Commissioning and Procurement (part 3) – the implications for skills

So, through part 1 and 2 of this series (see here and here, and do look at all the really insightful comments we’ve had from readers) we’ve got to the point of proposing that commissioning is fundamentally a very similar process to what we have traditionally considered to be “procurement”, but with an emphasis on identification of needs and make-buy decisions than we less often see in standard procurement. The biggest difference however is that commissioning is generally about providing services to recipients who sit outside the organisation doing the buying, unlike the vast majority of what we might call corporate procurement.

Now if that is the main difference, we can see why commissioning needs some different emphasis and activities, and maybe even skills, compared to corporate procurement. Understanding the needs and requirements of a few hundred thousand citizens (patients) in a medical commissioning area is not the same as determining what capabilities the sales force need for their mobile phones. The skills needed to  develop service providers where none exist is also strong in some commissioning sectors (although that's true for some categories too, I would argue).

Again, monitoring the performance of care homes or adoption placement agencies is a bit different from checking how well the cleaning provider is performing. But even here, the basics are not that dis-similar. It is basically good contract and supplier management - we're talking about KPIs, SLAs, managing the relationship... so  not really very different at all.

I found this definition of commissioning on the Croydon Council website:

“Commissioning includes a number of key activities including; needs analysis, service design, procurement (the buying of goods and services), the monitoring of contracts, and the development of strategic relationships with suppliers and the development of local organisations or businesses to compete for procurement opportunities”.

So there’s a new thought - what about that aspect of "development of local businesses or organisations” as Croydon put it?  Well, that is outside the scope of what many procurement people do day to day, but we could certainly argue it is, in essence, a type of supplier development activity.

But all of this does suggest that the skills of the commissioner are perhaps broader than those of many corporate procurers. There will be more emphasis on those less systemised activities such as supplier development, market creation and so on. Strong contract and supplier management skills are also needed. None of this is alien to good procurement people – but there will inevitably be less focus for commissioners on those core procurement competences around running sourcing processes, negotiation and contract creation.

So, where have we got to in this debate?

  • Commissioning basically includes the same core activities as procurement, but with stronger emphasis on certain parts of the overall process.
  • The main difference is that the recipients of what is being bought sit outside rather than inside the buying organisation. Interestingly, the point at which commissioning starts covering services for which the recipient will pay fully, (starting to happen in social care, for instance), we have perhaps moved into the territory of another major subset of "procurement" -  what we usually call retail buying (goods for resale).
  • The skills needed to be a good commissioner are not dis-similar to those required to be a high-performance procurement professional, but again the balance of skills and competences is different to that required in many traditional procurement areas.

More to come...

Voices (3)

  1. Stephen Heard:

    It will be interesting to see what happens when health commissioning and local authority procurement come together due to the drive towards integration. The move of £4bn of funding from the health spend (historically spent by commissioners) to the social care procurement teams will be an interesting clash of cultures!

  2. Doug Forbes:

    Commissioning is simply deciding what to acquire. The how to acquire leads to issues of social value where most currently in the public sector are trying to square the difference between previous practice and new techniques.

  3. Trevor Black:

    Interesting comment on the development of local businesses and organisations and that it is normally outside of the remit of procurement. I agree that is outside the scope of what many procurement people do ‘day to day’ and that regrettably reflects the blinkered and lack of commercial sense that blights the profession. If you believe in encouraging competition particularly at local level it is a ‘no brainer’ and I actively encourage organisations to embed into their procurement policies and strategies. To suggest that it is sacrosanct only to commissioning is quite frankly a load of old tosh!

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