Power of Aggregation

As businesses are under constant pressure to deliver improving financial results, procurement professionals find themselves uniquely positioned to impact the bottom line.  Every dollar saved is truly a dollar earned, creating immediate value and increased profitability.  The procurement professional can leverage many tools such as RFP software, running reverse auctions and hiring consultants.  Regardless of the tool, a vendor is going to price an opportunity based on its market value; a value often determined by size of spend.

More sophisticated procurement professionals within progressive organizations have begun to aggregate spend across divisions and business units in an effort to create more spend to leverage.  Such an aggregation strategy delivers value but is limited to the amount of spend a single company can muster.

What if a company could pool it’s spend and requirements with other similarly sized companies to create more leverage than it could on its own?  It is logical that the increased spend would result in additional value, but aligning companies to collaborate in such a manner would take time, effort, alignment and leadership from resources that are not allocated today in a typical company.  However, if that company provides group purchasing solutions then it just might have the resources, process and scale to deliver more value than an individual company could on its own; and the true power of aggregation could be realized.

James Hallock

CoreTrust VP Development