Property Regeneration Client – Procurement as a Service

  • Tom Lewers
  • Case Studies
  • No Comments

This property regeneration clientselected Barkers to conduct a maturity assessment and benchmark of its existing procurement capability.

The client has no central procurement function, with each business unit conducting its own procurements, from business requirement through to contract expiration. The assessment focused on a root cause analysis, proposed solutions, blueprint Target Operating Model, with quick win and longer-term recommendations.

The challenge was to take the maturity assessment and develop a target operating model which embraced and mapped into the regional operating model, whilst still reducing cost and risk throughout the supply chain. A model which also promoted and retained speed of decision making, consistency of process and good practice procurement, all efficiency driven.

This client clearly distinguishes between core and non-core procurement. Core captures procurement for project delivery: horizontal and vertical development. Non-core covers all other forms of procurement across the business.

The biggest challenge was the lack of a central or any dedicated procurement resources, with a clear maturity gap between good core procurement practices, and relatively immature non-core procurement. There were no plans to create a central function, and the client’sdevolved operating model carries unique supply chain characteristics, so one size does not fit all with regard tostandard good practice procurement solutions and recommendations.

The proposed Target Operating Model was designed with key characteristics, reflecting the root cause analysis:-

  • Centre led accountability (Procurement Operations) for the end-to-end procurement process, to include Policy, Compliance, Frameworks, Digital and Reporting. Responsible for ensuring the Group-wide adoption and use of standard procurement good practice frameworks and tools.
  • Devolved delivery operating model, aligned with the client’sregional operating model.
  • Non-Core procurement elevated to a similar standard to that of Core procurement, though in a proportionate manner.
  • Digitally enabled, end-to-end and fully integrated with MSFT Dynamics and with the client’s data strategy.
  • Collaborative working based, using a shared workspace for idea generation, knowledge and content sharing, and cross functional team working.
  • Pace and agility built into all processes and ways of working.
  • Risk managed and value driven approach, focused on balancing cost and risk, with defined business value (e.g. access to scarce supplier resources).
  • A single lexicon for procurement, understood throughout the business.
  • Connected seamlessly with Finance, Legal and Risk to ensure the earliest team engagement in all procurement processes within the scope of the Procurement Policy.
  • A self-service experience implemented for where the levels of cost and risk are below the Procurement Policy threshold.
  • Supplier collaboration driven, with a focus on risk, complexity, supply and cost management.

The maturity assessment was the first phase of this procurement transformation programme, the results and recommendations for which have been built into a broader organisational-wide transformation. The benchmark was accepted, as were the quick win and longerterm recommendations. For core procurement, the client was benchmarked strongly in the ‘Developing’ and ‘Advanced’ maturity levels. Non-core procurement benchmarked at ‘Emergent’.

Given the regional operating model, Barkers recommended that the clientexplore the business case for a digital procurement solution, one which would ensure process consistency, and maintain/enhance the pace of decision making. A graduate project was being planned to lead on a formal market review.

This property regeneration client places a significant emphasis on ESG, sustainability and social value. Supporting SME businesses and being a ‘good payer’ are key commitments. The capability assessment included recommendations to establish even deeper, more strategic partnerships with all strategic suppliers, with sustainability becoming a core value for all parties; creating a set of metrics for the monitoring of the positive social value impact; and building sustainability and social value criteria into the sourcing decision making process.

Barkers: Property Regeneration Client – Procurement as a Service Case Study

Achieve more through a Procurement Managed service

Author: Tom Lewers