The problem with public sector procurement?
There has been a great deal of coverage in the recent days in the press regarding public sector procurement and shortcomings. Hopefully the following article will draw a thread through the themes and come to a conclusion that might not be appreciated by the establishment.
There are three articles that create a theme. The first relates to the hesitancy of the public sector to embrace electronic invoicing. The second reports that the Civil Service are failing to effectively contract manage and finally an article about a shortage of contract management skills in the Civil Service.
In brief the article will link the articles together and conclude with a hypothesis that links these problems with the Chancellor's autumn statement making yet more savings in government departments and ask whether in light of all this where improvements will come and who will champion the improvement.
The first article from the link below identifies a problem with electronic invoicing and how electronic invoicing will deliver significant savings to the departments.
http://www.supplymanagement.com/news/2013/public-sector-wasting-ps2-billion-by-not-adopting-e-invoicing
The article identifies a number of issues:
" “Comfort with paper”, the merging of e-invoicing with wider e-procurement initiatives that “can take years to roll out”, and a “mindset of disbelief in the savings available” "
Let's just spend a couple of moments asking "Why?" to these comments. Being "comfortable with paper" could well be a resistance to change, being a blocker, or could the resistance be as a result of undergoing either previous failed initiatives or being subject to constant change initiatives in under resourced departments. It is very easy for non public servants to be sceptical about under resourced departments or budgets that are not sufficient for effective or even complete transformation. Business cases in the private sector help deliver improved profits; public sector organisations are nor permitted to make a profit, therefore any change initiatives must be a case of delivering more with less. Effective project management manages risk and has a risk budget; having a suitably resourced risk budget is very much more difficult to achieve in the public sector. In project management benefits tracking is essential to proving the original business case; if benefits are questionable then this is the opportunity to undertake trials and actually deliver the benefits.
A final question with regards to this article, "Is the electronic invoicing a separate system capability or part of a coherent procurement and contract management system?"
The second article ( http://www.supplymanagement.com/news/2013/mps-lambast-civil-service-contract-management ) identifies problems with contract management:
" a bias to inertia; a failure to learn from previous mistakes; a belief in incremental change versus long-term vision; working in departmental silos rather than cross-cutting initiatives; a shortage of commercial and contracting skills; and a tendency to procure from large suppliers."
Recognising the costs of systems coherence and repeat failure by departments to provide adequate systems could well account for the first two comments. The need to maintain services and a hesitancy of putting all eggs into one basket, due to previous failings, would support an incremental approach. Current delivery methodology tends towards a phased approach to ensure capability but also the ability to rectify problems in early iterations. A lack of contracting skills will tend towards dealing with larger suppliers and the aggregation of contracts due to a lack of personnel with appropriate skills to manage more contracts. There is also a perception, often erroneously, that larger suppliers are more capable than smaller suppliers. Equally erroneously is the perception that larger suppliers are cheaper.
The final article ( http://www.supplymanagement.com/news/2013/cameron-public-contract-skills-shortage-must-be-addressed ) quotes the prime minister (speaking in September) responding to criticism concerning aircraft carrier procurement, offender tagging and the West Coast main line tender problem, "There are examples of good contracting and bad contracting" and "I think the more general point is that the civil service needs to have more expertise across the piece on this. That is being done." If that is truly "being done" then the Chancellor's recent budget cuts announced in the Autumn Statement don't affect recruitment, training and funding for the introduction of effective procurement and contract management systems and processes.
Politicians need to step up to the challenge and support effective procurement and contract management; stop knocking the departments and lobby for better training, systems and external support to help get government contracts on track. Leadership and decisive decision making is required.
There are three articles that create a theme. The first relates to the hesitancy of the public sector to embrace electronic invoicing. The second reports that the Civil Service are failing to effectively contract manage and finally an article about a shortage of contract management skills in the Civil Service.
In brief the article will link the articles together and conclude with a hypothesis that links these problems with the Chancellor's autumn statement making yet more savings in government departments and ask whether in light of all this where improvements will come and who will champion the improvement.
The first article from the link below identifies a problem with electronic invoicing and how electronic invoicing will deliver significant savings to the departments.
http://www.supplymanagement.com/news/2013/public-sector-wasting-ps2-billion-by-not-adopting-e-invoicing
The article identifies a number of issues:
" “Comfort with paper”, the merging of e-invoicing with wider e-procurement initiatives that “can take years to roll out”, and a “mindset of disbelief in the savings available” "
Let's just spend a couple of moments asking "Why?" to these comments. Being "comfortable with paper" could well be a resistance to change, being a blocker, or could the resistance be as a result of undergoing either previous failed initiatives or being subject to constant change initiatives in under resourced departments. It is very easy for non public servants to be sceptical about under resourced departments or budgets that are not sufficient for effective or even complete transformation. Business cases in the private sector help deliver improved profits; public sector organisations are nor permitted to make a profit, therefore any change initiatives must be a case of delivering more with less. Effective project management manages risk and has a risk budget; having a suitably resourced risk budget is very much more difficult to achieve in the public sector. In project management benefits tracking is essential to proving the original business case; if benefits are questionable then this is the opportunity to undertake trials and actually deliver the benefits.
A final question with regards to this article, "Is the electronic invoicing a separate system capability or part of a coherent procurement and contract management system?"
The second article ( http://www.supplymanagement.com/news/2013/mps-lambast-civil-service-contract-management ) identifies problems with contract management:
" a bias to inertia; a failure to learn from previous mistakes; a belief in incremental change versus long-term vision; working in departmental silos rather than cross-cutting initiatives; a shortage of commercial and contracting skills; and a tendency to procure from large suppliers."
Recognising the costs of systems coherence and repeat failure by departments to provide adequate systems could well account for the first two comments. The need to maintain services and a hesitancy of putting all eggs into one basket, due to previous failings, would support an incremental approach. Current delivery methodology tends towards a phased approach to ensure capability but also the ability to rectify problems in early iterations. A lack of contracting skills will tend towards dealing with larger suppliers and the aggregation of contracts due to a lack of personnel with appropriate skills to manage more contracts. There is also a perception, often erroneously, that larger suppliers are more capable than smaller suppliers. Equally erroneously is the perception that larger suppliers are cheaper.
The final article ( http://www.supplymanagement.com/news/2013/cameron-public-contract-skills-shortage-must-be-addressed ) quotes the prime minister (speaking in September) responding to criticism concerning aircraft carrier procurement, offender tagging and the West Coast main line tender problem, "There are examples of good contracting and bad contracting" and "I think the more general point is that the civil service needs to have more expertise across the piece on this. That is being done." If that is truly "being done" then the Chancellor's recent budget cuts announced in the Autumn Statement don't affect recruitment, training and funding for the introduction of effective procurement and contract management systems and processes.
Politicians need to step up to the challenge and support effective procurement and contract management; stop knocking the departments and lobby for better training, systems and external support to help get government contracts on track. Leadership and decisive decision making is required.
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