Procurement as an institutional priority - Laura Watson

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Procurement as an institutional priority - Laura Watson

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  • Welcome to the workshop today. My name is John Lakin and, amongst other things, I am a member of Procurement UK which was set up to drive through the procurement related recommendation in the Diamond report. And I am accompanied by Laura Watson, who is the the Deputy Director of Procurement at Durham University.
    We are going to split the presentation into two parts: I will kick off and talk about some the findings of the research I undertook for the Efficiency Exchange into ‘Procurement as a strategic asset’; and then Laura will talk about her experience at Durham University and how they have managed to make great strides in establishing procurement as an institutional priority. We will then open up the workshop to questions and discussion, and give you a chance to share your experiences.
  • I carried out piece of research for the Efficiency Exchange in July 2013 into how procurement could be made a strategic asset in HE, which was one of the recommendations of the Diamond report.
    The background to this was that people often talk about the need to achieve this strategic status but rarely say how this can be done. I interviewed a cross section of people in Universities, purchasing consortia and CIPS and produced a number of of case studies of good practice from Durham, Edinburgh, London South Bank and UEL.
    The research indicated that there were three main ways in which procurement managers had increased their strategic influence: by raising the profile of procurement; by endeavouring to work at the top table of the institution; and by focusing on delivering the vision of the senior leadership. Let’s look at each of these in a bit more detail.
  • Raising the profile of procurement involves:
    Repositioning procurement and moving it away from being seen as just a transactional purchasing service and a ‘policeman’ to being seen as an ‘enabler’ and ‘influencer’.
    Upskilling procurement staff by investing in both soft and hard skills (and e-procurement) to provide a more professional service. Quality is more important than the numbers of staff
    Planning for the long term and investing in changes that may take many years to achieve (e.g. sustainibility), as well as anticipating key events (e.g mergers) which can raise new opportunities for procurement
    Being proactive and ‘stepping up to the plate’ to address business problems that are wider than procurement
    Seeking external validation to highlight procurement excellence within an institution – e.g. through THELMAs, procurement maturity assessments, Green Gown awards
  • Working at the top table can be difficult as most heads of procurement do not sit on the senior management team. However, it has been achieved by:
    1. Engaging and influencing leaders, usually through the Finance Director but also through strong relationships with Directors of Estate, Directors of IT and Chief Operating Officers. Some heads of procurement have also opened up a direct reporting line to the VC for particular projects or issues.
    Working with governors, through working closely with the audit staff who report to the audit committee on vfm issue. Some heads of procurement have also reported their PMA results to governors,
    Taking leadership positions, through volunteering to lead on particular issues or time-limited projects, or to share leadership with others (e.g. academic leaders)
    Being inside the planning and budgeting process, to ensure that procurement can input into all major plans, and has a complementary sourcing plan to the corporate plan
  • Delivering the vision of the VC is crucial to making procurement meaningful to HE leaders. This can involve:
    Focusing on procurement projects that impact on the outcomes of the university – e.g. student recruitment, progression, the student experience and employability.
    Working on breakthrough issues that the VC has identified – this might include sustainability, social responsibility, local economic development, engaging with students and local partners
    Redefining the offer, such that procurement is recognised as being about more than the purchasing of goods and cash savings, and can encompass demand management, income generation, delivering business solutions and the achievement of ethical and social goals.
    And now Laura will describe how some of this things have been achieved at Durham.
  • Procurement as an institutional priority - Laura Watson

    1. 1. Procurement as an institutional priority Workshop presentation by: John Lakin, Procurement UK Laura Watson, Deputy Director of Procurement, Durham University 27th March 2014
    2. 2. ∂ Procurement as a strategic asset Research shows that strategic influence results from • Raising the profile of procurement • Working at the top table • Delivering the vision of the institution [See research and case studies from Durham University, University of Edinburgh, London South Bank University and University of East London at http://www.efficiencyexchange.ac.uk/2842/procurement-as-a-strategic-asset-report-for-effi ]
    3. 3. ∂ Raising the profile
    4. 4. ∂ Working at the top table
    5. 5. ∂ Delivering the vision
    6. 6. ∂ Strategic procurement at Durham University – a case study • What is procurement? • What has worked well? • What remains to be done? • What has proved difficult? • Capability assessment • Training • Questions
    7. 7. ∂ Procurement is…. … a cumbersome process … slow … lengthy … not necessary … bureaucratic … a policing function … an enabler … necessary to ensure that fair treatment is provided to suppliers … necessary to ensure compliance with legislation … a supportive function … necessary to address environmental and social issues … there to award to the most economically advantageous tender … able to address whole life costing OR The customer view Our customers need to be re- educated … this takes time Procurement should be service orientated Procurement’s view
    8. 8. ∂ What has worked well? Strategic Sourcing Strategy To ensure better planning of tenders, using a category management approach, to facilitate improved collaboration Collaboration With key customers and stakeholders – to understand their business needs and how procurement can support those needs to facilitate delivery of their requirements • CIS with the New World Programme • Catering to improve the social and environmental aspects of food procurement – won a combined Green Gown award in 2011 Working with other Universities – through NEUPC and through a regional group that meets to discuss collaborative opportunities
    9. 9. ∂ What remains to be done? eProcurement •Conclude the roll out of Purchase to Pay to all departments across the University (95% completed) Category Management •Embed the category structure •Engage with key stakeholders to inform them of the purpose and benefits of category management Marketing Plan •Need to market the procurement service to explain the benefits of what we can do and how this will help
    10. 10. ∂ What proved difficult? eProcurement Implementation of eProcurement has taken longer than expected due to: • Ensuring the system was fully fit for purpose and would deliver what the departments and colleges required – as we have purchased an off the shelf system, there has been significant work to amend processes rather than system • Engaging with Academics Stakeholder Engagement Trying to remove the myth that procurement are blockers and will slow the process down, but instead provide strategic advice and guidance that will help
    11. 11. ∂ Procurement Capability Assessment Sections Status 1 Procurement leadership and governance Superior 2 Procurement strategy and objectives Improved 3 Defining the supply need Superior 4 Procurement Commodity / Project Strategies & Collaborative Procurement Superior 5 Contract and Supplier Management Superior 6 Key Purchasing Processes and Systems Improved 7 People Superior 8 Performance Measurement Improved Overall Procurement Status for the Organisation Superior The first English University to attain a superior status on the first assessment
    12. 12. ∂ Training
    13. 13. ∂ Any questions? Would this model work for your organisation? What could your organisation do differently to facilitate strategic procurement? What is the most difficult issue that you have to face?

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