The purpose of the standards is to set out how the public sector employment principles, which are established in legislation, are to be applied in the
Government agencies around Australia are standing up to support the campaign to end violence against women today for White Ribbon Day.
ALL THINGS P: The federal government wants to know which open data would be most useful to business, researc
We recently moved our readers to a new system. You may need to reset your password here to login.
Not a member ? Join here for free.
Forgot your password?
Home Features Rethink the way you look at savings in government procurement
Text size :
TAGS Procurement, Purchasing
Organisations focused on procurement-generated savings may miss equally important outcomes such as enabling process efficiencies, category management and risk management, writes contract management expert Louis Hof.
Are we focusing too much on the cost savings?
Good strategic-level procurement — the acquisition of products or services from an external source – can enable organisations both public and private to achieve sustainable cost savings. But there’s a trend emerging where the value of the procurement function of an organisation is measured purely through the potential cost savings.
Looking solely at procurement-generated savings estimates may shift the organisation’s focus away from other equally important outcomes including meeting the core business needs (or fit for purpose procurement), enabling process efficiencies, category management, contract management, procurement and probity risk management, legislative, legal and policy compliance.
In my experience, an effective organisation will generally focus on choosing products and services that are fit for purpose to ensure operational outcomes are achieved. But a procurement focus on driving savings or achieving targets can have a detrimental effect on the fit for purpose decisions, ultimately leading to declining operational performance or waste.
Receive unlimited access, get all the latest public sector news and features, plus The Juice, our daily news update sent direct to your inbox.
The Mandarin is where Australia's public sector leaders discuss their work and the issues faced within modern bureaucracy. Join today to discover the latest in public administration thinking and news from our dedicated reporters, current and former agency heads and senior executives.
Louis Hof has 20 years of procurement and contract management experience in government, most recently as a leader with the Queensland Government Chief Procurement Office, and now a consultant with Glentworth.
Read Related Content
FIRST LOOK: The federal procurement website will go dark to emerge next week with a new user-friendly design that aims to make tendering easier for small businesses.