Book review: 'Procurement Mojo'

This book has been around for over a year or so but I only got round to reading it after receiving it as a Christmas present from one of my daughters.  To be honest I think it was the title which put me off previously and, to be honest, try talking to a C-level stakeholder about the 'procurement mojo' and I suspect doors will close.

The book is well positioned in a niche which I'm unaware of others having addressed; setting aside procurement technicalities to focus on making the Procurement function more effective. You may well find some of the themes familiar as they are really transferred from the management literature you would expect to find in one of those airport shops - nothing wrong with that and Osagie makes an excellent transfer.  I really can't disagree with anything he says and can't think of any other book which addresses the themes in a Procurement context. Although I did  think the chapter on Branding was weak (I will return to this in a later Blog post). It would be particularly useful for those interested in Procurement Organisation & Management or even Procurement Change Management.

I did find some of the references to Osage's and others' research a bit aggravating since the detail was missing and it tends to be anecdotal - so it wouldn't work as an academic source. I also found the frequent cliches and case studies, which seemed to be more about demonstrating Osage's pedigree, annoying.

Set all those criticisms aside and you have a really good, easy to read book, relevant to all those who want to improve Procurement's strategic positioning as a function. Osage's five step approach  makes perfect sense and I suspect represents his own transformation approach:

1. Build an effective Procurement organisation;
2. Deploy robust fit-for-purpose enablers;
3. Adopt robust supply base management;
4. Apply appropriate performance management; and 
5. Build your Procurement brand.

I particularly liked the section on leadership but was surprised, when discussing processes, he didn't really explore the need to sort out processes only after you have define the new structure and roles. 

At only £14.99 Procurement Mojo is particularly good value (there has been a recent trend in over-pricing Procurement books lately) and an easy read. I think I will use aid memoire. 

Poker Playing Procurement

In amongst the debate on bombing Syria, you have missed the news that a requirement from the Prince of Wales for TV channels to sign a 15 page contract in order to have an interview with him has possibly backfired. It has led to one interview being scrapped and some of 'the market' collaborating in a potential refusal to sign. What happens next and who is the loser in this game of poker?

In the long-term it is impossible to believe that neither the media nor Prince Charles would want a stand-off. So will the Royal Household relax the requirement or will the media simply give in? If I were an advisor to the media I would advocate that they stand their ground in the belief that ultimately Prince Charles needs the media more than  the media need him - after all the Royal Household must have a communications strategy and 'closing down' one option is counter-productive for someone with such strong desire to express personal views.

One of the things I have become more conscious of since leaving the practitioner world of public procurement is the amount of investment potential bidders put into qualifying potential bids, in other words, calculating the likelihood of success compared to the cost expended in the bidding process. It is not taken as a given that because a buyer has invited an RFI that a bid should be prepared.

Bidding is always a gamble for the bidder. Having said that, onerous conditions placed by buyers don't make the contract any more attractive, in fact more often than not the opposite. The illustration of Prince Charles pre-contracts serves well to demonstrate that sometimes preferred suppliers may just say 'no thanks' - indeed those suppliers may never know that the buyer had a preference for them.  

Let's remember that when a buyer goes to the market, they generally have a required need and the worst of situations is when the market says 'no thanks'. Yes, you can have a great brand name,  you may even have Chartered status, yes, you can have great structures and policies and procedures, and even a seat at the top table, but if the market opts not to deal with you, you may also be a loser.

Let Procurement's internal customers drive eProcurement Strategy

For a number of years I have seen P2P briefs which include reference to internal stakeholders desire for an 'Amazon like' user experience. Exposure in domestic life to how easy the 'electronic shopping experience' can be through the use of Amazon has raised individuals expectations of what the procurement process could be within the business environment. Having said that, even with that domestic experience, it still surprises me when Procurement staff tell me that the 'AsIs' process for Requisition to Purchase Order takes on average two weeks - my response is "Why aren't you aiming for two hours max?". What I see and feel on the ground is evidence that internal customers are pushing for change as opposed to Procurement staff shaping driving the change.

I have also met opposition from Procurement staff to the use of eAuctions. However, when you ask the individuals concerned if have they used eBay - the 'lights go on' and you can start to help them understand how eAuctions could deliver benefits in a business environment. In parallel, I've discovered that internal customers of Procurement have a greater appetite for the use of eAuctions than their Procurement Team.

Tonight I was delighted to see an advertisement on television for MyCarNeedsA. Perhaps some of you have been aware of this site for some time, regardless, it is a domestic electronic RFP solution. The domestic car owner specifies what work is required for their car and bids are then invited. I'm sure, given what I have outlined above, you will not be surprised that I have experienced opposition from Procurement Teams for the use of eSourcing tools. So I am delighted that internal customers of Procurement will now have an opportunity to experience eSourcing within a domestic environment and then hopefully push for their adoption within the business environment.

We have recognised for many years that individual's domestic experience influences their work expectations.  Of course there are many understandable reasons why Procurement staff may want to oppose the use of eProcurement tools but I find it disappointing that Procurement are not pushing harder for improvement and adoption of what are now basic tools.

Procurement should encourage internal customers to cry louder for the transfer of domestic eProcurement tools into the business environment. Procurement should see the domestic tools as part of a skills development plan. Yes, why not let Procurement's internal customers drive hard for an eProcurement Strategy. Would that not help Procurement?

Lean is supposed to about getting rid of waste

I could barely believe my eyes when I read today that public sector managers are now going back to school, gaining an FICiPS en route, to learn about 'lean'. It's not that I don't agree with the need to implement 'lean' thinking in the public sector, indeed back in the 90s I was writing about the application of lean supply in the public sector. No, my concern is that the UK government have been preaching the 'lean' message for years too - indeed we have the 'Lean sourcing: The standard solution'.

What has gone wrong with their recruitment that they now need to invest in training for these managers - did the recruitment process actually let staff through the system without checking their understanding? Are we to view this as an admission that central government is 30 years behind the curve in management thinking?

My suggestion is quite simple: give each of the managers who require training a copy of either The Machine that Changed the World, Lean Thinking, or Systems Thinking in the Public Sector get them to research why the Japanese local government has struggled to implement 'lean', and then set within their personal objectives an appropriate objective to pilot a 'lean' initiative, reporting on the difficulties, how they overcome the difficulties, and the lessons learnt. No £17,000 training course, no mercy, if they can't deliver chase them - I can't see that after so long any other approach will work.

CIPS Global Standard for Procurement & Supply gets the thumbs up.

CIPS have firmly positioned themselves in the world of 'Procurement' as opposed to 'Purchasing' with the release of the Global Standard for Procurement & Supply.

Some may argue that it is a bit revisionist to describe this as "the first of its kind" -  I could cite other antecedents, even endorsed by CIPS. Yet, setting that aside, this is a useful resource and credit is due to those who have created, what appears to be a very thorough piece of work.

Sadly though it does little to support the claim that commissioning is synonumous with procurement. Regular readers will know I disagree with that argument anyway. But how do public sector procurers, with social care being a critical spend item relate to the Standard?

I was also surprised, given the rise in Vendor Management Offices in the private sector, that the associated roles, and even the term Vendor Management, weren't included or specifically named within the framework - I think CIPS missed an opportunity there. Yes, I recognise the similarities with Contract Managers but aren't Vendor Relationship Managers slightly different?

Setting those issues aside, one of the great virtues of the Standard is that it can be viewed as objective. So if you first gain acceptance of the Standard, then you can have a more reasoned depersonalised discussion on matching the standards.

I recently had to complete an evaluation of some staff and their competencies, and then develop role descriptions for new posts - the Standard would have helped a lot and I recognise that I will draw on this in the future.  I can also see its role in completion of Training Needs Analysis.

On balance, the Standard gets a 'thumbs up' from me and a thanks to all those involved in its development.

CIPS scores a masterful coup with Borgen procurement training video

I was really disappointed when I heard, last year, that Borgen, the Danish political drama, had finished. Borgen had been some of the best TV I'd seen - compelling viewing and impossible to predict what would happen next.

Borgen was a great example of a successful BBC make/buy appraisal. Auntie just doesn't seem able to produce such a consistently high quality series', so it was a clever to buy from Denmark rather than even attempt to compete by making.

We have all had enough long-running TV series' constructed around regional accents and although I generally have problems with sub-titles that wasn't a problem I had with Borgen. Would it be worth experimenting with subtitles on Eastenders, Coronation Street and Hollyoaks to see if they become more compelling viewing?

Borgen must also have been a tremendous success for the Danish tourist board. I suspect their marketing research now finds that when someone now asks: "What comes to mind when you think of the word 'Danish'?", responses have now moved beyond Danepak, Carlsberg, and pastry to include Borgen. That's a big success and is believed to contribute to the 0.23% increase in the Copenhagen tourist footfall.

So beyond make/buy lessons, what's all that got to do with procurement? As a stroke of genius, CIPS and CCS have entered into a partnership with DUPE (the Danish Unification for Public Procurement Eccord) in commissioning a public procurement training video for politicians based on Borgen. As I understand it, Borgen's central character, Birgitte Nyborg, finds herself faced with calls for her resignation as a result of a scandal involving the CPO and the Danish Chief Secretary to the Treasury. CIPS' press release states that "the video helps demonstrate the need for a clarity of roles between politicians and officers". CIPS also claim that this is a central part of their marketing strategy and is the first of a range of procurement resources using of subtitles due to ease of being able to provide translations. Consistent with that strategy, DUPE have priced for the first and second phases of translations. The first phase of translations are targeted for Belize, Botswana, Kenya, Fiji, Jordan, and Namibia; and the second phase translated for Mauritius, Malta, Nigeria, and the Philippines. It is understood that a recommendation for Cyrillic is being considered by CIPS Congress as part of a wider package of translation of all CIPS resources on public procurement and piloting of CIPS Licence.

Can CIPS licence learn from Labour's Licence to Teach

The Shadow Education Secretary has an aspiration for the introduction of a 'licence to practice' for all
teachers. The idea is that teachers would have their lessons peers-assessed and have to demonstrate they are up to date with the latest material. The peer assessment would then lead to licensing which in turn would require re-licencing every five years.

It would be the responsibility of the employers (schools) to provide the training but for teachers to make use of it. Fail to gain the licence and the teacher is 'struck-off' and banned from teaching - perhaps a bit strange in those situations where there is a shortage of teachers anyway. There are no suggestions as to what would happen if so many teachers are 'struck-off' that schools can no longer provide education, equally no suggestions as to how JobCentres would handle 'struck-off' teachers. There is some suggestion that the unions aren't happy with the proposals which may itself lead CIPS (our union, I suppose) to ask why?

I'm sure many see the advocating of a Licence to Teach as justification for the introduction of the proposed CIPS licence which I have previously discussed. Perhaps CIPS may even be considering this a part of their recommendations for the next government.

However, it is worth considering some aspects of the proposed Licence to Teach:

Twelve Angry Men - Procurement Theatre review

The film version of 'Twelve Angry Men' was released the month I was born, yet I have never seen it. Yes, I am of the vintage which remember Robert Vaughan when he was 'The Man from U.N.C.L.E.' and Martin Shaw as one of The Professionals. Perhaps that was why I couldn't resist the opportunity to see the stage version at The Garrick tonight.

The high-level story is a comparatively well known court drama played out in the Jury Room. One Juror isn't prepared to go with the pack and eventually the pack go with the original solitary Juror. It is brilliantly played out at the Garrick by Shaw, Vaughan, et. al., and I couldn't recommend it highly enough.

But it struck me that the procurement lessons didn't just lie in getting a good deal from Lastminute.com but in the play itself.

The Jurors each bring their own personal judgements to the Jury Room. Some were formed by the appearance and pedigree of the defendant. Some were based on racial prejudice. Some were influenced by the urgency of prior commitments and a preference to be somewhere else. Some too strongly influenced by others 'opinions'. Some even viewed changing their initial impressions as something to be defended, as if in a competition. Having said that, this is a play which will have you laughing out loud - it actually makes use of some brilliant irony and comedy.

It stuck me how effective questioning led to a better decision as the lack of robust evidence was highlighted.

However, it also struck me that this was a bit like some of bid evaluations I have witnessed. The need for a quick decision and pre-conceived ideas led to a poor decision, if not, wrong decision. The dominant voice for a strong individual subtly, and sometimes not so subtly, bullying others into a decision. I could go on with the parallels. But, if, instead of a Jury Room drama, this was recast as a Tender Evaluation Panel, I wonder which character would represent the CPO?

Twelve Angry Men may be a great play, but I think a DVD of the film would be a useful procurement training resource the next time a complex contract award is being approached. Come to think of it, it would be a very useful procurement training resource (full stop).

Reflections on eWorld Purchasing & Supply

Today I attended the eWorld Purchasing & Supply event. You wouldn't be surprised if I said a free conference was good value - well, to me there's no such thing as a free conference as there is always the opportunity cost of how you could have otherwise have spent your time. There's also the reality, that now, in many organisations, even justifying the costs of attending an event in London is a battle some feel just isn't worth fighting. But to me this was well worth attending and actually staying the whole day. (As an aside, it never ceases to amaze me that so few delegates have the good manners and ethics to stay the whole day!)

Having said all that, I found almost all of the sessions I attended of excellent quality and a really good opportunity to learn. So in a nutshell some interesting learning:

1. Eva Wimmers from Deutshe Telecom, in an excellent keynote, reflected on the reality that a short-term focus on paying less is probably detrimental to the procurement 'brand' and improved strategic contribution, particularly in an environment of decreasing volumes. Procurement needs to reposition itself and lead on demand shaping and spend management - what she referred to as moving beyond procurement.
2. Eva also told us there's a word in Germany for saving money but hurting the business. Don't ask me what the word is but I think there's a real problem that procurement people sometimes are their own worst enemies in doing just that, regardless of what the word is.
3. Another of Eva's gems was that "procurement is only as strong as the relationships with functional colleagues". I think that's very true but there's a real problem with procurement suffering from poor stakeholder engagement and management - the focus on technical know-how, to me, is distracts from the increasingly required soft skills.
4. There was a recurring theme from many of the speakers of splitting strategic procurement from operational buying. Their message about devolving to the right level or even outsourcing, effective use of P2P systems and pCards - in theory, that is all very simple but few really spoke of how they'd managed to get operational ownership. There is of course an interesting lesson here for those in the public sector who have been very cynical about the benefits of pCards!

It takes two to tango but who leads?

The NAO have just published a report exploring the rationale behind equipping England’s 43 police forces with Blackberry’s and other mobile technology.  

Referring to the report, Amyas Morse, head of the National Audit Office, said:

"The roll-out of mobile technology to police forces was achieved against a tight timescale and at reasonable cost. Too little consideration was given, however, to the need for the devices or how they would be used. In the majority of forces, the benefits have not so far extended beyond simply allowing officers to spend more time out of the station.

"There is still the opportunity to achieve value for money, though, if more forces use the technology to improve the efficiency of their processes and make savings in their back-office activities."

I may revisit the report at a later date and explore some of the detail, but one finding immediately triggered a train of thought. The report concluded that the introduction of mobile technology by the then Government was a policy decision simply to procure and deploy devices. 

We’ve seen similar ‘mandates’ before, remember the NHS IT system when Tony Blair said ‘how fast can you get it?’ 

To buy or not to buy? Caveat emptor!

A few days ago I wrote a very tongue in cheek blog: Minister admits Public Procurement Litigation Agency overspend.  While much of that blog was inspired by the media attention given to the overspend on settling NHS claims compensation, I could perceive a threat of a new business opportunity exploiting poor public procurement practice.

Today I was startled to find a new twist  in the NHS story as it was revealed

Minister admits Public Procurement Litigation Agency overspend

Today the new Secretary of State responsible for procurement was questioned by the influential Public Administration Committee on why there had been a five fold increase in the costs associated with running the Public Procurement Litigation Agency.  She explained that a new industry had grown up on the back of the The Public Contracts (Amendment) Regulations 2009.  The Regs were introduced to implement the Remedies Directive (2007/66/EC) and according to the SoS have changed the dynamics within the public procurement market.  The Regs were the first justification for the overspend.

The SOS then reminded PAC that a former Cabinet Minister had publicly admitted a bias amongst the public procurement community against UK suppliers.  Independent academic research then revealed

The political procurement blame game

Last week Spendmatters exposed the lack of substance behind some of the procurement claims made by Francis Maude.  I had previously critiqued Maude's 'revolutionary speech'  and have expressed a wish that some sort of test was put in place for robnessness prior to these fanfared announcements which are really only compromising credibility.

Today's font page of theTimes headlines a must read investigation into Whitehall waste - estimated to amount to £31bn!  Needles to say procurement does not escape the spotlight, so

BRAZIL - observations of a ‘BRIC’ (Part 2)

I made the 45 minute flight from Rio to Belo Horizonte, in Minas Gerais. Minas Gerais has 853 municipalities! It wasn’t the recently opened new City of State Administration (four buildings which cost £250m to build and houses 15,000 staff), which impressed me most, but the hunger of the strategists I met.  This team of departmental directors briefed me on their work and 20 year strategy.

They demonstrated a real hunger to learn from the UK experience of strategic commissioning, community engagement in shaping priorities, how to move towards a focus on outcomes, pooled budgets and community budgets.  They wanted to learn from the experience of the how the UK had encouraged examples of innovative local government practice and then shared those case studies so that others could learn and speak face-to-face with the innovators. Communities of Practice and the improvement work of the former IDeA were also of great interest. This team had a real and visible hunger to learn.  They want to be the best in Brazil.  I discovered that this group, with an average age of around 25, were the outcome of a strategic approach to recruitment.  All students in secondary education had an option of sitting an exam.  Success in the exam covered not only the cost of their degree in Public Administration but a guarantee of a two year post in the Minas Gerais state administration.  The public sector was clearly reaping the benefits. Would the UK make such an investment? 

Singling out Minas Gerais is perhaps unfair.  When I delivered a similar seminar to the state of Rio, those staff wanted to learn more and more about the same subjects, namely, strategic commissioning, community engagement in shaping priorities, how to move towards a focus on outcomes, pooled budgets and community budgets, developing and sharing council good practice, and sector led improvement.  They also wanted to understand consortia and shared services approaches to procurement. Despite giving them many opportunities to close the discussion, they opted for a four-hour seminar. I doubt I did more than whet their appetite – certainly their enthusiasm at the end of four hour for asking questions had not waned.

I also met with state owned public sector organisations.  The state oil company, ‘Petrobras’, and pharmaceutical company, ‘Bio Manguinhos’ wanted a more strategic procurement.  Amongst the big questions from them were: How do we get the organisation to work better together in procurement?  How do we introduce category management and set up consortia purchasing?  How do we cope with a legal environment that is far more prescriptive than that of the European public procurement rules?  Alongside operational questions such as, how would we best buy travel and hotel services?

For someone with a public sector procurement improvement background I thrived on these seminars, discussions and questions.  But what was fascinating to me was the engagement with the academic community in supporting municipalities, state and state owned businesses.  The GPI (Groupo de Producao Intergrada) team, which invited me, were working with all these public sector organisations on problem solving and developing ‘a better way’.  Why do we not have such an integrated approach in the UK?

Behind all the questions, there was also an implied but sometime explicit question for the UK to answer, how can Brazil remove corruption from the public sector?  I explained the steps taken since the 1970s ‘Poulson Affair’, but the recurring response was ‘but what do you do in Brazil, now?’

So to me Brazil is different.  It has almost 6,000 municipalities.  Only came out of dictatorship in 1988 and is still the early steps of democracy but one thing is clear, Brazil is a country which has much to learn from the UK.  Likewise it’s important to recognise the UK has much to learn from Brazil – let’s remember it was from Brazil the idea of participatory budgeting came to the UK!