Presentation to CIPS Surrey The central role of Procurement in - - PowerPoint PPT Presentation

Presentation to CIPS Surrey

The central role of Procurement in helping the Government reduce the deficit

John Collington

ERG Executive Director, Procurement 17th February 2011

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Points to Cover

• Dispelling the Public Sector myth
• The key changes to Government Procurement
• Debate and Discussion

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Background: John Collington

 30 years experience: 15 years in Procurement/Supply

Chain, 8 years in Operations and 7 years in Sales

 Worked for 6 Organisations: Thomson, Thomas Cook,

American Express, Accenture, ICG Commerce and HMG – Home Office / Cabinet Office

 Delivered, bought and sold Procurement services  Member of CIPS since 1999; Fellow from 2009

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Dispelling the Public Sector Myth........

“Working in the Public Sector will be like walking through treacle”

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“Delivered more change and results in the past 4 years than the previous 11”

And the past 9 months have seen the biggest changes...

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June Feb New Government in place > Commitment to Procurement at highest levels > Greater focus on cost reductions > OGC CEO moves on > ERG created > Crown negotiations with top suppliers > Centralised Procurement Programme > New Procurement Governance > The Green Review > BS CEO moves on > Strategic Review of BS announced > New Category Strategies developed > Governments first CPO position advertised

So Why Change?

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Government deficit - £156bn CSR 10 savings of £83bn required Total public sector expenditure is £669Bn

Pay 25% Procurement 35% Grants 35%

Other 5%

• Pay makes up £164bn
• Grants make up £242bn
• Procurement is £236bn
• Central Government is £66bn

Good Procurement is needed now more than ever!

Source: Public Expenditure Statistical Analysis(PESA) 2010

Government’s Approach

• Stated priority to tackle and reduce the deficit
• A Minister who sees Procurement as fundamental to

driving cost reductions

• Creation of the Efficiency & Reform Group and the

appointment of the Chief Operating Officer

• The willingness to listen to and learn from others,

both Public & Private sectors

• Committed to LEAN Government Procurement and
• pening the market to SMEs

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Learning & Leveraging from OGD’s

‘X+’ is > than the sum of the parts

= X+

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We must be better at identifying good procurement practice in Departments and the Centre and better leverage this across Government!

Learning from the Best in the Private Sector

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Sir Philip Green Review

• We must leverage our spend,

credit rating and buying power

• We must mandate centralised

procurement for common categories

• We must improve, produce and

use accurate spend and consumption data

• We must manage down demand

and specifications

So What’s Changing in Government Procurement

• 1. Departments will continue to manage existing
• perational and strategic spend
• 2. The Centre - with support from key Departments,

will manage our top suppliers as – the Crown

• 3. The Centre will implement and mandate a new

Operating Model for the procurement of common goods & services

• 4. We must and will improve the quality and use of

Procurement and Supplier data

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Purchase to Payment

Target Operating Model for Centralised Procurement

Data Warehouse Centralised Sourcing and Category Management

Volume Bound Agreements and/or Dynamic Purchasing

Procurement Delivery Centres Enabling Technologies

Improved Governance & Overarching Strategy

Payment Processing Business Intelligence

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Customers of Government Procurement

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Planned Timeframe for Centralised Procurement

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OCT-DEC JAN-MAR APR-JUN JUL-SEP

Category Deep Dives Output:

• Baselines
• As Is Supply Position
• To Be Supply Strategy

In Scope Categories:

Energy Office Solutions/Supplies Professional Services Travel Fleet Learning & Development ICT Commodities Print Management Advertising & Media

CATEGORY TRANSFORMATION

Phase 1 Phase 2 Phase 3

Thank You Questions and Answers

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