It is always dangerous to offer advice, perhaps even more so from the UK to the US at a time when our economy is not exactly roaring ahead. But as we've discussed over the last few days, the UK has had some interesting experience in at least trying to drive better procurement across the whole public sector landscape. So what are the key points that might have some implications for the US?
- This takes persistence -- just like transformation in a private sector organisation, you can make some quick wins, but this will be a 3-5 year minimum programme to really have a major effect.
- Benefits realisation/savings capture and measurement are critical. A strong methodology (what is 'allowed' to be claimed), and auditing are both important.
- Appropriate technology -- Spend Analytics, P2P, eSourcing (including auctions) can be very useful to drive efficiency, improve transparency, and improve outcomes.
- The UK had a clear 'figurehead' for eight years: the CEO of the Office of Commerce, positioned at a very senior ('permanent secretary') level. The new Government is taking a somewhat different approach but we are now seeing a Minister taking a very active interest in procurement matters. In my opinion, certainly in the early days of a serious drive for improvement, a very high level leader is essential.
- But one person can't make this happen. Senior management and political support is also vital -- that is true not only at national level, but also in each council, hospital, and police force. Again, we see parallels with the private sector, in that stakeholder engagement, management and buy-in is just as important as the technical competence of the procurement function.
- Improving the skills and performance of thousands of practitioners is very challenging. It is about attitude and 'soft' skills as much as it is about technical procurement capability.
- Ultimately cutting budgets drives the focus onto making real procurement improvements and driving savings from vendors. Without budgetary pressure, it is very tempting to just continue as before and come up with some impressive sounding 'savings' that may or may not reflect real achievement!
Real savings from procurement must be a better route than laying off government workers OR increasing taxes. It should therefore be incumbent on every public organisation to do everything they can to find those benefits. It isn't always easy, but there is potential I'm sure in every organisation and every major spend category. Good luck!