Sourcing Office Core Competencies
Successfully operating a public sector group purchasing consortium is difficult. Sourcing Office 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
Sourcing Office 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. Sourcing Office 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 spendsSourcing Office 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 ensures that:
- Potential suppliers know that they will have a minimum amount of revenue, which establishes Sourcing Office’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
Sourcing Office 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 Sourcing Office’s Council of Governments legal structure, the organization ensures that public sector entities that utilize Sourcing Office’s programs maintain compliance with the laws and rules governing public sector procurement
Managing group purchasing programs
Once Sourcing Office 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. Sourcing Office designs an implementation process that meets the needs of both the supplier and the Members
. Sourcing Office 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. Sourcing Office 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 Sourcing Office with any supplier issues as soon as they arise so Sourcing Office’s customer service team can resolve the issues before they become significant problems.
Sourcing Office also requires regular monthly supplier meetings. In these meetings, Sourcing Office 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. Sourcing Office’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
Sourcing Office 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. Sourcing Office 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. Sourcing Office 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. Sourcing Office develops highly personalized strategies to recruit the early adopters, who will then become advocates of new programs.
- General Communication. Sourcing Office 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