Need a different solution to help stop maverick spend in your procurement organisation? Why not hug a maverick?
At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.
From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.
Give Them a Hug
Stuart Brocklehurst, Chief Executive at Applegate Marketplace, argues that procurement’s importance to the organisation has never been greater. However, it still only has influence over a small proportion of the spend area it’s responsible for.
Stuart also believes that this change cannot come about by ordering changes and laying down the law. But procurement can start the process by “hugging a maverick” – engaging with people and enabling them to understand the benefits of working closely with procurement.
Is maverick spend an issue for the UK public sector? Is local government adhering to procurement practices when spending taxpayers’ money?
It’s not uncommon for businesses to suffer from high levels of uncontrolled procurement, often known as maverick spend. These levels can often reach 80 per cent of total spend, a figure likely to send shivers down the spine of any procurement professional.
To elevate its role within an organisation, procurement must extend its reach. A CEO is unlikely to take a function seriously that only influences 60 per cent of the activity for which it’s responsible.
Yet that is the situation of the average procurement team. No other function would allow this: Legal, HR, Finance, Compliance, Public Affairs – all insist their writ runs broad.
Maverick spend is a major obstacle to extending procurement’s influence. However, decades of setting policies and rolling out enterprise systems have had limited impact in reducing it.
Maverick Spend in the Public Sector
While it’s often easy to see the figures in an individual organisation, actively tackling this spend is another matter. Solutions range from improving reporting to enabling other functions to see the benefits proper procurement processes bring.
Today, Applegate PRO has released a whitepaper on maverick spend via Procurious. The paper will showcase data on procurement practices gained via a Freedom of Information (FOI) request to all local councils in the UK.
This is one of the largest FOI requests relating to procurement processes that has ever been conducted in the UK.
We hope that this research will provide a valuable snapshot of how local councils weigh up in the use of their allocated budgets on a national scale.
Applegate PRO are exploring further areas of research to analyse the maverick spend in public sector bodies, including the Ministry of Defence and NHS.
What the Whitepaper Offers
This white paper uses a case study of local government procurement to explore the varying levels of maverick spend across a set of comparable organisations. It reveals startling differences in levels of uncontrolled expenditure and explores the ramifications for this.
Findings from the 276 councils that responded from across the UK include:
Definition of maverick spend.
The top three councils that reduced levels of maverick spend between the financial years of 2012 and 2016.
The councils whose maverick spend increased the most between the financial years of 2012 and 2016.
Local council with the most maverick spend.
Local council with the least maverick spend.
The percentage of maverick spend undertaken in their council from each financial year from 2012 to the present day.
The sanction systems in place for non-compliance to procurement practices.
The percentages of transactions that require a purchase order.
The number of procurement professionals that have a CIPS or other professional procurement qualification and how many are currently undergoing procurement training.
If you are interested in reading the full report, you can sign up to receive your copy here.
Applegate PRO is a free-to-use eProcurement system that streamlines request for quotation and purchase order processes, enabling buyers to submit a request, receive up to ten competitive quotes and raise a PO in a matter of hours.