First procurement themed issue of Public Money and Management

The latest issue of Public Money and Management has just been published on line with the hard copy due mid February - it is a procurement themed issue. Not only is it the first in the history of the Journal but it is truly international with contributions from The UK, The Netherlands, Brazil, Ireland and Australia.

There are some really useful articles in the issue which provide surprising findings from previously unpublished research. If you would like to read a free copy of my editorial which provides insights into the articles covered - the first 50 can access a free copy at this link

"Purchasing: Can we bridge the gap between strategy and daily reality?"

A new academic paper is in press at the moment for publication in Business Horizons: 'Purchasing: Can we bridge the gap between strategy and daily reality' by Knoppen and Saenz which I think is worth a read. The paper is based on the survey findings of the International Purchasing Survey - over 600 usable responses from North American and European purchasing professionals - and a few anonymised case studies.

At first I wondered why the paper wasn't published in one of the mainstream procurement journals, then I decided it may be the reported findings quite possibly jar against the message their editors generally want to accept.

Nevertheless the findings are important and certainly merit further debate and validation.

I am not going to steal the paper's thunder, but the key messages include that 47% of the respondents believe Purchasing (I take that also to cover the Procurement function) is not included in the strategic planning process, and 56% the purchasing are not focussed on long-term issues that involve risk and uncertainty. Furthermore that organisational structure tends to be either centralised or decentralised with little development of hybrid models.

Those findings certainly act as a reality check on the rhetoric but, I have to say find some resonance with what I have all too often seen in big household name companies. If the findings are reliable we need to stop the bluff and really get down to asking the serious question of why is Procurement still suffering from an identity crisis, despite almost 30 years of procurement's potential contribution having been identified, the financial crisis, and even the recent spate of procurement related supply chain risks manifesting themselves? Why are simplistic structural models still prevalent despite the benefits of hybrids? Is the problem that with the profession of those who look at the profession?

However, leaving solving the world's problems for another day, and getting back to the paper. In answering the core question the authors pose: Can we bridge the gap between strategy and daily reality? The authors use the case studies to demonstrate the answer is 'yes',  and identify key pitfalls in bridging the gap, namely:

1. No time for reflection;
2. Lack of scale;
3. Lack of scope;
4. Unaligned incentives. 

While I may question some of the content and approach, and feel there may be an over-simplification of the discussion and recommendations,  I encourage you to give some thought to the findings.

Complex Contracting - Book review

Brown, et al. (2013) have pulled off a remarkable coup with this book in that it provides something of real value for procurement practitioners, those managing and leading major projects, academia and students. It is easy to read too and virtually free of jargon.

But what is meant by ‘complex contracting’? This is a book about contracting in uncertainty when there is a requirement for a level of buyer and seller investment that makes exit difficult. It is the degree of uncertainty that makes a contract complex, not the size of the budget.  The book will be relevant to all those contracting in “the fog of uncertainty” (p.49).

It deals with the US Coast Guard’s approach to using a new integrated strategic approach to procuring, over 30 years with an anticipated expenditure of $24bn, boats, planes, helicopters and an IT system. An exceptionally ambitious undertaking, with a steep learning curve and, as almost every aspect of the procurement was new for both the buyers and the providers, significant risk.

N.B This is an extract from my full review which can be read in Local Government Studies.

Scepticism, the pursuit of happiness and procurement

I remember, around 20 years ago, insisting I signed-off a consultant's report before it was presented to the major decision-making body for approval. The budget holder was aghast and saw me as being awkward. Then we discovered the consultant's recommendations were flawed and, had their recommendation gone through, the wrong choice would have been made. Sometimes the CPO shouldn't be too deferential.

There was a terrific example of the little guy being proved right in last week's Guardian. A leading academic in the field of mathematics of happiness, had the smile taken off her face when a Master's student exposed a flaw in her argument. Now the text books need to be rewritten.

This isn't the first time Goliath's of academia have been laid low by a sceptical David. You may recall a not dissimilar case last year when the highly influential, Reinhart and Rogoff, who had supposedly cracked austerity had flaws in their analysis exposed by a postgrad student.

The next time you encounter someone presenting a strong argument for some procurement decision which you don't feel quite comfortable with, I suggest you remember, Brown and Walker - the two Giant slayers of academics - and recognise that even those who expect deference can be wrong and if they are right, surely testing the robustness of the argument is something the CPO should do anyway.

ippc6 - International Public Procurement Conference 2014

It's some years since I last attended the International Public Procurement Conference. The conference only takes place every two years but sometimes attendance is cost prohibitive - particularly over the last few years when approvals for attendance have been hard to obtain. So selfishly I was pleased to learn that next year's conference will be hosted in Dublin.

To me, this type of conference, like IPSERA, are far better value for money in terms of learning than the more traditional commercial conferences. They provide a somewhat unique mix of academics and practitioners who want to understand what is really happening in procurement and perceived best practice, there is much more depth in the sessions and rarely 'selling'.

If you've been carrying out any research, the conferences are a great opportunity to share what you've found out and have constructive critique (you could of course consider submitting a copy of your potential paper for me if you would like to have it considered in the Procurement themed special edition of Public Money and Management). If you're a practitioner you have a platform for showcasing what you've been trying and gain the benefit of constructive suggestions. Of course delivering a paper isn't necessary - you can learn masses as a delegate. Personally I find the real benefit lies in the discussion which take place following the delivery of each paper.

As I said, it is a few years since I've been able to attend one of these conferences, however, based on my experience (which may be out of date), I think organisers can improve the effectiveness of the conferences if they:

1. Post online the abstracts and programme in sufficient time for delegates to best plan their time;
2. Give the option of soft and hard copies of papers to delegates;
3. Provide access to conference papers well in advance of the conference so that delegates have the choice of reading and digesting the papers;
4. Make wider use of Twitter as conversations and even posting questions which arise from pre-reading papers, prior to the conference;
5. Provide an opportunity for remote participation, say through Google Hangouts and webinars;
6. Make use of YouTube for the selected dissemination of some of the sessions.

I don't know whether or not I will be able to attend but at least we've a year's notice.

Good luck to Paul Davis and the conference organisers.

Will UKIPs success impact on procurement?

UKIPs success in Thursday's local government elections certainly changed the English political landscape but will it make a difference to local government public procurement? Or, put a different way, if you're a local government procurement practitioner in a council where UKIP have now a major voice what changes should you anticipate, if any?

Let's first recognise that in local government politicians should shape the agenda; that's what democracy is all about. Although UKIP have not yet taken control of a council that does't mean they can't affect change.

The first area I would anticipate an impact will be if a UKIP member secures the portfolio which covers procurement - given the strategic significance of that portfolio to UKIP's strategic intent, that should be one of their core political objectives. The second impact would be if UKIP members secure a strong position on Resources Overview and Security. If either of these roles is secured expect UKIP members to reflect their manifesto - and, if my experience of local government is a reliable indicator, expect the euphoria of the Thursday's results to bring the confidence and boldness to make a quick impact, even though there will be a lack of understanding.

So what can we assume based on the UKIP Manifesto?

1. Greater focus on cost reduction as opposed to service cuts;
2. Resistance to the EU procurement regulations;
3. Resistance to awarding contracts to non-UK businesses;
4. Cynicism over the effectiveness of previous initiatives designed to support local businesses;
5. Questions on how to make it easier for local businesses to tender for contracts;
6. Challenge on the need to embed equalities in procurement; 
7. Environmental procurement resisted;
8. A resurgence in the desire to support third sector organisation;
9. Cynicism that the procurement manger is committed to serving the citizenry as opposed to their own self-interest;
10. Expect a need to justify existing procurement staff numbers;

I suspect many, new to local government, may have listened to the election results and thought 'so what?'. Well, if that's how you felt, you have a real problem and need to remember that in local government, political manifestos are the backdrop which should shape strategic procurement objectives. One other thing worth reflecting on is that UKIP have an electoral mandate for pursuing their manifesto objectives, while procurement professionals don't. Procurement's challenge is to provide the best professional advice on how objectives can be achieved, regardless of whether or not they agree with the objectives.

Oyez, oyez, all ye who have something to say on public procurement

I'm sure you have something to say about public procurement. Have you ever thought of expressing your opinion in the form of a debate piece or like to share a new development (some of GO Awards entries would be ideal), or completed some relevant research which you'd like to share? 

Public Money and Management is an international, academic and professional journal covering public sector finance, policy and management. A special themed issue on Public Procurement is planned for January 2015 - yes, I know that's a long way away, but that's how long these things take. But the good news is that you also have plenty of advance notice to consider either completing some research or putting down some thoughts.

If you would be interested in potentially having a paper published in the Public Procurement themed issue, we'd be interested in hearing from you.  

Below is a copy of the formal call for papers, so give it some thought:

Call for papers: PMM theme on public procurement

Guest editors: Gordon Murray and Andrew Erridge

Public procurement is centre stage in public service delivery yet dogged by controversy: corruption allegations from Indian helicopters to Hawaiian university construction contracts; aircraft carriers which are not fit for purpose; wrongly awarded rail franchises; and trailblazing initiatives, such as the private finance initiative, which have questionable benefits. Public sector procurement is not easy because it is complex and high profile.

A public procurement themed issue of PMM is scheduled for January 2015 (Public Money & Management, Vol. 35, No. 1). The issue will provide an opportunity for debate pieces (1000 words), main papers (no more than 5500 words) and new development articles (up to 3000 words) to contribute to making a positive impact on policy and practice. Submissions must be of benefit to academics and reflective practitioners.

Submissions that relate their findings to practice are particularly welcomed, as PMM is widely consulted by practitioners. Equally, as PMM has international influence, international comparative analysis is encouraged. Articles may cover some of the following suggested topics, but we welcome contributions beyond this list:

• Lessons from decades of public procurement policy initiatives. 
• The effectiveness of public procurement as a political strategy. 
• The appropriate role of politicians in public procurement. 
• The impact of public procurement policy, for example innovation, SMEs, third sector. 
• Combating corruption in procurement.
• Evaluation of organizational structures. 
• Public perceptions of public procurement. 
• The measurement of procurement savings. 
• The effectiveness of public procurement performance management. 
• The impact of digital strategy on public procurement.
• The future of public procurement.

Outline proposals of around 300–400 words for main papers should be submitted by 1 January 2014 to both editors at drgordonmurray@gmail.com and AF.Erridge@ulster.ac.uk, and manuscripts for debate and new development articles should be emailed as Word documents by 1 April 2014. See http:// www.tandfonline.com/rpmm fir information about preparing an article for PMM.

Sacrifice the 5 Rights at our peril

In the mid 70s, when I first entered the world of Purchasing & Stores, Purchasing was the poor relation. The emphasis was on Stores. Gold stars and kudos came from stores management, minimising stockholding but avoiding stock-outs. Having said that, the mantra was the '5 Rights': The Right Product, at Right Quality, in the Right Place, at the Right Time, at the Right Price.

When carrying out the field research for my PhD, it became clear that one of the characteristics of those who had been successful in the transition from a clerical to strategic function had been their ability to demonstrate consistent competence in delivering the 5 Rights - it was the springboard for a more strategic role. 

So, it came as a surprise to me, during the 'noughties', when I started to meet those who had entered the profession at comparatively senior levels, who asked me what I meant by the 5 Rights. I continue to meet CPOs who have no idea what the 5 Rights are - what is perhaps more concerning is that they don't seem to care. It appears to me that strategic procurement seems to have lost sight of the 5 Rights - have the 5 Rights gone the way of the Dodo? If that's the case who is making sure that the 5 Rights are achieved?

CBI argues for BIG bonuses for procurement academics

I normally stick to the world of procurement and programme management, but today I have decided to make some comments on John Cridland's (head of the CBI), recent comments, reported in today's Times. In summary the CBI are making suggestions for the next budget.  They are worried about a potential cost to the UK of the backlash against bonuses and restricted immigration.  Cridland argues that leading executives will find the UK unattractive and, in the same breath, overseas academics will not believe they are welcomed.  To quote directly, "If you don't reward success, business can't walk the walk".

Yes, a strange brew of big bonuses and academic motivation!

It would have been interesting if Cridland had also read the Sunday Times feature on Elsevier - a remarkably high performing business baswed on academic publishing.  Elsevier, sells expensive academic journals (including one of my favourites, the Journal of Purchasing and Supply Management) and makes significant profits. Elsevier's supply chain are the host of academics who write papers and peer review others' work.  What most of my readers probably don't appreciate is that Elsevier do not make any payment to either authors or reviewers. There are parallels with the government's Work Programme - if you want to success, consider it an honour to be unpaid. 

What I can't understand is Cridland's disconnect. The UK need high performing academics and business reaps the benefits from their labour. Even those gaining high-performance bonuses are more often than not