Just before the Procurement Act came into force in February, I surveyed procurement teams in councils and housing associations across the country, asking how they were feeling about the biggest shake-up of procurement legislation for 30 years.
Alongside readiness for reform, I wanted to gauge the size of procurement functions, staffing levels and how the function was perceived. The results make for interesting and, at times, surprising reading.
Despite a growth in administrative requirements from the act, resourcing rates haven’t kept pace. Procurement teams feel understaffed and undertrained, with mounting pressure to deliver greater savings.
Although many organisations told me that procurement’s value in the sector has increased, they also confirmed that the old compliance-focused image is, unfortunately, still there.
In the months since the act’s go-live date, I’ve been reflecting on practical ways to tackle these issues.
Test processes
The survey results tell us that only half of respondents – 52% – planned to procure under the new regime within six months of it going live. This is partly because the new open award procedure is similar to the previous one, but it also signals apprehension. Smaller organisations with limited resources may feel unsure about procuring under new routes.
Overcome this by trialling your systems. Choose a low-risk contract and procure it under new regulations. Can you easily get payment data from finance teams to publish 30-day payment compliance details? Do you have systems in place so that contract managers can submit supplier performance metrics on time?
Make a case for more resources
The Procurement Act requires the publication of extra notices and data, and many procurement professionals were hoping for a boost in resources. But only 21% say their procurement team has increased in the past year; 47% feel inadequately resourced; and 42% feel insufficiently trained on the new regulations.
Unsurprisingly, the survey results show that the bigger a council or housing organisation, the bigger their procurement team, and the more likely they are to have a centralised function.
Use this to build the case for extra resourcing. Our figures show that the typical procurement team for organisations with fewer than 10,000 homes is one to two people. For organisations with 10,000-15,000 homes, it’s two to three people. And for larger providers, team sizes vary depending on levels of procurement and contract management centralisation.
Underline the full scope and potential of the function to show the return on investment. It is the relationship-building, risk management, market-shaping and supply chain management you do that will convince senior leaders.
Drive operational efficiencies
With budgets already stretched, extra heads aren’t always the answer. Teams can save time and effort by automating processes and streamlining day-to-day operations. From electronic procurement and procure-to-pay processes, to creating standard templates or using artificial intelligence to draft notices, technology can reduce the administrative burden, freeing people to deliver strategic value.
Challenge any image problem
Although 82% of respondents told us that procurement’s importance in the sector has increased, they still report being viewed as a transactional, compliance-driven department, indicating a reputation for regulation and administration, not strategic value or innovation.
Unless we demonstrate the commercial value we can add, our profession will never directly affect business plans. We must emphasise market knowledge, strategic sourcing, price-driving and negotiation capability at every opportunity.
Against today’s turbulent economic backdrop, procurement’s versatility and commercial nous will be more important than ever.
Find PfH’s Member Insight Report at bit.ly/PfHMemberInsight
