How C-Suite Can Empower Their Procurement Heroes

This interview is taken from an episode of the Spend Culture Stories podcast. In this episode, Anthony Clervi, the CEO & Co-Founder at Una shares his thoughts on why the C-Suite needs to empower procurement as a function, the role of group purchasing, and how it affects organizational spend culture.

About the Podcast:

Your company culture might attract talent, but your Spend Culture will make or break your company. The Spend Culture Stories podcast helps finance leaders learn the tactics, strategies, and processes to build a proactive Spend Culture. In this podcast, we have human conversations about the messy and sometimes hilarious stories that happen when people, organizations, and money meet. Learn how to pick the right tools, implement the most efficient processes, and how to develop the right people to transform the Spend Culture of your organization for the better.

Why the CSuite Needs To Be Vulnerable In Order To Empower Their Procurement Heroes

Anthony Clervi is the CEO & Co-Founder at Una, which is re-defining the GPO (group purchasing organization) model to go beyond simply providing discounts, to being innovative partners.

He is an experienced leader with a demonstrated history of executing and providing value in the group purchasing and procurement industry. Anthony has experience in sales, marketing, strategy, leadership, and team-building, with a strong business development background. Being multi-talented, he is also a former college athlete with a Bachelor’s Degree focused in Economics & Finance from McKendree University.

In this episode, Anthony shares his thoughts on why the C-Suite needs to empower procurement as a function, the role of group purchasing, and how it affects organizational spend culture.

Speakers: Anthony Clervi, CEO & Co-Founder, Una

 

Listen to the Episode Here:


Notable Quotes:

What are the benefits of a GPO (Group Purchase Organization)?

Anthony Clervi [00:15:32] Sure, love to. So, again, just a little plugging, check us out at una.com. I will say this – group purchasing has been around for about 100 years.

The concept started really in healthcare and now has extended into other verticals. We saw service and healthcare customers, but the majority of our business is in the business community in North America, typically the United States. We do service for some customers in Hawaii, and in Alaska.

The short of it is, we can help companies buy like the ‘big guys’ and buy products and services, commodities, everything from small parcel shipping to hotels, to rideshare, to furniture, to we say anything that’s on a carpet….and the list goes on.

There are many different types of GPOs that we could get into. But the long and short of it is – We should help you buy smarter. Our goal is to help you buy smarter, and understand really what it is that you need.

Typically, we’ll have two different conversations. One is “let’s look at a few categories and do some education” because most of our customers don’t even know that a GPO is available to them. And to your point, they don’t know what a GPO is.

So our team will say “that’s a group purchasing organization”. But now that you’ve explained the acronym, the question is – how does it work? That’s the beauty of a lot of what we’re doing with our content, and a lot of our conversations that we’re having with prospects and customers every day.

What are the two types of GPOs?

  1. Vertical GPO

Anthony Clervi [00:17:18]  A vertical GPO is a GPO focused on a specific vertical. How about that? So, everything from dental to pharmacy to hospitality – there’s literally focused GPOs that just service very specific market and products and services for that market.

       2. Horizontal GPO

A horizontal GPO is going to be really the opposite. They’ll serve any vertical and have a myriad of options that will service those markets or verticals.

Una is actually what’s considered a horizontal GPO. Although we do service the business and healthcare space, we have categories of spend and negotiated contracts that will extend really to any business and vertical.

What you tend to find on horizontal focused GPOs is that they focus on indirect spend, which is really everything that constitutes the everyday items that are going to affect most organizations or businesses like supplies and small parcels. On the vertical side, you’re going to see some opportunities on direct spend. They are very specific to that market.

How does an ideal GPO relationship look like? 

Anthony Clervi [00:18:36] Hopefully, you’re coming to the table with an idea of what success would look like in a partnership, and understand the fees and that there’s good dialogue back and forth on the shared expectations of this relationship.

Anthony Clervi [00:18:55] But then ideally, the right GPO, in my opinion, understands that they are a supplement and that they want to come alongside their C-Suite strategy that they’ve got in place for your spend, and that there is an opportunity for some outsource procurement assistance.

That’s how we try to position ourselves. Again, we don’t want to be just selling or throwing things off the shelf. We want to really consider ourselves as this advisor. Ideally, that’s the type of GPO relationship or procurement advisory relationship I would advise or encourage so that there’s real understanding.

If you go to https://whatisagpo.com/, this is articulated even better than what I just shared, and it’s a really good resource page that we tend to share with a lot of our current customers and even other prospects in our ecosystem.

How do you think Spend Culture will evolve in the future?

Anthony Clervi [00:12:10] I think the market will demand evolution, just like the market is demanding businesses to change how they approach company culture for their team members and employees. People want more freedom. They want more autonomy.

Noting this, I think this year alone will probably have the most investment in spend analytics tools or technology tied to procurement. So, I think it’s going to hopefully force some healthy capitalism and change how suppliers are going to market, and how they’re working with their customers.

On the flip side, (so the Latin word for Una is actually “together”), we believe that it’s the end-user that’s actually buying the products and services, or participating in that format, is just as important as our supplier partner. I think it’s going to be more relational based. The technology component is great, but not just technology for technology. I kind of lean towards the approach of having good communicators take complicated information and make it simple.

There’s this sense of elitism in the procurement, purchasing, and sourcing industry in my opinion that I’ve seen in the market. “You don’t know what I know”, or “Let’s be overly sophisticated” and sometimes depending on the market, the commodity, the category, or the business, it doesn’t need to be that complicated.

Anthony Clervi [00:14:10] That’s a little bit of what Una tries to do. We try to simplify that process and delineate from what’s important and what’s not. But again, I think the culture is evolving. I think it’s kind of forced change because none of us like to change.

Even though you may make it a core value or you may make it an initiative for the year, it’s really hard to commit to and action on. I think there’s an enormous opportunity just on the education of what a healthy Spend Culture would look like and what it means. I think it starts with the C-suite.  We don’t want it to be a reactionary mechanism, we want it to be proactive, forward-thinking – like this matters to our business and our ecosystem. And just baby steps, right?

How can leaders within an organization truly empower procurement professionals?

Anthony Clervi [00:20:59] Simple. Let them do their freaking job. You hired them to do a job. Make it clear ‘hey, these are the expectations – if you run into problems, let me know.’

But typically, depending on how big you are, procurement folks are going to handle multiple categories or one category. Make sure that it’s understood that we take it seriously here.
And I think, again, it starts from the top, just like culture, what you say is what you do, and people don’t watch what you say, they watch your feet.

And so, if there’s push-back on compliance and on change, there needs to be some reinforcement – not only from the leader that’s been empowered and doing the execution, but also by the people on the top, whether it is the C-suite, or whoever is the main person that signs off on major decisions (depending on how the organization is structured.)

We see it a lot where the procurement professional or sourcing hero thinks they have the authority to do X, then we have a conversation, we share some strategy, ideas, whatever. We’re just having a conversation, they go back to C-suite or whoever that leader is, and the idea gets hit with a roadblock.

In my opinion, that’s the worst thing that can happen. The ripple effect to that is ‘where else is that happening in our company culture, and not just spend culture?’ So, you’re handcuffing the people that you’ve hired to do a job, and then they feel stuck in the middle. That’s an example of what not to do. 

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