Innovative procurement / procuring innovation. Confused? (Part 1 of a series)

My regular guest writer, Toni Saraiva, and I were talking recently about innovation. The particular topic was how the EU is trying to encourage “innovative procurement” - but this isn’t by any means just a public sector issue.

We agreed that there is some confusion around the topic. It probably arises from the fact that “innovative procurement” is quite different from “procuring innovation”.  And even the EU appear to be confused at times, making grants available where it’s not totally clear which of the two issues they are really trying to address!

“Innovative procurement” (in our book anyway) means applying new, unusual or radical processes, technology or tools to the procurement scope of activities.   So, as examples, that could include application of the latest advanced sourcing / optimisation technologies; or a novel approach to supplier relationship management that uses psychological techniques to ....OK, I’m making this up now.  But you get the idea. It could also include novel ways of training procurement staff, or using Google trends to analyse supplier and market risk. The possibilities are endless.

As they are indeed in the case of “procuring innovation”. This, on the other hand, means buying goods or services that are innovative. (And the procurement process does NOT have to be innovative to do this.) Procuring innovation could also take different forms; so it could mean simply looking for innovation in routine spend categories; or searching out totally new or innovative products.  The current UK government Innovation Launch Pad we featured here had good examples of this; some firms such as HotDocs look innovative within a well established field; others such as Becrypt or Adinfa appear to create a whole new product sector.

And just to complicate matters, you could look to procure innovation through innovative procurement! We might argue the Innovation Launch Pad was again an example of that; the government seeking innovative products and services through a web-based marketing campaign rather than a formal ITT process.

But if you’re looking at how procurement can contribute to the “innovation” agenda in your organisation, the first step if is to be clear which of these two very different objectives you ‘re pursuing – you could of course decide to do both. But the two objectives need to be considered differently, so do make sure everyone involved understands exactly what you’re trying to do.

And stay tuned for more on this topic shortly...

Voices (3)

  1. bitter and twisted:

    Agree, “innovation” is a hollow buzzword.

  2. Dan:

    innovation – a pet peeve of mine. You cannot procure innovation – just something thats innovative in nature. Arguably, if you procure something properly, then you won’t need to concentrate on making sure its innovative since you’ll have the best value product/service for your needs anyway. By concentrating on ‘innovation’ as an abstract concept, you’ll simply just be distracting yourself from your objective.

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