Three things changing the world of procurement planning
The mix of a fast moving, digitally powered world and cost saving drives are shaking up the way that procurement planning works.
The procurement plan is the foundation of the planning process and its most tangible product. Setting out project requirements, it records, describes and justifies purchases, lists the procurement team, sets out timelines and explains the supplier selection process.
Bringing greater transparency and predictability, the benefits of a plan include all stakeholders being able to discuss requirements, decide if timelines are realistic and identify whether additional support is needed, either at the start or as the process moves on.
But is a procurement plan a static thing? In a fast moving, ever changing world and digitally powered environment, it probably isn’t. As changes come thick and fast, requiring procurement teams to stay alert and monitor the process as it goes along, here are just three ways that procurement planning is evolving in 2016:
Planning timescales are changing, or more particularly, speeding up, as e-procurement sees increased use in the UK public sector.
With claims that the government could save up to £10 billion through a reformed e-procurement platform, steps to move procurement more quickly in this direction came with the launch of Crown Marketplace in late 2015. Enabling government departments to buy a wider range of goods and services online, the system follows on from the Digital Marketplace, which enabled public sector buyers to procure cloud products and services through a central framework.
The onward march of e-procurement goes beyond the public sector. An IT market research report for May to October 2016 says that 71% of organisations in the global IT industry now accept e-procurement within their organisations at various stages in the procurement process.
Assessing how e-procurement can impact on planning, building in new timescales that fit with this and realising the benefits in terms of efficiency savings is now key.
2. Collaboration and consolidation
The ever onwards drive to increase efficiencies and ensure cost-savings is seeing more local authorities, NHS Trusts and others partnering up to procure jointly. This is said to bring the benefits of a stronger buying hand for negotiations, economies of scale and rationalisation of systems.
Where local authorities and NHS Trusts are joining forces to build a plan, set objectives and work together to ensure timescales are to the benefit of all, it is likely significant sums will be saved and cooperating ‘teams’ will secure more for their budgets.
3. The internal mix
Being prepared to change the mix of stakeholders involved in planning is more crucial than ever, particularly in fast changing market areas. Rather than have a pre-determined idea of who should be supporting the planning process, being open to a flexible, different group of individuals could ultimately save huge sums.
Channel Pro highlights the difficulties of procuring in the fast moving IT space where vendors often have the advantage of in-depth knowledge of the latest licensing models, market trends and will dedicate teams to analysing and understanding client opportunities, challenges and objections on a weekly basis. All of this means they are often several steps ahead on pricing and negotiations among other things.
To combat this, the answer is to bring together the best mix of expertise within the business to assess and advise on each project, taking into account the challenges of the market in question. A combined buying team with input from IT, sourcing and legal is mentioned as one of the ‘dream teams’ that procurement needs to gain the best deal in the IT space.