Sunday, 31 March 2013

Defining the scope for conflicts of interest in CCGs

It was only on the 15 March, discussing the potential Clinical Commissioning Groups' conflicts of interest, I said "what we don't know is how big a scandal some of those involved in CCGs could be walking into out of ignorance". Today's Sunday Times, 'naming and shaming' provides some indication that it will be a big scandal.

While "NHS England is creating guidance which outlines how conflicts of interest can be avoided and mitigated in the reformed health service" media attention and public scepticism just won't wait and have already jumped to conclusions.

I suspect a level of naivety in the NHS and CCG on procurement decision making and when those with a potential conflict of interest should absent themselves from the decision making process.

In commissioning the potential to exercise 'undue influence' is long before the decision of who should be awarded the contract and indeed long after. For example, the opportunity to influence for personal gain can be exerted:

  1. In completing a strategic needs analysis and identifying which services would help match the needs of the area;
  2. In prioritisation of the identified needs;
  3. In determining the budget allocated to specific needs;
  4. In determining the make/buy decision;
  5. In determining the level of competition required;
  6. In determining the potential for collaborative commissioning partners;
  7. In determining whether the identified needs should be expressed as outcomes or narrowly defined inputs/outputs;
  8. In agreeing the risk allocation;
  9. In agreeing exit clauses;
  10. In agreeing the bundling of contracts;

Friday, 29 March 2013

"NHS tendering 'a threat to patients' "?

I suspect many of you will not have access to today's Times but it has  a fascinating letter from Dr Hilary Cass (President, Royal College of Paediatrics and Child Health), Prof Sue Bailey (President, Royal College Psychiatrists), Dr Clare Gerada (Chair, Royal College of General Practitioners) and Prof Lindsey Davies (President, Faculty of Public Health).  Yes, the sort of people who you may be inclined to listen to if you were not deaf.

Their letter includes:
... we are concerned that Clinical Commissioning Groups will be forced to open services to competition against their will - creating an unnecessary bureaucratic and financial burden on commissioners, and unnecessary drain on vital NHS funding. There is also a real danger that the enforced tendering of one service may damage another independent service in a different part of the same organisation or care pathways which are key to providing high-quality healthcare to thousands of children and mental health patients every year.
We urge the Government to think again about how the section75 regulations are framed and their potential consequences. We want to see a full debate in Parliament and engagement with the Medical Royal Colleges and health professions to ensure these regulations are redrafted in the best interests of patients.
That's a fairly clear statement to the effect that key stakeholders have yet to be convinced on the way forward.

I have no reason to doubt the NHS procurement staff who, for many years, made clear that helping clinicians engage with professional procurement has been a major challenge; indeed many consider gaining their ownership of procurement initiatives the equivalent of winning an Olympic Gold.

Are these medical luminaries fighting against the changes as they see the erosion of their own vested interests or is patient care their sole motive? Are these very clever people, who appear to have resisted all forms of NHS reform, just creating yet another filibuster?

Thursday, 28 March 2013

Snake oil procurement

Tonight the so called 'Devils Advocate starts a 14 year jail sentence. His sentence is poetic justice for a lawyer with no legal qualifications not registered to practice,  yet gained notoriety and £1m from representing those who could never win within a justice system. Isn't there something quite remarkable about this modern day snake oil salesman who received good money on a 'no expectation of win basis'. Added to his real CV are now fraud, deception, money laundering and forgery. Would you buy advice from such a person?

Of course we have already discussed fake lawyers, this is not a one-off, and ironically we have even come across a coroner who turned out to be unqualified to practice.

Although it was before I stared this blog, there was also a wonderful example of an unqualified surgeon. You are also no doubt familiar with the great fraudster, Frank Abagnale Jnr, portrayed in 'Catch me if you can', who now works for the FBI. and perhaps that other compulsive fraudster Steven Jay Russell made famous in 'I love you Phillip Morris'.

Interestingly, it can also be implied from this week's evidence to the Public Administration Select Committee, that those leading procurement reform in the UK have no way of knowing who in central government procurement is actually a 'fraudster' unqualified to practice!

But today's message is simple, how can you meet the challenge and avoid the risk of being gullible enough to be taken in by a procurement snake oil consultant selling aspirations which cannot be delivered and is more qualified in non-delivery than the profession?  This is all the more relevant given that many of those who make such appointments just wouldn't recognise 'the real thing' and are buying the promise.

Tuesday, 26 March 2013

Paying for nothing in spite of austerity?

I remember some years ago a public sector organisation having to pay on-going and long-term costs associated with providing security relating to an asylum holding centre, yet the centre was never going to be used because planning permission had not been obtained. The organisation had to pay for nothing because a major project dependency wasn't in place before the contract was signed. It was a great example for workshops which most participants enjoyed and fitted into the 'stupid sourcing' category.

Then there was the new school which was no longer required due to changing demographics. Yet on-going long-term costs still had to be paid because a contract was signed prior to a robust review of the options and demographics. They were paying for nothing because a major project dependency wasn't recognised before the contract was signed. Another great example for workshops which, yet again, most participants enjoyed and identifies as 'stupid sourcing'. 

Then there was the new library, yes, all ready to go but without any books. Well, try to convince anyone that was clever sourcing.

Of course those case studies were from the hazy, halcyon days of plenty, long before austerity entered the daily vocabulary. Like you, I had assumed those days were gone. 

Yes, we still need to be cautious of stupid sourcing. So, simple lessons - have all your ducks, or approvals, lined up before you sign anything and don't sign contracts before you need to.

PS 20 May 2013 BBC Confirm planning permission for the Gloucestershire CC incinerator plant not obtained.

Monday, 25 March 2013

"I'm not really enthused" said Bernard Jenkin (Public Administration Select Committee)

The opening of the latest session of evidence to the Public Administration Select Committee Inquiry on Public Procurement included the Chair, Bernard Jenkin saying "I'm not really enthused".  I think he also could have repeated that statement many times. He could just as easily have asked:
"So, what are you telling us that is so different from what we have heard for the last 20 odd years? 
"Do you think it would have been acceptable, with your private sector background, to answer every question by saying 'it is a work in progress'?" 
Personally I found the evidence given quite depressing and very unconvincing. Personal accountability?

Let's face it, by default, all those who have led central government procurement initiatives over the last 20 years were, by implication, at fault of not bringing about change. It was also implied CIPS have not been able to develop suitable qualifications. Then you have the staff, who the Committee were led to believe, just aren't up to the mark - I'm sure they'll be really motivated now!

But perhaps there is a need for a reality check:

Is this the way to procurement credibility?

I recently discussed the issue of credibility and why I think that it is core to procurement effectiveness. You need only to have been dipping into the news over the last few weeks, and as recently as today, to have seen many examples of where credibility has been lost - quite simply we 'smell a rat'.  However, all has led me to think more on credibility. I threatened to return to the discussion and how you might gain the 'X Factor' of credibility. So here goes.

It does strike me that you gain credibility - it is something you need but is sadly not something you can do a great deal to protect against theft. It is earned but can easily be taken away as a result of others. It is earned but can be thrown a way in an instant.

So, how do I think you could gain the 'X Factor' of credibility:
  1. Relentlessly deliver against the '5 Rights';
  2. Be hoenst about reporting performance;
  3. Drop any reliance on qualifications - your credibility comes from delivery not bits of paper;
  4. Avoid being associated with the role of 'policing' the procedures; 
  5. Know your subject, your toolkit, and which is the right tool for the job;
  6. Simplify as opposed to complicate;

Saturday, 23 March 2013

A risk in outsourcing: (Not) Embracing Digital Procurement Strategy

I have been discussing Digital Procurement Strategy over the last few weeks. I thought I had said as much as I was going to until I read Thursday's report in The Guardian on the gagging orders allegedly placed on probation staff during the current outsourcing process of 70% of the work. This provides lessons for all those involved in outsourcing and change management.

As I see it, some stakeholders affected by the outsourcing decision aren't happy - should that be a surprise when your job is at risk, particularly in the current economic climate. They have not been won over during the change management process. They assumed they had freedom of speech and social media provided the channel. The main champion of the proposed outsourcing (the Justice Secretary) doesn't like what is being said using social media, so has chosen to effectively issue a gagging order on any dissenting voices. The gagging order isn't restricted to the disgruntled workers criticism but also applies to their 'retweeting' of others views (potentially this blog too). Seems like a strange view of justice but then perception counts for a lot. There also seems to be more than a little contradiction between the MoJ's view of the world and the proposed NHS Duty of Candour!

Of course we also need to remember that there are more stakeholders than the staff - there are the other potential providers (as I discussed in Probation's Dilemma a few weeks ago).

We are currently in the outsourcing process, what will happen when the contracts are subsequently awarded - will social media turn the process into another West Coast Rail debacle, will contract management become a target of social media, etc...?

My suggestion is that:
  1. Recognise social media is two way - you may see it as part of external communications but it is also market communication about and to you;
  2. Digital Procurement Strategy needs to reflect the risks of stakeholder engagement, misalignment and criticism;
  3. Any potential discussion, yes, even a discussion, on outsourcing needs to be viewed within the context of a change management programme, even if it may not lead to outsourcing;
  4. Trying to stifle social media is unlikely to be productive.

Friday, 22 March 2013

Brazil's procurer of last resort & the UK's missed opportunity

I had an absolutely fantastic time with friends at the University of Ro de Janeiro during 2011. I couldn't help but be impressed with how the university was working hand-in-hand with industry and the public sector in providing procurement support. I remain convinced the UK could learn a lot from those partnerships and that learning from their experience would help the UK industrial strategy. You can read about my visit here and here.

However, I find the recent news that public procurement processes in Brazil are so unwieldy and cumbersome that a deal has been made with the UN to handle some of their procurement in the run up to the World Cup. Let's not forget that the World Cup is only one of international events Brazil will host over the next few years, including the Olympics. Some brief observations:
  1. If your procurement process aren't fit for purpose, change the procurement processes;
  2. Given that the UK have been forging stronger relationships with Brazil, with plenty of ministerial missions, and the general acknowledgement that the procurement for the London Olympics was well managed, why on earth did the UK not identify this potential opportunity - can we not turn procurement expertise into an internationally tradable service? 
  3. Given the need for stronger political alliances with Latin American countries, could we not use procurement expertise as a diplomatic resource?
I cannot understand how Brazil have got themselves into this situation, but at least they had the good sense to get support. But equally I just cannot understand how the UK missed such a strategic opportunity.  

Wish I was there.

Thursday, 21 March 2013

Big Data: Embracing Digital Procurement Strategy

Recently we have been discussing the need for a Digital Procurement Strategy - a strategy which sets out how to gain the optimum benefit from cloud, mobile and social. I hope you have found the series of interest - this is the last of the five sections.

If organisations are to seize that opportunity they also need to recognise the risk of being overwhelmed by data, yes, enormous amounts of data. Peter Smith recently highlighted this as the problem with information overload. Big Data analytics provide the solution.

An information deficit is removed by Digital Procurement Strategy but in its place comes information overload and clutter. Clutter which needs to be captured, curated, stored, retrievable, searchable, shared, analysed, and visualised. We have already discussed the potential benefits gained through conversations and listening within a global supply market stakeholder community. Digital means the conversations are linked and taking place simultaneously - a cacophony of amplified noise.

But conversations are only part of the digital equation, integration with the eProcurement systems is the other ingredient - that's a phenomenal amount of intelligence. Digital Procurement Strategy needs to make sense of that, it's almost like some GCHQ listener syphoning off what is important to procurement decision making and responding proactively.

Big Data analytics provide the means for making sense out of the clutter and we have previously discussed the excellent example of MBS' work on this with BMW supply chain. Digital Procurement Strategy is the means for strategically harnessing the opportunity and setting out how and the outcomes to be achieved.

Tuesday, 19 March 2013

Public procurement meets super-hero comics

He spoke but mere mortals couldn't see him. He spoke our language but used new words - he spoke FIST. We could see Bernard Jenkin nervous and deferential, here was a man who talked of toy hovercrafts, the fastest computers, bombers, fighter jets, and nuclear submarines. He took risks but gave examples of delivery at half the cost in half the time. He had the Public Administration Select Committee talking about super-hero comics as a procurement change management tool. It was 18 March 2013. It was the 5th session of the Public Administration Select Committee Inquiry into procurement. This was a new way. This was a new day. It was the day Lt Col Dan Ward USAF came to town - or rather it was the day he gave evidence by video link.

So what is 'FIST'? It is an acronym for "a pattern of thinking": Fast, Inexpensive, Simple, Tiny. It is concerned with reducing complexity in the procurement process and specifications.

Asked why, in his experience, procurements fail he provided three simple answers:

  1. Engineering mistakes;
  2. Communication failures; and
  3. Management failures.
Adopting FIST and breaking bigger projects into much smaller chunks didn't removed the risk of failure, but it means the failures are smaller and identified earlier with less impact.

He provided a wonderful example of a threshold for cancellation being included in a contract, so that once the threshold of 15% was exceeded everyone knew the contract was cancelled - simple but effective.

He also referred to the culture of rewarding success with bigger and bigger budgets with a simple solution, "okay you did really well, now let's see what you can do with half the budget"

So, how do super-hero comics come into the story? Well Lt. Col. Dan Ward USAF was asked how he managed to get his message across - he adopted change management principles and as part of his communications wrote super-hero comic books. Yes, simple but effective.

This was an impressive evidence session and I think it is a useful education resource. I recommend watching the session as part of your own personal development, and yes, you will be able to watch the Committee reading comic strips too. It's in two parts accessible here and then here.

I am clear that this will not be the last we've heard of FIST and rightly so.

The full transcript of meeting can be accessed here

Monday, 18 March 2013

NHS Commissioning looks poorly

I had thought we had done away with public flogging but today's Public Accounts Select Committee certainly gave me cause to doubt that. What was even more bizarre was that some of the witnesses appeared to be wearing self-written sandwich boards which said "I haven't really prepared for this grilling and I don't plan to demonstrate any humility today and certainly not accept personal accountability".

It was a gruelling session for all those involved and the patience of the MPs seemed to be sorely tried - I may return to some of the evidence in more detail. Four points though are worth reflecting on and one worth discussing:
  1. Hospital consultants appear to have negotiated wonderful contract which led to being paid more and being less productive. 'Pay more for less' just isn't that best outcome for a buyer from a negotiation.
  2. The reason why we are 'paying more for less' is, believe it or not, being a consultant has become more complicated in the last decade. I'm sure that's not what they meant to say but they made a point of reiterating that argument.
  3. There was great play made of the presence of annual plans for clinical consultants. The committee appeared to struggle to understand why their presence alone was worthy of credit while the lack of an associated performance management system.
  4. There is a need to really understand what you have authority to do - our friends seemed unsure whether Treasury Guidance, because it had been around for some time, still needed to be adhered to.
However, there was another strange twist in the Clinical Commissioning Group saga, now we find "Commissioners should only use competition where there is evidence it works". I would have liked the Committee to have been more probing on this statement and what the guidance will say. Given the conflicts of interest we discussed on Friday this does not strike me as a good foundation for achieving value for money:

  • What will be acceptable evidence that competition works?
  • What incentive would there be to try to prove competition works?
  • Will it be possible for potential challenges that 'competition doesn't work'?
  • What incentives will there be to ensure that those who have demonstrated poor negotiation in hospital consultants' contracts will be able to negotiate contracts without competition? 
It is certainly is an interesting precedent to set and one which I am sure others will crave for. Why on earth did the Public Accounts Committee let that pass?

Sunday, 17 March 2013

Social Media: Embracing Digital Procurement Strategy

One of they key aspects of being sociable is the ability to hold a meaningful conversation. In a nutshell that's what social media provides to procurement - the ability to carry on a meaningful conversation. Of course that assumes that procurement has recognised the strategic advantages of 'talking with' as opposed to 'talking to'.

Think of the last time you had to deal with a point of clarification with a RFP - would it be easier and less open to challenge if you had that conversation with the market through micro-blooging sites such as Twitter or Yammer?

Now think of the benefits you've gained through private conversations. Is it fair to assume that sometimes someone has made a suggestion that has saved you a lot of money? Is it fair to assume that someone has triggered an idea for a better of way of solving a problem you've been struggling with? Is it fair to assume that someone has helped you avoid a crisis? I hope you have benefited from others suggestions in the past on how to reduce costs, creativity and innovation, and risk mitigation. Just visualise the benefits procurement could gain from conversations with the supply market, existing suppliers and potential suppliers, product and service users - social media makes that opportunity a reality, and your procurement strategy should set out how you will make use of the opportunity.

Having said that, social media changes the market place dynamics. The buyer may not shape the conversations but become the subject of the conversations. The potential for the buyer to be 'named and shamed as a bad payer' and also for the market to make comparative assessments of buyers is very real. Those conversations about the buyer are beyond the buyers control but have introduced new risks which need to be recognised and reflected in procurement strategy.

While there are a plethora of social media sites which can be accessed and have their place in a digital procurement strategy (such as, Yammer, Twitter, YouTube, Facebook, LInkedIn, Slideshare), starting from the perspective of available channels is an easily made mistake. Instead the starting position should be who are the audience you want to converse with and what is the outcome you want to achieve.

However, by way of suggestions, here are some potential uses of social media in procurement:

Friday, 15 March 2013

Conflicts in Clinical Commissioning Groups

I overheard a discussion on the Thursday morning' s Today programme which made reference to BMJ published research suggesting one in three of GPs involved in the new CCGs have a conflict of interest - I couldn't access the report but you can read more here. The actual expenditure at stake is £62bn.

Last week I discussed the chaotic nature of how new commissioning rules are being cobbled together inside a month.  We also know from Ben Goldacre's excellent Bad Pharma that, in spite of self-professed business acumen and nous, GPs are not immune from the wily salesman.

The NHS Code of Conduct, insofar as procurement is concerned, implies that it is okay for those who have declared a conflict of interest to participate in discussions but be excluded from the decision making. To me that is insufficient and needs to be significantly strengthened during the rewrite to the new procedures to ensure that those who have a conflict of interest absent themselves from any related discussion and, any perceived undue influence in the procurement process is treated with sufficient seriousness to act as a deterrent.

We know procurement fraud costs money, we know there is a lack of personal accountability, we know the Code is weak, we know there are a lack of skills - what we don't know is how big a scandal some of those involved in CCGs could be walking into out of ignorance.

This change management process does not inspire confidence - anyone aware of the risks having been assessed?

P.S. Sunday Times 31 March 2013 headline, 'GPs' Private Firms Grab NHS Cash' , now there's a surprise (not).

PPS in a later blog I expand on this and suggest where conflicts could arise.

Thursday, 14 March 2013

Mobile: Embracing Digital Procurement Strategy

Recently we have been discussing some of the potential impact of Digital and the need for a Procurement Strategy which embraces the digital opportunity.

We have discussed the high-level strategy and Cloud but in this blog I wanted to discuss Mobile.

Recall the recent past when, if you wanted to check your emails, you needed to be in front of your desktop. Remember how liberating it felt when you were able to pick your emails up through your Blackberry/iPhone/whatever.

Digital means we no longer need to be linked to a desktop to access our eProcurement systems. Nor do those other colleagues who would have perhaps had to complete paper records for subsequent data  input. With Quick Response (QR) reader codes you can go straight from mobile to the main platform in seconds without so much as keying in a single digit. But you don't need QR codes to benefit all that is required is a mobile device.

We now have apps on mobile phones, for example, which enable shopping cart requests to be approved remotely faster and at less cost which in turn improves P2P time.

Mobile means transaction costs are reduced and productivity is increased.

Tuesday, 12 March 2013

The Cloud: Embracing Digital Procurement Strategy

Last week I implied that Procurement has been a laggard, by comparison with Marketing, in embracing 'digital'. I suggested there is a need for digital procurement strategies which support the achievement of procurement strategic objectives, for example, cost reduction, innovation, risk mitigation, CSR. 

Before we can develop appropriate strategies we need to understand 'digital' and its potential. This blog discusses 'The Cloud' and in subsequent blogs I hope to discuss 'mobile', 'social' and big data'.

At a very basic level it may be suffice to understand that it is cloud technology which enables 'Apps' - no cloud, no apps. The impact for procurement is that Apps can now be accessed and developed to reflect our needs. The challenge therefore is to define the appropriate applications portfolio needs and, if an app doesn't exist, incentivise its development. The procurement professional needs to become both a visionary and a discerning selector of the ever increasing range of available apps. However, if you take this one step further you will understand than the cloud means apps can talk to each other, so, customers apps, marketing apps, suppliers apps, supply chain apps all have the potential to be interconnected and talk to each other - just visualise yourself in the London Olympic stadium and that you have the capacity to instantly exchange information and 'know how' with every other person in the stadium, including the athletes and the coaches, and every person watching the Olympics throughout the world - that's what cloud interconnectivity has the potential to delivery. 

One of the big impacts is that cloud completely transforms the eProcurement business justification.

Monday, 11 March 2013

Procurement policy on blacklisted construction workers?

Scottish construction workers protested on Friday about the discovery of a blacklist of 'trouble maker' employees'. I had previously discussed the blacklisting and asked why procurement should interfere if a potential employer opted to bypass 'trouble makers'.

However, what the protest has brought to light is that, when you scratch a little below the surface you find that the definition of a trouble maker, in this case, also relates to some who raised concerns about health and safety. That's a much more serious issue, as not raising concerns about health and safety could lead to liabilities, delays in project completion and serious injury or even death. Silencing the trouble maker in this case amounts to something similar to silencing NHS and other whistle-blowers. Yes, I think we all agree that whistle blowing policies are a good thing.

However, the protesters are calling for a ban on public sector contracts being awarded to firms that have used the blacklists. How on earth would that work? Would it be legal? How would you answer one of your political masters if you were asked to advise? How would you advise your Board if you were in a private sector organisation committed to responsible procurement?

I can't really see any scope for the public sector to avoid using those involved in the blacklisting as it is quite probable that a number of the issues just aren't relevant to the subject matter of the contract. Yet, I do think there is scope for every public sector organisation to consider within the selection criteria the need for a whistle blowers policy. Would that not be a more pragmatic way to solving the problem and yet avoiding the direct risks of related potential increased delivery costs through site closures, etc.. and duty of care?

What would your recommendation be?

Thursday, 7 March 2013

Embracing digital procurement strategy

It has been reported that 60% of brand marketers anticipate a 40% increase in social media spend this year. That leads me to ask two questions:
  1. How much influence does the CPO have over this increasing area of spend?
  2. How much is being allocated within the Procurement budget for embracing digital as part of procurement strategy?
I'm not going to try to answer the first question at the present, although it would provide an interesting research question.

However, I'm inclined to hazard a guess, in answer to the second question, that most CPO's have not allocated anything in their budgets for a digital procurement strategy.

What do I mean by a digital procurement strategy? I'm referring to more than using mobile 'shopping cart' applications or twitter for advertising ITTs.  I mean setting out how procurement is going to make use of digital technology to achieve its objectives, say, for example, the objectives of cost reduction, risk mitigation, innovation, CSR.

By a digital procurement strategy I also mean how are you going to make use of the Cloud, mobile technology, social media and big data to achieve your objectives, and how you are developing the skills of procurement staff to address digital.

It has been clear that our sister profession, Marketing, has been concerned with digital strategy for some time. yet I see little evidence of Procurement giving digital much thought. Like Marketing, we too straddle the boundary interface between the internal organisation and the external environment - we have a responsibility for the upstream supply chain. We also have interfaces and communications needs with every part of the internal organisation and with buying partners.

Over the next few weeks I may give some more attention to the opportunities which the digital revolution provide for procurement. In the meantime I would be interested to hear of your own plans and experience?

Wednesday, 6 March 2013

Unhealthy diagnosis for NHS commissioning reform

The NHS chief publicly begs for his job arguing that he didn't make any mistakes but has learnt from his mistakes. Then, because he made a promise to lead the NHS reforms two years ago he justifies that he should be allowed to stay, whether or not he was paid to be personally accountable for needless deaths and misery. It is also clear that there has been no succession planning - quite simply, he implies, with the Prime Minister's endorsement, there is no one else in the whole world would could oversee the NHS reforms.

As if we were in any doubt about Nicholson's view of the world, the efficiency element of the reforms is named the Nicholson Challenge. Not that I would want to cast doubt on the effectiveness of the man's leadership, but it appears even the delivery of Nicholson Challenge is challenged.

So just as we learn that there is an indispensable man leading the NHS reforms, and recognising that the efficiency strand delivery is questionable, and with less than four weeks to go before the new commissioning regime kicks in, we also learn that the commissioning rules need to be rewritten.  After all this time discussing the commissioning reforms is it really conceivable that a sprint rewrite will be a good job.

We have one person at the top of the pile with a history of losing focus (his own admission) and new commissioners who now discover the rules are being rewritten.

So all the ducks seem lined up for an almighty mess. Change management case study ready and waiting - pity we all look set to suffer. I wonder is anyone identified as personally accountable?

Monday, 4 March 2013

Are you ready for Procurement Visibility: ProcureTruths

I wonder how many of you have come across Glassdoor; a website where potential employees can identify a particular organisation, the typical salaries paid to their varying levels of staff, what questions were asked in interviews, others experience of the recruitment process and what those who were successful in the selection process subsequently thought about working for the organisation. Some really interesting insights and all free of charge.

It came as quite a surprise to someone who recently wanted to discuss a 'compelling opportunity' with me, when I explained that the comments on Glassdoor made it clear to me there was little value in progressing the discussion.

I can see how Glassdoor could be used as part of procurement research in providing useful insights on bidding firms. Of course as Peter Smith rightly implies have we information overload?

However, visualise a similar service for the supply market, let's call it, 'ProcureTruths'. Perhaps ProcureTruths already exists unbeknown to me (please enlighten me if you know of it?).

Nevertheless, let's visualise that ProcureTruths, provides potential suppliers with information on specific buying organisations, say:
  1. Key decision makers in the procurement process;
  2. Procurements influence over spend;
  3. Typical questions asked during the procurement process; 
  4. Organisational tendency to maverick spend;
  5. Buyers qualifications and currency of training;
  6. Understanding and application of procurement best practice; 

Saturday, 2 March 2013

Yes, to me, lowest price wins

With so much attention on UK public procurement there is perhaps some comfort that there are questions also being asked in the USA about public procurement. And in answer to those questions we hear that a culture of 'lowest price wins', lack of skills and risk aversion prevails. The blame is clearly laid at the door of procurement professionals with a perception that they just are not up to the mark.

Let's forget about arguing whether or not the perception is justified because it appears to be a fairly prevalent perception on both sides of the Atlantic.

While the perception may be completely inaccurate, why would those in the private sector, who have that perception, ever want to employ someone from the public sector? That is particularly an issue in the UK where it was hoped that the private sector would pick up some of the many UK public sector staff shed as a result of the austerity strategy.

Those who hold the belief increasingly appear be highly respected business leaders and influential with politicians. They are also be reinforcing others opinions, however unfounded, that public sector procurement wastes money as opposed to having a strategic role in cost reduction.

Sadly, while we hear plenty of reference to Purchasing Managers' Indices we have no such measure of public perception of procurement as adding value or indeed that lowest price does not prevail.

Those of us who consider procurement to be our profession need to start redressing the balance because the next thing may well be that resourcing the procurement function may be at lowest price too.