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As a director at successful startup I see how we went from being able to buy new software in minutes by pulling credit card to multi stage procurement process o
by jakozaur 6y ago
As a director at successful startup I see how we went from being able to buy new software in minutes by pulling credit card to multi stage procurement process of public company.
All changes got good intention:
1. We need to be secure. Know what kind of data there.
2. We need check and balances for finance.
3. We need to be compliant.
Etc.
I would love if there would be open consortium that could provide a lot of services, without price overhead that also establish some quality/security/compliance bar for its members.
Companies as a broker model is flawed. Procurement won't accept paying 20%+ extra for same stuff. Terrible lock-in.
- numbsafari 6y agoIn healthcare this is referred to as the Group Purchasing Organization (GPO) model. Instead of waiting for sales orgs to band together, purchasers band together to negotiate and vet products and services. This is a much better model, in my opinion, because it keeps the incentives on the side of the buyers, not the sellers. Keep in mind, certain products still have to be vetted by the individual purchasers due to statutory requirements. But, as a buyer you narrow the scope of offerings you have to consider and you increase the likelihood that your in-house audit will pass. So, there's still a benefit even if you absolutely must inspect their facilities yourself.
- conductr 6y agoWhat also happens in healthcare is the manufacturer raises prices to account for margins of/lost to the GPOs. Individual buyers become required to buy through GPO as the price differences are stark. As GPO gains negotiating power, they want to keep more spread for themselves. Manufacturers adjust. The cycle continues, all the while the ecosystem becomes more expensive since you inserted yet another middle man.