NEXTStep Commerce, Inc.: Maximizing a GPO’s Collective Buying Power

Robert G. Skyler, President & CEO Access to timely and accurate procurement data is the lifeblood of a successful Group Purchasing Organization (GPO). In order to positively influence a GPO’s desired business outcome, an enterprise business solution is required; which addresses the overall needs of the group as well as the specific needs of the individual member companies and preferred supplier partners. Robert G. Skyler, President and CEO of NEXTStep Commerce, Inc. is an e-commerce veteran with nineteen years of intimate GPO know-how. While working with several buying groups early in his career, "I realized that the inability to access group-wide procurement data in a timely fashion could be a real management challenge; restricting a GPO’s ability to maximize the collective buying power benefits they could provide to their members,” says Skyler. “I needed to develop an all-inclusive solution that provided GPOs with the tools needed to even the playing field against emerging big box competitors; enabling comparable product acquisition pricing, more cost-effective procurement processes, and access to real-time data; which would improve a member’s bottom line profitability.”

The result of this understanding, was the formation of NEXTStep Commerce, Inc., a Leesburg, VA-based technology corporation, which provides e-business software and services, specifically to the GPO market. The company is made up of a team of seasoned GPO administrative and technology experts; offering their clients extensive business, process, and technology insights, that have proven to be invaluable to startup buying groups as well as the most seasoned of GPO trading networks. NEXTStep offers an integrated suite of eight e-business software applications, the “NXT-Cloud® GPO Commerce Suite”, which enables independent businesses to band together and operate as an e-business qualified GPO. The cloud-hosted solution provides GPO management staff with online data access and visibility into the entire end-to-end procurement process.

“A GPO’s value to its members is greatly enriched when group-wide data can be made available in real-time. We provide the tools to leverage the data, empowering GPO’s with better decision-making capabilities to effectively manage their procurement cycle,” asserts Skyler. Today, after 15 years of successful endeavors, NEXTStep’s NXT-Cloud GPO Commerce Suite is responsible for processing nearly $1 Billion in GPO transactions annually. NEXTStep also provides the rebate management platform, “NXT-Cloud GPO Rebates” for several leading GPOs; supporting over 25,000 member locations.

Diverting from the Status Quo

The key to a GPO manager’s ability to maximize supplier rebates and other loyalty incentive program earnings, lies in the acquisition of accurate and timely data. Traditionally, GPO’s were forced to rely on an “honor system” of supplier-reported sales and rebates earned, after the reporting period had ended. These GPOs did not have an effective method of collecting purchasing data from their members in a timely and consistent manner. This presented GPO management with the unique challenge of determining how close the group was to achieving a time-sensitive volume goal; or how to validate supplier-reported numbers against actual member purchases.

NEXTStep transforms traditional GPOs into e-business powered trading networks

Many opportunities for rebate growth earnings were being missed. This is where NEXTStep “Steps In”. NEXTStep’s GPO Rebates application aggregates member EDI invoice data provided by suppliers into a data warehouse daily, from which on-demand data analyses, report generation, and purchasing volume validation can be performed by GPO management and individual members.

"Over the years, we’ve seen several instances where a GPO was only a few hundred dollars away from reaching the next rebate incentive tier. Because they had no effective mechanism for determining exactly where they were as a group, in terms of actual purchases, they ended up losing tens of thousands of dollars in rebate earnings," says Skyler. “Collecting data ‘after-the-fact’ has no meaningful influence on the GPO members’ ability to meet a purchases goal. Providing visibility to real-time data can make a measurable bottom line difference,” he adds.

The GPO Commerce Suite Advantage

NEXTStep’s key market differentiator is providing a complete enterprise suite of GPO software; offering application-specific modules that support and e-enable the major business functions of a GPO. NEXTStep’s solutions may be “tailored-to-fit” a client’s unique requirements and business objectives; 85-percent of which are typically satisfied directly out of the box. “No two GPO’s requirements are the same, so our software is designed for custom tailoring as needed,” explicates Skyler.

Since the GPO Commerce Suite is a 100-percent cloud-hosted solution, GPO’s are provided secure, high-speed, around-the-clock access to the entire suite of software applications. A standard internet browser is all that is required from each company, making it possible for companies of differing technical capabilities to fully participate in a GPO’s preferred supplier programs. Combined with NEXTStep’s full range of GPO Services, a complete turnkey solution is offered. “We aim to provide our GPO clients with best practice processes and the necessary tools to help increase management efficiency, leverage a group’s collective buying power, increase preferred supplier sales, and maximize member rebate earnings,” connotes Skyler, “which is a win-win for both buyer and seller.”

For example, the Installed Parts Group (IPG), a GPO Management Services Company for the Automotive Parts Distribution industry, approached NEXTStep to supply a fully integrated software suite to help IPG bring independent repair shops and tire dealer members the best possible savings on auto parts, supplies and services. IPG needed a cost-effective solution to electronically collect, manage, analyze, and report on sales, rebates, and rewards point data earned by over 24,000 repair shops associated with the American Tire Distributors (ATD) network.
NEXTStep’s GPO Rebates application was implemented to extract, transform, and load purchasing data received from the leading auto parts retail chains into a data warehouse. Custom-defined business rules were developed to qualify or exclude purchases in real-time, calculate rebates, and report rebates and rewards points earned to each repair shop. GPO data visualization charting and report generation functionality were integrated, providing on demand access to critical business data via mobile smart phone and tablet devices.

Another scenario involved the Independent Distributors Cooperative (IDC), a leading GPO in the industrial bearings and power transmission industry, who needed a one-stop procurement solution to collect real time purchasing data and enable 275 of their independent distributor locations to procure products online from 70 preferred suppliers via a single website. IDC selected the NEXTStep’s GPO Marketplace application to launch their “IDC Marketplace” website; along with the NEXTStep’s GPO B2B Exchange and GPO Rebates platforms to electronically exchange, collect and analyze procurement data; in an effort to grow preferred supplier program sales and maximize rebate earnings for their distributor members.

Just Press the Refresh Key

By continually updating the GPO suite with the latest advancements in e-business functionality and investing in forward thinking talent, NEXTStep maintains its edge over the competition. “We practice the philosophy of taking the best care of our employees and trust that that they, in turn, will take the very best care of our clients,” expounds Skyler.

NEXTStep’s help desk team works around the clock to identify, correct and manage issues and inconsistencies encountered during the procurement cycle. Skyler emphasizes that his staff’s primary business objective is to empower GPO’s to provide “more value” to their members; by sharing GPO “best practice” processes and lessons learned, and providing the technology solutions needed to make these processes operational. NEXTStep’s help desk staff are trained to deliver immediate “on-the-fly” issue remediation where possible, reducing costly time delays to the procurement process. As one of NEXTStep’s clients put it, “We are told to just press the refresh key and the issue is remediated before our help desk call has ended.” Skyler adds, “This level of service is what places NEXTStep several notches above our competitors.”

Shaping the Future of NEXTStep

Being a professional engineer by trade, Skyler is hard-wired to be on the lookout for new and better ways to solve a problem or improve an inefficient process. His curiosity is contagious, as he encourages his team to strive for more innovative and cost-effective solutions, which in turn, can provide a greater ROI to NEXTStep’s clients. “In 2017, NEXTStep’s product improvement cycle will be focused on enhancing the NXT-Cloud GPO Commerce Suite for improved multi-device usability. We will also be adding advanced data visualization features, enabling the ’big picture’ performance metrics of a GPO to be more easily assessed and drilled-down to reveal greater detail as needed,” notes Skyler.

An all-inclusive suite of GPO software and related services is hard to come by in the current state of the industry, which puts NEXTStep in the driver’s seat on an open highway to even more success in the future.

NEXTStep Commerce, Inc

Leesburg, VA

Robert G. Skyler, President & CEO

Provides an enterprise suite of Group Purchasing Organization (GPO) software and services, which e-business enable the major business functions of a GPO

NEXTStep Commerce, Inc