The Global Procurement Network
National Hospital Procurement Conference:
‘Driving Change: Successful Strategies to Build I...
The Global Procurement Network
The Global Procurement Network
ArcBlue Government Procurement Development Activity
across Australia/NZ
VIC State Governmen...
The Global Procurement Network
© PMMS Consulting Group
ArcBlue Services
The Global Procurement Network
Presentation
• Driving Change: Successful Strategies to Build Influence and
Lead Organisati...
The Global Procurement Network
Why Change?
The Global Procurement Network
What is Changing?
• Pressure on Government to do more with less, to collaborate,
and to inn...
The Global Procurement Network
o Reduce costs – drive savings
o Internal productivity - streamlining
o Reduce risk
o Build...
The Global Procurement Network
Challenges
• Increasing pressure on procurement teams
• Resources not matching growing expe...
The Global Procurement Network
Becoming Strategic in Approach
• Moving from: Reactive...through....Proactive….to....Determ...
The Global Procurement Network
Designing Effective Change
Programs
The Global Procurement Network
Procurement Reform Programs
• Local Government Procurement Roadmap Program
– Partnership wi...
The Global Procurement Network
• Professional
procurement
• Influencing the
business
• Transactional
• Order placement
Lev...
The Global Procurement Network
Clear Structures
The Global Procurement Network
Approaches to Assessment
The Global Procurement Network
Personal Assessment - Process Overview
Procurement Competence Questionnaire
* 13 Competenci...
The Global Procurement Network
• 13 common procurement technical competencies
– Governance, Leadership and Functional Desi...
The Global Procurement Network
0.00
1.00
2.00
3.00
4.00
5.00
Procurement Leadership, Governance and
Financial Design
Suppl...
The Global Procurement Network
Features of successful integrated teams
• Leadership with:
– External focus – gaining organ...
The Global Procurement Network
Organisational Assessment
Strategic
Procurement
External Focus Internal Focus
The Global Procurement Network
NSW Accreditation Model
•Procurement Management Plan
•Procurement Strategies
•Performance a...
The Global Procurement Network
Successful change programs
• Programs based on sound integrated multi-dimensional models
– ...
The Global Procurement Network
Understanding the change process
The Global Procurement Network
Influence
The Global Procurement Network
Understanding stakeholder groups
Chief Engineer
Corporate Relations
SER
Finance
HR
Operatio...
The Global Procurement Network
Formal processes to assess stakeholders
- e.g. Power Interest Grid
The Global Procurement Network
Category Management and the value curve of procurement
Value
Need Strategy
Market
engagemen...
The Global Procurement Network
Traditional Sourcing
• Focus on Strategy, Market Engagement and Negotiate Contract
• Time o...
The Global Procurement Network
Category Management
• More in-depth long-term needs analysis as well as manage
contract
• O...
The Global Procurement Network
New Approaches to Achieving TBL Objectives
• All levels of Government & (Private Sector) ha...
The Global Procurement Network
Strategic Procurement
• Procurement is how we spend most of our money
– E.g. NSW – State Go...
The Global Procurement Network
What is social procurement?
Social procurement is a strategic approach to meeting social an...
The Global Procurement Network
Social Procurement and Economic Development –
Areas of Focus
• Often focussed in areas of P...
The Global Procurement Network
Growing number of examples of social procurement
• Private and public sector case studies
–...
The Global Procurement Network
Broader Benefits of a structured approach to
TBL Procurement
• Integration - Achieving TBL ...
The Global Procurement Network
Support available
www.socialprocurementaustralasia.com
• Case Studies/ clauses/ research
• ...
The Global Procurement Network
Questions
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Chris Newman - ArcBlue Consulting; Social Procurement Australasia - Driving Change: Successful Strategies to Build Influence and Lead Organisational Change in Procurement Capability and Performance

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Chris Newman delivered the presentation at the 2014 National Hospital Procurement Conference.

The 2014 National Hospital Procurement Conference explored a number of cost-saving measures in the hospital procurement ecosystem. Highlights included sessions on improving efficiency, savings and patient safety within Australian Hospitals.

For more information about the event, please visit: http://bit.ly/hosprocurement14

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Chris Newman - ArcBlue Consulting; Social Procurement Australasia - Driving Change: Successful Strategies to Build Influence and Lead Organisational Change in Procurement Capability and Performance

  1. 1. The Global Procurement Network National Hospital Procurement Conference: ‘Driving Change: Successful Strategies to Build Influence and Lead Organisational Change in Procurement Capability and Performance’ Chris Newman Director ArcBlue Consulting Chris.newman@arcblue.com.au www.arcblue.com.au 0412 318 384
  2. 2. The Global Procurement Network
  3. 3. The Global Procurement Network ArcBlue Government Procurement Development Activity across Australia/NZ VIC State Government • CIPSA Certification • Training and Development Programs VIC Local Government • Procurement Roadmap development • Contract Management Guidelines and Training State Government Local Government SA Local Government • Roadmap Program • Regional Opportunity Analysis Procurement Capability Assessment / Development Federal Government • Contract Management Development • Regional Procurement Development Programs Federal Government Gold Coast Council – Capability Development and Contract Management WA Local Government • Procurement Training Program NZ Government • Departmental reviews QLD State Government • Contract Management Capability Assessment & Development Program NSW State Government • Accreditation Program – preparation and assessment • Sourcing Project Delivery NSW Local Government • Roadmap Program with LGP • Procurement Leadership Program • Social Procurement Development • Sydney Metro Councils Joint Procurement Development Program
  4. 4. The Global Procurement Network © PMMS Consulting Group ArcBlue Services
  5. 5. The Global Procurement Network Presentation • Driving Change: Successful Strategies to Build Influence and Lead Organisational Change in Procurement Capability and Performance – Why Change? – Designing effective change programs – Features of successful integrated teams; – Influencing stakeholders » Stakeholder management » Category management » Social procurement
  6. 6. The Global Procurement Network Why Change?
  7. 7. The Global Procurement Network What is Changing? • Pressure on Government to do more with less, to collaborate, and to innovate • Strategic objectives increasingly being reflected in procurement practice • Growing understanding of the role and power of Strategic Procurement • Developing personal, organisational, and sector procurement capability • Structured Programs to drive change • Case Studies, evidence and guidance – a growing body of knowledge
  8. 8. The Global Procurement Network o Reduce costs – drive savings o Internal productivity - streamlining o Reduce risk o Build confidence o Demonstrate professionalism o Political Objectives o Project Delivery o Reputation o TBL Objectives o Capital works and budget planning o Project management and delivery o Collaboration – organisational/ sector An increasing focus on procurement The benefits
  9. 9. The Global Procurement Network Challenges • Increasing pressure on procurement teams • Resources not matching growing expectations • Lack of influence at senior organizational levels • Poor planning creating pressure on Procurement Teams • Reliance on Government decision making process that can be slow/ inconsistent/ contradictory • Balancing working ‘on’ and ‘in’ the business • Conflicting priorities – ‘Get it done’ vs. Probity – Savings vs. Quality – Aggregated vs. local/ SMEs • Lack of influence of the whole procurement lifecycle
  10. 10. The Global Procurement Network Becoming Strategic in Approach • Moving from: Reactive...through....Proactive….to....Deterministic • Key Features: – Cross business team-based collaborative approach – Explicit Department involvement; commitment by all stakeholders – Inclusive workshop approach that encourages ownership, commitment and knowledge transfer – Deep understanding of the category, supply market, suppliers, and business needs – Using market knowledge and innovation as a source of leverage – Striving to have a deterministic influence on the supply markets – Measurement of short, medium and long term goals
  11. 11. The Global Procurement Network Designing Effective Change Programs
  12. 12. The Global Procurement Network Procurement Reform Programs • Local Government Procurement Roadmap Program – Partnership with Local Government Peak Bodies and State Governments – 175 Councils across 3 States have participated in the last 4 years • New Zealand MBIE Procurement Review Program – Procurement Effectiveness Review Major Agencies – Procurement Health Check Minor Agencies – Online Procurement Capability ReviewSmaller Public bodies • NSW Government Procurement Accreditation Program – Accreditation development support/ assessment: NSW Health, Justice, Police, Education and Communities, Sydney Trains, Rural Fire, SHFA etc. – Gap Analysis, Gap Closure, Mentoring, Accreditation • CIPS Corporate Certification Program – International Benchmark - Standard and Advanced
  13. 13. The Global Procurement Network • Professional procurement • Influencing the business • Transactional • Order placement Level 1 Emergent Level 2 Basic Level 3 Developing Centre of Excellence across all expenditure Procurement foundations in place with improved controls Some functional and category strategies in place Focus on meeting legislative and compliance requirements Largely unco-ordinated procurement with gaps in compliance Level 4 Advanced Levels of procurement maturity
  14. 14. The Global Procurement Network Clear Structures
  15. 15. The Global Procurement Network Approaches to Assessment
  16. 16. The Global Procurement Network Personal Assessment - Process Overview Procurement Competence Questionnaire * 13 Competencies * 156 Multiple-Choice questions * 100% objective * Completed on-line * Supported through semi- structured interviews Gap Analysis and Benchmarking * Gap Analysis - Score against benchmarks - Score versus peers * Benchmarking - By industry sector - By role - By geographic region - By experience Reporting * Learning footprint - Development priorities - Recommended interventions * Group & Individual reporting
  17. 17. The Global Procurement Network • 13 common procurement technical competencies – Governance, Leadership and Functional Design – Supply base and Category Analysis – Risk Management – Category Strategy and Go-to-Market processes – Supplier Appraisal, Evaluation and Audit – Contracting and Legal Aspects – Finance and Purchase Price Cost Analysis – Negotiation and Influencing – Supplier Performance, Contract and Relationship Management – Transactional procurement and Procure-to-Pay processes – E-Procurement and Technology – Project Management and Change – Sustainability & CSR PCQ - Assessed Procurement Competencies
  18. 18. The Global Procurement Network 0.00 1.00 2.00 3.00 4.00 5.00 Procurement Leadership, Governance and Financial Design Supply Base and Category Analysis Risk Management Category Strategy and Supply Market Engagement Supplier Appraisal, Evaluation and Audit Contract Selection & Legal Aspects Pricing, Cost and Financial AnalysisNegotiation and Influencing Supplier Performance, Relationship and Contract Management Transactional Procurement e-Procurement and Technology Project Management and Change Sustainability and Corporate Social Responsibility Group Average (All Roles) Average (Transactional Role) Group Min (Transactional Role) Group Max (Transactional Role) Graphical Results
  19. 19. The Global Procurement Network Features of successful integrated teams • Leadership with: – External focus – gaining organisational influence and engaging stakeholders – Internal focus – clear delegation and program oversight • Organisational Governance and on-going buy-in • Clear roles and responsibilities – Organisational – e.g. centre-led model with documented, well-understood roles and responsibilities for Procurement, Business Units, others – Team – clear, consistent and communicated roles and responsibilities • Effective structures • A clear Strategy for Development and Continuous Improvement • A well established and managed ‘infrastructure’ – Meeting and approval structures – Documentation and systems – A Program Management Model • The right culture – Customer Service vs. Compliance • On-going training and development programs
  20. 20. The Global Procurement Network Organisational Assessment Strategic Procurement External Focus Internal Focus
  21. 21. The Global Procurement Network NSW Accreditation Model •Procurement Management Plan •Procurement Strategies •Performance and tracking Strategy •Risk management processes •Polices and procedures •Financial delegations Governance, Control & Policy •Business case •Specifications •Tendering and negotiations Procurement Process •Use of tools •Training in tools Procurement Tools & Systems •Reporting •KPI’s •Procurement data Information Management & Reporting •Level of resourcing •Organisational design Organisation & Capability Weightings 15% 10% 25% 15% 10% 25%
  22. 22. The Global Procurement Network Successful change programs • Programs based on sound integrated multi-dimensional models – People, organisation, process, projects etc. – Measurable and repeatable • Ability to benchmark against peers/ ‘good practice’ • Value of sector-wide implementation programs • Engaging the right stakeholders – Senior Leadership, Business Owners – The process itself helps deliver the change • Need for real incentives to participate and to change • Need a ‘start’ and ‘end’ date for the intensive period • Establish on-going review and continuous improvement models built in • models • Involve your team through the whole program • Be willing to ‘take’ the opportunity • Provide positive leadership and adequate resourcing
  23. 23. The Global Procurement Network Understanding the change process
  24. 24. The Global Procurement Network Influence
  25. 25. The Global Procurement Network Understanding stakeholder groups Chief Engineer Corporate Relations SER Finance HR Operations Projects Customer Service Network Asset Management Infrastructure Delivery Rolling Stock Operational Rail Safety Network Control Network Planning & Development Train Services Delivery Project Controls RRL Delivery Major Renewals SQ&E Finance Learning & Development Business Development ICT
  26. 26. The Global Procurement Network Formal processes to assess stakeholders - e.g. Power Interest Grid
  27. 27. The Global Procurement Network Category Management and the value curve of procurement Value Need Strategy Market engagement Negotiate contract Manage contract Stages of Procurement Time Spent Category Management – a whole of life approach
  28. 28. The Global Procurement Network Traditional Sourcing • Focus on Strategy, Market Engagement and Negotiate Contract • Time or event based for specific product or service • Requirements immediate to near term, individual • Commodity cost down focus • Step by step transactional process • Culminates in new or revised contract for specific requirements
  29. 29. The Global Procurement Network Category Management • More in-depth long-term needs analysis as well as manage contract • Ongoing definition, analysis and review across category • Requirements medium to longer term, across business • Strong ‘total cost of ownership’ focus (internal and external costs) • Collaborative ongoing review process • Adaptable to (guaranteed) change in needs or conditions
  30. 30. The Global Procurement Network New Approaches to Achieving TBL Objectives • All levels of Government & (Private Sector) have social, economic, environmental and Leadership/ Governance objectives (TBL) – Traditional ‘silo’ approach to achieving objectives • Innovation – Complex issues require new models – New ways to address complex, multi-causal and long-standing community, economic and environmental issues – Integrating TBL objectives into procurement, service design and employment • For Government these may include: – Breaking cycles of long-term disadvantage – Providing genuine pathways to training and sustainable employment – Achieving ‘Zero Waste’ and carbon footprint reduction targets – Driving local and regional economic development outcomes
  31. 31. The Global Procurement Network Strategic Procurement • Procurement is how we spend most of our money – E.g. NSW – State Gov’t $25bn and Local Gov’t $7bn each year – Private development – housing and infrastructure – Major Projects – Service delivery • Procurement represents significant market power to: – Deliver high quality, value for money goods, services and works; – Drive sustainable cost savings; – Influence, enable and stimulate the private and social enterprise markets to deliver social, economic and sustainability outcomes;
  32. 32. The Global Procurement Network What is social procurement? Social procurement is a strategic approach to meeting social and economic development objectives through procurement Social procurement involves using procurement processes and purchasing power to generate positive social and economic development outcomes in addition to the delivery of efficient goods, services and works
  33. 33. The Global Procurement Network Social Procurement and Economic Development – Areas of Focus • Often focussed in areas of Place-based disadvantage • Providing employment and employment pathway opportunities to disadvantaged communities – Indigenous, long-term unemployed, disability, older workers, minorities • Strengthening and creating opportunities for local business • Maximising local and regional benefits from investment in the region (private/ Government) • Diversifying the supply market • Engagement of SMEs and social benefit suppliers
  34. 34. The Global Procurement Network Growing number of examples of social procurement • Private and public sector case studies – Construction - North-west rail/ Nowra Jail – Local Services – Councils/ Telstra • New Health Sector examples - e.g. St. Vincent’s Health Australia (Vic, NSW, Qld) – Café spaces to be operated by social enterprises – Toowoomba – Grounds maintenance provided by disabled personnel – Exploring new opportunities including laundry, ward services, waste, landscaping and maintenance – Working with organisations such as Toowoomba Clubhouse – a social enterprise providing employment to people with metal illnesses – Specific link to St. Vincent’s priorities working with indigenous, refugees and homeless
  35. 35. The Global Procurement Network Broader Benefits of a structured approach to TBL Procurement • Integration - Achieving TBL goals, and addressing community issues as part of the way we do business • Innovation – Encouraging innovation and the development of new forms of partnership and service delivery models. • Team and Organisational Identity and Reputation – Building and broadening the role of procurement and organisational identity. • Competitive Advantage –Directly demonstrating the capacity to add social, environmental and economic value in delivering on Government funded projects • Planning Ahead - Rather than responding in an ad hoc way as community and Government expectations grow, TBL procurement can be introduced through a managed, systemic and achievable program.
  36. 36. The Global Procurement Network Support available www.socialprocurementaustralasia.com • Case Studies/ clauses/ research • Social Procurement in NSW – Public Sector Guide www.arcblue.com.au • Procurement Capability Assessment/ Development • Category Management • Training • Sourcing project support and delivery • Spend and opportunity analysis • Project Support
  37. 37. The Global Procurement Network Questions

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