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Friday
Jun192009

when procurement policy is broken

Right now in the New Zealand public sector, there is a subtle shift in procurement behaviour apparent in agencies. Much to the chagrin of many long-time vendors, central government purchasers are rumoured to be following policy more closely: tender rules are being enforced, and the traditional practice of end-of-year pre-ordering (using up unspent budget) has largely vanished in June 2009. Likely a response to new shareholders rather than the economic climate, this change brings into high relief how common it is for staff to work around policy.  Where policy is not liked, not understood, or even not appropriate, people will find creative ways to follow their own.  Such activity will be most common where rules are too blunt but also where systems and processes are too loose. 

The better option is to create a balance of:

  • strong process that feeds-back situational challenges to improve policy for the better of all
  • flexible systems that enable compliance while empowering staff to act with commercial agility and strategic sensibility.

The best procurement goes beyond the transaction to respond to specific opportunities and threats in the supplier landscape involved.  The best procurement is also practiced systematically and continuously improved for the overall brand, and its industries and markets. It's good to see compliance in the public sector - the next step, though, is to ensure the procurement rules are right and the systems are flexible enough to ensure it is sustained by more than just managerial enforcement.