Procurement transformation increased capabilities by 30%

Procurement transformation increased capabilities by 30%
The Client: Public sector agency
Key Consultants: Dr Stefan Gassner

Read how our client boosted the capabilities of its procurement function by 30%. Guided by Grosvenor’s transformation strategy, our public sector client implemented far reaching changes to the way procurement was done in the organisation and left no stone unturned to increase the capabilities of systems, processes and people.

The situation – fighting fires

The procurement function of our public sector client was dispersed amongst four business units. Each unit had their own procurement personnel and unique systems. Of course, the way procurement projects were run was very different across business units. Day to day activities were pretty much focussed on “fighting fires” and running tender processes – there was little time to consider the big picture.

The client recognised the need to establish a centre-led procurement function to adequately address business risks, legislative requirements and create better procurement outcomes.

The project – transforming procurement

The first step in the procurement transformation was a detailed diagnostic against 26 criteria covering strategy, governance, source to contract process, systems and organisational design. The procurement team agreed a three year strategy to prioritise improvements. We identified the right size of the centre-led team, its roles and responsibilities during sourcing and contract management and a detailed implementation plan based on Grosvenor’s Procurement Framework.

The client then implemented the strategy, despite push-back on required resourcing, a change in procurement leadership and far-reaching changes in the wider business. Key elements that the client implemented included:

  • Disbandment of the decentralised teams to form a centre-led team of 16 FTE
  • Introduction of business partners to work closely with key stakeholders in each business unit to identify their needs, upcoming projects and opportunities in the supply market
  • Introduction of an intranet site for customer self-service for low risk/low value procurements and to communicate the newly developed processes that now apply to all business units
  • Investment in training and upskilling of procurement staff, especially in the area of category management
  • Introduction of a source to contract system as the single source of truth for all related data
  • Collaboration with the finance team to create a view of external spend that spans three siloed ERP systems.

The results – leaders in government procurement

This transformation started in 2013 and is still ongoing. An important milestone was reached in early 2017 as the team went through another detailed diagnostic. The original diagnostic score of 69% was increased to almost 90%. The results showed that the client’s procurement capabilities have advanced from the middle tier to a leading position within government. Most importantly, a strategic view is now taken to procurement. Gone are the days where there is no future planning and only day-to-day firefighting.

2017 Procurement Study

Carrot or Stick?

Keys to boosting supplier performance revealed

Our 2017 research study highlights clearly a number of practical insights that will help your organisation drive much stronger performance from your suppliers.

The report hightlights:

  • What performance buyers typically get from their suppliers
  • What suppliers recommend buyers should do to improve the suppliers performance
  • What interventions actually work to lead suppliers to better performance
  • Differences between managing contracts in the public and private sector
  • Three things you can do today to improve supplier performance