Five Ways CUVM Will Save You Money on Vendor Services
September 14, 2015
September 14, 2015
It’s not cheap to run a credit union these days. But a new member of the Strategic Link family of business partners helps credit unions save thousands and even millions of dollars on the third-party services they use the most.
The key is an eBay-style platform offered by Credit Union Vendor Management (CUVM) that brings top vendors together to bid on your business in real-time. But unlike eBay auctions where prices go up as auctions progress, during these Strategic Buying auctions, prices go down as vendors under-bid each other in an effort to become your provider of choice.
“Strategic Purchasing was instrumental in our vendor selection for our new mobile ATM through the e-purchasing event process,” said Lisa Smith, Senior Vice President Risk Management of Achieva Credit Union in Florida. “They assisted us in meeting all the regulatory requirements for vendor due diligence in a proficient manner and we saved over $30,000! I will definitely use their services again in the future.”
All of this takes no additional expertise on the part of the credit union. A dedicated CUVM point person meets each credit union where they are and makes the process incredibly simple on the credit union’s side.
Here are the top five ways that CUVM’s Strategic Purchasing service can save you money on the third party services you’re using right now.
- eBay in Reverse. If you’ve ever bought anything on eBay, you know the pain of watching the price rise as new bids come in. Now imagine the opposite. You need armored car services (or ATMs, check printing, janitorial services—you name it) and you get to watch along as trusted vendors offer lower and lower bids in order to get your services. Live auctions typically take 15–20 minutes, and you can see real time updates as lower bids come in.
- 21% Average Savings. The reverse bid auction is so powerful, credit unions save an average of 21% off the lowest paper bid they receive for the same products or services. And sometimes they can save 85% or more. Often times a credit union’s current vendor will outbid themselves in order to keep the credit union’s business. One credit union got an initial paper bid for a very specific mobile ATM of $169,000. When the credit union opened a reverse bid auction for the same mobile ATM, bringing in one other supplier, the same vendor submitted a bid of $138,000—a savings of $31,000. “We have used Strategic Purchasing events to buy several services and have not experienced less than a 20% cost savings; in more than one case resulting in 40% savings,” said Dennis Holthaus, CFO of Achieva Credit Union. “I won’t purchase another contract without it.”
- Deleting Contract Creep. Some contracts include automatic escalation clauses that allow vendors to increase their price over time. These and other contract provisions can cost credit unions enormous sums of money, especially if they have been on the same contract for a long time. By creating an RFP for these services and conducting a reverse bid auction, credit unions can dramatically cut their costs on key services.
- Matching Your Demand With the Best Supply. After helping your credit union develop its digital RFP, CUVM taps their database of over 800 top vendors to invite vendors into your auction. By opening your RFP to more vendors across more geographies, CUVM Strategic Purchasing makes better deals available to your credit union.
- When Credit Unions Collaborate, Prices Fall. Small credit unions often don’t feel they have the buying power to drive down prices. By pulling together the third-party needs of multiple credit unions, CUVM can help credit unions of all sizes get better prices from vendors. The buying power of multiple credit unions together, combined with the powerful reverse bid auction platform, can lead to savings that most credit unions could never access alone. CUVM can help match the needs of multiple credit unions in order to increase their buying power and get the best possible deals.
Credit unions are not obligated to take the lowest bid, or any bid. They can choose the provider that best suits them. And many credit unions have found that they get the best partners at the lowest prices using CUVM’s Strategic Buying Services.
Beyond Strategic Purchasing, CUVM is also a leading vendor management provider, helping credit unions streamline their third-party vendor compliance by managing contracts, providing a tool for risk ratings, conducting due diligence, and handling everything they need to comply with NCUA guidelines. This deep vendor expertise is vital when it comes to managing agreements and purchasing new solutions, making sure that credit unions choose the best vendors and offering them an easy way to ensure compliance on new contracts.
“We are so pleased with the services of CUVM,” said Colorado Credit Union President/CEO Mike Williams of their vendor management services. “They have helped us to significantly reduce our burden for vendor due diligence. In addition, their technology is flexible and easy to use and the cost is absolutely on target.”
If you’re interested in what it would look like for your credit union to save an average of 21% on third-party services you use every day, contact NWCUA Director of Strategic Partnerships Craig Reed—email@example.com, 206.340.4789—and ask about CUVM.
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