Procurement transformation is a unique type of change management within an organisation that focuses on ‘strategies to enable major and long-term improvements to procurement and supply management processes, activities and relationships’ as defined by Day and Atkinson. Essentially, it’s a way for organisations to acquire change capabilities and alter their core beliefs in an effort to keep up with modern demands.
So what kind of guidance is there for implementing an effective procurement transformation in public sector organisations?
- The Steps to Effective Implementation
- Advice for Procurement Transformation
- Procurement Transformation in Action
- The Advantages of Procurement Transformation
- Encouraging Better Data Management
The Steps to Effective Implementation
There are a number of crucial steps when it comes to implementing procurement transformation for public sector organisations.
- Do the research: Analyse market realities and public demands. What risks are there in the current operational method? What opportunities come about from transformation?
- Create a group of champions: This needs to be a management team with liaisons dotted strategically throughout all departments. They need to be onside with transformation and enthusiastic to lead.
- Create a vision and a strategy: Without an emotional hook, a persuasive argument, a number of goals and a framework to pursue them, any transformation process will be dead in the water.
- Clearly communicate your vision: These goals and visions need to be accurately and transparently communicated to all, through every channel. This will help to increase organisation-wide buy-in.
- Begin to alter operations: Are there any systems in place that are undermining the successful delivery of work? Are there any that would directly undermine the transformation process? If so, in what ways can you alter, update or replace them to help rather than hinder?
- Create short-term wins: These type of wins really help in the beginning when buy-in may be at its lowest. And reward employees when these short-term wins are gained.
- Empower innovative thinking: Encourage creativity, collaboration and non-traditional ideas. These are the things that can help drive a procurement transformation by challenging the operational norm that may not have been 100% effective.
- Link new behaviours to operational success: Work to anchor the cultural change within the actual new operational methods and vice versa. This means viewing culture shift as impossible without new technology, new ideas and innovation.
Don't worry if these steps appear ill-defined to you as this process can be strengthened with the appropriate guidance.
Advice for Procurement Transformation
Digitisation of your operational methods is your best friend. With innovations such as forecasting algorithms, artificial intelligence and big data analytics, producing public services which are anchored in digital is becoming easier and easier.
View it as a key advantage. The base routines that can be handled by automation allow for reduced labour costs and more time for innovation. This means more people can direct their focus to higher-value work. Digitisation also helps increase visibility across an organisation by providing digital paper trails for people to follow and analyse.
Focus on Employee Benefits
A successful procurement transformation is aided by providing the means for employees to do their jobs better. In any change of operational processes, an organisation is given the chance to create opportunities for learning.
‘Upskilling’ your employees is one way to view it like this.
What this means is that the onboarding of new technology and new ideas provides an uncharted area for a workforce to explore. This is the means through which employees gain new skills and become more invested within the procurement procedures.
Use Data Wisely
Evidently, digitisation goes hand-in-hand with an increase in data capture and use. What organisations need to be aware of is poor quality data. This doesn’t necessarily mean inaccurate data; most times, it means a workforce that doesn’t know how to use it correctly.
Successful leaders of procurement transformation are leveraging analytics and tech, such as integrated analytics platforms to create unified data models. It’s these master data management solutions that are amending the issues with back-end systems that aren’t providing visibility.
While digitisation is your best friend, quality data is the keystone in that relationship.
Procurement Transformation in Action
Procurement transformation has already been an effective implementation for public sector organisations. For example, Royal Mail began to carry out its transformation through organisation redesign.
They reorganised their management structure and also moved their entire procurement system online to an SAP e-sourcing platform, meaning they went completely paperless. It helped to increase both efficiency and strategic visibility.
Similarly, Care UK is a private social care provider that works closely with the NHS and other public services to provide both health and social care. They gradually reduced the number of operating divisions from five to two, as well as creating a business-wide identity and culture.
On top of that, they also incentivised cross-divisional work and collaboration in an effort to boost employee engagement. On the changes, Mike Parish, the then Chief Executive at Care UK stated that “Procurement is absolutely in the vanguard of organisation and cultural change.”
Advantages of Procurement Transformation
There are a number of advantages of procurement transformation, all equally important. For example, procurement management offers a change in stasis for organisations, meaning they can be more equipped to handle more dynamic and complex operating environments.
Public sector organisations can also benefit from:
- A carefully planned, incremental process. By creating transformation in stages, company buy-in is more successfully garnered, meaning that all agents within a group can reinforce the strategic changes being put in place.
- Procurement transformation not only is able to reduce costs by updating operations through digitisation, it can also provide opportunities for upskilling for the very same reasons. New tech means new skills are needed, which means new learning and increased accountability.
Encouraging Better Data Management
No procurement can occur without the right use of data. More data than ever is required to inform your digital tools and implementation processes, giving you more insight into the needs of the procurement process. It’s just another way of transforming public services for the better, without bending to financial constraints.
For example, the Local Government Association (LGA) encourages a number of practices for anyone using data within the public sector in an effort to increase the value and transparency of that data:
- Practise transparency and accountability with data use.
- Use evidence to drive key change.
- Promote economic health and growth through the use of data.
- Design services around the needs of the user.
The LGA makes it clear that these practices are crucial when it comes to any digital transformation or procurement initiative. It wants local governments to become advocates for balanced, proactive and transparent data use.
It is only by using data in this way that local government services can more accurately serve and provide for the populace within their jurisdiction.
If you’re looking to capitalise upon the advantages of procurement transformation, develop your change management process and get the most out of your employee engagement, scroll down for information on our useful download.
If you’re looking to capitalise upon these advantages, develop your change management process and get the most out of your employee engagement, scroll down for information on our useful download.
Implementing Transformation Within the Public Sector
Discover the benefits of cultural and digital transformation in our download, the Cultural Transformation Roadmap. It covers the best practices for digitising your organisation, how to increase employee engagement and some examples of successful transformations happening in the public sector today.
Just click the link below to get your own copy.