Company policy and guidelines - Home | Victorian ... · Web viewYes, procurement performance...

Capability assessment tool and templateThis document is made up of two parts:

Part 1: capability assessment tool

Part 2: capability assessment template

The tool contains the performance standards used to complete the template. The tool and template can be applied at the organisational level or at the business unit level if capability is lacking at the organisational level.

The capability assessment tool and template aligns with the eight capability descriptors in the Guide to procurement capability, that is governance; people; environmental; ethical; social/technology and tools; procurement processes; contract management; category management; performance management.

It is not mandatory to use this template if the accountable officer (or their delegate) decides that an equivalent template satisfies the standards of capability assessment under VGPB supply policy.

Key stepsUsing the tool1. Review the performance standards for each capability descriptor.

2. Capability descriptors are grouped into segments with a series of questions. Each question has a five-point ranking scale with one being minimal performance/provision and five being evidence of high-level performance/provisions. Consider each question and select the appropriate ranking (score).Note: Where the organisation/business unit is close to achieving the desired level of capability for a small number of criteria, the accountable officer may, at their discretion, authorise the organisation/business unit at the desired level. This adjustment is to be noted in the relevant segment of the capability assessment tool.

3. Where applicable, list any documentation used to determine the response to a given question in the additional information section (Docs).

Using the template1. Enter name of the organisation and business unit (if applicable).

2. Transfer the individual capability score for each question from the tool to the relevant criteria in the template and total the scores for each segment.

3. Compare the total score for each segment to the performance score indicated for different categories of complexity (transactional, leveraged, focused and strategic) to identify the level of procurement complexity the organisation/business unit can undertake (e.g. a minimum of 14 points is required in the governance segment for the organisation to undertake procurement activity of a transactional nature).

4. The capability assessment tool and template is approved by the accountable officer or delegate. Note: If the capability assessment score is less than the minimum performance score the organisation/business unit will need to either increase its capability or not undertake the procurement.

Part 1: Capability assessment tool1. Governance Score

1.1 Is there a procurement policy in place?No, there is no internal procurement policy in place.

Yes, an internal procurement policy is in place and updated on a regular basis. The policy clearly articulates the legislative requirements for Victorian Government procurement.

Yes, an internal procurement policy is in place and updated on a regular basis. The policy clearly articulates the legislative requirements for Victorian Government procurement, and additional probity and audit requirements of the business unit/organisation.

Yes, an internal procurement policy is in place and updated on a regular basis. The policy clearly articulates the legislative requirements for Victorian Government procurement, and additional probity and audit requirements of the business unit/organisation. The procurement policy also requires detailed procurement plans to be developed for highly complex procurement activities.

Yes, an internal procurement policy is in place and updated on a regular basis. The policy clearly articulates the legislative requirements for Victorian Government procurement, and additional probity and audit requirements of the business unit/organisation. The procurement policy requires complex procurement plans to be developed for highly complex procurement activities. Procurement activity is also monitored to ensure policy requirements are met.

1 2 3 4 5

Docs

1.2 Is there a procurement strategy in place that details its strategic direction for procurement activities?No, there is no procurement strategy in place.

Yes, a procurement strategy in place which partially aligns to the overall business strategy and the VGPB procurement principles.

Yes, a procurement strategy is in place which aligns to the overall business strategy of the organisation and the VGPB procurement principles. The procurement strategy includes defined objectives in relation to procurement and relevant, measurable performance targets relating to procurement activity.

Yes, a procurement strategy is in place which aligns to the overall business strategy of the organisation and the VGPB procurement principles. The procurement strategy includes defined objectives and relevant, measurable performance targets relating to procurement activity. The procurement strategy is cascaded down into the operational strategies for relevant business units or categories.

Yes, a procurement strategy is in place which aligns to the overall business strategy of the organisation and the VGPB procurement principles. The procurement strategy includes defined objectives and relevant, measurable performance targets relating to procurement activity. The procurement strategy is cascaded down into the operational strategies for relevant business units or categories. The strategy differentiates objectives based on the complexity level of procurement activities occurring.

1 2 3 4 5

Docs

Last updated 23 May 2013 Capability assessment tool and template 2

1. Governance Score

1.3 Is there a formally stipulated decision-making process and probity requirements relating to procurement activities?No, there are no probity requirements in place and decision-making occurs on an ad-hoc basis.

Yes, probity requirements are in place that comply with Victorian Government requirements. These have been documented and communicated to all personnel but no additional guidance on decision-making process exists.

Yes, probity requirements are in place that comply with Victorian Government requirements. These have been documented and communicated to all personnel and are accompanied by some level of guidance on decision-making throughout the procurement lifecycle.

Yes, probity requirements are in place that comply with Victorian Government requirements. These have been documented and communicated to all personnel and are accompanied by clear decision-making processes which clearly emphasise the probity requirements at each stage of the procurement lifecycle.

Yes, probity requirements are in place that comply with Victorian Government requirements. These have been documented and communicated to all personnel and are accompanied by clear decision-making processes which emphasise the probity requirements at each stage of the procurement lifecycle. Procurement activity is monitored to ensure probity requirements are met and decision making processes followed.

1 2 3 4 5

Docs

1.4 Is there a system in place for the identification and management of procurement related risks?No, there are no processes in place for identifying and managing procurement related risks.

Yes, there are processes and a framework in place for identifying procurement related risks which identifies potential risks across the whole business unit/organisation.

Yes, there are processes and a framework in place for identifying procurement related risks and this framework facilitates the prioritisation and management/mitigation of these risks.

Yes, there are processes and a framework in place for identifying procurement related risks, and for prioritising and managing/mitigating these risks. In addition, residual risks are continuously monitored throughout the procurement lifecycle.

Yes, there are processes for identifying, prioritising, and mitigating procurement risks. Residual risks are continuously monitored throughout the procurement lifecycle, and where considered ‘significant’, there is a process for developing business continuity plans to ensure core services can continue in the event of supplier failure.

1 2 3 4 5

Docs

1.5 Are the responsibilities of procurement personnel clearly communicated and monitored?No, procurement responsibilities are not formally documented or monitored.

Yes, responsibility for procurement activities are formalised for relevant personnel and there is evidence to demonstrate that personnel are aware of their responsibilities.

Yes, responsibility for procurement activities are formalised for relevant personnel and evidence demonstrates personnel are aware of these responsibilities. These responsibilities are allocated in a way which ensures the proper segregation of duties between key procurement processes.

Yes, responsibility for procurement activities are formalised for relevant personnel, and responsibilities are allocated in a way which ensures the proper segregation of duties between key procurement processes. Procurement activities are monitored to ensure they are carried out by the appropriate personnel.

Yes, responsibility for procurement activities are formalised in the position description of relevant personnel, and responsibilities are allocated in a way which ensures the proper segregation of duties between key procurement processes. Procurement activities are monitored to ensure they are carried out by the appropriate personnel. These


1. Governance Scorepersonnel are assessed against the requirements of their position description as part of a regular performance development process.

1 2 3 4 5

Docs

1.6 What is the approval process for delegation of authority relating to procurement activities?No, delegation of authority is not formally documented or monitored.

Yes, delegation of authority is formally documented in policies; however this may not be adequate to ensure the appropriate segregation of duties are upheld at all times and meets the probity requirements of both the business unit/organisation and the Victorian Government.

Yes, delegation of authority is formally documented in policies. This process is adequate to ensure the appropriate segregation of duties are upheld at all times and meets the probity requirements of both the business unit/organisation and the Victorian Government.

Yes, delegation of authority is formally documented in policies. This process is adequate to ensure the appropriate segregation of duties are upheld for all procurement activities and meets the probity requirements of both the business unit/organisation and of the Victorian Government. There is evidence to demonstrate that key personnel are aware of their responsibilities and act in accordance with this approvals process.

Yes, delegation of authority is formally documented in policies. This process is adequate to ensure the appropriate segregation of duties are upheld for all procurement activities and meets the probity requirements of both the business unit/organisation and of the Victorian Government. There is evidence to demonstrate that key personnel are aware of their responsibilities and act in accordance with this approvals process. In addition there is a formal monitoring system to ensure that the approvals process is complied with at all times.

1 2 3 4 5

Docs

1.7 Is spend monitored to ensure compliance with policies and value for money principles?No, procurement spend is not monitored.

Yes, procurement spend is monitored in an ad-hoc or informal way, with business units generally reporting in different ways, and with little or no senior management oversight.

Yes, procurement spend is monitored in a consistent way and on a regular basis to ensure compliance with the relevant policies of the business unit/organisation and the Victorian Government. Irregularities and instances of non-compliance are investigated.

Yes, procurement spend is monitored in a consistent way and on a regular basis to ensure compliance with the relevant policies of the business unit/organisation and Victorian Government. Irregularities and instances of non-compliance are investigated. In addition value for money performance indicators have been developed to assess achievement of procurement objectives.

Yes, procurement spend is monitored in a consistent way and on a regular basis to ensure compliance with the relevant policies of the business unit/organisation and Victorian Government. Irregularities and instances of non-compliance are investigated. In addition value for money metrics are in place and are monitored against internally communicated performance targets.

1 2 3 4 5


1. Governance Score

Docs

2. People and culture Score

2.1 Is procurement viewed as strategic by senior management?No, the perception of senior management is that the procurement function has little relevance to overall business operations.

Yes, senior management has visibility of some procurement activities and reviews some procurement reporting to monitor compliance with procurement policies, but procurement is not generally viewed as strategic.

Yes, senior management has visibility of all procurement activities, and is involved in the development of procurement objectives to align with the organisation’s and/or business unit’s overall business strategy.

Yes, senior management views the procurement function as an important part of the business and procurement objectives are aligned with the organisations and/or business unit’s overarching business strategy. Senior management has visibility of majority of procurement spend which it uses to encourage performance improvement.

Yes, senior management views the procurement function as a core part of the business and as a function that may be leveraged to drive operational efficiencies. Procurement objectives are aligned with the organisation’s and/or business unit’s overarching business strategy. Senior management has visibility of all procurement spend which it uses to encourage performance improvement and drive business efficiencies.

1 2 3 4 5

Docs

2.2 Are there personnel with specific procurement knowledge?No, there are no personnel with specific procurement and category knowledge or training.

Yes, there are some personnel with specific procurement knowledge; however their category knowledge is not closely related to the goods/services being procured. Personnel generally work in isolation and do not have strong visibility of the procurement activities.

Yes, there are personnel with strong procurement and some category knowledge related to the goods/services being procured. These personnel are trained in procurement, have the appropriate level of expertise to be the primary source of procurement knowledge, and are generally utilised during the procurement lifecycle.

Yes, there are personnel with strong procurement knowledge and with category knowledge specifically related to the goods/services being procured. These personnel are trained in procurement, and their skills are commensurate to the complexity of procurement undertaken, allowing these personnel to be the primary source of procurement knowledge. These teams are strongly utilised as a centre of procurement knowledge.

Yes, there are personnel with strong procurement knowledge with recognised expertise and experience in the category of goods/services being procured. These personnel are trained in procurement, and their skills are commensurate to the complexity of procurement undertaken, allowing these personnel to be the primary source of procurement knowledge. These teams are strongly utilised as a centre of procurement knowledge and assist in the co-ordination of most procurement activities to ensure the right level of procurement knowledge, category knowledge, and oversight occurs at all points of the procurement lifecycle.

1 2 3 4 5


2. People and culture Score

Docs

2.3 Are there mechanisms to encourage teamwork and collaboration on procurement activities?No, procurement activities generally occur in isolation.

Yes, procurement activities generally involve procurement personnel where procurement is of a non-transactional nature, however teamwork and collaboration is not strong and generally does not involve internal stakeholders (other than procurement personnel).

Yes, procurement activities involve procurement personnel where procurement is of a non-transactional nature and there is a level of collaboration across teams that assists in the procurement process. Where internal stakeholders are identified they are consulted as part of the procurement process.

Yes, procurement teams are formed based on the required knowledge (both procurement and category specific knowledge) and the complexity of the procurement undertaken. Internal stakeholders are actively identified during the initial stages of procurement planning, and are engaged throughout the procurement lifecycle.

Yes, procurement teams are formed based on the required knowledge (both procurement and category specific knowledge) and the complexity of the procurement undertaken. For complex procurement activities internal stakeholders are engaged from the outset and personnel work to ensure effective teaming of procurement and category expertise from across several areas and/or skill sets. Consideration of external stakeholders and communication with these key stakeholders occurs at the earliest practical stage.

1 2 3 4 5

Docs

2.4 Do recruitment, personnel and training considerations explicitly integrate the skills needed to meet procurement objectives?No training is provided and there is little consideration of procurement skills when undertaking recruitment activities.

Yes, procurement personnel are required to have procurement-specific training; however training requirements are generally not identified through any formal training needs analysis or procurement resource planning.

Yes, procurement personnel are required to have procurement-specific training, and all personnel receive basic training on procurement processes. Procurement recruitment considers the specific procurement expertise requirements.

Yes, procurement personnel are required to have procurement-specific training, and all personnel receive basic training on procurement processes. Procurement resource planning considers the specific procurement expertise requirements and training needs analysis (or equivalent) is undertaken to identify key procurement skills required.

Yes, procurement personnel are required to have procurement-specific training, and all personnel receive basic training on procurement processes. Procurement resource planning considers the specific procurement expertise requirements and training needs analysis (or equivalent) is undertaken to identify key procurement skills required. Skill levels are monitored to demonstrate continual improvement.

1 2 3 4 5

Docs

2.5 Do personnel have a level of procurement understanding appropriate for their level of procurement engagement?No, personnel personnel within the organisation

Yes, there is evidence to demonstrate that personnel

Yes, personnel have general procurement awareness. In addition all

Yes, personnel have general procurement awareness. In addition all personnel who

Yes, personnel have general procurement awareness. In addition all personnel who


2. People and culture Scoreare not informed of or have access to dedicated procurement information. However, some general procurement information is available but the availability is not formalised.

are aware of the procurement function and the high-level processes for procurement. This occurs as part of induction training or in general communications or via a dedicated procurement information system.

personnel who are authorised to undertake non-transactional procurement activities have received training on procurement policies, processes, and key procurement knowledge sources. The organisation has a dedicated procurement information system.

are authorised to undertake non-transactional procurement activities have received training on procurement policies, processes, and key procurement knowledge sources. There is evidence to indicate that these personnel comply with policies, and seek appropriate procurement expertise based on the complexity of the procurement activity undertaken. The organisation has a dedicated procurement information system.

are authorised to undertake non-transactional procurement activities have received training on procurement policies, processes, and key procurement knowledge sources. These activities are actively monitored to ensure procurement activities comply with policies and procedures and have the appropriate level of procurement expertise and oversight based on the complexity of the procurement activity undertaken. The organisation has a dedicated procurement information system that also has updates/links to other procurement websites and feature articles.

1 2 3 4 5

Docs

3. Technology and tools Score

3.1 Are there tools in place that facilitate a systematic and consistent approach to procurement and purchasing activities?No, there are no integrated Enterprise Resource Planning (ERP) systems in place.

Yes, basic systems exist for requisition, purchase order and approval, but systems are different across business units/cost centres, which significantly impairs the ability to monitor and compare purchasing activities.

Yes, systems are in place in most business units but they are not integrated across business units resulting in some level of inefficiency for procurement outcomes. Catalogue systems are generally not in place. Purchase orders are mainly recorded electronically.

Yes, systems are in place across all business units which are integrated, and in addition some catalogue systems are in place to facilitate efficient purchasing. Purchase orders are mainly recorded electronically.

Yes, an integrated system exists and, where appropriate, catalogues with key suppliers have been created and linked into the system to facilitate greater efficiencies in procurement processes.

1 2 3 4 5

Docs


3. Technology and tools Score

3.2 Is procurement data managed and stored in a way which facilitates accurate expenditure reporting and tracking?No, all purchasing data is archived in spreadsheets or paper based files.

Yes, data is stored in a procurement database; however not all transactions are recorded or typically not recorded in a consistent format.

Yes, all procurement data is stored in a procurement database, with policies, procedures and controls in place to ensure data is robust and comparable.

Yes, all procurement data is stored in a procurement database, with policies, procedures and controls in place to ensure data is robust and comparable. Spend data for key categories is also tagged with additional details on volume of good/service/pricing.

Yes, all procurement data is stored in a procurement database, with policies, procedures and controls in place to ensure data is robust and comparable. Spend data is also tagged with additional details on the volume of good/service/price. This data is stored in a way which allows for easy collation by spend type.

1 2 3 4 5

Docs

3.3 Are procurement policies, tools, contract data and training information available in a consistent technology platform and format?No, there is little linkage or integration across key procurement systems, tools, and templates.

Yes, there is some degree of linkage between the systems; however not all tools and templates are linked to the relevant systems and/or it is not easily navigated.

Yes, there are good linkages between systems, and tools and templates have been properly referenced and included in the system. The system is accessible by all personnel and easy to navigate.

Yes, there are good linkages between systems and across business units, and tools and templates have been properly referenced and included in the system. The system is accessible by all personnel and easy to navigate. The system has a single interface point, acting as a ‘hub’ for procurement knowledge.

Yes, there are good linkages between systems and across business units, and tools and templates have been properly referenced and included in the system. The system is accessible by all personnel and easy to navigate. The system has a single interface point, acting as a ‘hub’ for procurement knowledge. The interface also contains basic procurement information and has segmented information to facilitate easy use and navigation of the system for personnel.

1 2 3 4 5

Docs

4. Procurement processes Score

4.1 Are regular and constructive procurement planning processes undertaken?No, there are no procurement planning processes in place; the

Yes, however procurement planning only occurs for a few key categories.

Yes, procurement planning processes are in place and occur on a regular basis. Historical data is used to inform

Yes, procurement planning processes are in place that scale procurement activities based on the complexity of procurement.

Yes, procurement planning processes are in place that scale procurement activities based on the complexity of procurement.


4. Procurement processes Scoremanagement of forward spend occurs in an ad hoc manner.

the planning process; however the process tends to focus only on some categories.

Detailed procurement plans are developed for highly complex procurement activities which include specific planning to ensure probity through procurement lifecycle.

Detailed procurement plans are developed for highly complex procurement activities which include specific planning to ensure probity through procurement lifecycle. In addition procurement planning information is used to identify where additional internal and external resource requirements are needed for procurement activity.

1 2 3 4 5

Docs

4.2 Is a standard procurement process documented and consistently applied?No, there are no consistent or documented processes relating to purchasing, procurement and contract management.

Yes, financial and probity policies are in place and are relevant to procurement activity. In addition there is some level of documentation on general procurement guidance; however evidence suggests there is little consistency in procurement processes.

Yes, financial and probity policies are in place and are relevant to procurement activity. In addition there are documented processes and/or work steps detailing procurement processes and these are followed for most standard procurement activities.

Yes, financial and probity policies are in place and the end-to-end procurement process is fully documented and communicated. This documentation includes supply policy documents, procedures, better practice guidelines and supporting templates.

Yes, financial and probity policies are in place and the end-to-end procurement process is fully documented and communicated. This documentation includes supply policy documents, procedures, better practice guidelines and supporting templates. Compliance with key components of the procurement process are measured and periodically reviewed by internal audit or equivalent.

1 2 3 4 5

Docs

4.3 Is there a central group that supports the development of contracts?No, contracts are developed in an ad hoc way with little oversight from procurement personnel or other contract management specialists.

Yes, there are standard terms and conditions available for use for routine procurement activities; however compliance with these templates is not monitored.

Yes, there are standard terms and conditions available for use for routine procurement activities, and compliance with these templates is monitored.

Yes, there are personnel who have contract management capabilities and who are able to assist personnel with the development of contracts where templates or standard terms and conditions are not appropriate.

Yes, specialised contract management personnel are used for complex procurement activities as required to ensure the robustness of contracts created.

1 2 3 4 5


4. Procurement processes Score

Docs

4.4 Is there a complaints management and dispute resolution process in place to address and resolve procurement related complaints?No, there is no complaints management and dispute resolution process in place that deals with procurement-related complaints.

Yes, a complaints management process is in place; however it is not consistently applied in relation to all procurement complaints received.

Yes, a complaints management process is in place that deals with procurement-related complaints and includes dispute resolution steps. There is evidence which demonstrates due process has been given to all procurement complaints received.

Yes, a complaints management process is in place that includes dispute resolution steps and ensures independence of the complaints process. There is evidence that demonstrates due process and integrity in resolving procurement complaints.

Yes, a complaints management process is in place that includes dispute resolution steps and ensures independence of the complaints process. There is evidence that demonstrates due process and integrity in resolving procurement complaints. Complaints are also reviewed as part of a continuous improvement program to limit the likelihood of similar complaints reoccurring.

1 2 3 4 5

Docs

5. Sourcing Score

5.1 Are there documented category plans in place for all key categories?No, there is no category management process in place and categories are managed in a reactive way.

Yes, some category plans are in place however the categories do not necessarily match up to key categories, and/or there is no clear owner of the category.

Yes, a category management process is in place that actively manages the key procurement categories; however the management processes are not led by a business representative, instead category management occurs in isolation.

Yes, a category management process is in place. This process ensures key categories are managed centrally or by lead business units. The responsibility of these leading groups is to identify and implement performance improvement, assess market conditions and lead procurement activities within the key categories.

Yes, a category management process is in place. This process ensures key categories are managed centrally or by lead business units. The responsibility of these leading groups is to identify and implement performance improvement, assess market conditions and lead procurement activities within the key categories. Category management activities are monitored, with key learning being shared across category lead business units and targets set for continuous improvement.

1 2 3 4 5

Docs


5. Sourcing Score

5.2 Are activities undertaken to identify opportunities to aggregate spend with other business units/agencies, including joint tenders or being a lead for a state purchase contract?No. Organisation participates in state purchasing contracts but has made no attempt to collaborate with other business units/agencies in assessing aggregated demand opportunities.

Yes, the organistion has participated in sector procurement forums but to date has not participated in any collaborative procurement activities or assessed aggregated demand opportunities.

Yes, organisation has participated in collaborative procurement initiatives to aggregate spend across other business units/agencies occurs, however no action in leading in the development or management of state purchasing contracts has occurred.

Yes, organisation has participated in collaborative procurement initiatives to aggregate spend across other business units/agencies occurs and there is some experience in initiating and leading this type of activity.

Yes, organisation has participated in collaborative procurement initiatives to aggregate spend across other business units/agencies occurs, and there is significant experience in initiating and leading this type of activity.

1 2 3 4 5

Docs

5.3 Are supplier and stakeholder relationships actively managed during the sourcing process to assist in the achievement of quality procurement outcomes?No, day-to-day pressure dictates the sourcing process with limited forward planning occurring. As a result suppliers and stakeholders are not proactively managed.

Yes, suppliers and stakeholders are made aware of the sourcing process and specific planning events however there is no standard process for communication of this information.

Yes, suppliers and stakeholders are actively communicated to and engaged with, and there are formalised processes for the communication of sourcing events to stakeholders.

Yes, suppliers and stakeholders are actively communicated to and engaged with throughout the sourcing process, and a communications strategy is included within category management plans.

Yes, suppliers and stakeholders are actively communicated to and engaged with throughout the sourcing process. A communications strategy is developed as part of the category management plan and opportunities for stakeholders and suppliers to provide feedback throughout the sourcing process.

1 2 3 4 5

Docs

5.4 Is a broad set of information used for analysis of key categories?No, there is no marketplace information in relation to key categories.

Yes, some basic information analysis is undertaken in relation to key categories. This information may include factors such as size of market (value and number of players), locations, some social, ethical and/or environmental objectives or

Yes, some basic information analysis is undertaken in relation to key categories. This information may include factors such as size of market (value and number of players), locations, some social, ethical and/or environmental objectives or pricing considerations (price elasticity). This information is obtained from a range

Yes, information analysis is undertaken in relation to key categories. This information may include factors such as size of market (value and number of players), locations, some social, ethical and/or environmental objectives or pricing considerations (price elasticity). This information assists in the analysis of micro and macro economic impact and

Yes, detailed information analysis is undertaken in relation to key categories. This information may include factors such as size of market (monetary and number of players), locations, some social, ethical and/or environmental objectives or pricing considerations (price elasticity). This information assists in the analysis of micro and macro economic impact and broader


5. Sourcing Scorepricing considerations (price elasticity); however is sourced from limited sources, sometimes including suppliers.

of sources and is used to undertake basic market analysis.

broader government objectives which is analysed by procurement personnel with deep category expertise.

government objectives which is analysed by procurement personnel with specialist economic or technical skill. This market analysis is used to determine the specifications of a good/service and the go to market strategy.

1 2 3 4 5

Docs

5.5 Are there initiatives to identify innovation or demand reduction opportunities?No, there are generally no initiatives to work with suppliers on identifying innovation, and no processes around demand management.

Yes, procurement specifications are generally output focused, with little scope for suppliers to identify innovation opportunities. Demand reduction processes are in place but they generally do not involve suppliers.

Yes, demand management processes are in place, and personnel works with suppliers to identify mutually beneficial demand reduction opportunities. This generally occurs as part of the contract management process once the supplier has been selected.

Yes, demand management processes are in place, and personnel work with suppliers to identify mutually beneficial demand reduction opportunities. Opportunities for innovation and demand reduction occur both at supplier selection and contract management stage. At supplier selection stage, specifications are generally output focussed however non-financial objectives are clearly communicated.

Yes, demand management processes are in place, and personnel work with suppliers to identify mutually beneficial demand reduction opportunities. Opportunities for innovation and demand reduction occur both at supplier selection and contract management stage. At supplier selection stage, specifications are generally outcome focussed to encourage innovation in supplier submissions.

1 2 3 4 5

Docs

6. Contract management Score

6.1 Is there a contract management framework in place which enhances the efficiency and effectiveness of procurement activity undertaken?No, there is no framework in place to manage suppliers or stakeholders.

Yes, there is a basic contract management framework in place that ensures, at a minimum governance of contract management, development of service level agreements, and communication to key

Yes, there is a contract management framework in place that ensures governance, communication, and risk frameworks are applied to the contract management phase. In addition, the contract management framework ensures a consistent approach to contract management covering

Yes, there is a comprehensive contract management framework in place ensuring governance, communication and risk frameworks are applied to the contract management stage and a consistency in approach to contract management. In addition, the framework offers a flexible approach based on an

Yes, there is a comprehensive contract management framework in place ensuring governance, communication and risk frameworks are applied to the contract management stage and consistency in approach to contract management. The framework offers a flexible approach based on an assessment of the supplier


6. Contract management Scoresuppliers and stakeholders. onboarding, data management,

conflict resolution, and offboarding processes.

assessment of the supplier risk and the good/service’s ‘proximity to core’/importance.

risk and the good/service’s ‘proximity to core’/importance. The framework also gives specific guidance on opportunities for leveraging benefits during the contract management phase.

1 2 3 4 5

Docs

6.2 Are supplier and stakeholder relationships actively managed on an on-going basis to assist in the achievement of quality procurement outcomes?No, day-to-day pressures dictate procurement activity, with limited forward planning occurring.

Yes, however procurement planning is largely driven by contract end dates and there is insufficient capability to leverage strategic opportunities. No contract management plans are in place.

Yes, contract management plans are in place for key suppliers which form the basis for the management of supplier relationships; however there is little differentiation in the approach to contract management planning between suppliers.

Yes, contract management plans are in place for all non-transactional procurement. The approach to contract management planning is flexible based on the supplier risk analysis and the good/service’s ‘proximity to core’/importance, which increases the efficiency of contract management processes and allows for the prioritisation of key suppliers.

Yes, contract management plans are in place for all non-transactional procurement. The approach to contract management planning is flexible based on the supplier risk analysis and the good/service’s ‘proximity to core’, which increases the efficiency of contract management processes and allows for the prioritisation of key suppliers. These plans are linked to the overall risk management processes such that identified supplier risks are actively mitigated.

1 2 3 4 5

Docs

6.3 Are there clear performance requirements in place for suppliers that are actively managed?No, there are no performance requirements in place.

Yes some suppliers’ performance is tracked with basic tools and manual processes; this varies by business unit and procurement type.

Yes, there are basic tools and manual processes to measure some suppliers’ performance, mainly at a high level. This information is not shared or only partly shared with suppliers to improve collaboration.

Yes, there are standard processes to measure the performance of all suppliers. Information is shared with suppliers to improve the level of service collaboration and efficient procurement outcomes.

Yes, there are standard processes in place to measure the performance of all suppliers. In addition, specific KPIs have been developed for key suppliers based on procurement objectives. These are monitored, communicated with the client and used to improve collaboration and efficient procurement outcomes.

1 2 3 4 5

Docs


6. Contract management Score

6.4 Is procurement spend reporting used to proactively identify cost reduction or service improvements?No tracking of spend metrics for purposes other than compliance checks.

Yes, business units/cost centres are responsible for managing budgets only.

Yes, business units/costs centres track major suppliers’ spend but it is often across multiple IT systems and not collated in a way which allows for meaningful spend analysis.

Yes, spend in key categories is tracked and collated in a way which allows for meaningful comparison and analysis (e.g. collated into procurement categories).

Yes, spend in key categories is tracked and collated in a way which allows for meaningful comparison and analysis (e.g. collated into procurement categories). This analysis is used to analyse key demand and supply drives and to identify potential cost reduction or service improvements.

1 2 3 4 5

Docs

7. Performance management Score

7.1 Is the performance of the procurement function known, monitored and used to drive continuous improvements?No, there is no monitoring of the procurement performance.

Yes, procurement performance metrics have been developed, however they are not consistently used to measure performance and/or are largely reliant on qualitative measures. The usefulness of metrics is limited by the quality of procurement data available.

Yes, procurement performance metrics have been developed as part of a procurement management dashboard applied consistently across procurement functions. The metrics largely focus on procurement financial metrics however may also include some other qualitative measures.

Yes, procurement performance metrics have been developed as part of a procurement management dashboard which is applied consistently. The metrics are relevant to the procurement activities and address people, customers, suppliers, and operational activities as well as financials.

Yes, procurement performance metrics have been developed as part of a procurement management dashboard which is applied consistently. The metrics are relevant to the procurement activities and address people, customers, suppliers, and operational activities as well as financials. In addition performance targets have been developed and communicated to relevant personnel.

1 2 3 4 5

Docs

7.2 Is external benchmarking used to identify performance gaps, set target performance levels, and identify process changes to close the gaps?No, there is no external benchmarking used.

Yes, some categories and business units use external benchmarking to identify performance gaps, however this generally occurs in an

Yes, external benchmark is used to identify performance gaps for procurement activities, and this is used to develop detailed development plans.

Yes, external benchmark is used to identify performance gaps for procurement activities, and this is used to develop detailed development plans. Performance against developments plans

Yes, external benchmark is used to identify performance gaps for procurement activities, and this is used to develop detailed development plans. Performance against developments plans is regularly


7. Performance management Scoread hoc way and no formal development plans are generated from the process.

is regularly assessed. assessed. In addition performance targets are set and internally communicated to demonstrate expectations and performance.

1 2 3 4 5

Docs


Part 2: Capability assessment templateName of organisation/business unit:

Key areas Segments Criteria Score Minimum performance score

Governance and organisation

1. Governance 1.1 Is there a procurement policy in place?

1.2 Is there a procurement strategy in place that details its strategic direction for procurement activities?

1.3 Is there a formally stipulated decision-making process and probity requirements relating to procurement activities?

1.4 Is there a system in place for the identification and management of procurement related risks?

1.5 Are the responsibilities of procurement personnel clearly communicated and monitored?

1.6 What is the approval process for delegation of authority relating to procurement activities?

1.7 Is spend monitored to ensure compliance with policies and value for money principles?

Total governance score Transactional 14Leveraged 22Focused 31Strategic 34

2. Organisation 2.1 Is procurement viewed as strategic by senior management?

2.2 Are there personnel with specific procurement knowledge?

2.3 Are there mechanisms to encourage collaboration on procurement activities throughout the organisation?

2.4 Do recruitment, personnel and training considerations explicitly integrate the skills needed to meet the organisation’s procurement objectives?

2.5 Do personnel have a level of procurement understanding appropriate for their level of procurement engagement?

Total organisation score Transactional 9Leveraged 15Focused 20Strategic 25



Tools, systems, process

3. Technology and tools 3.1 Are there tools in place that facilitate a systematic and consistent approach to procurement and purchasing activities?

3.2 Is procurement data managed and stored in a way which facilitates accurate expenditure reporting and tracking?

3.3 Are procurement policies, tools, contract data and training information available in a consistent technology platform and format?

Total technology and tools score Transactional 6Leveraged 9Focused 12Strategic 15

4 Procurement processes 4.1 Are regular and constructive procurement planning processes undertaken?

4.2 Is a standard procurement process documented and consistently applied?

4.3 Is there a central group within the organisation that supports the development of contracts?

4.4 Is there a complaints management and dispute resolution process in place to address and resolve procurement related complaints?

Total procurement and processes score Transactional 8Leveraged 13Focused 17Strategic 20

5. Contract management 5.1 Is there a contract management framework in place which enhances the efficiency and effectiveness of procurement activities undertaken?

5.2 Are supplier and stakeholder relationships actively managed on an on-going basis to assist in the achievement of quality procurement outcomes?

5. Are there clear performance requirements in place for suppliers that are actively managed?

5.4 Is procurement spend reporting utilised to proactively identify cost reduction or service improvements?

Total contract management score Transactional 7Leveraged 12Focused 16Strategic 20



Sourcing 6. Sourcing 6.1 Are there documented category plans in place for all key categories?

6.2 Are activities undertaken to identify opportunities to aggregate spend with other business units/organisations, including joint tenders or being a lead for a state purchasing contract?

6.3 Are supplier and stakeholder relationships actively managed during the sourcing process to assist in the achievement of quality procurement outcomes?

6. Is a broad set of information utilised for analysis of key categories?

6. Are there initiatives to identify innovation or demand reduction opportunities?

Total sourcing score Transactional 6Leveraged 14Focused 20Strategic 24

7. Performance management

7.1 Is the performance of the procurement function known, monitored and used to drive continuous improvements?

7.2 Is external benchmarking used to identify performance gaps, set target performance levels and identify process changes to close the gaps?

Total performance management score Transactional 3Leveraged 5Focused 7Strategic 9


Additional information[Insert any additional information]

Signed by (Assessor): ................................................................................................

Approved by (accountable officer or delegate): ................................................................................................


Company policy and guidelines - Home | Victorian ... · Web viewYes, procurement performance...

Documents

Transcript of Company policy and guidelines - Home | Victorian ... · Web viewYes, procurement performance...