Getting your procurement right
Updated: Mar 3
If you’ve ever been involved in the public sector procurement process, either as part of a government agency or as a supplier, you know it can be a time consuming and complex process. There are so many things to consider, so much paperwork to fill in, and so many rules and regulations to follow. But a successful procurement process can also bring great rewards so it’s worth doing it properly or working with an experienced procurement partner to help you through the process.
In basic terms, procurement is all about sourcing, selecting and purchasing goods and services. It shouldn't be that hard, right? But procurement decisions often have a big impact on the day-to-day operations and/or the long term strategic direction of an organisation. Hence the need to get the decision right.
Good Procurement Practice
The five principles of Government Procurement (see www.procurement.govt.nz for more info) outline what is required for good procurement practice. They are:
● Plan and manage for great results;
● Be fair to all suppliers;
● Get the right supplier;
● Get the best deal for everyone;
● Play by the rules.
A good procurement partner can help shape your thinking before, during, and after the process. This includes helping you find the right opportunities, doing the prep work and being vigorous during the tendering process to increase your chances of delivering lasting value.
A procurement process for a small amount of work and a minimal budget is usually fairly straightforward. But any procurement project related to goods or services that will have a long-term, strategic impact on the business requires a significant amount of time, thinking, and resources to deliver. A procurement partner who has been through the process before can help you plan and manage the project.
We typically partner with agencies investing in new IT systems. Some of the projects we’ve worked on include a new telecommunications system, an investments and contracts management system and an enterprise content management system.
From the outside looking in
Often the need for a new service or tool is identified at the operational level but when the procurement process gets underway, some project teams overlook consultation with end users about their requirements.
That’s where having an outside observer to work through the process with your team can be so helpful. We can manage your whole procurement process from A to Z or if you have in-house expertise, we can work with them. It doesn't have to be a high cost engagement but having a procurement specialist review your process can save you pouring money into the wrong solution and having to start all over again.
Getting the basics right A successful procurement process is built on the basics of understanding your project drivers and defining your requirements. Your goal is a Request for Proposal (RFP) process that delivers relevant products, services and providers. A lot of organisations get to the RFP stage before they realise that they may be requesting the wrong product or service. Before you approach the market you need to be clear about what the business needs are and how you're going to evaluate them.
Procurement is too complex a process to take lightly. There are a lot of consequences from a poorly executed plan. The worst case scenario is the business pays a lot of money for a solution that isn't fit for purpose. Is the product you purchase worth anything if it doesn't do what it's meant to do?
At the evaluation stage you need to weigh up the different solutions and vendors, what they include in their service offering, pricing models and support models among other things. That becomes just as important as the tool itself. We’ve developed a robust framework to evaluate and weigh the different requirements.
Rules and Regulations
According to the www.procurement.govt.nz website, the Government Procurement Charter and Government Procurement Rules rules are designed to “to support good market engagement, which leads to better outcomes for agencies, suppliers and New Zealand taxpayers.” The amount of documentation, deadlines, rules and regulations in the procurement process can be overwhelming. The other thing to consider is the rules frequently change or are updated and the timelines can be challenging. Just like building a house, the procurement process always takes longer than people think.
Many organisations view procurement as a big scary process but it doesn't have to be. Let us do it for you or with you. The benefits of working with a procurement specialist include:
● quality assurance;
● cost savings;
● customer impact;
● information clarity;
● and visibility.
We know the steps to take, the pitfalls to avoid and the hacks to make the process much easier and pain free.