Environmental Scanning:  A primary indicator of strategic significance J. Gordon Murray PhD
Is it possible to have a primary indicator of  whether or not procurement is strategic?
Does it matter  whether or not procurement is strategic?
Scope of paper Research method Findings, conclusions &  implications Strategic  Procurement Environmental scanning Procure...
Environmental scanning <ul><li>Scanning for information about events and relationships in an [organisation’s] outside envi...
 
Environmental scanning literature <ul><li>Largely unexplored in terms of  </li></ul><ul><ul><ul><li>top managers </li></ul...
The recession <ul><li>5% of council ‘strategic/critical suppliers ‘at risk’ </li></ul><ul><li>Procurement’s response repre...
Strategic procurement <ul><li>Evidenced </li></ul><ul><ul><ul><li>When procurement professionals are  viewed as   key deci...
Strategic procurement <ul><li>A recognition that organisational success will be compromised without the contribution of pr...
The mere presence of a procurement strategy,  as opposed to how it is discussed & owned,  is questionable as a measure of ...
Procurement strategy literature <ul><li>Should be aligned and linked with other strategies </li></ul><ul><li>Assumes a lin...
Municipal Year Book research:  Chief Executives April 2010
Research question <ul><li>What has been the impact of the recession on councils procurement strategy? </li></ul>
Research approach <ul><li>Exploratory </li></ul><ul><li>26 homogenous councils, previously identified with strategic objec...
Findings <ul><li>57.9% had a written procurement strategy </li></ul><ul><li>21% linked with economic development strategy ...
Conclusions & discussion <ul><li>Recession could have been expected to have been a major cause of concern of councils </li...
Hypothesis <ul><li>A primary indicator of strategic procurement is that on-going environmental scanning will required by a...
Does it matter  whether or not procurement is strategic?
Does it matter if procurement is strategic? <ul><li>What matters is whether organisations are making optimum use of the re...
Implications <ul><li>Practitioners </li></ul><ul><ul><ul><li>Reflect on how environmental scanning is embedded in culture ...
Environmental scanning:  A primary indicator of strategic significance? www.slideshare.net/DrGordonMurray   [email_address...
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Environmental Scanning: An indicator of strategic significance

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  • Perhaps we have over complicated in the quest to justify our own importance?
  • These provide useful indicators – but perhaps an over-complication?
  • Environmental Scanning: An indicator of strategic significance

    1. 1. Environmental Scanning: A primary indicator of strategic significance J. Gordon Murray PhD
    2. 2. Is it possible to have a primary indicator of whether or not procurement is strategic?
    3. 3. Does it matter whether or not procurement is strategic?
    4. 4. Scope of paper Research method Findings, conclusions & implications Strategic Procurement Environmental scanning Procurement strategy Recession
    5. 5. Environmental scanning <ul><li>Scanning for information about events and relationships in an [organisation’s] outside environment, the knowledge of which would assist top management in its task of charting the [organisation’s] future course of action </li></ul><ul><li>(Aguilar, 1967) </li></ul>
    6. 7. Environmental scanning literature <ul><li>Largely unexplored in terms of </li></ul><ul><ul><ul><li>top managers </li></ul></ul></ul><ul><ul><ul><li>tools and processes </li></ul></ul></ul><ul><ul><ul><li>procurement strategy </li></ul></ul></ul><ul><li>Can be generalised as asking leading question </li></ul><ul><ul><ul><li>‘Do you carry out environmental scanning?’ </li></ul></ul></ul>
    7. 8. The recession <ul><li>5% of council ‘strategic/critical suppliers ‘at risk’ </li></ul><ul><li>Procurement’s response represents an interesting opportunity for research </li></ul>
    8. 9. Strategic procurement <ul><li>Evidenced </li></ul><ul><ul><ul><li>When procurement professionals are viewed as key decision makers in the organisation’s strategic planning process, </li></ul></ul></ul><ul><ul><ul><li>participating in the formulation and suggesting ways to enhance and support the organisation’s strategic success . </li></ul></ul></ul><ul><ul><ul><li>Through a procurement strategy , reviewed & adjusted to match changes in the organisation’s strategic plans on a regular basis . </li></ul></ul></ul><ul><ul><li>(Ellram & Carr, 1994; Carr & Smeltzer, 1997) </li></ul></ul>
    9. 10. Strategic procurement <ul><li>A recognition that organisational success will be compromised without the contribution of procurement. </li></ul>
    10. 11. The mere presence of a procurement strategy, as opposed to how it is discussed & owned, is questionable as a measure of strategic significance; particularly in a dynamic environment
    11. 12. Procurement strategy literature <ul><li>Should be aligned and linked with other strategies </li></ul><ul><li>Assumes a linear and sequential development process </li></ul><ul><li>Environmental scanning at the start, or </li></ul><ul><li>in terms of using the supply market as a source of innovation </li></ul>
    12. 13. Municipal Year Book research: Chief Executives April 2010
    13. 14. Research question <ul><li>What has been the impact of the recession on councils procurement strategy? </li></ul>
    14. 15. Research approach <ul><li>Exploratory </li></ul><ul><li>26 homogenous councils, previously identified with strategic objectives of local economic development </li></ul><ul><li>Personalised email survey </li></ul><ul><li>One year into recession </li></ul><ul><li>Response rate: 73% (19 of the 26 councils) </li></ul><ul><li>Only 46% of respondents procurement managers </li></ul>
    15. 16. Findings <ul><li>57.9% had a written procurement strategy </li></ul><ul><li>21% linked with economic development strategy </li></ul><ul><li>55.6% felt procurement strategy wasn’t owned by elected members </li></ul><ul><ul><ul><li>“ Little interest from members” (Dir of Corporate Services) </li></ul></ul></ul><ul><li>61% could not say procurement strategy reviewed in light of recession </li></ul><ul><ul><li>“ It was produced to provide a strategy, not to promote results” (Procurement Manager) </li></ul></ul>
    16. 17. Conclusions & discussion <ul><li>Recession could have been expected to have been a major cause of concern of councils </li></ul><ul><li>Even though evidence of procurement strategies in place </li></ul><ul><li>Response to recession? </li></ul><ul><ul><ul><li>Business as usual yet regular review of strategy an indicator of strategic procurement. </li></ul></ul></ul><ul><li>While we debate ‘is procurement strategic?’, the argument can be distilled into how important is procurement environmental scanning </li></ul>
    17. 18. Hypothesis <ul><li>A primary indicator of strategic procurement is that on-going environmental scanning will required by and reported to the organisation’s leadership. </li></ul>
    18. 19. Does it matter whether or not procurement is strategic?
    19. 20. Does it matter if procurement is strategic? <ul><li>What matters is whether organisations are making optimum use of the resources at their disposal. </li></ul><ul><li>This exploratory research suggests they aren’t. </li></ul>
    20. 21. Implications <ul><li>Practitioners </li></ul><ul><ul><ul><li>Reflect on how environmental scanning is embedded in culture as part of risk management and strategic response </li></ul></ul></ul><ul><li>Research </li></ul><ul><ul><ul><li>Test the findings of this exploratory research and the hypothesis </li></ul></ul></ul><ul><ul><ul><li>Why is procurement not being making its optimum contribution? </li></ul></ul></ul><ul><li>Educators </li></ul><ul><ul><ul><li>Consider perception that environmental scanning is ‘task and finish’ as opposed to on-going process. </li></ul></ul></ul><ul><ul><ul><li>Draw on the teaching example of the recession. </li></ul></ul></ul>
    21. 22. Environmental scanning: A primary indicator of strategic significance? www.slideshare.net/DrGordonMurray [email_address] www.twitter.com/DrGordie
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