Four ways to benefit from developing procurement pipelines in the public sector
Operational organisations rely on an effective procurement function to enable delivery and balance resource against priorities. This requires an understanding of what needs to be bought when, which budget should be used, and the supply market it should be bought from. In other words, leaders need to take a forward look at the future buying activity. The private sector has benefitted from a forward-looking approach and acknowledged it as standard practice. However, procurement pipelines within the public sector have historically been immature and less accessible to suppliers.
This is now changing. As a consequence of the National Procurement Policy Statement (NPPS) published in May 2021 and the subsequent Cabinet Office guidance, all Government Departments must publish their pipeline to suppliers annually from April 2022. The Government is going further too. To build transparency throughout the sourcing process, a regime of new notices is being incorporated into the upcoming Procurement Bill, expected in 2023. This includes publication of ‘Pipeline Notices’ to support supply chain resilience by enabling potential suppliers to plan and respond to public sector demands. For UK Government, it’s now become an essential internal planning tool too, informing workforce development, routes to market, and delivery timescales.
For many Departments, this has thrown up a series of challenges. Complex public sector procurement functions, like the Ministry of Defence’s, must deliver the sourcing needs of different Front-Line Commands. They’ll also need to consider various enabling organisations, each with their own array of data sources, sensitivities, and priorities. For less complex Departments, there are firm requirements from the Cabinet Office on the information suppliers should receive, which need to align with corporate systems and data. The new call for compliance should not be perceived as an additional burden to public sector sourcing leaders. It’s a golden opportunity to showcase how procurement can accelerate delivery, encourage new market entrants, and enable innovation.
So how best for departments and procurement leaders to align with the guidance and extract the maximum benefit from new procurement pipelines?
Here are four ways that leaders can act now to make a difference:
1. Set up underpinning systems and data architecture
As a first step, the underpinning systems and data architecture needs to be set up properly. Taking a strategic approach to exploiting data is always a challenge in any organisation where there is room for creating offline spreadsheets to plug weak business processes. The data requirements need to be set centrally and then enforced through corporate e-procurement systems so that they can be adopted by the organisation. The UK Government’s ongoing migration to Cloud provides the best opportunity to press ‘reset’ here. Transitioning to Cloud will, in many cases, necessitate a substantial reinvigoration of systems and processes.
2. Define top-down governance and gain senior commitment
Once the data architecture and processes have been established, they need to be supported by top-down governance and senior commitment. Weak links in the data chain can lead to a breakdown of trust both internally and externally. A supplier let down by the communication of poorly thought-out requirements and unachievable timescales is unlikely to rely on the data again. To prevent this, procurement leaders should recognise the data as the bedrock of their supplier engagement and internal planning activity. And they should also positively reinforce its importance to their teams, holding them responsible for the creation and management of records. Tracking the quality of the pipeline data as a core departmental performance indicator increases accountability across the organisation.
3. Develop the pipeline as a total business activity
Having established an effective ‘digital backbone’, developing the pipeline needs to be a total business activity. Planning is most effective when it’s a shared and high-profile activity amongst genuinely interested parties. A cross-cutting approach supports option development, challenge, and iteration of pipeline information. That means shared and aligned governance, communications strategies, and policy across the organisation. If this is implemented correctly, the benefits will be shared too. For example, being able to hand customers a more concrete view of future delivery timescales improves the reputation of the department. The commitment to creating a buying pipeline internally and externally becomes a shared business priority to increase speed of delivery, ensure compliance with policy and resource customer priorities.
4. Use the pipeline as a living record
Finally, the creation of an organisation’s buying pipeline should be iterated continuously to drive value. The Cabinet Office’s intent is that the pipeline is a ‘living’ record which increases transparency, accountability, and early visibility of government investment. Consequently, the pipeline is something that must be maintained by users across the business. Training and communications are vital levers in demonstrating the benefit of getting the data right. A single user planning a medium-value procurement may not immediately think of the resourcing, planning, and strategy implications that the data they are inputting contributes towards. The participation of vast networks of users is essential to delivering a ‘live’ forecast of future procurement activity.
Achieving the aspirations laid out in the NPPS and Procurement Bill will be challenging. The push for transparency will gain even greater traction through the Procurement Reform Bill, becoming a legal, rather than policy requirement. It’s a clarion call for public sector procurement leaders to not just fulfil Cabinet Office’s ambition, but to structure their departments around robust planning and pipeline practices through reformed a data architecture. In turn, this will enable early supplier engagement and innovation, progressive assurance, supply chain resilience, and a dataset that underpins internal workforce strategies.