BenardOdote.jpgBenard Odote, Group Managing Director, House of Procurement, looks at the need for governance in public-sector procurement.

First and foremost, let us begin with compliance in public procurement, which is much lower than that in private procurement. Compliance levels need to be similarly verified as in the case of contract management, not only when money is lost but also during due diligence, supplier audit and supplier performance management, supplier failure risk management, supplier search and database development as well as compliance of supply chain and organisational strategies.

Public procurement focus: value for money
In the private sector, one can focus on things like category management and strategy building, however, we also need to show the advantages of doing the same in the public sector. Of course, in the private sector, interests include the need to make money, attain profit, reach customers faster, etc. In the public sector, in turn, key essentials of procurement are to ensure that services are delivered and achieve value for money, and one is able to do more with less to ensure that society receives more services from the same budget. Hence, a focus on cost savings and avoidance should be key for all public procurement entities in the same manner as it is for the private sector.

Categorising services to align procurement strategies
The public sector should also categorise much-needed services, such as healthcare for the poor, programmes aimed at women and the youth, housing, employment, etc. and ensure that their procurement strategies are aligned to government / ministry goals, in that, while in the private sector one would like to reach the customer faster, in the public sector we should try to reach the neediest with services.

You may say that there are conflicting interests in both the private and public sectors, but if we take an in-depth look, the conflicts in both are almost the same. While in the public sector one is not trying to make profit, if they do, the money can be used for other activities. Thus, money made will be used in aid of the community. In the private sector, profit will be only to the benefit of the sector itself.

Transparency in public procurement
Transparency needs to be a key factor, especially in the public procurement sector. An example would be a project and how much it would cost to the end, how the community would benefit from the project and also what the initial cost and variations were. In the private sector, transparency is achieved internally whereas in the public sector it should be attained both internally and externally as this will gain the procurement function budgetary as well as community support.

Procurement chain talent
One of the things that lack in the public sector is procurement chain talent. In the private sector, a strong focus is placed on training as well as on hiring the best talent. In the public sector, there is a need for capability development and training of talent. These can be achieved in the following ways:
– Executive supply chain education and programmes
– Supply chain certifications
– Peer-to-peer mentoring and cross-generational collaborations, i.e. workshops, webinars, etc.
– Cross-training and job rotation
– Partnering with universities and colleges

Having the right talent will ensure that procurement teams are able to decipher and translate government strategies into actionable plans without any money being lost in the supply chain.

Email: benard.odote@hop-global.com
www.hop-global.com