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INFORMATION FOR CANDIDATES The senior assessor’s report is written in order to provide candidates with feedback relating to the examination. It is designed as a tool for candidates - both those who have sat the examination and those who wish to use as part of their revision for future examinations. Candidates are advised to refer to the Examination Techniques Guide (see the following link: http://www.cips.org/en-GB/Qualifications/study-support/ ) as well as this senior assessor’s report. The senior assessor’s report aims to provide the following information:

An indication of how to approach the examination question

An indication of the points the answer should include

An indication of candidate performance for the examination question Each question has a syllabus reference which highlights the learning objectives of the syllabus unit content that the question is testing. The unit content guides are available to download at the following link: http://www.cips.org/Qualifications/About-CIPS-Qualifications/cipsqualifications/ ADDITIONAL SOURCES OF INFORMATION The Supply Management magazine is a useful source of information and candidates are advised to include it in their reading during their study. Please see the following link to the Supply Management website: http://www.supplymanagement.com/

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SECTION A Q1 Using a recognised model, evaluate the external and internal

stakeholders of the University of Ridgewood. (25 Marks)

Analysis of the Question The case for section A represented a fictional University In this question an evaluation was required. This requires a fairly in depth look at the stakeholders and some comment about the importance of them linked to the case. Candidates were expected to use stakeholder models such as Mendelow, Primary/ secondary, proximity of stakeholders, OGC models, category management variations and so on. Analysis of the Answer Candidates were allowed a wide choice of stakeholders for their evaluation and many went for a small number (four to eight) and when identified these scored one mark each prior to evaluation. Candidates mainly identified the internal stakeholders as the board, the staff, senior staff including professionals such as Heads of department, Faculty, Finance, generalist staff who hold delegated purchasing authority currently, and the central procurement team; and the external stakeholders as the national suppliers, local suppliers, the local interest groups, the taxpayer, and the ratepayer, students (could be internal or external if well argued). A recognised model was required and by far the most popular was Mendelow. However, some candidates merely illustrated the model without populating it and this attracted limited marks. Other popular models were; Stakeholder Mapping (Interests), Stakeholder interests plan, OGC Models (Blockers Advocates etc) and Proximity of Stakeholders. Some approaches used the OGC Category management documentation providing a number of relevant approaches, one for this scenario may be taking into account change and trust. Candidates could then develop the stakeholders mapping tool or list the stakeholders from the case against a number of key aspects and base their evaluation on this. Weighting could then be used in the response on the basis of credibility, intimacy, risk and trust. Recognising that exact values are difficult to allocate, candidates could rate stakeholders against each heading as high, medium or low. It may follow according to the analysis that a stakeholder could be low on credibility and high on risk, which might mean that the candidate suggests a particular strategy to manage the stakeholder planning. This is one way to approach the question but a well thought out Mendelow linked to a communication plan scored equally well. Academically, the stronger responses mentioned the work of Ramirez, Grimble and Wellard, Susskind and Cruikshank and others. At L6, credit is given for academic reference and evidence of wider reading.

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Exam Question Summary Generally, the level of evaluation was disappointing. The stronger responses looked in depth and this can be done by using one model provided it is used well. In the evaluation, stronger responses also recognised the importance of who can influence decisions and key to this case, which will be affected by those decisions. Some of the weaker answers did not do this and the weakest did not even populate the Mendelow Matrix (where this was used). Within the marking scheme, latitude was allowed for all credible models leading to a broad evaluation of the external and internal stakeholders of the University of Ridgewood. Q2 Describe the main elements of a communication and marketing

plan for the procurement strategy for the University of Ridgewood.

(25 marks)

Analysis of the Question The question required a description of the main elements of a communicating and marketing plan for the University. This could be linked to stakeholder engagement, procurement data and how the message is broadcast. Analysis of the Answer The question specifically required a description of (main elements) a commination and marketing plan linked to the procurement function. Key to the response was;

Identifying procurement stakeholders

Analysing the needs and expectations of these stakeholders in respect of communications

Prioritising effort toward key stakeholders

Identifying internal and external media routes considering the 4 “W”s-Who, What, Which and When.

Within their description stronger responses stressed and demonstrated that a procurement marketing plan must aim to enable internal and external stakeholders to recognise the importance of the central procurement unit in all aspects of the procurement cycle. This could include;

Good news stories

Collection and broadcast of data on the importance of good procurement for the organisational success of the universities finances

A good evaluation process

A structure for an answer plan could include (but this is not an exhaustive list);

Customer needs analysis

Assessment of “competition”

Market intelligence

How to tackle opportunities in University of Ridgewood

Promotion of the service

Opportunity cost analysis

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Typical components included (not exhaustive);

The vision statement for the procurement unit and how it links to the universities objectives

SWOT analysis

Marketing objectives

Collection and dissipation of ‘good news’ stories about procurement successes

Convincing data on the importance of good procurement for organisational success and evaluation of success of the plan could also be highlighted.

Within their description of the main elements of the plan, stronger responses explained that procurement units often suffer from a low profile both internally and externally but can help themselves through understanding stakeholders and their needs, becoming an “attractive” client and growing supplier interest, being professional in all dealings with stakeholders in the university, and other similar initiatives. Therefore a structured communication and marketing plan can help raise this profile or in this case help with the launch. Exam Question Summary Stronger answers made it clear that a communication and marketing plan can act as a blueprint to help identify the performance measures and marketing expertise that matter for the purchasing team, and this was at the core of the stronger responses. There were some excellent answers where the elements were described to a high level, however, in some there was variable understanding of the main elements of a marketing plan and at times the link to a procurement strategy was missing. In the main, this was a well answered question. SECTION B Q3 Prepare an informal report for a procurement director, in a public

sector organisation of your choice. Your report should: identify key types of procurement financial and

management information (PFMI); outline the adequacy and robustness of each type

of PFMI; provide a conclusion, outlining the risks involved

in not having effective PFMI

(25 marks)

Analysis of the Question The question required an informal report to a procurement director in a public sector organisation and any format with introduction, recommendations, analysis etc. (A conclusion was mandatory from the question) gained 2 marks. Here the question required candidates to demonstrate understanding of key sources of procurement financial and management information (PFMI) and wide latitude was allowed in selection of data. The question allowed candidates to specialise on any organisation which they are familiar. Recency of reading was rewarded. Analysis of the Answer

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In many papers the candidate firstly identified key sources of procurement financial and management information with a recommendation of how robust each one is. This was often contained in the report summary/introduction/abstract etc. A number of candidates, within the main body of the report, analysed each part of the PFMI available to a procurer and commented on its robustness. Candidates looked at the identification of the data, looked at how robust it was, how user friendly it was, all in the context of adequacy and the limitations of a report to a senior official. The issue of having good management information was a key area of the NAO report “Improving Procurement” 2004. Any organisation public or private runs many risks if it does “not know its business”. More recently the state of procurement MI was lambasted by Sir Philip Green (October 2010) and was subject to much comment by Francis Maude the Cabinet Office Minister who called it “woeful” (Nov 2010). Stronger responses highlighted these areas in their conclusions. Within some reports from candidates, comment was made on public sector organisations requiring reliable information on procurement and contract spend and supplier performance. Reliable management information used strategically is an important tool that can identify inappropriate buying arrangements that are unlikely to secure value for money. In their reports candidates highlighted that if MI is ignored procurement directors could face the following risks (not exhaustive); • By not monitoring and benchmarking prices paid for key items and services it is

impossible to gauge VFM • They risk losing leverage (if they have any) and handing over power to the supplier

due to not reviewing the volume of procurement. • They will have no idea what constitutes “maverick spend” • Frameworks are unlikely to be utilised as volumes not known. • They will be open to fraud as monitoring will be poor • Strategy will be unreliable as it will not be backed up by reliable financial information • Often MI is used for control of particular functions and activities (e.g. volume

discounts) and this will prove difficult • Legal challenges could be made (e.g. EU aggregation rules) There were many areas of Information to choose, supplier data, spend analysis, GPC spend Treasury data, OGC data, sustainability targets, maverick spend analysis, Idea data, PASA and other framework data and many more. . Exam Question Summary Very few candidates attempted this question and they did so with varying degrees of success. Stronger responses set the report out in relation to the audience “A Procurement Director” who might not see this area as a priority therefore the style is most important. The weaker responses did not target their reports to a senior official and gave a very general response. Generally, weaker responses could have been better at ensuring that all of the required aspects of this question were covered - where the bullet points in the question gave a clear steer.

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Q4 Assess the various methods of alternative dispute resolution (ADR) and analyse the reasons for incorporating ADR clauses into standard public sector contracts.

(25 marks)

Analysis of the Question The question aimed to test the candidates’ ability on the incorporating dispute resolution clauses into standard public sector contracts and to test candidates’ knowledge of the reasons for a public sector procurement specialist to use ADR to resolve a conflict as opposed to litigation. A very popular question. Although candidates could have been better at ensuring that they addressed both elements of the question i.e. assess the methods and analyse the reasons for incorporation. Analysis of the Answer Many candidates started off this question with a brief overview of ADR and its elements (mediation, conciliation, negotiation, adjudication, arbitration, expert determination and more). However, the question asks for an analysis of the reasons for incorporating ADR clauses into public contracts. ADR offers several advantages (e.g. over litigation and this area could have been developed better) and is near enough mandatory in the public sector arena, because of these important benefits: • neutral • confidential • flexible • cost-effective • speedy Many candidates, as part of the analysis section of their response, looked at "going to Law" to settle disputes. This is often (they observed) an intimidating experience for the parties, expensive - especially in respect of legal costs and fees, time consuming with lengthy meetings between the parties and lawyers and in preparing evidence and discussing strategies, long winded and protracted as correspondence flows back and forth between the parties and their lawyers and in waiting for court hearings. Some candidates observed that lawyers and judges are perceived by many as being out of touch and as having little empathy for the concerns and the needs of clients and the people who appear before them in court, especially if that person appearing is the public sector!. Although this Senior Assessor makes no such conclusion marks were allowed for the broad observation! By contrast, to varying degrees, ADR processes are likely to be:- • Less formal and far more consumer friendly than attending court hearings. • Less expensive than going to law. • Less demanding on personal time in respect of preparation for the process. • Much quicker, enabling parties to get on with business sooner. • Conducted in private, protecting business confidentiality and reputation. • Less divisive and assists reconciliation between the parties. • Conducted by individuals with commercial and industrial experience. Candidates often concluded that it is hardly surprising therefore that many people and organisations choose to settle their disputes in private, bypassing the judicial system.

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Arbitration has been used in the United Kingdom and internationally. Adjudication is now a significant part of the dispute resolution process in the United Kingdom. Conciliation has played a significant role in employer / trade union dispute settlement for almost half a century. Many large employers today operate an internal grievance procedure which helps to keep disputes out of industrial tribunals and the courts. Incorporating ADR clauses into contracts allows the public sector procurer to resolve any disputes that occur at the earliest opportunity. Incorporating dispute resolution clauses into standard contracts gives an agreed route for resolving problems. This can reduce the need for the involvement of external advisors, helping to keep the time and costs spent on resolving the problem to a minimum. The contract clauses also give other parties to the contract confidence that an independent, neutral process is available to them and this is vitally important especially in large public sector contracts which can quickly attract adverse publicity and high costs to the taxpayer. Exam Question Summary This was a popular question which, in the main, was well answered. Candidates who firstly assessed the various methods then went on to analyse the reasons for incorporating the clause scored well. Weaker responses did not answer the question in two parts and the weakest merely listed the types of ADR without going on to analyse the reasons for incorporating them into public sector contracts. Some weaker responses also failed to give the “public sector” angle from the question where cost, speed of resolution and reputation are often key. Q5 Define the term ‘Corporate Social Responsibility’ (CSR), and

assess the implications of CSR for public sector procurement organisations and their governance.

(25 marks)

Analysis of the Question The question looked at testing candidate’s knowledge of CSR but key to the response were the implications for public sector organisations and their governance Analysis of the Answer Candidates had a wide range assessment area choose from starting with a definition something like the Governments definition; The business contribution to sustainable development goals. Essentially about how an organisation takes account of its economic social economic and environmental impacts in the way it operates. (Key words social, economic and environmental in any definition) and latitude was allowed even for definitions without a reference as long as the essence of the definition came through. Some candidates observed that in the private sector, the largest of companies are often only too aware of the ability they can have to squeeze their suppliers in negotiations, and in certain industries there are some disturbing trends in the passing of contractual risk. Against that, some of the most proactive work in organisations working with their supply chains to raise ethical or environmental standards has come from the private sector and has been adopted afterwards by the public sector. Many candidates developed the point that it has been from the public sector that some of the purchasing initiatives that have been most impressive have emerged, particularly the

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development of the NHS Sustainable Procurement Network, UK Sustainable Procurement Task Force, and the lead that Defra is taking within government purchasing. Higher marks were awarded for a well-rounded assessment of the implications of CSR, some of which are discussed above. Stronger answers included relevant supporting examples and the broad marking was split definition 5 marks, assessment of the implications 20 marks. Exam Question Summary A popular optional question. Candidates developed some of the above and many more areas with the emphasis on public sector CSR, some candidates mentioned Simms, effect on stakeholders, implications of late consideration of SP and CSR and legislation surrounding this area. The weaker answers gave very little evidence of wider reading in this topical area and gave a general outline only of CSR and did not tailor their response in terms of public sector procurement organisations and their governance and therefore missed the chance to gain more marks. Q6 (a) Describe communication processes by which feedback on

procurement performance in the public sector can be received from internal and external stakeholders.

(12 marks)

Analysis of the Question The question aimed to test application of knowledge of understanding of communication processes regarding feedback on performance Analysis of the Answer Many candidates started their answer with a definition of feedback along the lines of ‘A process in which a system regulates itself by monitoring its own output’. Feedback is used to improve a procurement system for instance through such areas as questionnaires, face to face, e-input, vendor rating, balanced scorecards, surveys, focus groups, customer complaints etc. Candidates noted that feedback is any response or information about the result of a procurement process. Feedback is used to refer to communicate information concerning actual performance, particularly in comparison with the stakeholder plan. The feedback process is a critical part of a management control system in order to test a given system or model to see if it is performing as planned. Timely feedback enables quick corrective action when things get out of hand. Candidates could choose from many processes to improve performance based around feedback from both internal and external stakeholders. Feedback in a management process occurs when information is fed into the process and the outputs are analysed, passed back and systems improved. The feedback process helps to build team and personal relationships as well as monitoring performance. Internal feedback helps to show the purchasing function as a pro- active in performance management. In a process it is vital at the planning stage of the procurement to ensure that provision is made for feedback, and that a process exists to handle the data and candidates could discuss any such process.

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The process could be targeted at: • Improving status of procurement in the PS organisation • Resolving conflict early • Improving employee performance • Better communication • Gaining information • Procedural or legal The process could improve performance, supply chain, and delivery services throughout the procurement lifecycle and the feedback must therefore take place regularly and be planned for. Other processes could include: • On line surveys • Individual project appraisals • Questionnaires • Interviews Candidates developed these and many more areas with the emphasis on public sector arrangements. Exam Question Summary This was not a popular option. Many candidates used examples to support their answer such as conferences, meet the buyer, contract review meetings, Q and A sessions, 1 to 1 performance targets etc and in the main this part of the question was well answered. However, the weaker responses failed to give examples of who the internal and external stakeholders were and how the various processes may differ accordingly. Again in the weaker responses little referral to specific public sector examples were given. Q6(b) Define the term ‘benchmarking’ and discuss the benefits that

could result from benchmarking the procurement function of a public sector organisation against organisations with similar procurement functions.

(13 Marks)

Analysis of the Question To test candidates knowledge of involving stakeholders in a benchmarking exercise comparing the procurement functions of different public sector organisations with the emphasis on benefits. Analysis of the Answer Candidates needed to start this question with a good definition of benchmarking and some realised that this is not a general ‘benchmarking’ question; rather, it is a question seeking a specific explanation of benefits of benchmarking exercises specifically aimed at procurement functions. Benchmarking can also be the process of comparing one's business processes and performance metrics to industry/public sector bests and/or best practices from other industries. Dimensions typically measured are quality, time, and cost. Improvements from learning mean doing things better, faster, and cheaper. Candidates could then go on to

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explain how to identify and approach procurement stakeholders, how to evaluate their levels of interest, their needs and their enthusiasm / commitment to the benchmarking exercise. Benefit wise, benchmarking allows an organisation to compare itself against the competition, the market, either nationally or internationally, or against similar businesses in terms of size or turnover. Candidates noted that once you discover areas of under performance against other procurement organisations, you can investigate why and set in motion improvement strategies. You are then in a position to benchmark your own current performance against past performance. You are also able to measure which improvement strategies are successful and which are not. Over time, benchmarking should demonstrate a steady increase in performance in the areas measured. A typical benchmarking exercise for a procurement function for instance would look at financial performance, customer satisfaction, supplier performance, employee satisfaction, employee performance, cost savings, and innovation on the business side and at operational issues such as health and safety, quality, programme, variations and budget performance in terms of contracts. Exam Question Summary This was not a popular option. A mixed quality response, with stronger responses explaining how they might capture and utilise the information gleaned from stakeholders and capitalise on it for current and future benchmarking exercises; and how they would maintain levels of interest and commitment from stakeholders during, and after, the exercise. The benefits gained were a little less clear in a number of the weaker responses. Also the weaker responses tended include all they knew about benchmarking without too much reference to the heart of the question, namely the procurement function of a public sector organisation and organisations with similar procurement functions. APPENDIX: Syllabus matrix indicating the learning objectives of the syllabus unit content that each question is testing

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