My participation at the NSW Procurement Board Strategy Day, Panel discussion

I had the privilege of being asked to participate in a Panel discussion at the NSW Procurement Board Strategy Day with the theme of uplifting public sector procurement capability. Here is what I had to say….?

To uplift procurement capability, we first must understand what we are talking about… what is procurement? Well, according to the APCC and its members, procurement is defined as??

The public sector procurement profession, including contract management, is the dedicated workforce primarily responsible for championing government outcomes through agency procurement spend in collaboration with service providers.?

Championing government outcomes – while process and compliance are essential, the main prize is outcomes. We all know that government is not only buying the widget but also buying social, economic and environmental (ESG) results. While we know this, with outcomes constantly changing, practice has been slow to keep up with the vision for procurement to champion government outcomes.

Procurement includes collaborating with service providers to deliver an outcome. Suppliers are critical to governments achieving the purpose of a contract.??

This loops back to the APCC definition of procurement, which includes contract management. We all know the smile curve, where the most significant value achievable is upfront in the planning phase, then dips during the tender/assessment phase, to curve upwards during the contract management phase. Are the contract owners and those managing the contract across what ‘value’ looks like? Do they have the capability to deliver the value – ESG - as stated in the contract??

When we talk Strategic Procurement – previously, we said this covered cradle to grave; however, considering ESG, it needs to be cradle to cradle. The links in the chain need to be equipped to make sound decisions and be adequately resourced.??

Let’s have a look at the procurement capabilities as defined by APCC and endorsed by all members:?

• Procurement technical skills?
• Business Skills?
• Personal skills?

It is the balance between and across these that the procurer refines and develops throughout their career.??

If we look at procurement technical capability, the necessary skills are:?

• Identifying and engaging with risk?
• Business law?
• Industry engagement?
• Governance and assurance?
• Planning, sourcing, evaluation, and negotiation?
• Contract development and management?

What has typically been viewed as the ‘procurement’ role: planning, sourcing, evaluation, and negotiation is only part of the procurement tapestry – engaging with risk, business law, and engagement skills are all equally important if procurement is expected to deliver the array of outcomes.??

Acknowledging that contract management is a part of procurement discipline, I will say it is a core capability of government and employees. Of course, there would be different proficiency levels; nevertheless, all public servants should have a foundational level of procurement skills and competencies.??

I will add that ‘people’ is only a third of procurement capability required. Digitalisation and efficient and effective processes are also critical to achieving value-for-money outcomes.??

We spend a lot of energy developing and implementing strategies to grow the pool of procurement talent; however, there is a point of diminishing returns. All professions are bustling for people and skills – the war on talent. Digitalisation and seamless processes decrease the size of the needed talent pool.??

To conclude, I have seen a greater recognition of procurement – it’s the holy grail. Still, there needs to be a lot more work to change the mindsets of decision-makers, suppliers, and educational institutes, and changes are required within government to support procurement to champion government outcomes.?

Teresa Scott

Executive Director, APCC?