At PUBLIC, we work with authorities on a wide range of procurement and commercial challenges.
We've consistently found that the biggest challenge for procurement teams - and the biggest enabler of better commercial outcomes - is better access to data.
First of all, procurement teams can only improve what they can measure. This means building a single, reliable picture of your spend across all of your different contracts, vendors and categories. This is especially important for their 'tail-spend' (high volume, low value spend) which is frequently left un-analysed and un-optimised.
Second, better data can allow procurement teams to benchmark and compare their spend with other authorities, or the private sector. This allows authorities to compare their spend profiles with their peers, and establish more transparent and open pricing conversations with their vendors.
Crucially, there are also compliance and legislative requirements for authorities to better capture and manage their data. In the UK, authorities currently have statutory requirements to publish financial data, but this will only become more important. As part of the upcoming UK Procurement Act, authorities will need to capture and publish procurement data in an OCDS format, covering the entire publishing lifecycle from planning to award, to management.
Finally, procurement data is also a critical enabler of sustainability and social value outcomes. Public authorities - which jointly spend hundreds of billions of pounds a year - are the largest buyers of goods, works and services. From pens and pencils, to transport fleets, to construction services, the average local council manages tens of millions of pounds of annual spend that can be leveraged to drive more sustainable outcomes.
But most authorities struggle to make the most of these opportunities. The problem can start with the source data, with procurement and spend data sitting in a wide range of different systems, which are not joined-up or integrated. This might involved different classification systems, vendor naming conventions, or other challenges that make joining up data impossible. Authorities can struggle to assign social value or sustainability outcomes to their data, with a lack of clear measurement or reporting frameworks. And even with all the data cleaned and consolidated, it can be virtually impossible to derive meaningful insights at this kind of scale of spend (tens of thousands of transaction lines).
To help authorities to tackle these challenges, and make the most out of the opportunities for spend data, we have partnered with best-in-class spend management tool, Ignite Procurement. In particular, we'll be working with Ignite to help authorities to meet their new data transparency requirements in the new UK Procurement Act, and to help them measure the social value and sustainability outcomes of their spend. From the smallest local council, to the largest central government department, we are working to solve their spend data problems.
Our first project together has seen us work with Teignbridge District Council, South Hams District Council and West Devon Borough Council to better measure spend across their tri-council procurement services. We analysed tens of thousands of financial transactions to help the three councils to optimise their spend, especially their long tail-spend, identify opportunities for consolidating spend across the councils, and estimate their total carbon emissions due to procurement.
Our work with Ignite Procurement will allow us to promote more transparent, intelligent and sustainable procurement. And that will be better for our public services, and for the planet.
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While private sector companies have realised the importance of looking to their supply chain to advance sustainability efforts, global government action on procurement has been generally slower. As this can often be a daunting process - and to mark the first ever World Sustainable Procurement Day - we want to share some key insights from our work helping the public sector tackle this challenge.
Public authorities are - in most cases - failing to benefit from the new wave of technologies and tools available to the modern procurement professional.