All posts by Helen Mackenzie

A Decade In Review: Procurement In 2020

Is procurement less, just as, or more important this decade than the last? Find out as we take a walk down memory lane…

It’s the dawn of a new decade in procurement, and goodness me, how things have changed. From the digitisation of just about everything, to the introduction of big data, 2020 looks vastly different than 2010 did. 

As a former CPO and now Principal Advisor at Procurious, I’ve been at the coalface at what I can only describe as seismic changes to our profession. 

But have all the changes we’ve seen been good changes? Are we now poised to deliver more value, or will we struggle to do more with less? And are we more relevant than ever, or is technology replacing us? Here are my key observations from the last decade – and what we need to do to stay valuable going forward:

We became captivated with compliance

The last decade started for me with a bang – I was promoted to a procurement leadership role and I was, for the first time in my career, excited to be able to effect real, lasting and meaningful change. I felt that procurement could achieve much more than pumping out stock-standard contracts and controlling third-party spend. 

Yet my excitement was short-lived. As I looked around me, I found that, as a function, the procurement community just didn’t seem interested in broader, value-adding gains. Their focus was still quite shortsighted; they seemed captivated by processes and fixated on compliance. Cost-savings, contracts and the financial bottom line seemed to be the only thing on their mind.

Data made us better advisors (but some of us are still catching up)

‘Don’t ever do a job a machine can do,’ said our grandparents, as they rejoiced at the invention of the calculator. Suddenly, this advice was ringing true in our profession – we had eProcurement, cloud computing, and AI to take away a lot of our administrative work. What came in its place was the ability to deliver new and intriguing insights to our stakeholders quickly, without having to spend hours on Excel.  

As emails replaced purchase order pads, eCatalogues replaced supplier brochures and the data started to flow through, we had the information to inform our strategies and priorities. As a result, our advice and cost savings rapidly improved. 

Not everyone was a fan, though. Many of us became concerned with job stability, and some believed that technology had created more issues than it solved.

From cost reduction to value creation

As the decade progressed, our relentless focus on cost reduction started to feel like a grind, not least for suppliers who, feeling bullied by our negotiation techniques, began to speak out and cry ‘no more.’ These changes meant that the expectations of our stakeholders started to move away from a focus purely on cost.

The good news was that our newly automated processes helped us to shift our attention from cost-savings to value creation. Before we knew it, we’d automated our entire P2P process, freeing us up to build strategic partnerships with both our suppliers and stakeholders. 

In uncertain business and economic times, the focus on value creation was exactly what our profession needed. It lifted us from a ‘necessary evil’ in some people’s eyes to a strategic partner. On the whole, though, that transformation is far from complete, and many of us still have some work to do in this regard.

It’s more about the people than ever

Behind the analysis, behind the processes, and behind the cost-savings, procurement has always been a people profession. And perhaps the best news of the decade is that with all the change, with all the uncertainty and with the new and heightened expectations, procurement professionals have shown themselves to be resilient, optimistic and future-focused. 

We’ve embraced digital disruption. We’ve welcomed, with open arms, technology that makes us more efficient, and we’ve also onboarded stakeholders and suppliers to use that technology, meaning we’re adding even more value. 

But we’ve also realised where technology stops and that is, sometimes, with communication. We now understand how critical our ‘soft skills’ are at work, and that technology can’t replace the influential conversations we need to have to convince an operational manager to change suppliers, or make a case to buy more sustainably. Technology is transformative, but then again, so is our ability to negotiate.

As for 2020 and beyond?

With digitisation and automation now happening at breakneck speed, many of us have embraced the change but fear what’s coming next. Soon, virtual assistants will abound, collaborative marketplaces will proliferate. What value will we add, then? 

The answer is plenty. One thing we’ve learnt from the last decade is that in uncertain times, human relationships prevail, and that’s where our strength and expertise shine through. Armed with our best people skills, the sky is really the limit for procurement. As a function, 2020 and beyond could see us having more strategic influence than ever before. 

What other changes have you seen in the last decade? Do you think that procurement is less, just as, or more important this decade than last? Tell us what you think in the comments below.

Helen Mackenzie is a Principal Advisor at Procurious and a former senior leader in UK public procurement. Connect with her on LinkedIn and join Procurious to hear more of her unique insights.

Four Reasons Why Value Is the New Procurement Normal

We’re all talking about delivering value these days in procurement, aren’t we? But with so many definitions around, how do we maximise its impact?

value
Photo by Riccardo Annandale on Unsplash

We’re all talking about delivering value these days in procurement, aren’t we?  Value is now the new normal.  And everyone has their own take on what delivering value for the business really means.  There’s no single definition.

So Procurious were delighted when our November Roundtable sponsor Ivalua asked us to use value as our theme. Here are some of the great insights that speakers shared with attending CPOs on the day.

Stakeholder Value – an idea whose time has come?

In August, Business Roundtable CEOs made the announcement that value is about more than just shareholders. It’s this idea that we should be focusing on going forward.

And they were clear that value, rather than maximising return to shareholders, is now “the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.” 

But what does this mean in practice for procurement? And how can we demonstrate stakeholder value? Stuart Woollard has been at the forefront of pioneering work in this field for many years, assessing the measurement of factors beyond cost. 

Stuart had a warning for the CPOs too that, “being purpose driven is not enough”. He urged a move away from a focus solely on output metrics, and encouraged them to take a balanced multi-faceted approach. 

Stuart and his organisation, The Maturity Institute, has a tool that they’ve been using to achieve this balance for many years. But just because there’s a method of measuring value doesn’t mean this shift will be easy.

Finally, Stuart reminded the CPOs that, “Without support from the CEO and your Board, you may not achieve the shift to value that you need”, bringing home the point that buy-in is needed across the leadership team and beyond, in order to ensure success.

The value in your supply chain comes from people

If changing to a value-based model will require a mindset change at the top is there anything CPOs and their teams can do right now?

Nadia Youds, from UK retailer John Lewis & Partners, told our CPOs that an approach targeting employees is a great way to deliver value back to the business. “Job design in our supply chain is as much about the business relationships procurement has put in place as it is about the suppliers themselves.”

Nadia is clear about the connection between the buying organisation and the way employees in the supply chain are treated, and the work they’re expected to deliver. 

Although Nadia and her team have developed an assessment process that moves away from the standard suppler audit, she was keen to stress that the process needs to move away from compliance as a ‘tick box exercise’.

Using an approach that focuses on people and jobs, particularly in the manufacturing industry, can help suppliers develop and retain their workforce. This will lead to them ultimately being more competitive in the market.

Winning the war for talent – could value be the key?

Many CPOs are facing huge challenges in talent recruitment and retention. Procurement is still keen to learn from the best. And so a chance to see what the Tech industry does to source and retain the right people was an eagerly anticipated agenda item. Andrew MacAskill, from Career Jump and Finlay James was the person for the job (as it were!).

“We’ve still got a long way to go to attract the brightest minds in the industry,” Andrew mused. He reminded CPOs we can learn a lot from the Tech industry where “talent has become the customer”.

One tactic Andrew urged CPOs to consider is to build their own online personal brand. Many of his candidates select roles based on a leader, not a brand. “They’re asking themselves the question – do I trust this person to take my career forward?”

The issue of whether the talent wants to work for us led Andrew to suggest a reverse interview process:

  1. Sell your vision to the candidate – why should they want to work for you;
  2. Conduct a balanced interview – make sure the process and discussion is equal between recruiter and candidate;
  3. Open up the floor – give the candidate the chance to sell themselves to you.

Andrew shared that testing for the candidate’s attitude, cognitive aptitude and habits is the norm in tech recruitment processes. He urged CPOs to consider this when they’re recruiting team members to help them deliver their vision for value.

Value remains the same throughout history

Looking back through history shows that data gives procurement a head start when it comes to delivering value. Ivalua’s Stephen Carter has studied the impact from medieval times right up to the present day.

“There’s a lot we can learn from history about how we can exceed our stakeholder expectations” explained Stephen, “and a good overview of your data can provide the key.”

Even in the late 17th Century, procurement used data to provide insight into what their stakeholders needed. Looking at past spending trends, conditions and requirements, military campaigns were won due to the foresight of procurement in providing equipment not in the client’s original scope of requirements.

From history to the modern day, the value that procurement can deliver comes from insights that organisational data provides. It’s clear that whether our focus is strategic or operational, within our team or in our supply chains, delivering value is fully embedded as the new procurement normal. 

And as we set ourselves a new target to deliver value, there are no better words than those of the final speaker on the day, adventurer George Bullard.

“Research your goal, make sure you are prepared and fix a time to start.” Words to live and work by.

In 2020, we will be holding CPO Roundtable events in London and Edinburgh. If you are interested in attending one of these events, please contact Laura Hine by clicking here.

Three Reasons I’m Excited About Blockchain

Blockchain – is it the answer to procurement and supply chain’s prayers?  Or is it over hyped, another ‘technological innovation’ that promises much and delivers little?

blockchain
Photo by Mert Guller on Unsplash

I must admit I was leaning towards the pessimistic camp – when were those great use cases really going to happen?  I signed up for the Procurious webinar to find out more about how this new technology is impacting supply chains – and what I learned was very exciting:

Blockchain Lets You Focus on What Is Important

One of the pieces of work we all wish would disappear from the day job is the time-consuming process of supplier onboarding. 

Webinar guest IBM Sterling’s Shari Diaz told us about a blockchain-enabled onboarding process that would “give the procurement professional all that time back”. 

Describing immutable records that the supplier would update themselves and third-party validation of accreditation, Shari encouraged us to think of a world where master data management had transferred from the buyer to the supplier.

Imagine what you could do if you didn’t have to worry about more mundane tasks within your role and could instead give more focus and energy to strategic projects!

A New Way of Measuring Value

One way that Professor Olinga Ta’eed is taking forward the development of a blockchain is through the not for profit Transnational Transaction Procurement Foundation.  Since its launch earlier in 2019 the TPP foundation has grown to over 165,000 members, impressive numbers! 

Olinga set out the goals of the TPP as being practical – to “fathom out” use cases like how we can capture and report things like intangible assets using blockchain to give a broader picture of an organisation’s true value.  

Olinga thinks this new reporting will be liberating for procurement professionals allowing a more strategic focus to the role. 

How much more value could we demonstrate if we could capture and record it?

A Re-Alignment of Values for the 21st Century

Both webinar guests thought that the greatest potential for blockchain will be the ability to articulate the alignment of values.  As we move into a world where values are becoming more important, blockchain is going to provide the traceability and trackability that consumers demand. 

As Shari observed “there’s a huge trend for supply chain to be able to demonstrate their values and consumers are starting to speak with their dollar”.

Shari also stressed that blockchain can enable our eco systems to work together.  “Enterprises [typically] depend on partners for 65 per cent of the value they deliver to their customers.  The more collaborative and connected we are – the more efficient and effective we’re going to be”.

So, blockchain technology is ready to give us time back, new ways of measuring value and for our values to be realigned. 

Our webinar guests have given procurement and supply cause to remain optimistic and in fact licence to dare to dream big.

I’ll leave the last words to Professor Ta’eed,

“Blockchain will light up the path for procurement to align with mankind – making procurement and supply chain the single greatest instrument to change the world”.

A recording of the Procurious-IBM Webinar – Blockchain Supply Chain’s 21st Century Truthsayer – with panel members Shari Diaz, IBM Sterling, Professor Olinga Ta’eed and host Tania Seary, Procurious is available here

Authentic Leadership Is As Easy As ABC

Most procurement pros are in agreement that authentic leadership  is a great thing. But what actually constitutes an authentic leader? It’s as easy as ABC… 

Join The Big Ideas Summit 2017 group to access all of last week’s discussions and exclusive video content.

Have you ever wondered about that term Authentic Leadership?  We’ve seen it so often in blog posts and Facebook ads it’s become ubiquitous. Most people agree that being an authentic leader makes us more open to new possibilities; persistent and passionate about what we do.

But how can we become more authentic?

Visions of meditation, yoga and alternative therapies spring to mind.  And, while I enjoy all three, this isn’t the route to being authentic.

Achieving  authentic leadership is just a case of learning your ABCs…

A is for Adaptability

Things change at an alarming rate these days.  I can remember when only one person in the team had permission to use email.  Nowadays, emails, texts and social media are the cornerstone of communication.

And it’s not just technology that’s changed.  Information is available at the touch of the button. Anyone can find out the answer to (almost) any question in under a minute.  Politics is changing too, look at the seismic shift brought about by Brexit and Trump.

Jenny Blake sums it up beautifully in her book Pivot: “If change is the only constant in life let’s get better at it”.  By developing adaptability in our business model and ourselves, we can anticipate changes and lead our teams with authenticity and confidence.

As Nancy Duarte tells us in Illustrate: “Leaders anticipate the future…[they] shape and bring it forth.”  So we need to be open to all the possibilities that arise, willing and able to adapt both ourselves and our services quickly, responding to the ever-changing world we live in.

B is for Bouncebackability

Being adaptable comes at a price.  We won’t success at everything we try. Sometimes we’ll misjudge the changes, back the wrong horse or, even worse, fail to act.

As aspiring authentic leaders we have to learn that there’s nothing wrong with any of these, that failures are part of the learning curve and are actually incredibly important.  We need to see them in the context of Angela Duckworth’s concept of grit or, to use a term which originated in the fanatical world of UK soccer, we need to develop bouncebackability.

By telling our teams we will fail along the way, we’re preparing them for the challenges ahead.  We’re encouraging them to be brave and try things and we’re removing the paralysing effect of waiting for everything to be perfect.

Bouncebackability instigates a culture with a growth mindset, turning setbacks into future successes, making failure not a permanent position but a necessary step.  As Carol Dweck tells us, exceptional people as seeming “to have a talent for converting life’s setbacks into successes”.

We need to encourage and embed a culture of bouncebackability into the teams we lead and the organisations we work for.

C is for Creativity

And finally, to do all this we need to foster our creativity. To be flexible and adaptable we must be creative.  We need to be able to look at the challenges facing our services and discover new, better, more robust ways of delivering them.

As the Monty Python veteran John Cleese reminds us “creativity is not a talent, it’s a way of operating”.

We’re not born creative, it’s not a gift we either have or don’t have.  It’s something we learn, a skill we can develop.  We need to strengthen our creative muscle by finding the courage to be authentic and to take risks.  This, in turn, will strengthen and develop our creativity.

MIhaly Csikzentmihalyi’s research shows that creative people are both humble and proud, they’re playful and disciplined.  And the key unlocking creativity is a passion for what they do.  Passion that brings us right back to authenticity.

So, as leaders, we can be authentic in what we do.  It really is as simple as ABC…

Want to catch up on all of last week’s Big Ideas Summit activity? Join the group here

Creating Community Empowerment With Football

How taking an interest in football can help put community empowerment at the heart of public procurement.

Lots of public bodies at national, regional and local level like to talk about community empowerment don’t they? That’s because promoting community empowerment is perhaps the holy grail of participatory democracy.

Many politicians and policy makers believe that getting communities more involved in what public money should be spent on and, more importantly, why, will lead to improved outcomes for people and their communities. And there’s plenty of evidence to back this up.

For procurement, tasked with delivering more for less, increasing community empowerment could also mean that the ever-decreasing pot of cash available to spend on public services could actually be deployed in a much more effective way.

Empowerment and Football?

So what we can we do in procurement?  How could we promote community empowerment and what benefits could that bring?  When I was searching Google for examples, strange connections started to occur.  Wherever I found a good example of procurement and community engagement, great football, or soccer to those of you on the other side of the pond, was also evident too. You don’t believe me? Well read on…

Let’s start in the home of sexy football, Brazil.  They’ve been doing a thing called Participatory Budgeting there for a number of years, and it’s a great way to do community empowerment at the front end of the procurement process. Participatory Budgeting in Brazil is an approach which gives local people a direct say in how, and where, public funds can be used to address local requirements.

It started in a place called Porto Alegre in southern Brazil over a decade ago. The first phase of participatory budgeting was to get people together to prioritise how money should be spent, and where investment should go. Should it be parks or water supply, or schools or roads? People at the grass roots of the community were asked to come together in neighbourhood assemblies, and make those decisions.

As the process matured people were able to take decisions at an increasing lower level.  From choices between thematic areas, to choices between services within a theme, to choices about what the specification for that service should be.

So people at the front end determining priorities. Something perhaps we already get involved in from a procurement point of view through User Intelligence Groups, particularly when we have service users involved in that process.

Community Empowerment

What they’ve done in Brazil is a start, but how could we shift control even more directly to people’s hands and empower communities through procurement?

To have a look at how this might be done I moved on to another football hotspot – Spain. I zoomed in on a city which features on a daily basis in my house, and probably every household that has football crazy kids in their midst. Now the football club might be having a great season, but the real reason why Barcelona is a great place isn’t the sublime football of Messrs Neymar, Messi and Suarez.

It’s their approach to procurement using open problems that was the real wow factor for me. Instead of coming up with a specification for a service, they’ve specified the problem, and then gone to the market and asked suppliers to solve it.

They asked people from geographic communities, or communities of interest, to identify what needs they have, and then turned it over to the world’s entrepreneurs to solve them.

Barcelona’s approach was successful. They had 50,000 views of their contract notices, and ultimately let six contracts in this way for issues ranging from tackling bike theft, to systems to tackle social isolation, and empowering local retailers using technology. The thing to understand here, is that communities don’t always know the answer to what they need at the outset – they just know they have a problem.

This method of empowering them to say what they want to change and then enabling them to choose what the answer should be from a range of options, some of which they might not even have considered, is very powerful and procurement is right at the heart of it.

Going Remote and Rural

But is it just in big cities and the regions where these community empowerment approaches might work? Could we use them in remote and rural locations?

My final destination is in one of the great footballing heartlands (well we like to think so anyway!) – Scotland, and my own organisation in the Outer Hebrides.

We wanted to improve community empowerment and link it to a procurement process and so we gave a combination of Brazil and Barcelona a try.  We used a bus service contract but flipped the requirement on its head so we went out to the market to seek travel solutions for people without cars – the problem we sought to solve.

We engaged with the community to identify needs, drive specification development and score the tenders. We embedded community engagement the length and breadth of the procurement process.

To make this happen we assembled our squad of players. The Transport Team in defence, yearning to retain the old ways of doing things, community workers in midfield being creative with their consultation techniques, corporate policy playing in goal making sure we didn’t make any strategic blunders, and finally our strike force, the procurement team, taking all the needs, creativity and service requirements, and converting this into the winning goal by putting a great procurement process and contract in place.

With a 5 per cent budget saving delivered over the lifetime of the contract we clinched the trophy with no need for extra time.

Footballing metaphors aside, promoting community empowerment as part of the way we do things gives those of us in public procurement a real opportunity to shine.

It’s a chance to showcase our talent – getting the right people to have the right input into the procurement process at the right time.

It’s a chance for us to stretch ourselves and learn new techniques. To work with different types of people, using different engagement techniques, at different points in the procurement process.

And it’s the chance to deliver more for less, to provide real answers to the challenges of austerity, and to score that winning goal!

7 Reasons Why Procurement is the Perfect Valentine

Don’t be shy, you can finally admit it. You’ve always thought that procurement is the perfect Valentine for your organisation.

It’s that time of year again.  The shops are full of hearts and flowers and we’re all encouraged to share the love.  But, in these times of increased pressure to deliver, reduce costs and improve outcomes, who really should be an organisation’s secret love, their special Valentine?

Well, I’ve got news for you.  Procurement is your perfect match and here are seven reasons why.

  1. We Can Show You a New Angle on Things

Getting procurement involved in sourcing your requirement can give you a whole new perspective on the process. We’ll challenge your specification, make you think about new developments in the market and, more often than not, get you a better price.  We’ll even bring things like ethical sourcing and sustainability into the mix and really broaden your horizons.

  1. We Love You Regardless of Your Flaws

We don’t mind if you come with an input specification when you really should be focusing on outputs. We’ll forgive you if you’ve already chosen something without going through the correct sourcing process. We’ll even turn a blind eye if you’ve indulged in a bit of maverick spend in your past. After all you wouldn’t be the first to have strayed down that path.

  1. We’ll Put Your Needs Ahead of Our Own

Procurement is all about your needs and the needs of the business.  While you may think all we care about are our metrics, nothing could be further from the truth. We’ve designed our procurement processes so that we can do everything in our power to deliver the outcomes that you need.

  1. We Believe Life is Better With You, Rather Than Without You

It’s easy to think that those of us in procurement would rather just get on and source things, and that we’ll manage suppliers without input from those of you on the front line. However, we know from experience that your input and involvement makes things better. We couldn’t just bear to think of sourcing things without you.

  1. We’re Willing to Lose an Argument

In many conversations we have with you about sourcing, we know we’re right, and you’re wrong. But we’re so focused on your needs that, if you really must have a particular supplier or a certain product, and there’s a way we can source it without breaking the law or company rules, we’ll come up with a procurement strategy to help you achieve that aim.

  1. We’re Incredibly Loyal

Because we spend so much time with suppliers it would be easy for you to think they might lead us astray.  But there’s no need to worry – our integrity won’t falter. We want the same things as you, so we’ll be true to the flag and the organisation’s goals. We won’t use processes that are corrupt. Transparency is our middle name. You know you can trust us no matter what.

  1. Our Sex Appeal is Second to None

I must warn you that once you’ve got involved with us in procurement you’re bound to be hooked.  After all there’s something alluring about being listened to and having your needs met. Top that with a large dose of innovation, ethical sourcing and a gold star from the management for your achievement of company aims, and you’ll be coming back for more.

Working with us could just be the most excitement you’ve had in years. After all you don’t get that sort of feeling from working with colleagues in Accounts now do you?!

So, when you’re pondering your choice of Valentine this year,  remember us in Procurement – your ideal secret love.

The Great Procurement Social Value Bake-Off

How promoting social value in public contracts should be the icing on the procurement cake.

Well, what a task! I’ve just finished commenting on the draft statutory guidance to implement the Procurement Reform (Scotland) Act, perhaps one of the most ambitious pieces of public procurement legislation that the world has ever seen!

Worryingly, in amongst the feedback from colleagues, is the concern that including social value considerations in contracts would push up the contract price (Here in Scotland we call them Community Benefit Clauses).

This view was echoed at the 2015 CIPS conference where lawyer David Hansen cautioned against going overboard when applying social value provisions.

But does including an element relating to social value really have to cost much more? Isn’t it something where the public sector can rightly use to take action to put the icing on the cake of great procurement?

Absolutely I say! And while I may not come close to Mary Berry’s cake making, here’s my recipe for success when it comes to Social Value Clauses.

Helen’s Recipe for the Perfect Social Value Clause

  1. Sift the social value clause into a bowl.

Social Value clauses (aka community benefit clauses) are really in vogue in Scotland just now. They’ve been included in all sorts of construction projects to generate thousands of opportunities for apprentices in the building industry, working on things like the facilities for the Glasgow Commonwealth Games or the new Forth Road Crossing.

I actually don’t know of many local authorities this side of Hadrian’s Wall who haven’t managed to get an apprenticeship or student placement into one of their major works contracts.

But it’s not just works contracts where social value can be included.

We’ve managed to secure community benefit clauses in our services contracts for things like sponsored places for the third sector at conferences and additional contact time for people receiving care at home from the supplier who delivers pre-prepared meals.

The key is, as David Hansen rightly advised CIPS colleagues, to keep things proportionate to the contract and sift out the irrelevant that will add cost.

I mean, you only need a bit of innovative thought. Just what social value can a Peterborough based IT system supplier to your Benefits Service provide when you’re based in the Outer Hebrides? IT prizes for schools? Maybe a couple of tablet PCs for people most in need?

  1. Mix in the Third Sector when it starts to boil

Keeping third sector organisations hot, engaged and ready to tender for public contracts can give a real extra dimension to the value you can achieve.

Not only will you have secured savings and benefits arising from a fabulously crafted specification and procurement strategy, but you’ll also be able to award the contract to a third sector organisation whose sole purpose is to give something back.

Awarding a contract to a third sector provider will mean your social value can really start to rise.

Awarding a community transport contract to the third sector means the outreach work they do with vulnerable people is safeguarded as they can now spread their overheads, admin and fleet costs, across more than one income stream.

What about a car maintenance contract, which, if awarded to a garage run by the third sector, can provide work placement opportunities to men who’ve been unemployed for a considerable length of time and who perhaps need a bit more support due to addiction problems or mental health issues?

You see, you can never add too much of the third sector to your recipe; the key is to make sure they’re hot and ready to bid.

  1. Finally, add the secret ingredient

Just when you think you’ve created the best social value cake you can, you need to add the pivotal secret ingredient that’s going to win you the procurement bake off prize:

User engagement and participation in the process.

Delivering real social value must be about putting service users and the community at the heart of what procurement does. Where our contracts affect people’s lives we should be out there asking them what outcomes they want to see delivered and getting them to make the choices about which supplier is used.

We’ve being pushing the boundaries up here in the Outer Hebrides through our participatory budgeting bus services project in Uist and Barra (check out @YourBus for details). But we’re not alone, Orkney have done a great job by engaging with users and carers to commission services and there’s been innovative engagement with deaf service users as part of procurement processes in Nottingham.

Putting the people who matter at the heart of the process not only means better contracts and potential reductions in cost but also, and perhaps most importantly, the legacy of a group of people whose confidence has grown.

Social Value must be at the Heart of every Procurement Recipe

Social Value does not need to be expensive, nor does it need to be ‘an optional extra’. When you view it as part of the recipe for public contracts, it’s that extra ingredient that takes the cake from average to amazing.

And suddenly, you’ll be delivering more than just contracts, you’ll be making a difference to the people your organisation is there to serve.

So why not try my recipe for social value and maybe you can win first price in the Great Procurement Bake Off!

What the Spice Girls can tell us about procurement…

What can the Spice Girls teach us about procurement?

There I was, having a discussion on LinkedIn about engaging with clients before sourcing commodities when on comes Wannabe by the Spice Girls. Other than reminding of me of another time, place and alcopops, strangely, it made me think about specifications.

When you’re in that exciting part of setting up a new contract, it’s really easy to fall back on the last specification and just reproduce it; particularly if you’re short on time. I mean, if no one has complained about it, then it must be ok.

But I think we are missing a huge opportunity to review, challenge and improve on the contract and, ultimately, the final result.

In the public sector we’re assessed more and more against how and when we engage with our client departments, the people who actually use the things we buy. We’re expected to establish User Intelligence Groups to come up with specifications and then to challenge these UIGs on what they come up with. We’re even expected to challenge them as to whether they actually need it in the first place!

Then when clients have decided on what they want it’s our job to steer them in the direction of an output (you might call it a performance) specification. Thinking about what they actually want rather than what they’ve already had can be a challenge. It’s so much easier for clients to specify the product they’ve always used, the way that things have always been done, rather than allow suppliers to come up with something new.

Of course improving specifications is much easier when you’re working in one organisation but opportunities to collaborate are being pursued not only in the public but also the private sector now.

Where do you start when faced, as we are in Scottish local government, with 32 different requirements? In his seminal piece Towards Tesco, Colin Cram gives the example of 100 different specifications for tarmac in Greater Manchester when seven would do. Is this a set of varied needs or be-spoking gone crazy? How can we balance diversity against the reduced cost and benefits of standardisation?

So what’s happening in practice?

In China the standardisation of viaducts used to carry railway tracks has saved millions on construction costs. Closer to home Scotland Excel has succeeded in devising a core specification for residential care for children which enabled the first ever framework agreement for these services to be put in place in Scotland.

In my own organisation we’ve been working hard to standardise requirements and use output specifications wherever we can. We’re just about to finalise the contract for a new school which will see the building of the 4th A shaped footprint – enclosed courtways, essential for our windy climate.

We’ve used an output specification for the first time for grounds maintenance in the expectation that this will allow more responsive and innovative suppliers to shine.

And finally we’re just embarking on a project to redesign transport services in Uist and Barra which will not only use an output specification rather than timetabled services, but also a participatory budgeting approach to allow true community engagement to devise specifications and prioritise services prior to tendering later in 2015.

The Spice Girls know what they want, what they really, really want (I think it was Zig-a-zigah) and your clients do too.

Ultimately, it’s your responsibility to discover from your clients what they really, really want and help them achieve this through a great specification.

How to use Big Data to inform your commodity strategies

Have you ever wondered what all the fuss about this thing call “Big Data” is all about?  Of course we all have access to spend data don’t we?  So why are people getting themselves in such a lather about the whole Big Data thing?

WARNING: ONCE YOU’VE PLUNGED INTO YOUR BIG DATA YOU MIGHT NEVER COME UP FOR AIR!

Well first of all I need to share my guilty secret with you.  Big Data is addictive.  We’re lucky to have the national procurement information hub, which we lovingly call Spikes after it’s creator Spikes Cavell, to play with up here in Scottish public procurement.  Rather than being prickly and difficult to love, Spikes is cuddly and warm.

Plunging in can tell me about my spend, what category I spent it on, whether there was a contract for that spend, whether the suppliers were local, whether they were small, whether they were from the region… and on and on.  Knowing that you can find out all this stuff can leave you craving for the next Big Data hit.  Be careful, the addiction is frightening!

Next up is the fascination with the data.  Once you plunge in you can drill down and the fascination builds.  OK so we spend 5 per cent on a particular category like building supplies; who was that with, what type of products did we buy (we have classification codes on Spikes to help us there), how many invoices did we pay, which department was buying that?  Then off you go to find the line item detail from your purchasing system.  “I need to find out more… and more…and more” It can be as captivating as watching Professor Brian Cox explaining the Wonders of the Universe this plunging into Big Data thing.

Having all that Big Data also really helps on a practical level.  We use it to inform our commodity strategies.  We recently did some research to identify what we’d spent with suppliers of security systems.  Knowing what we’d bought helped us drill down into line item detail and then forecast what we needed to buy.  This was really powerful when it came to developing a strategy to secure a great contract going forward.  Forecasting based on our Big Data something we really need to do more of.

Big Data can ask us some difficult questions.  If 34 per cent of our spend is on construction then why are we focussing all our contract management effort on something else?  Why do we pay over 10,000 invoices a year to our catering suppliers?  Is there a better P2P process we could put in place to save both sides costs?

In this age of infographics and instant reporting Big Data is just what we need to help us present information to our senior management teams, operational managers, Boards or, in our case in public procurement, our elected councillors or Government Ministers.  It’s not good enough these days to say we don’t know the key procurement metrics for our organisation.

So all in all Big Data has the power to suck you in, pull you under and never let you go.  There’s so much potential, there’s so much we can find out.  The key is to make sure you have a plan to get out of Big Data and TAKE ACTION on what you find out today.

So come on, share with me the times when you’ve taken the plunge into Big Data!  Did you find your way out?  What tales can you tell of good savings and great outcomes?

Are we falling out of love with the PQQ?

Are you someone who can’t live without two stages?  Do you quake in you boots at the thought of having too many tenders to score?  Are you like my colleagues in works; do you love a good old PQQ?

Well thanks to the EU procurement directive, Scottish Construction Review and improving public procurement practice, the Pre Qualification Questionnaire is in danger of falling into misuse in Scotland.  But will the PQQ really end up like a great pair of 1970s flared jeans?  Something which we put to the back of the wardrobe only to bring out again when they come right back into fashion.

Before you take your PQQ to the charity shop of procurement history, here are a few reasons why it might be just the procurement tool you’ve been looking for.

Don’t bin the PQQ just yet

So you’ve done your supply market analysis and you may even have published a future contract opportunity or a prior information notice.  All the intelligence you’ve gathered tells you that the tenders you should receive will be many and plentiful.

While you may be tempted to jump straight into the Invitation to Tender, a well thought out PQQ can benefit both your Client service and potential Suppliers:

  1. Reduces the amount of evaluation work required by the Client
  2. Sorts the ‘Great’ suppliers from the ‘Good’
  3. Allows Small and Medium Enterprises (SMEs) to apply and only spend valuable time and resources on a full-blown tender if they qualify and are really in with a chance of winning
  4. Speeds up the tendering process
  5. Allows a logical and defendable evaluation to be made.

Using a PQQ is the obvious answer to make sure the more detailed Price : Quality evaluation work at the second stage doesn’t take your Panel all year to complete.  Believe me, the Panel will thank you for this.

Sometimes a just asking a straightforward pass/fail qualification question doesn’t give you the detail you need to differentiate the great suppliers from the good.  A PQQ with some scored questions could be just the tool to use when you need a more sophisticated evaluation process.

SMEs don’t have the resources of larger companies.  For them preparing a tender will take resources away from their ‘day to day’ work, costing them both time and money.

It is much fairer to only ask them to do this if they genuinely have an opportunity to win the tender, and a PQQ will enable this.  Not only that, done correctly, the PQQ can demonstrate to the SME exactly what the Client is expecting (and so may deter SMEs who just can’t deliver).

While the PQQ is an extra-step on the ladder and may appear to increase the time taken between tender and award, in fact it can significantly speed things up.  By using the PQQ to decide who goes through to the tendering stage, it speeds up the Award process.  Not only that, but it spreads out the time and commitment from the Evaluation Panel, allowing them to schedule their contribution over a period of weeks and avoid the accusation that this procurement thing is just a load of bureaucratic time-consuming red tape.

Finally the PQQ can be used to defend decisions taken at an early stage.  Suppliers are told at the start of the process that either they can or can’t tender.  So any challenges to the decision not to be allowed to tender are made before the contract award.  This should mean that, once the contract is awarded, there’s no issue with the qualification part of decision.

Although the mechanistic days of using a PQQ just because we’ve always done are over, let’s not put our procurement “flares” to the charity shop just yet.  By thinking about how to effectively use a two-stage process we can get the best outcome for our services and our suppliers.

Best of all we won’t have to contemplate life without our beloved PQQ.