Procurements as a Strategic Tool
Procurements are big drivers of value – does your agency orchestrate approaches at a strategic level to harness this potential?
Christine Tonkin argues that 75% of value in procurements is created at the strategic level: in understanding what it is we are aiming to achieve and designing approaches to suit.
This means stepping above the individual procurements and thinking at an agency level about how to best engage the market to achieve strategic objectives. This may mean applying different approaches (sourcing strategies) to specific procurements by actively engaging with the risks and opportunities each procurement entails.
To do this effectively, the agency needs deep awareness of the market: where are the opportunities to leverage innovation and new players with new offerings, versus the tried-and-true offerings of established players?
How do we configure our risk appetite to be bold where we need to be and conservative where that will deliver the best results? This requires a considered appreciation of the agency’s purpose, objectives, environmental context and internal capabilities. It means understanding:
How the agency can leverage the government’s overall buying power to achieve value for money – this is especially important for smaller agencies.
How it can contribute to government policy objectives using the government’s buying power – this requires clarity of purpose and leadership at the inter-agency level.
Where the agency’s capabilities should be supplemented by vendors to address emerging threats or take advantage of opportunities, for example where regulators require innovation to keep pace with market trends, or to address specific cybersecurity threats.
What internal capabilities are required to make the most of strategic procurements – for example, contract management prowess, strong investment prioritisation and governance mechanisms, or specific technical expertise.
While taking a strategic approach to procurements at the agency level is important for setting the stage, solid procurement execution is critical for efficient and effective delivery on the agency’s priorities. This is not something agencies can drop the ball on. Government agencies should get both the strategy and execution right in order to deliver on the promise of value in procurements.
Terrace Services has the strategic nous, procurement delivery expertise, negotiation prowess and contract management skills to help agencies at all stages in their procurement strategy, planning and execution. If you are looking to get more out of your procurements and to avoid traps and pitfalls in your procurement practices, look no further. Reach out today.