Capturing Social Value through Procurement | News

Capturing Social Value through Procurement

A Robust Strategic Procurement Framework is the Key to Capturing Social Value through Procurement

 

Samantha Young, Director Procurement Advisory at Landell

 

Social Procurement is an important responsibility for all organisations. Legislative frameworks across Australia either have or are considering using procurement to achieve social objectives. It is rumoured that the Victorian Government will soon release a social procurement policy, and as such public sector bodies need to ensure that their procurement strategy is robust enough to accommodate social procurement requirements. Without this, opportunities for leveraging procurement for increased social value could be missed, often impacting those less fortunate than ourselves.

 

How can we approach the development of a robust procurement strategy to identify and be ready to capture social value? Historically, procurement has often been undertaken in a reactive ad hoc manner, to address a project need or to aggregate and consolidate expenditure.

 

For an organisation to strive to spend its funds efficiently and effectively and meet the broader needs imposed, it should implement a strategic procurement framework that aligns with its core business strategy. Understanding spend patterns, contractual relationships and internal capability can provide valuable information to develop a strategy that can deliver procurement outcomes that optimise expenditure and deliver increased social value.

 

Building a Procurement Profile through a Baseline Assessment

 

Undertaking a baseline assessment to detail an organisation’s procurement profile at a point in time can provide valuable information. A spend analysis can highlight areas for aggregation and provide valuable intelligence for negotiating future supply arrangements. Analysis of existing contracts and supplier relationships can provide a snapshot of existing commitments and identify the effectiveness of each supply arrangement.

 

Finally, reviewing internal capability to detail gaps within the organisation can assist with resource allocation and identify areas for capability uplift. Each organisation has its own unique procurement profile and business environment, and for their procurement function to be fully effective, the procurement strategy must be fit for purpose and tailored appropriately. 

 

Devising a Strategy

 

An effective procurement strategy should provide a planned approach to the way the organisation undertakes its procurement activity including a clear governance structure, a category management framework, an approach to engaging with suppliers and managing contractual arrangements, a statement on capability including a capability development plan and performance measures that identify the effectiveness of the procurement function and how to build in broader objectives such as social procurement.

 

Together we can make a Difference!

 

In summary, procurement if undertaken effectively can deliver a host of benefits with the most obvious one being financial. However, once an organisation understands its existing procurement profile, they can make decisions to improve the way they spend their valuable funds, including how additional social value opportunities and benefits can be captured.

 

Landell has helped many clients to Baseline their organisation’s spend dynamics and to work with them to implement an evidence-based procurement strategy, that achieves better value for money. Landell has also led the development of social procurement policies for State and Local Government.

 

By bringing this expertise together, we can help you realise the vision of Social Procurement policy, and make a real connection between your procurement team and their community.

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S Young Profile Article Pic

Samantha has over 18 years’ experience in government procurement including goods, services, construction and outsourcing arrangements. She was formerly a strategic advisor to the Victorian Government Purchasing Board (VGPB) and a key driver of the procurement reform in Victoria. She was a major contributor to the establishment of the procurement reform framework and recently established guides to aligning with the VGPB framework and obtaining VGPB accreditation.

 

Samantha can be reached by phone: 0410 542 397 or email samantha.young@landell.com.au