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26 March 2014 | Gurjit Degun
A successful procurement model for IT across London boroughs is to be rolled out nationally to tackle local government budget cuts.
Delegates at the Procurex South conference, which took place in London yesterday, heard this will be done through better pricing transparency across local authorities, sharing data and making sure this information is of good quality.
Terry Brewer, divisional director commercial, contracts and procurement at the London Borough of Harrow, added: “We need to do much more in supplier relationship management, we need better stakeholder engagement, and we need more resources.”
Brewer, who is the national category procurement lead for ICT for the Local Government Association’s National Advisory Group for Procurement, explained there needs to be a change in how procurement is done “because the landscape that we’re working in now is extremely different”.
He explained that ongoing budget cuts mean that “we need to think very differently about how we do procurement and take a more commercial approach to ensure we can close that gap”. The national IT spend for local authorities is around £2.2 billion, of that, London boroughs spend £500 million.
When compiling the IT procurement strategy for London, Brewer said he found across 16 boroughs, a supplier was charging between £30,000 and £150,000 for the same product. “I’m not blaming the supplier for that, I’m blaming us for that because we have allowed the supplier to differentiate the market that much,” he said.
Brewer explained the first thing he did was to look at project governance because engagement with chief information officers (CIOs) was essential. “It was very important that [they understood that] we were doing this with them and not 'to' them so that this was a project that they could engage with,” he said. “We set up an ICT category management project board, which I chaired but had a number of CIOs from London sitting on it.”
He said he looked at how to disrupt the market in doing things differently, how to involve more SMEs and how to make substantial savings. So far, he has managed to save £2.5 million.
For the national strategy, Brewer said there are three areas to tackle: strategic category management, getting procurement at the “top table” and speaking with one cohesive voice.
Brewer added: “We’re imminently about to launch an ICT category strategy so that we can issue that to procurement professionals and CIOs up and down the country as a guide.
“A national category strategy does not mean a series of huge contracts, what it does mean is guiding procurement officers in local authorities about what approach should be taken.
“We’re hoping to have a common procurement platform where the aim is to have commodity unit costs, so if you work in a local authority you know how much you are going to be paying and how much your colleagues are paying.”