Government Procurement Service update (part 2) – technology starts to pay off

We featured the first part of our GPS (Government Procurement Service) review here following our recent trip to Liverpool. Today we'll take a look at the technology strategy they're following.

After a competition last year, GPS chose the BravoSolution analytics tool, and have gathered information now from all central government departments to populate the analytics platform. This is probably one of the largest spend analysis projects undertaken in the world to date based on spend value – there is around £60 billion a year going through central Government and associated bodies. And the progress they’ve made over the last 3 or 4 months is very impressive in terms of successfully getting to grips with this huge amount of data.

The platform now enables spend to be analysed by category, supplier and organisation of course, which in itself is very useful and interesting. But the next stage is to link it to internal GPS data. That will enable a view of how much of each organisation’s spend is going through GPS contracts, identify “off-contract" spend, other suppliers being used and so on. That will give GPS a very clear view of compliance and future opportunities.

Just with the work they've done so far, it is throwing up some fascinating data; across the 10 common spend categories, the variance is quite startling. Some departments are putting more than half their spend in those categories through GPS; in others it is a single figure percentage.

I asked David Shields, the GPS CEO, for his view of these differences.

“In some cases, departments have major outsourcing or PFI contracts that mean they can’t just move the spend to GPS. But in other cases, we are finding that the internal procurement function in the department just doesn’t have control of all their own internal spend. If that’s the case, it is hard for them to channel that spend to GPS contracts – or indeed to their own preferred suppliers”.

But there is also good news; “MOD, who didn’t tend to be major users of Buying Solutions deals, are very much on board with the new process and are co-operating very closely with us”, says Shields, and the spend analytics data bears this out.

GPS accept that data quality is variable at the moment – “organisations are used to reporting in terms of whether they’re within budget, but reporting by supplier or spend category is quite a new concept for many public sector organisations”. Eventually, better spend classification when purchase orders are raised will improve the data.

But already just seeing the ranking of top suppliers to government – the most accurate of such lists that has ever been produced – is fascinating. And the data can be shared easily with the departments themselves, so they can carry out their own detailed spend analysis using the Bravo tool.

In the medium term, vendor ratings from GPS and customers will be a key element of supplier management, and Shields would like to see these put in the public domain – there’s an interesting thought!

In terms of the another key element of the GPS software platform, the implementation of Emptoris Sourcing tool is “going well” and it is being implemented “without compromise” as Shields puts it. That means some changes in the way staff construct tenders and evaluation processes, but it will lead to greater efficiency – for instance, future pipelines of procurement projects (which are to be published) and all external reporting will be driven directly out of the system.

In terms of commercial activities, as well as the initial contract letting, GPS are more active than ever in resisting price increases, checking actual pricing and generally holding suppliers to account. “Re-setting relationships” is the phrase Shields uses, and there’s no doubt he’s bringing a greater private-sector like focus on value to the work of GPS, all driven by data and information.

But of course data and technology by themselves aren’t enough – people are the other key ingredient. So stay tuned for part 3 of this series when we’ll look at some of the people and relationship issues that will determine the future success of GPS and indeed the whole government procurement programme.

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