Public sector bodies, from central government to local health trusts, are under increasing pressure to seek out cost savings. Many strive to achieve this by implementing ‘effective purchasing’, and it is easy to see why. In general, external spend is a high proportion of the total costs of an organisation, so inevitably purchasing is the natural focus for many of the cost reduction initiatives.
In the UK there have been many reviews of procurement in the public sector, including those by the National Audit Office and the Audit Commission. The focus on procurement was championed by Sir Peter Gershon, when he undertook an independent review of civil procurement in Central Government at the invitation of the Paymaster General and the Parliamentary Secretary to the Cabinet Office (the Gershon Efficiency Review).
However, the route to successful procurement-based savings has proved to be a difficult one. Some of the key reasons for this are :
- the sheer scale and size of government
- the extent of devolution of powers and budgets to the front line
- the lack of organisational commitment and skilled people to drive the change through.
PA’s work with OGCbuying.solutions on the Zanzibar Managed Service has approached e-Procurement implementation from a whole new angle. In PA’s experience a ‘marketplace’ is the most effective way of implementing e-Procurement. Put simply, both buyers and sellers plug into a central hub (using industry standards and protocols) that acts like a shop window for products, either storing catalogues centrally or plugging into existing supplier catalogues.
This publication describes the approach of using e-Procurement as the catalyst for change. Nevertheless it essentially understands that e-Procurement today simply provides the foundation, that if built on can increase the efficiency of an organisation’s procurement process. ‘Effective purchasing’ lies at the heart of this new approach, allowing organisations to use the information derived from their e-Procurement implementation to trade more effectively with all of their suppliers.
