This document outlines the steps in defining a business need and developing a procurement strategy. The key steps are: 1. Define the business need by capturing requirements, obtaining stakeholder buy-in, and estimating budgets. 2. Develop a procurement strategy through activities like a team kick-off meeting, market research to identify potential solutions, defining success criteria, and agreeing on a procurement approach. 3. Evaluate and select suppliers by developing a pre-qualification strategy to filter suppliers, scoring and notifying suppliers, launching a tender, and further assessing and filtering suppliers to create a shortlist.

1. 2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
1.
Define
Business
Need
1.
Define
Business
Need
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

2. Objectives
What you need before you start
Deliverables
1. Capture the business requirements
2. Obtain full stakeholder buy in to any resulting plans and
timelines
1. Key Contact Details
2. Business Requirements
1. Formal Business Requirement statement
2. Confirmed buy-in.
3. Budget Estimate
1.11.1
1.21.2
1.31.3
Identify Business
Requirement
Knowledge
Capture
Stakeholder
Consultation
1.41.4
Risk
Assessment
1.51.5
Scope and
Communication
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

3. 1.11.1
Identify Business
Requirement
Knowledge
Capture
Stakeholder
Consultation
Risk
Assessment
1.51.5 Scope and
Communication
1.1 Identify Business Requirement1.1 Identify Business Requirement
Ensure that it is the business requirement that is captured and not the anticipated solution toEnsure that it is the business requirement that is captured and not the anticipated solution to
the requirement. e.g. When the business requirement is expressed like this: “We need athe requirement. e.g. When the business requirement is expressed like this: “We need a
software package to deliver presentations on the intranet”, the business requirement is to besoftware package to deliver presentations on the intranet”, the business requirement is to be
able to deliver presentations on the intranet. The software package is a potential solution. Itable to deliver presentations on the intranet. The software package is a potential solution. It
may be that outsourcing the work is more cost effective than buying software, support andmay be that outsourcing the work is more cost effective than buying software, support and
training to use it.training to use it.
Challenge the business in terms of how requirement might best be delivered. Again, make sureChallenge the business in terms of how requirement might best be delivered. Again, make sure
you and your stakeholders know the difference between the requirement and the solution.you and your stakeholders know the difference between the requirement and the solution.
Once you establish the difference it is more straight forward to challenge the preconceivedOnce you establish the difference it is more straight forward to challenge the preconceived
ideas about how best to deliver a solution.ideas about how best to deliver a solution.
Timescale – be realistic and recognise that timing may be a critical component of the businessTimescale – be realistic and recognise that timing may be a critical component of the business
requirement. If the solution is needed yesterday, a quick solution might be the most pragmaticrequirement. If the solution is needed yesterday, a quick solution might be the most pragmatic
– even if it’s not the most cost effective. But beware – the need for speed is often over– even if it’s not the most cost effective. But beware – the need for speed is often over
emphasised. Ensure that all stakeholders are aware of the risk to cost and quality of solution byemphasised. Ensure that all stakeholders are aware of the risk to cost and quality of solution by
prioritising speed of delivery.prioritising speed of delivery.
Make sure there is not already a solution in place. Another part of the business may haveMake sure there is not already a solution in place. Another part of the business may have
already dealt with this business problem.already dealt with this business problem.
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

4. Identify Business
Requirement
Knowledge
Capture
Stakeholder
Consultation
Risk
Assessment
Scope and
Communication
1.2 Knowledge Capture1.2 Knowledge Capture
Perform a thorough fact-find. Understand the current situation and the problem thatPerform a thorough fact-find. Understand the current situation and the problem that
requires a solution. Get beneath the skin of the issues and understand the widerrequires a solution. Get beneath the skin of the issues and understand the wider
implications. Without gathering solutions, gather a set of needs (SPIN – Solution, Problem,implications. Without gathering solutions, gather a set of needs (SPIN – Solution, Problem,
Implication, Need)Implication, Need)
Identify any initial risks to the procurement process. Examples of common risks to aIdentify any initial risks to the procurement process. Examples of common risks to a
procurement project include: falling foul of IT security policy; failure to get budget sign off;procurement project include: falling foul of IT security policy; failure to get budget sign off;
failure to meet implementation deadline; failure to get project sponsorship.failure to meet implementation deadline; failure to get project sponsorship.
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract
1.21.2
1.31.3
1.41.4
1.51.5
1.11.1

5. Identify Business
Requirement
Knowledge
Capture
Stakeholder
Consultation
Risk
Assessment
Scope and
Communication
1.3 Stakeholder Consultation1.3 Stakeholder Consultation
Identify all of the relevant stakeholders who have an interest in the business requirement. ThisIdentify all of the relevant stakeholders who have an interest in the business requirement. This
will include budget holders as well as others on whom a solution is dependent e.g. IT securitywill include budget holders as well as others on whom a solution is dependent e.g. IT security
and ensure that input from all correct areas is receivedand ensure that input from all correct areas is received
Identify what roles and responsibilities each stakeholder has and ensure that their agreement isIdentify what roles and responsibilities each stakeholder has and ensure that their agreement is
obtained and that commitment is gained from all those stakeholders to drive the projectobtained and that commitment is gained from all those stakeholders to drive the project
towards to a successful result.towards to a successful result.
Key stakeholders to identify are: Sponsor (person who can ensure that the requirement isKey stakeholders to identify are: Sponsor (person who can ensure that the requirement is
agreed, resources are made available and a solution approved), procurement team (the peopleagreed, resources are made available and a solution approved), procurement team (the people
who will act on a day to day basis to drive the project forward) and a budget holder (the personwho will act on a day to day basis to drive the project forward) and a budget holder (the person
who can make appropriate funds available).who can make appropriate funds available).
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract
1.31.3
1.51.5
1.11.1

6. Identify Business
Requirement
Knowledge
Capture
Stakeholder
Consultation
Risk
Assessment
Scope and
Communication
1.4 Risk Assessment1.4 Risk Assessment
Assess the initial risk (high level), anything that may get in the way of aAssess the initial risk (high level), anything that may get in the way of a
successful conclusion to the procurement activitysuccessful conclusion to the procurement activity
Pay particular attention to any health & safety issues associated with thePay particular attention to any health & safety issues associated with the
procurement activity or the solution.procurement activity or the solution.
Also pay particular attention to environmental or sustainability issues asAlso pay particular attention to environmental or sustainability issues as
well as ethical and international sourcing issueswell as ethical and international sourcing issues
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract
1.41.4
1.51.5
1.11.1

7. Identify Business
Requirement
Knowledge
Capture
Stakeholder
Consultation
Risk
Assessment
Scope and
Communication
1.5 Scope and Communication1.5 Scope and Communication
Confirm the scope of the procurement exercise. In which businesses/regionsConfirm the scope of the procurement exercise. In which businesses/regions
will it cover. What is the budget likely to be and what impact if any, will thatwill it cover. What is the budget likely to be and what impact if any, will that
have on scope. What are the quality constraints?have on scope. What are the quality constraints?
Communicate and clarify the business requirement across all stakeholdersCommunicate and clarify the business requirement across all stakeholders
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract
1.51.5
1.11.1

8. Objectives
What you need before you start
Deliverables
1. Agree Procurement Approach and timescales
2. Evaluate current environment and decide on the procurement
process
1. Formal Business requirement statement
2. Resources identified and committed
3. Buy-in obtained from all stakeholders
1. Procurement Plan
2. Estimated budget
3. Sign off on estimated budget
2.12.1
2.22.2
2.32.3
Team Kick
Off
Market
Research
Define
Success
2.42.4 Agree
Strategy
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

9. Team Kick
Off
Market
Research
Define
Success
Agree
Strategy
2.1 Team Kick Off2.1 Team Kick Off
This is an opportunity to bring the team together to gainThis is an opportunity to bring the team together to gain
mutual understanding & buy-in to project objectives, roles,mutual understanding & buy-in to project objectives, roles,
responsibilities & actions.responsibilities & actions.
Bear in mind that the scale of this event depends on theBear in mind that the scale of this event depends on the
scale of the procurement activity. It could range from asscale of the procurement activity. It could range from as
trivial as a quick chat over a coffee to an off-sitetrivial as a quick chat over a coffee to an off-site
conference.conference.
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract
2.12.1
2.22.2
2.32.3
2.42.4

10. Team Kick
Off
Market
Research
Define
Success
Agree
Strategy
2.2 Market Research2.2 Market Research
Gather as much information as possible in order to establish a range ofGather as much information as possible in order to establish a range of
approaches, products and services that will meet the business need.approaches, products and services that will meet the business need.
Identify what traditional and innovative solutions may be available.Identify what traditional and innovative solutions may be available.
Use as many sources of information as you have access to including theUse as many sources of information as you have access to including the
internet and the existing knowledge from stakeholdersinternet and the existing knowledge from stakeholders
2.12.1
2.22.2
2.32.3
2.42.4
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

11. Team Kick
Off
Market
Research
Define
Success
Agree
Strategy
2.3 Define Success2.3 Define Success
Define the criteria by which a successful solution will beDefine the criteria by which a successful solution will be
judged.judged.
Define the minimum quality criteria, the cost range and theDefine the minimum quality criteria, the cost range and the
deadline for delivery.deadline for delivery.
2.12.1
2.22.2
2.32.3
2.42.4
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

12. Team Kick
Off
Market
Research
Define
Success
Agree
Strategy
2.4 Agree Strategy2.4 Agree Strategy
Compile market research and make recommendations as theCompile market research and make recommendations as the
proposed strategy. e.g. outsourced solution vs. in-houseproposed strategy. e.g. outsourced solution vs. in-house
developed and managed.developed and managed.
Include within the strategy, some thinking about the purchase toInclude within the strategy, some thinking about the purchase to
pay processes to identify potential problems or opportunities forpay processes to identify potential problems or opportunities for
efficienciesefficiencies
Collaborate with stakeholders to ensure that they all have inputCollaborate with stakeholders to ensure that they all have input
to the procurement approach and strategy.to the procurement approach and strategy.
Obtain formal agreement to the strategy before moving theObtain formal agreement to the strategy before moving the
process forwardprocess forward
2.12.1
2.22.2
2.42.4
2.42.4
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

13. 3.13.1
3.23.2
3.33.3
3.43.4
Develop Pre-qual
Strategy
Score, Filter
& Notify
Develop &
Launch Tender
Assess
& Filter
Objectives
What you need before you start
Deliverables
1. To select the right suppliers and value proposition to be taken
forward to final negotiation.
1. Procurement Strategy
2. Market Research
1. Shortlist of suppliers
2. An agreed procurement approach with shortlisted suppliers
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

14. Develop Pre-qual
Strategy
Score, Filter
& Notify
Develop &
Launch Tender
Assess
& Filter
3.1 Develop Pre-qualification Strategy3.1 Develop Pre-qualification Strategy
It is important that the number of suppliers taken forward to negotiation is a small as possible therefore it isIt is important that the number of suppliers taken forward to negotiation is a small as possible therefore it is
important to develop some strict criteria that must be met in order to eliminate suppliers which would ultimatelyimportant to develop some strict criteria that must be met in order to eliminate suppliers which would ultimately
not succeed.not succeed.
Agree and document the key criteria by which the supplier will be selected and develop a qualificationAgree and document the key criteria by which the supplier will be selected and develop a qualification
questionnaire to be completed by responding suppliers.questionnaire to be completed by responding suppliers.
Develop a scoring mechanism and apply weighting to each criteria to ensure that priorities are addressed. Don’tDevelop a scoring mechanism and apply weighting to each criteria to ensure that priorities are addressed. Don’t
be too rigid at this stage. It may be that new information is learned as suppliers submit responses that will changebe too rigid at this stage. It may be that new information is learned as suppliers submit responses that will change
your view of the criteria.your view of the criteria.
3.13.1
3.23.2
3.33.3
3.43.4
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

15. Develop Pre-qual
Strategy
Score, Filter
& Notify
Develop &
Launch Tender
Assess
& Filter
3.2 Score, Filter and Notify3.2 Score, Filter and Notify
Based on suppliers responses, score each responseBased on suppliers responses, score each response
against the weighted selection criteriaagainst the weighted selection criteria
Confer with stakeholders and agree which supplier toConfer with stakeholders and agree which supplier to
shortlist based on preferred commercial model andshortlist based on preferred commercial model and
pricing principles as well as the weighted selectionpricing principles as well as the weighted selection
criteria scorescriteria scores
Document which suppliers are unsuccessful includingDocument which suppliers are unsuccessful including
rationale for non-selection and notify successful andrationale for non-selection and notify successful and
unsuccessful suppliersunsuccessful suppliers
3.13.1
3.23.2
3.33.3
3.43.4
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

16. Develop Pre-qual
Strategy
Score, Filter
& Notify
Develop &
Launch Tender
Assess
& Filter
3.13.1
3.23.2
3.33.3
3.43.4
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract
3.3 Develop and Launch Tender3.3 Develop and Launch Tender
Amend the tender based on lessons learned fromAmend the tender based on lessons learned from
responses and prepare the relevant documents toresponses and prepare the relevant documents to
be issued to shortlisted suppliers.be issued to shortlisted suppliers.
Develop a set of weighted criteria by which tenderDevelop a set of weighted criteria by which tender
responses will be assessed and agree this, togetherresponses will be assessed and agree this, together
with the rest of the tender, with stakeholderswith the rest of the tender, with stakeholders
Prepare all relevant communication to ensure thatPrepare all relevant communication to ensure that
suppliers are aware of what is expected of themsuppliers are aware of what is expected of them
and issue all tender documentation to suppliers.and issue all tender documentation to suppliers.
Consider contractual terms and conditions as wellConsider contractual terms and conditions as well
as day to day operational considerations. Matteras day to day operational considerations. Matter
such as health and safety, invoicing and paymentsuch as health and safety, invoicing and payment
arrangements should all be clarified at this stage.arrangements should all be clarified at this stage.
For goods and services that will be orderedFor goods and services that will be ordered
regularly, ensure that the internal procedures forregularly, ensure that the internal procedures for
placing and approving orders are understood andplacing and approving orders are understood and
documented as this may have an impact on the waydocumented as this may have an impact on the way
the supplier is expected to interact with thethe supplier is expected to interact with the
businessbusiness

17. Develop Pre-qual
Strategy
Score, Filter
& Notify
Develop &
Launch Tender
Assess
& Filter
3.4 Assess and Filter3.4 Assess and Filter
The purpose of this stage is to assess theThe purpose of this stage is to assess the
capability of the suppliers that havecapability of the suppliers that have
responded to tender and to ascertain if andresponded to tender and to ascertain if and
how they can fulfil the requirements of thehow they can fulfil the requirements of the
tender.tender.
As they are received, score the responsesAs they are received, score the responses
against agreed weighted criteria. Ifagainst agreed weighted criteria. If
possible, filter further to eliminate weakerpossible, filter further to eliminate weaker
suppliers.suppliers.
3.13.1
3.23.2
3.33.3
3.43.4
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

18. 4.14.1
4.34.3
4.44.4
4.54.5
Prepare Negotiation
Strategy
Conduct
Negotiations
Finalise
Contract
Award
4.24.2 P2P Design
Objectives
What you need before you start
Deliverables
1. Complete Negotiations and select best supplier
2. Award contract
1. Filtered List of Suppliers
2. Knowledge of Purchase to Pay process stakeholders
1. Agreed Purchase to Pay processes and KPIs
2. Signed Contract
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

19. Prepare Negotiation
Strategy
Conduct
Negotiations
Finalise
Contract
Award
P2P Design
4.1 Prepare Negotiation Strategy4.1 Prepare Negotiation Strategy
Prepare for the negotiation with short listed suppliers. DecidePrepare for the negotiation with short listed suppliers. Decide
on the approach (face to face conversations, a collectiveon the approach (face to face conversations, a collective
supplier conference and auction etc.) Based on thesupplier conference and auction etc.) Based on the
submissions , the pricing principles, the commercial model,submissions , the pricing principles, the commercial model,
services level and the contract terms and conditions may haveservices level and the contract terms and conditions may have
been amended.been amended.
Finalise the approach to these and ensure that there is legalFinalise the approach to these and ensure that there is legal
support available if necessarysupport available if necessary
4.14.1
4.34.3
4.44.4
4.54.5
4.24.2
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

20. Prepare Negotiation
Strategy
Conduct
Negotiations
Finalise
Contract
Award
P2P Design
4.2 Purchase to Pay process design4.2 Purchase to Pay process design
Explore the process by which goods and services will beExplore the process by which goods and services will be
purchased. Look for opportunities to reduce business riskpurchased. Look for opportunities to reduce business risk
reduce process time and effort and develop efficiencies.reduce process time and effort and develop efficiencies.
Will there be a need for a requisition and approval process. WillWill there be a need for a requisition and approval process. Will
there be purchase orders and how will they be placed? How willthere be purchase orders and how will they be placed? How will
payment be made? Against a schedule, in response to invoices?payment be made? Against a schedule, in response to invoices?
Will invoices be paper or electronic. Will invoices be sentWill invoices be paper or electronic. Will invoices be sent
directly to AP or will the business need to see them first? Howdirectly to AP or will the business need to see them first? How
will segregation of responsibilities be employed to minimisewill segregation of responsibilities be employed to minimise
risk? Will the supplier need to put in place new or revisedrisk? Will the supplier need to put in place new or revised
processes? Will there be training required either internally orprocesses? Will there be training required either internally or
within the supplier?within the supplier?
Document the Purchase to Pay processes including details of anyDocument the Purchase to Pay processes including details of any
authorisations that will be required .authorisations that will be required .
Identify and agree relevant Key Performance IndicatorsIdentify and agree relevant Key Performance Indicators
4.14.1
4.34.3
4.44.4
4.54.5
4.24.2
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

21. Prepare Negotiation
Strategy
Conduct
Negotiations
Finalise
Contract
Award
P2P Design
4.3 Conduct Negotiations4.3 Conduct Negotiations
There are two primary goals in the negotiation:There are two primary goals in the negotiation:
1. To negotiate prices that deliver lowest total cost1. To negotiate prices that deliver lowest total cost
of ownership while maintaining the suppliers’of ownership while maintaining the suppliers’
commercial viability.commercial viability.
2. Minimise/transfer risk: Commercial, reputational2. Minimise/transfer risk: Commercial, reputational
health and safety etc.health and safety etc.
4.14.1
4.34.3
4.44.4
4.54.5
4.24.2
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

22. Conduct
Negotiations
Finalise
Contract
Award
P2P Design
4.4 Finalise Contract4.4 Finalise Contract
Finalise commercial agreement and contractual termsFinalise commercial agreement and contractual terms
with the supplier in preparation for award and agreewith the supplier in preparation for award and agree
achieved savings with budget holders and log themachieved savings with budget holders and log them
on the savings registeron the savings register
4.14.1
4.34.3
4.44.4
4.54.5
4.24.2
Prepare Negotiation
Strategy
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

23. Prepare Negotiation
Strategy
Conduct
Negotiations
Finalise
Contract
Award
P2P Design
4.5 Award Contract4.5 Award Contract
Communicate the award of contract to successful as wellCommunicate the award of contract to successful as well
as the unsuccessful suppliers. Communicate also toas the unsuccessful suppliers. Communicate also to
relevant internal audiences. Ensure the contract is in placerelevant internal audiences. Ensure the contract is in place
prior to commencement of the service or product beingprior to commencement of the service or product being
purchasedpurchased
Be prepared to provide feedback to the suppliers aboutBe prepared to provide feedback to the suppliers about
their performance throughout the process. Apart fromtheir performance throughout the process. Apart from
being a professional courtesy it can help maintain abeing a professional courtesy it can help maintain a
positive relationship with the unsuccessful supplierspositive relationship with the unsuccessful suppliers
4.14.1
4.34.3
4.44.4
4.54.5
4.24.2
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

24. 4.14.1
4.24.2
4.34.3
Launch
Supplier
Post Procurement
Review
Objectives
What you need before you start
Deliverables
1. To ensure that the supplier is fully prepared to deliver all aspects of the contract
2. To ensure that all parties are familiar with agreed P2Ppolicies and procedures
3. To initiate the relevant performance measures and reporting
1. Signed contract in place
2. P2P policies and processes agreed
3. SLAs and KPIs agreed and understood
1. Business Requirement met
Continuous
Integration
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

25. Launch
Supplier
Post Procurement
Review
4.1 Launch Supplier4.1 Launch Supplier
Ensure stakeholders are aware of key changes to the agreement andEnsure stakeholders are aware of key changes to the agreement and
processes Develop and agree communication plan. This can range fromprocesses Develop and agree communication plan. This can range from
distributing an email to interested parties to a full scale event to launch adistributing an email to interested parties to a full scale event to launch a
major suppliermajor supplier
Initiate training programmes internally and ensure that supplier trainingInitiate training programmes internally and ensure that supplier training
is underwayis underway
Continuous
Integration
4.14.1
4.24.2
4.34.3
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

26. Launch
Supplier
Post Procurement
Review
4.2 Post Procurement Review4.2 Post Procurement Review
Monitor and review P2P process to identifyMonitor and review P2P process to identify
weaknesses and learningsweaknesses and learnings
Document learning points and recommendDocument learning points and recommend
amendmentsamendments
Continuous
Integration
4.14.1
4.24.2
4.34.3
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract

27. Launch
Supplier
Post Procurement
Review
4.3 Continuous Integration4.3 Continuous Integration
Initiate performance monitoring and amend processes asInitiate performance monitoring and amend processes as
improvements are identifiedimprovements are identified
Continuous
Integration
4.14.1
4.24.2
4.34.3
1.
Define
Business
Need
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.
Supplier
Evaluation &
Selection
5.
Induction &
Integration
5.
Induction &
Integration
4.
Negotiation
and Award of
Contract
4.
Negotiation
and Award of
Contract