Despite the baggage, "leveraged contracts" doesn't have to be a naughty phrase, signifying that procurement skipped out on sourcing and managing a category on its own behalf. Moreover, technology is about to make leveraged buying that much more effective for both sides of the buying equation – not to mention the intermediaries capturing a fair commission in the middle.
In 2015, Group Purchasing Organizations (GPOs) will finally start partnering with technology providers in earnest. And they’ll bring additional value to their members as a result.
All this makes sense. GPOs are also like marketplaces of buyers and sellers, but they’re not e-marketplaces. They just need an "e" – and good e-procurement on ramps similar to our Amazon prediction.
This is an old topic of discussion – at least 15 years old to be precise. Remember the old ICG Commerce? Even if you don't, the GPOs and the tech providers aren’t going to party like it’s 1999. But, we do expect to see some real partnerships emerge. The technology now exists, and for e-procurement providers wanting to sell to the mid-market, the value proposition of GPO pricing enabled in pre-loaded catalogs is a no-brainer.
Moreover, with certain tech providers, the line will blur between traditional offline – or now e-enabled GPO models – and their own leveraged contracts they present to their customers in catalog format.
It’s 2015 friends. Lever up.
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