GPOs Turn to Digital for Better Member Service

Corcentric Webinar Digitization

Digitizing processes results in greater efficiencies, lower costs, and greater visibility, and that includes rebate management and price validation.

This blog first appeared on the Corcentric Blog.

Decentralization can wreak havoc when it comes to efficiency in a business. That’s especially true when that business is dependent upon paper and manual processes for their procure-to-pay functions. And it becomes even more complex when you’re dealing with a purchasing co-op; where disparate companies deal with multiple suppliers, but all are part of a larger entity…the purchasing co-op, which is responsible for making the arrangement work for both members and vendors.

Where things go wrong…

In a manual world, there is limited control and visibility over processes. Tracking down lost or misplaced purchase orders and invoices is a total waste of time for both the purchasing co-op and its members. The same is true for manual data entry which is prone to high error rates, which can result in incorrect shipments and, ultimately, member dissatisfaction.

Even more important, members join a purchasing co-op in order to realize the savings that have been negotiated by the group. But when contract pricing can’t necessarily be verified, that advantage is lost. We’re not just talking about potential price variance from business to business, but even between different locations for the same company.

Another advantage to membership is rebate management, but without centralized control, members often have to depend on the supplier to give those rebates back on their own…and that doesn’t always occur.

Where things go right…

Purchasing co-ops are discovering what so many other businesses today have already discovered; that digitizing and automating your processes creates efficiency, eliminates errors, reduces costs, and provides visibility into the underlying data that helps determine a company’s success or failure. End-to-end, procure-to-pay solutions for purchasing co-ops give members and the group visibility through the entire order-to-cash process and provide accurate order information as well as shipment and invoice information.

Since all transactions are handled electronically, delivery of POs, acknowledgement of POs, and changes to POs are immediately verifiable. The right procure-to-pay solution will also enable suppliers to submit e-invoices and provide straight through processing and automatic matching so members can approve payment, confident that they’re paying the right price. And since all transactions are archived, suppliers and members can now eliminate paper from all of their processes.

With all transactions archived, both current and historical, businesses can project and plan their spend with accuracy. They can also identify order processing time and out-of-stock items. These benefits aren’t available in a manual world and the inability to identify either of these can lead to lost opportunities and potentially lost customers.

Working with the right solution provider

Reluctance to digitize on the part of purchasing co-ops can be attributed to resistance to change or, more likely, a concern with the cost of conversion. In reality, working with the right solution provider will allow a purchasing co-op to connect to its entire member/supplier community without additional investment in people, hardware, or software. And the scalability of the solution means that a big growth in membership and transaction amount won’t need to be buttressed by an increase in headcount.

Members also will finally fully realize the benefits for which they joined the purchasing co-op in the first place:

Price Validation – Buyers get the right price for the right product at the right time. That means less disputes, an increase in the ease of doing business, and better relationships and trust between buyers and suppliers

Rebate Management – Now members will get rebate information in a timely and accurate manner, realizing the savings that were promised.

Business Intelligence – Reports and dashboards give members visibility into spend which in turn enables them to make better purchasing decisions, forecast future trends, and analyze data necessary for the company’s success.

It’s pretty clear that without digitizing and automating their processes, purchasing co-ops aren’t offering the optimal benefits to either their suppliers or their members. In a business environment dominated by technology, enterprises will either avail themselves of that technology or they’ll fall behind. Co-ops need to have the same forward-thinking attitude.

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Dave Lindeen

About Dave Lindeen

Dave Lindeen Senior Vice President of Sales for Corcentric. For the past 10 years, Dave has led the strategic business planning of Corcentric including sales, technology investments, and systems improvements which has resulted in Corcentric’s explosive growth, competitive advantage, and market penetration. In addition, Dave plays an instrumental role in recognizing new developments in technology, and anticipates organizational modifications. Prior to joining Corcentric, Dave acquired 25 years of experience within the transportation industry, a majority of that time with Ryder System Inc.

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