The Slow Death of Public Sector Procurement (final part)

In what - I promise - is our final instalment of this series, we look at the possible implications of the major decline in the public sector procurement population we’re going to see between 2010 and 2015. This assumes, clearly, that our prior analysis is correct.

So let's look at it from the point of view of different stakeholder groups.

Potential public sector procurement staff - thinking about a move into public procurement? Should you bother?  Well, there will be very little mileage in looking to do standard category management roles in IT, FM etc, let alone old-fashioned procurement officer roles processing random requisitions. But in specialist areas such as social care procurement, there is a huge talent and capability shortage. And even if there is outsourcing in such a role, you may get transferred into the private sector to do the same interesting and challenging work.

There may also be less competition in the public sector as many will be put off by wage freezes etc! And as we've said throughout this series, there will be a need for someone to manage these critically important outsourcing contracts. That's another major opportunity area.

I’m already a public sector procurement professional – shall I get out? Depends how you feel about being outsourced. It might be very good news! If you want to stay in the public sector, you need to be working at the level where you're involved in the outsourcing contracts. Even if procurement is outsourced, you still need to let the contract for outsourcing procurement!  But letting these contracts, as we've said,  won't need huge numbers of staff. And the contracts need managing as well. So we see opportunities for procurement pros to move towards contract and supplier management roles. But note that ownership of many of these contracts isn’t going to sit in the procurement department – it will be stakeholders very close to the operational outsourcing.

I work - or want to work - for an outsourced service provider - what about me? Boomtime! I hope we're going to see major investments in procurement capability from providers - ranging from the generalists like Serco and Capita to specialist health, social care, and employment services providers, who will realise that good procurement will both help them make more money AND win more public sector contracts. (That assumes the contracting process focuses on procurement capability within the provider firms, which I sincerely hope it will). I see this as a major growth area for procurement professionals in the next 5 – 10 years: but the firms won’t necessarily be looking for existing public sector folk of course.

Anyone else need to worry about this? Yes, CIPS (the Chartered Institute of Purchasing and Supply). Their public sector membership will decline and its not clear that the firms who will take up the slack will necessarily be as keen on promoting membership as public bodies – or on paying premiums to staff with the qualifications.

Back to where we started - politicians may find they've lost some room for manoeuvre when the delivery arms of their empires are locked into long-term contracts. And the public may find the loss of accountability and transparency - if this isn't handled well (see part 4) - is something they''ll live to regret.

Phew. After about 3,000 words, that's all on the topic for now. But we'll no doubt keep a close eye on how the whole public sector outsourcing thing develops.

Voices (2)

  1. David Orr:

    The values and aims between procuring as an in-house professional (public or private sector) and procuring on someone else’s behalf from an outsourcing provider will be conflicting won’t they?

    When you work in-house you are “all in this together” and the aim is “best value”.

    When you work for an outsourced provider, then will the aim be to maximise profits by directing spend to preferred suppliers & existing contracts giving “best commission” and not necessarily “best value” for the client?

    Some challenges to Spend Matters followers:

    Name one or more public sector outsource (like IBM/SW1 here in Somerset) that has a properly resourced and formally qualified procurement service within the Client contract management team?

    Name one or more ERP-based (e.g. SAP) public sector outsource that has made the predicted cashable procurement savings?

    Name one or more large, successful & well-known private company (Tesco, Sainsburys, JLR, Rolls Royce, Toyota, Honda etc) that has fully outsourced “buying stuff” for themselves?

  2. Sam Unkim:

    Theres a quote going round
    “For every beautiful woman, there’s a guy tired of her”

    Here in the NHS we know that no matter how matter hard we work, how effective we are and what good results we deliver –
    Theres always someone planning how to get rid of us.

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