What You Could Do With the Business Savings Generated by Using a GPO
By Hugo Britt | January 4, 2022
At Una, we save money for our members by leveraging over $100 billion in buying power. Deep business savings in popular categories such as office supplies, shipping, and corporate services mean members can save an average of 22%, along with additional savings in sourcing time and effort.
These numbers will get most procurement professionals excited, but it’s important to remember that not every stakeholder is motivated by cost savings.
If you are building a business case for partnering with a group purchasing organization (GPO) like Una, showing stakeholders what could be done with the money saved can be a great way to bring them on board.
Real business savings that impact the bottom line
Show stakeholders that these are not hypothetical savings that may or may not appear in the P&L. While many procurement savings depend on factors outside of your control (such as compliance), the upfront savings generated through higher volume purchasing and pre-negotiated GPO discounts are a very definite and immediate perk.
At its simplest, the business case is as follows:
If the business approves the GPO partnership, we will save [$x in costs] by [date] that can be invested in [business priority].
Business priorities
What could your organization do with the savings you’ll see from using a GPO like Una? When building your business case, be sure to align your proposals with business priorities, along with the priorities of the stakeholders you are working to convince.
Investing in cashflow
For many organizations emerging from the economic rollercoaster of 2020-21, simply having access to the cash saved by procurement could be a key priority. A positive cashflow will enable the organization to pay expenses, settle debts, return money to shareholders, and build a buffer against future disruption.
Cashflow is also crucial to demonstrating profitability and improving the company’s valuation.
Investing in people
If an organization is focused on growth, the bottom-line savings generated by partnering with a GPO can be invested in hiring more people. Ask your stakeholders what could be achieved.
For example, would they be able to hire more salespeople, more customer support staff, more data analysts, or more IT professionals? What would that look like, and how would certain additions help the organization reach its goals?
Investing in technology
Covid-19 accelerated the adoption of digital technologies by several years, but this rapid technological investment came with a significant price tag.
GPO-enabled savings can be invested in upgrading legacy systems, migrating to the cloud, improving the IT support service, or building a cutting-edge technology stack.
Investing in sustainability
Sustainability initiatives inevitably provide long-term ROI because, as Forrester notes, going green is synonymous with two generators of business value: optimization and innovation. But sustainable transformation can be expensive in the short-term. Procurement savings generated by a partnership with a GPO can be invested into:
- Greening the office
- Creating a more sustainable product or service
- Reinvested in supply chain sustainability with options including green energy and sustainable packaging.
Jumpstart business savings now
Membership with Una is always free. There are no minimum purchasing requirements and you may cancel your GPO membership at any time. Gain access to over 2,000 pre-negotiated contracts with some of the best supplier partners in the country.
Contact us with any sourcing questions you have or for assistance with building a business case for partnering with a GPO.
