Consortium Buying — Have You Got the Goods?

Quick, what's often the easiest way to save money while improving internal customer satisfaction inside a company? If you guessed joining a purchasing consortia and selectively implementing a handful of categories that offer savings and other service-based advantages, you'd probably be right. Supply Excellence recently offered up a basic but useful primer on some of the advantages of purchasing consortia (along with some of the steps companies should take to avoid stumbling as they implement leveraged contracts). According to Supply Excellence, "Consortium Bids/Purchases enable companies to leverage their collective size and drive greater savings on the purchase of goods and services ... in the case of a consortium, the relative size of the purchase AND savings is increased, thus making it a very attractive process for buyers and their suppliers." In the Spend Management world, buying consortia can take many forms. Some marketplaces (e.g., Enporion) offer consortia and group-buying services as an adjunct to software and professional services delivery. While GPOs such as Corporate United base their entire business model on the leveraged sourcing / group buying concept. Which is right for you? Most likely, you owe it to yourself to investigate all of the options. But most important, it's critical to evaluate existing leveraged contracts on a category-by-category basis.

- Jason Busch

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