This new environment is expected to result in to 91视频鈥檚 non-profit sector – pushing for consolidation amongst similar-interest organizations specifically.

Many 91视频 non-profit organizations are concerned about the impact of the widespread cuts and program restructuring to their identity, autonomy as well as the communities they serve.

One example of such structural changes is the replacement of Local Health Integration Networks with 91视频 Health and local 91视频 Health Teams. According to this change aims to achieve 鈥�unified administration and governance鈥� in the name of quality improvement and accountability.

This significant transition includes the implementation of 鈥�focused and simplified鈥� funding models that encourage 鈥渞eduction of waste, and elimination of duplication.鈥� The concern amongst non-profit professionals is that this shared funding models could result in community organizations losing control over their programming.

Another example is the introduction of 鈥�service system managers鈥� within the employment and training sector as the province seeks to reduce the total number of service agreements it manages.

Consolidation is a priority for 91视频鈥檚 government – the primary objective being to achieve financial efficiencies through direct (reduced duplication) and indirect (reduced bureaucracy) means.

One strategy to achieve similar efficiencies while maintaining independence and control is through consolidated purchasing activities. 

Leveraging what is known as 鈥渃ollaborative purchasing鈥� or 鈥渃ollective buying鈥� between two or more similar-need organizations can be a strategic first step towards (or, sometimes, an alternative to) sector consolidation. 

The provincial government鈥檚 perspective is that administrative and operational redundancies exist and that there are opportunities for efficiency through consolidation.  Whether this point is arguable or not, it does support our longstanding belief that there are opportunities for improvement through improved collaboration in the sector.  One way to pursue these opportunities, either as a stand-alone initiative or as a step in an overall shared service strategy, is collaborative purchasing.   Because many group procurement models do not require independent organizations to share identity, governance or anything else for that matter, they can be a particularly powerful yet non-threatening first step toward realizing financial and operating efficiencies. 

If you鈥檙e considering a collaborative purchasing strategy, here are three points to consider:

Shared Procurement Services can result in significant hard-dollar savings

Unlike other shared services, benefits from improved procurement include significant hard-dollar savings, which can then be used to fund initiatives in other areas (including other shared services such as HR or IT.) Typically, there is opportunity for 鈥渜uick wins鈥� through improved procurement that can provide some much-needed early momentum for a shared service or consolidation strategy.

Shared Procurement Services offer a great first step.

Organizations can 鈥渄ip their toe鈥� into the shared services waters by participating in collaborative buying. Each organization can access the benefits realized through efficiencies without many of the complexities that come with more complex consolidation efforts.  

Capacity among current teams can also be increased in the way of formal or informal knowledge sharing, shared access to expertise, and consolidated data collection, all of which can ultimately lead to improved performance for each organization and the sector overall simultaneously.

Shared Procurement Services reinforce sector operating principles

The more open to collaboration and change you are, the more significant the benefits can be.  While many of the benefits are easily accessible, many of the deeper improvements are accessed through a new way of looking at how your team manages your operations, including your procurement activities.  Perhaps it鈥檚 time to revisit the standards of the products you鈥檙e buying – and whether you鈥檙e really getting value out of them? Or to take a harder look at the principles behind how you select and manage your supplier partners?  Use this as an opportunity to revisit some old practices and assumptions, work with a new network of prospective partners and prepare to embrace the possibilities available in this changing environment.

In recognition of 91视频鈥檚 new efficiency-minded, consolidation-friendly operational reality, non-profit organizations should consider collaborative procurement as an attractive first step (or alternative approach) to achieve financial efficiencies.

Regardless of whether your organization does or does not expect to be impacted by sector consolidation, establishing a shared purchasing system – like group buying – can achieve much of the same benefits with far less complexity and little compromise. This can be especially true if you are able to join an existing buying group (the ONN Purchasing Program is one example). In this case, your organization (as well as your prospective 鈥減urchasing partners鈥�) avoid the leg work and coordination required to set up your own system yet retain the opportunity to provide input and feedback on how the program can continuously meet your needs. 

From the Board of Directors to funders to community members they serve, nonprofits have a long list of stakeholders to take into consideration when determining how money is spent and how suppliers are chosen. Establishing and enforcing policy to govern the way a nonprofit buys goods and services, also known as a procurement policy, can help nonprofits ensure their spending aligns with their organizational values and the interests of their supporters.

Here are five best practices to help nonprofits develop or improve their procurement processes:

1. Seek supporter feedback

Many different roles and responsibilities are required for a nonprofit to deliver its social mission effectively and efficiently. This may result in different perspectives on what resources are needed and how those resources should be purchased. To eliminate individual biases or group think, it is recommended that nonprofits receive input from different supporters. Establishing policy to orchestrate this input can improve decision quality, reduce risk, and eliminate biases.

2. Maintain consistency

The expectations (and need) for fair and transparent selection processes are greater than ever. How nonprofits select and manage suppliers may impact their public reputation and credibility. Creating and enforcing policies consistently, such as how to steward supplier relationships or how to uphold a professional code of conduct, can help maintain consistency of quality and conduct across all team members. 

3. Establish team procurement leaders

Finance and administrative leads within your organization can support program staff on large or complex projects. These projects usually involve highly specialized activities such as researching suppliers, developing documents, creating evaluation tools, and writing contracts that most staff rarely perform. To increase efficiency, nonprofits can use the same few individuals to manage this work across all projects, and define when and how to engage these 鈥減rocurement leaders鈥� in its procurement policies. 

4. Expand your network

Establishing procedures and supplier evaluation processes can help nonprofits 鈥渃ast their net鈥� further to discover alternative and possibly more appropriate opportunities for partnership. By expanding their network, nonprofits can gain knowledge and increase confidence that existing suppliers are the best choice.

5. Leverage the sector鈥檚 purchasing power

Establishing and enforcing procurement policies can take time and resources that many nonprofits may not have. This is why ONN developed the ONN Purchasing Program with purchasing experts at . The program aims to provide nonprofits with strategies, tools, and programs to save time and money with their buying decisions. And leverage the purchasing power of the nonprofit sector. That’s 58,000 organizations across 91视频!

Establishing and implementing your nonprofit鈥檚 procurement policy may seem daunting. If you have any questions or require support, please contact our team (RTPS team for the ONN Purchasing Program) at onnpp@rtps.ca. We are here to help!

Not all supplier relationships are of equal importance of course. The provider of a vital donor management system or an event management firm tasked with organizing key conferences can, and should, receive more attention than one-off suppliers or infrequent suppliers. One needs to prioritize relationships and foster those that are of strategic importance to your nonprofit. It鈥檚 not a matter of ignoring other relationships, but in a world of limited resources, nonprofits need to focus their efforts.
Regardless of the level of importance that you assign to a particular supplier relationship, there are universal traits that distinguish healthy supplier relationships (and the good suppliers behind those relationships) from the rest of the field.

When assessing your roster of suppliers, consider the 3 C鈥檚 of healthy supplier relationships 鈥� Commitment, Communication, and Cooperation 鈥� and whether your current suppliers live up to these standards.

Commitment

The best suppliers demonstrate an ongoing commitment to the needs of your organization. Going beyond the basic requirement of ensuring that you receive the right things, at the right place and time, and at the right price, they offer a level of customer service that makes it clear they will do everything possible to 鈥渕ake things right鈥�. They are knowledgeable about and interested in your operations and your overall mandate, and they are responsive to your requests 鈥� even if they don鈥檛 have an immediate resolution, they let you know that they鈥檝e received your query and are working on it.

Communication

A healthy supplier relationship is also punctuated with open two-way communication. There are no surprises and you are kept aware of developments in products, pricing, service delivery, order status, etc. Account managers ensure that your questions are answered succinctly and in a timely fashion and the best ones possess another great skill 鈥� they are able to accurately assess how best (and how frequently) to communicate with you. Are weekly telephone conversations appropriate, or do formal quarterly reviews work best, or both? The little things are important as well. Making sure that you are aware when they are unavailable and that you have access to appropriate backup and escalation protocol can be critical when unexpected issues arise.

Cooperation

Finally, those suppliers that understand and embrace the need for mutual cooperation will serve your organization most effectively. Collaborating with your supplier on mutual initiatives ensures they are aware of your requirements and, likewise, you are aware of what they have to offer. This understanding will lead to better solutions being provided and can represent new business opportunities for the supplier. Knowledgeable supplier representatives with your best interests in mind will advocate on your behalf within their organizations in order to provide you with solutions that address your needs in the best way possible and maximize your value for money.

Again, not all supplier relationships are created equal, but in times of stretched internal resources, a well-managed mix of Commitment, Communication and Cooperation can result in your suppliers playing a key role in helping your organization more efficiently operate and be able to focus on your mission.
About the authors

Duane Donnelly and David Rourke are the principals of聽(RTPS),聽a services organization that specializes in supporting non-profit organizations in their efforts to better manage their purchasing activities and improve the impact of every dollar spent. They offer a unique combination of proven tools, approaches and skills that help instill robust best practices within an organization and optimize their costs. Their collaborative approach allows organizations to implement pragmatic and effective purchasing and supplier management solutions that are sustainable over time.

Get free expert advice through out partner RTPS. Find out more.

Nonprofits know intuitively that there is benefit in closely managing their purchasing activities, and that cost savings are available if the necessary resources can be dedicated. Taking the time to check pricing, obtain multiple quotes, or simply confirm that the right things are being purchased, can all drive down costs. But it鈥檚 still sometimes difficult to justify spending more precious time on this type of function, in particular for smaller nonprofits.

It鈥檚 important to consider though, especially in the nonprofit world, that focusing solely on cost savings may mean that purchasing is missed as a potential lever to drive a number of important benefits to your organization. Investing the time to manage your nonprofit鈥檚 purchasing in a professional manner can have a profound effect on your organization, far beyond simple cost savings. Well-managed purchasing can yield a bevy of benefits to your organization, such as:

• Reducing the risk of organizational wastefulness or lack of expertise being exposed outside the organization
• Demonstrating active and effective use of funds to potential donors
• Maximizing cost savings – though it鈥檚 not the only benefit of managed spending, it鈥檚 fundamentally important and can鈥檛 be ignored
• Improving the quality and suitability of the goods and services being purchased
• Forcing critical thinking around demand management – what you really need, when you really need it, and how much of it you really need
• Ensuring that contractual agreements protect your organization.

Finding a way to put some focus on your organization鈥檚 purchasing needs can be a challenge, but the benefits of doing so in a non-profit organization are real and substantial. Whether you handle your needs individually, seek external support or pool your resources to work with other nonprofits, the return on well-managed purchasing activities will far exceed simple cost savings.

Access to resources and support for nonprofits
Get free expert advice through out partner RTPS. For example, if your organization is about to sign a new services contract, is creating an RFP for a consultant, or is planning on purchasing a new computer service, contact RTPS today to get the advice you need:
Toll free line: 1-877-742-9776 |   Email: info@rtps.ca
Stay tuned! We鈥檙e developing a whole bank of resources, including templates for purchasing strategies, policies, contracts and more!

About the authors
Duane Donnelly and David Rourke are the principals of , a services organization that specializes in supporting non-profit organizations in their efforts to better manage their purchasing activities and improve the impact of every dollar spent. They offer a unique combination of proven tools, approaches and skills that help instill robust best practices within an organization and optimize their costs. Their collaborative approach allows organizations to implement pragmatic and effective purchasing and supplier management solutions that are sustainable over time.