Building procurement’s confidence to generate value

The Client: NSW Department of Finance and Services

Implementing better practice and defining the future role of procurement

The Situation

Goods and services procurement for contracts in excess of $250,000 was previously centralised at the NSW Department of Finance and Services. Recent changes have devolved accountabilities and responsibilities for most procurement activities to government agencies accredited under the NSW Scheme for Goods and Services Accreditation (the Scheme).

The Scheme requires agencies to perform a fundamental shift from operational procurement activities to strategic sourcing activities. This change has the potential to be disruptive for agencies as the capabilities, systems, skills and day-to-day activities of strategic procurement are significantly different from those required to run a tender process for procurements under $250,000.

The challenge

Our client had obtained accreditation and was subsequently able to independently procure most of its goods and services.

The procurement leadership team understood accreditation as one, albeit important, milestone on their journey to better procurement practice. They realised their strategic goal of adding value to their clients would not be achieved with accreditation alone.

Our client operated in a highly fluid environment where legislative requirements changed the role of every team member. Agencies needed to also address the challenges arising from a shift in responsibilities between government departments.

For our client this meant bringing together different approaches to procurement from a handful of smaller agencies in one Centre of Excellence. Procurement practices varied greatly between the smaller departments with various degrees of procurement capabilities, different systems, different policies and processes.

Our client understood that agency-wide transformation was an opportunity for procurement to be seen as a leader in the organisation. With the strategic goal to generate value for the agency, procurement was determined to introduce new processes, responsibilities and continuous improvement initiatives.

The solution

Grosvenor recommended our client adopt a tailored version of Grosvenor’s template Procurement Framework to guide their transformation.

Through the adoption of the Procurement Framework our client was able to:

  1. move from operational procurement to strategic sourcing and add greater value to the business
  2. gain visibility and control of all procurement activities across the relevant agencies
  3. obtain the additional resourcing required to undertake high value and high risk sourcing activities.

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Our client has established a formal change program to manage the implementation of the Procurement Framework. A detailed three-year Implementation Plan describes the requirements to put all components of the Procurement Framework into place and guides the change program.

The results

Grosvenor subsequently provided this client with a more comprehensive and business-specific review of their procurement function, which identified opportunities to implement better practice incorporating the requirements of the Scheme and other learnings of better practice organisations. We continue to support our client to define the future role of procurement within the agency and the requirements for implementing the Procurement Framework.

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