How GPOs Using SaaS Offer Better Services for their Members

May 16, 2020 by Nisreen Galloway

A survey conducted three years ago by BetterCloud estimated that, for a majority of companies, 80 percent of their apps would be SaaS by 2020. Today, that number is actually closer to 84 percent, and the expenditure on SaaS applications is expected to reach an incredible $623 billion by 2023.

Let’s take a look at why the exponential expansion, and how this type of software can benefit Group Purchasing Organizations (GPOs) and their members.

SaaS Solutions

Software as a Service (SaaS) refers to software that is licensed via subscriptions for users. A few examples include HubSpot and Dropbox—essentially, any software that is delivered to an end user from a cloud environment. Companies today use, on average, 34 of these SaaS apps.

Cloud-based SaaS delivers several key characteristics including scalability, flexibility, consistent updates, increased collaboration, and security.

Vertical SaaS refers to SaaS that is designed for specific industries and supply chains with predefined metrics and KPIs. GPOs are turning to this type of software to improve their business strategy and provide their members with impeccable service.

GPOs

Group Purchasing Organizations (GPOs) allow small buyers to aggregate their spend and gain leverage over large suppliers. The collective buying power of the GPO members greatly affects the ability to buy at reduced costs as well as the ability to negotiate contracts and consolidate rebates. An example of a GPO geared to the restaurant industry is Consolidated Concepts. Their buying power, which amounts to almost $10 billion, enables them to reduce member’s costs on over 165,000 line items.

In addition to buying power, GPOs provide long-term relations with best-in-class suppliers that have been vetted over the course of years, if not decades. Other services include supply chain consulting, revenue management, and ecommerce solutions.

In order to accomplish this, GPOs require accurate and timely procurement data which maximizes their collective buying power.

Why GPOs are Partnering with SaaS Providers

For GPOs, the benefits of using SaaS solutions are in alignment with the benefits associated with most companies such as increased security and the ability to collaborate. In addition, cloud-based services provide up-to-date data analytics & reporting, rebate management tools, and B2B document exchange which creates an e-business powered trading network. Access to online data also enables visibility of the entire procurement process.

As procurement professionals know, high-quality and timely data is the core of a GPOs ability to provide the best prices along with the best quality supply chain supplier selection.

Faster

Real-time information stops delayed reactions. Purchasing data must be accurate from moment to moment in order to maximize rebates and other incentives. No more waiting for a quarterly statement to determine if the group has met a rebate tier. Performance metrics can be analyzed, enabling members to achieve their growth targets and maximize buying power.

A cloud-based application creates high-speed that gives GPOs 24/7 access, all from a standard internet browser.

Better-Informed Decisions

Operating in the cloud allows GPOs to identify food cost issues based on pricing trends. Operators can identify items going up in price by comparing with commodity markets, and these can be compared to market prices to determine what factors are influencing price fluctuations.

Spend Management

From inventory, invoices, contracts, and rebates, there is a tremendous amount of data that is derived from the purchasing segment. Organizing this data and making it accessible via a cloud-based software solution enables a spend management platform that is operating in real time.

Real-time data enables GPOs to know how close they are to reaching the next rebate inventive tier so that they can act in real time, instead of finding out later that they’d just missed the mark.

Reduce Order Processing Costs

Preferred suppliers will appreciate your technical expertise which reduces order processing costs, a price reduction that can then be passed on to your members.

InsideTrack has developed the most versatile procurement SaaS in the industry—allowing GPOs to make faster and better-informed decisions.

InsideTrack

InsideTrack takes in raw transactional data from multiple sources and normalizes every online item to a single key data point. When purchasing data is cleaned, the ability to optimize contracts, reduce costs, and gain insight into foodservice and purchasing operations is available.

Customized reports are then configured by category, location, time frame, manufacturer or vendor. Easy-to-read dashboards compare purchasing data to commodity markets, monitors contract compliance, and updates rebate claims and payments.

With item-matching software, manufacturer’s item-level data, and compliance analysis, billing, and allocation tools, InsideTrack provides a tremendous opportunity for GPOs to take their membership experience to the next level.