our various offerings.

WHAT DOES NEOSO ACTUALLY DO?

NEOSO has several functions. One area involves identifying opportunities to provide value to our membership. We are constantly seeking new opportunities. We interview our Members and potential Members, seek suggestions, conduct research and brainstorm. All input is valued from any source; we only care about results.

Once we identify potential opportunities, we evaluate them. How much value will they bring to our members? Are these opportunities worth pursuing?

A second area is procuring the necessary products and services to meet the needs of a particular opportunity so we can make it an offering that will be available to our Members. Depending on the particular offering, we may conduct a competitive bid process, solicit RFPs or select vendors, facilitate a group bid process - whatever is most appropriate.

Thirdly, we market the opportunities we've developed to our Members so that they receive the benefits of our work.

Finally, we cultivate membership. It's our job to identify potential members, educate them about NEOSO's offerings and provide them the opportunity to join. The following diagram demonstrates the relationship between NEOSO's stakeholders:

diagram of operational structure. click image to download full page pdf.

LEVERAGE EXAMPLE 1: AGGREGATING DEMAND FOR PRODUCTS AND SERVICES
If ten members are buying the same item, why not buy it together? By buying it together through NEOSO, we can achieve better pricing and more advantageous terms and conditions. This type of leverage leads to discounts or cost-over-cost savings.

NEOSO facilitated a process that enabled three cities (Shaker Heights, South Euclid and University Heights) to buy their crack sealing together. By working together and creating a common bid package as well as a more attractive job for the vendor, they secured an 8% discount on the crack sealing job.

LEVERAGE EXAMPLE 2: IMPLEMENTING SOUND BUSINESS PRACTICES
Local governments have overwhelming operational demands, but rarely have the necessary money and staff to meet all of those demands. As a result, things slip. Unfortunately, most things that slip usually end up costing local governments in the long run.

One example involves roof maintenance and repair. A properly installed and maintained roof should last between 20 and 30 years. However, in the public sector, the typical roof lasts only 7 years. Why? Because public entities often have to divert monies that should be spent on preventive maintenance to other priorities. If an entity underfunds maintenance long enough, it spends all its time and money fixing things that break instead of maintaining things so that they don't break. This thinking is highly reactive instead of proactive.

In 2006, NEOSO will develop an asset management program that is intended to enable our Members to break the break-fix habit and return to a preventive maintenance mode. Why? Think of it this way: would you rather floss today or get a root canal tomorrow? Would you rather pay a little bit each year to have a roof that lasts for 20 - 30 years or pay for a new roof every 7 years? Preventive maintenance is A LOT less expensive. We'll help you get there and AVOID major costs that you are now incurring by extending useful product life.

LEVERAGE EXAMPLE 3: IMPLEMENTING SHARED SERVICES TO REDUCE THE WORKLOAD OF EXISTING STAFF
We've found that many of our members have staffing needs, but don't have the money to hire qualified full-time professionals. We can provide those areas of expertise on a part-time or shared basis. For example, many of our Members told us that they don't have the internal Information Technology resources they need. Therefore, we developed a package of Information Technology offerings ranging from a CIO that is shared across multiple communities to shared technical support.

There is a tremendous benefit to multiple Members utilizing a NEOSO shared service. Shared services are in effect a standardized method of doing business. With standards in place, NEOSO has the ability to look across multiple members and understand their needs and requirements over time. We can forecast. That gives us the ability to aggregate those needs systematically, which leads to ongoing group purchasing opportunities.