Using spend data – Procserve workshop explores the opportunity in the UK public sector

Thanks to the forward thinking public procurement leaders who came along to the Procserve “procurement data” workshop last week. With billions of pounds of spend going through the Procserve marketplace/ network, we’re beginning to see really interesting opportunities in terms of how large quantities of real spend data from multiple organisations can drive future performance improvement, and even impact on public procurement policy.

We had people at the workshop from central government, university sector, local authorities, Police,  GPS (good to see them participating in a wider government initiative) and health sectors. And what was interesting was the different ways in which people perceive the value and potential of data and what different data would be useful to them. So, for example, one organisation which wants to control strongly what their internal users can buy was interested in price comparisons cross different organisations - so they can see whether they're getting good deals.

Another, more devolved, with perhaps more suppliers in each category, wants to be able to do internal comparisons to avoid the situation (for instance) where a supplier is charging different prices to different parts of the buyer's organisation. At an organisational level, there are obvious opportunities for comparison of prices paid on a pretty much real time basis (not too different perhaps from the vision for invoice based spend analytics put forward by OB10 / Tungsten in their new venture, perhaps?)

In terms of one of the hot procurement policy issues for the public sector,  the data can show (pretty much in real time) how much is being spent with SMEs (smaller businesses), and the location of the supply firms. In one analysis which Procserve have recently run, 60% of spend from a particular regional group of users was going to SMEs, and of that, over 60% was with “local” suppliers. It’s worth remembering of course that this applies to the spend going through the Procserve platform, which tends to be the smaller unit cost items - so that probably favours SMEs compared to spend areas such as major capital projects or equipment. But useful information nonetheless.

And we should be able to take this to the next stage, where broader comparisons can be made of SME performance. How do the prices charged by SMEs or local firms compare to those in the market in general, for example?  The data is not quite at that stage yet, but it will be quite feasible before too long to get answers to those fundamental questions.  As one of the participants said, being able to explain to councillors or chief executives what the cost of “buying local” really is (if indeed there is a cost) would be a powerful tool for making informed decisions.

There are still important issues to resolve around governance (how can we make sure the data isn’t used just to beat up “inefficient” buyers or “expensive” suppliers), and how the data is used day to day. Are regular reports enough, or do CPOs want real-time dashboards and the ability to carry out their own analysis, for example? Or would alerts (“you’re paying too much for that!”) be a valuable tool?

But this is going to be major opportunity in the future, for public and private sector organisations. The data contained within the Procserve platform is growing by the day, so over time more and more useful information should emerge.  The power to understand, interrogate and act on really detailed spend data will be a key tool in delivering better procurement performance, and I suspect will change procurement in ways we’re only just beginning to understand.

We’re not sure whether there will be further similar workshops, but if you’re interested in participating if there are, or want to know more generally about the topic, then drop an email to Cora.Byrne@procserve.com.

First Voice

  1. Mike:

    Given the push at PASC for a system that delivers comparable data it would seem like the time is more than right to take this to the next stage. Data – whether Procurement-related or anything else – should be the nugget that really makes automation worth while. In a Procurement context it’s potentially much more than a matter of being better informed – it can be the determining factor in all forward Procurement strategies and key decisions. Two things though – there needs to be a plan to gather, present and optimize use of data and at a more fundamental level people need to put spend through the eProcurement systems that deliver it. In the private sector, particularly retail, there are few things more valuable than data. But if there is no will to harness and use data it has no value at all. At the moment I don’t see significant moves in public sector to get to grips with this. Of all the lost opportunities this could turn out to be the most expensive.

Discuss this:

Your email address will not be published. Required fields are marked *