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The Global Procurement Network
National Hospital Procurement Conference:
‘Driving Change: Successful Strategies to Build Influence and Lead Organisational Change in Procurement Capability and Performance’
Chris Newman Director ArcBlue Consulting Chris.newman@arcblue.com.au www.arcblue.com.au 0412 318 384
The Global Procurement Network
2
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ArcBlue Government Procurement Development Activity
across Australia/NZ
VIC State Government
• CIPSA Certification
• Training and
Development Programs
VIC Local Government
• Procurement Roadmap
development
• Contract Management
Guidelines and Training
State Government
Local Government
SA Local Government
• Roadmap Program
• Regional Opportunity
Analysis
Procurement Capability
Assessment / Development
Federal Government
• Contract Management
Development
• Regional Procurement
Development Programs
Federal Government
Gold Coast Council –
Capability Development and
Contract Management
WA Local Government
• Procurement Training
Program
NZ Government
• Departmental reviews
QLD State Government
• Contract Management Capability
Assessment & Development Program
NSW State Government
• Accreditation Program – preparation
and assessment
• Sourcing Project Delivery
NSW Local Government
• Roadmap Program with LGP
• Procurement Leadership Program
• Social Procurement Development
• Sydney Metro Councils Joint
Procurement Development Program
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ArcBlue Services
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Presentation
• Driving Change: Successful Strategies to Build Influence and
Lead Organisational Change in Procurement Capability and
Performance – Why Change?
– Designing effective change programs
– Features of successful integrated teams;
– Influencing stakeholders
» Stakeholder management
» Category management
» Social procurement
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Why Change?
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What is Changing?
• Pressure on Government to do more with less, to collaborate, and to innovate
• Strategic objectives increasingly being reflected in procurement practice
• Growing understanding of the role and power of Strategic Procurement
• Developing personal, organisational, and sector procurement capability
• Structured Programs to drive change • Case Studies, evidence and guidance – a growing body of
knowledge
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o Reduce costs – drive savings
o Internal productivity - streamlining
o Reduce risk
o Build confidence
o Demonstrate professionalism
o Political Objectives
o Project Delivery
o Reputation
o TBL Objectives
o Capital works and budget planning
o Project management and delivery
o Collaboration – organisational/ sector
An increasing focus on procurement The benefits
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Challenges
• Increasing pressure on procurement teams • Resources not matching growing expectations • Lack of influence at senior organizational levels • Poor planning creating pressure on Procurement Teams • Reliance on Government decision making process that can be
slow/ inconsistent/ contradictory • Balancing working ‘on’ and ‘in’ the business • Conflicting priorities
– ‘Get it done’ vs. Probity – Savings vs. Quality – Aggregated vs. local/ SMEs
• Lack of influence of the whole procurement lifecycle
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Becoming Strategic in Approach
• Moving from: Reactive...through....Proactive….to....Deterministic
• Key Features: – Cross business team-based collaborative approach – Explicit Department involvement; commitment by all stakeholders – Inclusive workshop approach that encourages ownership, commitment and
knowledge transfer – Deep understanding of the category, supply market, suppliers, and business
needs – Using market knowledge and innovation as a source of leverage – Striving to have a deterministic influence on the supply markets – Measurement of short, medium and long term goals
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Designing Effective Change Programs
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Procurement Reform Programs
• Local Government Procurement Roadmap Program – Partnership with Local Government Peak Bodies and State Governments – 175 Councils across 3 States have participated in the last 4 years
• New Zealand MBIE Procurement Review Program – Procurement Effectiveness Review Major Agencies – Procurement Health Check Minor Agencies – Online Procurement Capability Review Smaller Public bodies
• NSW Government Procurement Accreditation Program – Accreditation development support/ assessment: NSW Health, Justice,
Police, Education and Communities, Sydney Trains, Rural Fire, SHFA etc. – Gap Analysis, Gap Closure, Mentoring, Accreditation
• CIPS Corporate Certification Program
– International Benchmark - Standard and Advanced
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• Professional procurement
• Influencing the business
• Transactional
• Order placement
Level 1
Emergent
Level 2
Basic
Level 3
Developing
Centre of Excellence across all expenditure
Procurement foundations in place with improved controls
Some functional and category strategies in place
Focus on meeting legislative and compliance requirements
Largely unco-ordinated procurement with gaps in
compliance
Level 4
Advanced
Levels of procurement maturity
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Clear Structures
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Approaches to Assessment
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Personal Assessment - Process Overview
Procurement Competence Questionnaire
* 13 Competencies
* 156 Multiple-Choice questions
* 100% objective
* Completed on-line
* Supported through semi-structured interviews
Gap Analysis and Benchmarking
* Gap Analysis
- Score against benchmarks
- Score versus peers
* Benchmarking
- By industry sector
- By role
- By geographic region
- By experience
Reporting
* Learning footprint
- Development priorities
- Recommended interventions
* Group & Individual reporting
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• 13 common procurement technical competencies
– Governance, Leadership and Functional Design
– Supply base and Category Analysis
– Risk Management
– Category Strategy and Go-to-Market processes
– Supplier Appraisal, Evaluation and Audit
– Contracting and Legal Aspects
– Finance and Purchase Price Cost Analysis
– Negotiation and Influencing
– Supplier Performance, Contract and Relationship Management
– Transactional procurement and Procure-to-Pay processes
– E-Procurement and Technology
– Project Management and Change
– Sustainability & CSR
PCQ - Assessed Procurement Competencies
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0.00
1.00
2.00
3.00
4.00
5.00
Procurement Leadership, Governance and Financial Design
Supply Base and Category Analysis
Risk Management
Category Strategy and Supply Market Engagement
Supplier Appraisal, Evaluation and Audit
Contract Selection & Legal Aspects
Pricing, Cost and Financial Analysis Negotiation and Influencing
Supplier Performance, Relationship and Contract Management
Transactional Procurement
e-Procurement and Technology
Project Management and Change
Sustainability and Corporate Social Responsibility
Group Average (All Roles)
Average (Transactional Role)
Group Min (Transactional Role)
Group Max (Transactional Role)
Graphical Results
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Features of successful integrated teams
• Leadership with: – External focus – gaining organisational influence and engaging stakeholders – Internal focus – clear delegation and program oversight
• Organisational Governance and on-going buy-in • Clear roles and responsibilities
– Organisational – e.g. centre-led model with documented, well-understood roles and responsibilities for Procurement, Business Units, others
– Team – clear, consistent and communicated roles and responsibilities
• Effective structures • A clear Strategy for Development and Continuous Improvement • A well established and managed ‘infrastructure’
– Meeting and approval structures – Documentation and systems – A Program Management Model
• The right culture – Customer Service vs. Compliance • On-going training and development programs
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Organisational Assessment
Strategic
Procurement
External Focus Internal Focus
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NSW Accreditation Model
•Procurement Management Plan
•Procurement Strategies
•Performance and tracking Strategy
•Risk management processes
•Polices and procedures
•Financial delegations
Governance, Control & Policy
•Business case •Specifications •Tendering and negotiations
Procurement Process
•Use of tools •Training in tools
Procurement Tools & Systems
•Reporting •KPI’s •Procurement data
Information Management &
Reporting
•Level of resourcing •Organisational design
Organisation & Capability
Weightings
15%
10%
25%
15%
10%
25%
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Successful change programs
• Programs based on sound integrated multi-dimensional models – People, organisation, process, projects etc. – Measurable and repeatable
• Ability to benchmark against peers/ ‘good practice’ • Value of sector-wide implementation programs • Engaging the right stakeholders
– Senior Leadership, Business Owners – The process itself helps deliver the change
• Need for real incentives to participate and to change • Need a ‘start’ and ‘end’ date for the intensive period • Establish on-going review and continuous improvement models built in • models • Involve your team through the whole program • Be willing to ‘take’ the opportunity • Provide positive leadership and adequate resourcing
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Understanding the change process
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Influence
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Understanding stakeholder groups
Chief Engineer
Corporate Relations
SER
Finance
HR
Operations
ProjectsCustomer Service
Network Asset
Management
Infrastructure
Delivery
Rolling StockOperational Rail
Safety
Network Control
Network Planning &
Development Train Services
Delivery
Project Controls
RRL
Delivery
Major
Renewals
SQ&E Finance
Learning &
Development
Business
Development
ICT
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Formal processes to assess stakeholders - e.g. Power Interest Grid
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Category Management and the value curve of procurement
Value
Need Strategy Market
engagement Negotiate contract
Manage contract
Stages of Procurement
Time
Spent
Category Management – a whole of
life approach
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Traditional Sourcing
• Focus on Strategy, Market Engagement and Negotiate Contract • Time or event based for specific product or service • Requirements immediate to near term, individual • Commodity cost down focus • Step by step transactional process • Culminates in new or revised contract for specific requirements
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Category Management
• More in-depth long-term needs analysis as well as manage contract
• Ongoing definition, analysis and review across category • Requirements medium to longer term, across business • Strong ‘total cost of ownership’ focus (internal and external costs) • Collaborative ongoing review process • Adaptable to (guaranteed) change in needs or conditions
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New Approaches to Achieving TBL Objectives
• All levels of Government & (Private Sector) have social, economic, environmental and Leadership/ Governance objectives (TBL) – Traditional ‘silo’ approach to achieving objectives
• Innovation – Complex issues require new models
– New ways to address complex, multi-causal and long-standing community, economic and environmental issues
– Integrating TBL objectives into procurement, service design and employment
• For Government these may include:
– Breaking cycles of long-term disadvantage – Providing genuine pathways to training and sustainable employment – Achieving ‘Zero Waste’ and carbon footprint reduction targets – Driving local and regional economic development outcomes
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Strategic Procurement
• Procurement is how we spend most of our money – E.g. NSW – State Gov’t $25bn and Local Gov’t $7bn each year
– Private development – housing and infrastructure
– Major Projects
– Service delivery
• Procurement represents significant market power to: – Deliver high quality, value for money goods, services and works;
– Drive sustainable cost savings;
– Influence, enable and stimulate the private and social enterprise
markets to deliver social, economic and sustainability outcomes;
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What is social procurement?
Social procurement is a strategic approach to meeting social and economic development objectives through procurement
Social procurement involves using procurement processes and purchasing power to generate positive social and economic
development outcomes in addition to the delivery of efficient goods, services and works
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Social Procurement and Economic Development – Areas of Focus
• Often focussed in areas of Place-based disadvantage
• Providing employment and employment pathway opportunities to disadvantaged communities – Indigenous, long-term unemployed, disability, older workers, minorities
• Strengthening and creating opportunities for local business
• Maximising local and regional benefits from investment in the region (private/ Government)
• Diversifying the supply market
• Engagement of SMEs and social benefit suppliers
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Growing number of examples of social procurement
• Private and public sector case studies
– Construction - North-west rail/ Nowra Jail
– Local Services – Councils/ Telstra
• New Health Sector examples - e.g. St. Vincent’s Health Australia (Vic, NSW, Qld)
– Café spaces to be operated by social enterprises
– Toowoomba – Grounds maintenance provided by disabled personnel
– Exploring new opportunities including laundry, ward services, waste, landscaping and maintenance
– Working with organisations such as Toowoomba Clubhouse – a social enterprise providing employment to people with metal illnesses
– Specific link to St. Vincent’s priorities working with indigenous, refugees and homeless
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Broader Benefits of a structured approach to TBL Procurement
• Integration - Achieving TBL goals, and addressing community issues as part of the way we do business
• Innovation – Encouraging innovation and the development of new forms of partnership and service delivery models.
• Team and Organisational Identity and Reputation – Building and broadening the role of procurement and organisational identity.
• Competitive Advantage –Directly demonstrating the capacity to add social, environmental and economic value in delivering on Government funded projects
• Planning Ahead - Rather than responding in an ad hoc way as community and Government expectations grow, TBL procurement can be introduced through a managed, systemic and achievable program.
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Support available
www.socialprocurementaustralasia.com
• Case Studies/ clauses/ research
• Social Procurement in NSW – Public Sector Guide
www.arcblue.com.au
• Procurement Capability Assessment/ Development
• Category Management
• Training
• Sourcing project support and delivery
• Spend and opportunity analysis
• Project Support
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Questions
top related