Much like 2015, 2016 is shaping up to be the year of the comeback.
2015 had the blockbusting return of Star Wars; 2016 will have the well overdue return of Independence Day. 2015 had the spine tingling return of John Luther to our screens; 2016 will have the metal crunching return of Robot Wars. 2015 saw New Order return after years away in fine form; 2016 will have the return of The Corrs… Oh well, I guess there is plenty of time for 2016 to up the ante.
Unlike these tenuous entertainment examples, we are not talking about a comeback when we discuss collaborative procurement. Although it was cited by procurement professionals as one of the key areas for development in Science Warehouse’s Procurement Trends Survey 2016, this is not new, nor is it a surprise. Collaborative procurement has been a hot topic for many years now and appears to be here to stay.
What is collaborative procurement and how is it being done?
So, let’s go back to the basics. Firstly, what is collaborative procurement and how is it being done? The phrase may be viewed by some as yet more nonsensical, ‘blue sky thinking’ or ‘management speak’ but the premise is actually as effective as it is simple – collaboration between public sector bodies in order to drive savings.
From a national perspective, the Scottish government was an early adopter and, in recent years, fellow UK and Irish governments have sought to follow suit, driving collaborative initiatives. On a more localised level, collaborative procurement has been adopted within the NHS, local councils and even within some higher education institutions in the form of procurement via approved frameworks, use of shared service procurement platforms and centralisation of procurement teams between multiple sites and organisations.
When did the idea of collaborative procurement take off?
The Office of Government Commerce’s Collaborative Procurement Programme was set up in 2007. Managing over £18 billion of spend under nine categories of goods and services, this led to great improvements in the way public bodies bought goods and services but there was still a way to go.
In May 2010, the National Audit Office released A Review of Collaborative Procurement Across the Public Sector, concluding that ‘Given the size of public sector procurement spend, value for money would be improved if: public bodies worked together much more effectively than they currently do to maximise savings for the entire public sector; and there was a clear framework to coordinate public sector procurement activity.’
In 2015, the Cross Sector Procurement Gateway (CSPG) quoted Andrew Coulcher, director of the business solutions division of CIPS as stating: “There are significant savings to be made if you can go to the market with a single voice.”
So, why does collaborative procurement continue to stay so relevant?
Nine years on and collaborative procurement is still being pushed hard. Why? Because there are still significant savings that can be made by public sector organisations – savings that aren’t just recognised by getting the best price but rather by driving efficiencies within procurement teams.
With the squeeze ever tightening on public sector organisations and savings targets rising, effective procurement is seen as one of the easier, more crowd-pleasing wins. What better way to save money and time than buddying up with your local public sector brethren?
In this year’s annual Procurement Trends Survey by Science Warehouse, procurement professionals predicted that central government and healthcare sectors would drop in procurement challenges in comparison to local authority.
Could this be a sign that procurement challenges and spend targets are filtering further away from the core of public sector spend to smaller authorities and organisations? By their nature, smaller authorities and organisations do not always have specific procurement teams or members of staff, let alone category managers. Centralisation of teams and technology has long been viewed as something more pertinent to large private sector organisations, but now these methodologies and technology are being adopted by smaller public sector organisations.
Collaborative procurement via secure eProcurement solutions, designed to give control over spend back to the buying organisation, is something that has long been available to large organisations from a singular installation and shared service perspective, so the adoption of this technology at a local level is the logical next step. Makes sense really, doesn’t it? This would certainly add further gravitas to the reason why the subject of collaborative procurement remains top of the agenda within public sector, irrespective of the size of the organisation.
Collaborative procurement – don’t call it a comeback because it’s an initiative that is here to stay.
Sources: CSPG, NAO, Science Warehouse