We listed our six challenges for public procurement in 2015 at the beginning of the year. Here they are again (for the last time)!.
Challenge no.1; Implementation of New Directives
Challenge no.2; Austerity continues
Challenge no.3; Social issues
Challenge no. 4; Value and Innovation
Challenge no.5; The Fight against corruption
Challenge no.6; Capability and competence
Today, let’s look at the last on our list – capability and competence.
In a sense, everything flows from this. Contracting authorities and governments more widely cannot successfully implement the new directives, cannot achieve value for money and support social issues, or fight against corruption, if there is a lack of capability amongst the procurement profession and indeed more widely, as we will discuss later. But there is intense pressure at the moment and some real issues facing authorities who would like to develop that capability.
Whilst everybody will agree that capability is vital for successful procurement, the reality is that money is tight as we know in the public sector, and budgets for training and development are amongst the first to get cut when times are tough.
There has also been a reduction in many countries in the number of people carrying out public procurement, which can put more pressure on them and again does not help in terms of time for training activities. The reduction in numbers also means many procurement functions are not being “refreshed” with younger people coming into the procurement teams.
At the same time, 2015 and 2016 are going to be important years as the new procurement directives some into operation across Europe. That brings a training burden – and opportunity – that governments will need to embrace.
But these are not just issues for the procurement profession and professional. As we have said previously, for organisations to get the most out of suppliers and manage their expenditure effectively, many different people within the organisation need to be commercially capable. Developing greater competence and commercial understanding amongst commissioners, budget holders, even elected representatives in some cases, is also vital.
Actions for Procurement
– Given the pressure on time, resource, and available funds, organisations need to take a fresh look at their training and development needs and how they can be met. Technology is opening up new options too. eLearning is well established, and developments such as MOOCs (massive open on-line courses), which sees Universities and others putting material out for wider use, free of charge in many cases, are changing the education and training landscape.
– Whilst this has not yet had a major impact on the “professional procurement” world, and qualifications such as CIPS (the Chartered Institute of Purchasing and Supply), and its equivalents in other countries, offer a good basis, we need to be aware of other options as they develop.
– But in the short term, with the new directives coming into force, procurement practitioners should ensure they have a good and thorough understanding of the directives and national regulations as they are introduced.
– Developing training internally and making it widely available can lead to real economies for the public sector. The UK government has taken this step in terms of training on the new directives, which has saved a lot of money which might have otherwise been spent on external training costs.
– Education of stakeholders such as budget holders is also important both in the context of the regulations and more generally in terms of developing their commercial understanding. Procurement leaders should take the lead in their organisations in terms of looking to improve those wider procurement (commissioning, commercial) skills.