Examining the risks to achieving procurement effectiveness in a post-Carter world

03 May 2017

One year on from the Carter Review, Trusts are delivering their Procurement Transformation Programmes (PTPs) aimed at making real changes to procurement functions.

Successful programmes will have to contend with a number of fundamental risks (and opportunities) to ensure that they deliver sustainable changes to their procurement functions. Some of these involve longstanding challenges around procurement leadership, data, technology and sustainable collaboration. We explore how some of these risks are being addressed below.

A voice at the top table

Lord Carter’s review asserts that in order to drive transformational change, Trusts need to recognise the importance of involving procurement in crucial decision-making processes. Without strong leadership in place, Trusts run the risk that procurement functions are not sufficiently empowered to carry out change. Some Trusts have set up specific arms-length organisations to provide focus on procurement effectiveness, whilst others have gone down the route of nominating existing Board members to take on a ‘head of profession’ role. Where procurement leadership is having a positive impact, its role often involves integrating PTPs with existing business and operational strategies. This also involves raising the ‘red flag’ when business practices are in sharp conflict with achieving commercial benefits.

Acting on comparisons

A Trust’s ability to achieve procurement function effectiveness centres on their willingness to be both outward and forward-looking; this includes acting on comparisons available as a result of benchmarking data. Trusts should now be receiving benchmarking information against which they can draw a comparative assessment of their own procurement effectiveness. Acting on this new information is crucial. There are opportunities to augment existing data with local information to build richer data pictures relating to price variation, product choice and sourcing alternatives. However, our view is that, given the pressure on procurement departments, there are risks that Trusts can become too inward-looking and are thus unable to utilise the wider pool of information available.

The full article also explores bridging the technology gap, sustainable collaboration and an unbiased view of capabilities. Download now.