Collaborative procurement helps counter pressure on public sector budgets and the need to extend services as far as possible.
Delegates at the Public Sector Solutions Expo in London heard how sharing resources and collaborating as part of procurement partnerships can help deliver cost savings and improve relationships with suppliers and commissioners.
1. Cost savings
Customers may think they’re getting the best deal from their suppliers but according to Will Laing, account director at the Crown Commercial Service (CCS), there has been a drive for more collaboration in procurement due to pressure on public sector budgets.
There is also a “need to make public money extend as far as possible to ensure service provision to the public can be delivered” and collaboration can help authorities achieve savings.
Laing cited an example of customer-driven collaboration where 33 London authorities had all procured similar software from a small base of suppliers.
“They all had separate contracts. No one thought they were getting a particularly good deal. When we actually showed them the data, they were buying the same software system from the same supplier and the difference in what they were paying for support ranged from about £25,000 a year to £150,000 for the same thing,” he explained.
As a result, Laing said authorities can often look to organisations such as the CCS to help them pool together demand and execute the procurement to deliver a consistent cost for the same products or services.
2. Reducing duplication of efforts
As well as financial incentives, Nichola Cooke, assistant director at STAR procurement, a shared procurement service in the Greater Manchester area, described how collaborative procurement can have an impact on resources by reducing duplication of efforts.
“We recently delivered a procurement for 10 local authorities and 10 CCGs (clinical commissioning groups) and although that was very difficult, without collaboration there would have been 20 organisations going out to procure exactly the same thing and expecting suppliers to respond 20 different times to 20 different sets of requirements.”
While collaboration can be highly beneficial to procurement, Cooke said it’s important to only work with those that want to work with you.
“Work with the coalition of the willing, work with people who want to work with you. If you try and force collaboration, that's where you'll end up with a lot of problems. But if you work with people who want to work with you, there will still be barriers to overcome but you're at least starting off wanting the same outcome,” she said.
3. Relationships with suppliers
Michael Pace, managing director at NHS London Procurement Partnership, said collaboration also presents procurement teams with the opportunity to be a better customer to their suppliers.
“Obviously customers are important and so is understanding what they want. But it's also about talking to the supplier community and understanding what suppliers can do for you. Technology is changing all the time so there's no point in talking to the customer and understanding what they need, but then we can't deliver it because the supplier can't deliver it.”
By collaborating with suppliers, listening to what their capabilities are and looking at where innovation is coming from, procurement partnerships can gain a better understanding of what they are able to deliver, he said.
“A big part of collaboration is to be a better customer to the suppliers as well, and driving some of those efficiencies and then make compromises and really drive forward for everybody's benefit.”
4. Additional expertise
Collaboration in procurement is also able to benefit commissioners on issues such as social value, according to Louise Capel-Cure, contracts innovation programme manager at the London Mayor’s Office for Policing and Crime (MOPAC).
“We're able to access the central team working in the area and they're supporting us to look at how we better embed all the aspects of a responsible procurement policy into our commissioning processes. There are some aspects of it that come quite naturally,” she said.
“But there are other areas where we could definitely be doing more. One of the key principles is around skills, training and apprenticeships. We've not really thought about where that might fit in terms of our commissioning and what we're buying. ”
By working with procurement partnerships, Capel-Cure said MOPAC is able to draw on expertise and gain insight into best practice as well as being able to see what’s happening across the Greater London Authority.
☛ Want to stay up to date with the news? Sign up to our daily bulletin.