All posts by Helen Mackenzie

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.

How Better Together is putting the excitement back into UK public procurement

The Scottish Independence Referendum was a thrilling time, one I’m glad to have been part of, but now it’s over, what is the real impact of Better Together for UK Public Procurement?

Better Together for UK Public Procurement

I believe that we are facing exciting times ahead and that we now have an amazing opportunity to create something special, something lasting and something that will have a real impact on the communities we serve.

Let’s push things to the next level

It’s time for our collaborative buying organisations to push things up a gear.  At a UK level the public sector spends over £45bn on goods, services and works.  Crown Commercial Services chairman Bill Crowthers is quite right when he says that “we need to make the most of this extraordinary buying power.”

How CCS, Scotland Excel and other collaborative buying organisations engage with their customers, the public bodies the length and breadth of the UK, will be crucial as we move into the next generation of public contracts.

We need agreements which serve not only London but Lerwick, not just Belfast but Bangor.  Our collaborative partners must deliver agreements and contracts that will reduce the overall cost to the whole public purse.

Savings not just for the strong and influential public bodies with huge amounts of spend but for the smaller less centrally located bodies too.  All for one and one for all!

It’s time for innovation, imagination and change

Let’s use this next period to encourage innovation amongst our suppliers, particularly those who are UK based small and medium enterprises.

Let’s use imaginative contract strategies, structured contract management and true and deep supplier engagement.

Let’s make access to public contract opportunities easy.

If we really are better together then let’s have a single gateway where all public contracts for the UK are advertised.

Think how refreshingly simple it would be if you’re a British supplier, particularly a small one looking to grow, if you knew about every single contract opportunity for your commodity in the UK as soon as it was advertised.  So let’s build on the success of portals like Public Contracts Scotland to create something bigger and better that covers the whole of the UK.

Let’s take the impetus given to us by the new EU directives and drive this SME agenda forward!

Community benefit clauses that benefit all

We need to seize the opportunities to make public procurement a force for good in the wider community and economy.  We can use community benefit clauses to not only deliver apprenticeships and work placements, but also to promote improved engagement with and services for communities.

How about donating the power of a community benefit clause in your construction project to another area if you can’t sustain any more apprenticeships at the moment where you are?  Why not put it in your contract but target it for a related geographic area where there is a demonstrable need?

Now that would be Team UK working better together wouldn’t it?

There is powerful information in the data – we just need to use it!

We have access to big data on spending across our organisations, across our sectors, across our countries, across the UK.

It’s time to inspire our IT suppliers to give us integrated solutions which join up purchasing systems to general ledgers to contract registers to national procurement information hubs.  It’s no longer acceptable for us all to say we don’t have the data; that we just don’t know.

Just imagine what we could do with all that knowledge about our spend and contracts if we can actually get our hands on it?

The future for public procurement is exciting

So as we head towards a place where decision-making could become more local, the potential for public procurement to excel has never been greater.

We can deliver even more savings and value by joining up behind the scenes and working together whenever we can.  This won’t be by implementing a one size, or organisation, fits all approach.  It will only be by adopting a federalist approach that recognises procurement teams operating at local, sectoral and national levels all have their roles to play in this exciting next stage.

Only then we truly be better together.