CIPS CEO David Noble suggested in his recent blog ‘Strategic value’: “Commissioning, I believe, is synonymous with strategic procurement. In fact, it is strategic procurement.”
To some commentators it’s a controversial view, but I’m with Noble on this one.
The ‘traditional’ role of procurement is all too often overwhelmingly seen as a supply-market-facing one, deploying the sourcing toolkit to achieve value for money on pre-specified products and services. Great careers have been built on doing this well and organisations have saved hundreds of millions in the process. However, and paradoxically, this approach has for years boxed procurement into a corner – the greater the success in delivering savings, the more it has become defined by its ability to keep the savings tap running. Consequently, the complaint about not having a seat at the ‘top table’ continues year after year, decade after decade.
I suspect those who defend commissioning as different from procurement understand the paradox and see deal making with suppliers as largely tactical. I think they have a point.
Think about commissioning for a moment. For example, the Department of Health (DH) defines it as “the process of ensuring that the health and care services provided effectively meet the needs of the population. It is a complex process with responsibilities ranging from assessing population needs, prioritising health outcomes, procuring products and services, and managing service providers.”
What’s particularly interesting about this is the focus on meeting the needs of end customers – in the DH’s case, the UK population. I see this as strategic work, and compatible with procurement in the 21st century.
The implication for procurement (and its top-table aspirations) is that it must marry its core sourcing and deal-making competence with a more advanced form of stakeholder engagement. Such engagement goes beyond cementing stakeholder business requirements into a service or product specification for tendering purposes. Instead it must work on downstream engagement with those customers that consume the organisation’s services or products. The question becomes not what our stakeholders need, but what the organisation’s customers’ need, and how inputs from the supply chain can help. A familiar question, perhaps, but how well is it ever answered?
How many stakeholders out there see procurement as genuine ‘trusted advisers’, competent enough to be let loose on real customers? Not many, I’d wager. But that shouldn’t stop procurement developing specific plans and actions to achieve access to that level of engagement.
It’s where a true strategic role for procurement (and commissioners) exists.
This blog was first published in Supply Management magazine in August 2011.
By David Atkinson