Buying process lengthens as authorisation level increases

5 July 2010

6 July 2010 | Isabel Palmer

The procurement process is getting longer, according to almost two-thirds (64 per cent) of the 100 buyers surveyed in the latest SM poll.

Purchasers quizzed voiced mixed opinions as to whether this was a good or bad thing.

Last month, the defence, aerospace and security supplier Chemring Group reported that delayed Ministry of Defence contracts dampened profits in its first half.

Chemring’s chief executive David Price said: “What we are seeing is not a slackening of demand, but a longer procurement process with decisions needing higher authority before contracts are okayed.”

Most public sector buyers agreed and are frustrated by the lengthier process and the need for higher-level authorisation. Many cited EU regulations and the need to hit government targets as the cause.

“This need to hit efficiency targets is leading to scrutiny similar to the Office of Government Commerce’s (OGC) gateway process,” said Caroline Wood, procurement manager at Buckinghamshire County Council.

Andy Foulis, head of procurement at the Scottish government agency Highlands and Islands Enterprise, said a further frustration is “caused by the use of consultants within the public sector tightening delegated authority”.

However, most private sector buyers said a longer procurement process was a good thing.

Vincent Fernandes, project manager at IT services firm Agilisys, said: “Because of the difficult market conditions all spend has to be reviewed to iron-clad purchasing decisions. Involvement from a CEO gives procurement the opportunity to raise the bar internally. All unnecessary spend will automatically be filtered out through this process and all critical ones will be validated aggressively.”

Other private sector buyers said it wasn’t solely down to the impact of the recession.

Paul Baker, senior procurement manager at broadband and telecoms company Telefónica Europe, said their process had lengthened because the function is now being accepted as a “core discipline within the business and not a department that orders from brochures”.

“The inclusion of ‘decision gates’ enforces discipline and ensures the business follows a recognised procurement framework to take the business forward,” he added.

Siemens IT Solutions and Services has also extended the sign-off process, introducing a procurement approval protocol and additional senior management review forms.

However, Andrew Jones, director of sourcing and property development at BMI Healthcare, is speeding up procurement. He believes it is vital to remove “blockers” so his team can “accelerate the process”.

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