The City of Vantaa’s Strategic Road Map and Operating Model

Tiina Ekholm

Procurement Director

Salla Koivusalo

Sustainability Consultant

Procurement Center

Changes in the operating environment

Legislative Social and societal Economic

Environmental Cultural Technological

HOW TO CONSIDER IN PREPARING OF PROCUREMENTS?

The economic importance of procurement

• 2000 billion a year in the EU

• 35 billion a year in Finland – Public procurement covers 15% of Finland's GDP

• In Vantaa, purchases of services and materials 704 million a year, investments 147 million (2016)

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Principles applicable to procurements and the objectives of the Procurement Act

4

Exploiting competitive conditions

Impartiality Quality

Economic efficiency Non-discrimination

Openness

Proportionality

Innovativeness

Attentive to social responsibility

Reducing administrative tasks

Considering local companies and the transparency of small purchases

Governing legislation

- According to the Local Government Act (365/95), the municipality aims to promote the well-being and sustainable development of local residents in their area - Procurement is one way to accomplish the basic task.

- It is important to find qualitative, economically and environmentally sustainable ways of achieving this

→Public procurement is governed by EU directives and national legislation → Oblige to take stronger account of accountability considerations

→ Encourage the development of procurement

City of Vantaa, Salla Koivusalo 5

1. Values and strategy

OBJECTIVES OF THE STRATEGIC PRIORITIES AND THEIR

• VALUES – Transparency Courage Responsibility Communality

• PRIORITIES – We safeguard the balance of the economy

– We concentrate the city, taking care of the surrounding nature

– We increase the city's vitality and attractiveness

– We promote the well-being of the inhabitants

– We are pioneers in developing services

– We lead renewing and participating

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VITALITY PROGRAM STARTING POINT

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- The indisputable advantages of Vantaa and also in the new program are, along with the location and accessibility advantages, the city’s diverse industrial structure and international operating environment

- In a modern skilled economy workplaces, business activity, quality living

options, and an interesting city are ever more strongly knitted together - In the future, companies invest more and more into cities that are

interesting and that support their innovative activity and objectives

- In addition we know that in urban development the growth of job self-sufficiency follows the growth of the city population

VITALITY PROGRAM AND EMPLOYMENT

We are at the forefront of

service development Developing leadership and

participation

We are creating a more

vibrant city

We promote the wellbeing

of residents

• The Capital Region has the best-

developing urban employment

situation

• We promote the employment of

residents in the open labor

market

• We help companies in recruiting

skilled labor

We ensure balance in the

economy

Increasing urban density

while conserving nature

• The municipal share of labor

market subsidies will decrease

• We promote wellbeing by

supporting the employment of

those in a poor situation in the

labor market

• We promote equality in our

services

• New service model for youth

employment

• Increasing use of customer feedback

• Promoting employment of

employment services’ customers

through the employment clause in

procurements

• Implementing new operations system

at coaching centers

• Utilizing project funding as part of

developing operations

• Implementing coaching

leadership

• Personnel’s wellbeing and

enjoyment at work as a core

value of leadership

• Equality as a part of daily

operations

8.2.2018

Katariina Rautalahti 10 Kuva Sam Schooler

Strategy of the Council Period 2018 - 2021

Development of the urban structure that supports resource wisdom Vantaa will be a carbon neutral city in 2030

The roadmap for resource wisdom is a strategy implementing program

‘’Long-term target program to promote resource efficiency and environmental responsibility

Measures 2018 - 2021 2022 - 2025 2026 -2029

The business areas will carry out the implementation plans for the current council period

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Objectives of the strategic procurement roadmap and operating model

• Know how to procure that which is really needed

• Make economically viable cost-effective procurements

• Procurements are made optimally for the city's resources

• Systematic, proactive planning of procurement in a sufficiently long-term perspective and related communication

Procurements are part of leadership

Procurements are an instrument for implementing the strategy

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STRATEGIC PROCUREMENT PACKAGE

• From a sectoral, industry and category-specific point of view to an integrated one. Procurement and investment entities are increasingly hybrids of service, trademark, and license procurement. An integrated perspective enables the use of performance-based and partnership models in procurement.

ICT procure-

ments

Construc-tion

invest- ments (house

and infra)

Material and

service procure-

ments

Deparmentsservice,

material, and ICT

procure- ments

Arrange- ment and procure- ment of

services for inhabitants

MANAGEMENT OF STRATEGIC PROCUREMENTS

Management of cooperation/partnerships State

Counties

Joint municipal

authorities

R&D actors

Companies and other

actors

STRATEGIC OBJECTIVES- EFFECTIVENESS

(productivity, enterprise, responsibility (environment, social, life cycle) lobbying)

Inhabitants

Work situation (1)

• Pilot of the Strategic procurement roadmap 2017

• The city’s strategic procurement approach was identified in 2017

• BusinessFinland (TEKES) granted financing to the city – For the development and implementation of the strategic procurement

model

– Development of business forum and procurement communications

– Development and testing of national innovative procurement approaches

– Preparing and competing for 5 procurement pilots (facilities 24/7, indoor air service, material needs of the robotics center, procurement of personal assistants, Maas services)

• Sustainability Advisory Board

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The operating cycle of strategic procurement function

Updating of business road maps for the current year

Assessment of the strategicity of supply chains for the Mayor's framework negotiations and ongoing

monitoring

Divisions financial plan of strategic procurement section into income cards during the

Council period strategy

Presentation of the division of labor between the procurement items in industry selected strategic

sectors into the Mayor's budget negotiations. Ongoing tracking.

Updating the roadmap for strategic procurement in the city

for next year. Reporting on tracking data.

January

OOPERATIONAL PREPARATION

GROUP

June

October March

Procurement risk assessment as part of risk

analysis

PROCUREMENT COORDINATION

GROUP

OPERATIONAL PREPARATION

GROUP

OPERATIONAL PREPARATION

GROUP

On the industry's management team agenda

PROCUREMENT COORDINATION

GROUP

On the industry's management team agenda

On the agenda of the City Executive Team

On the agenda of the City Executive Team

OPERATIONAL PREPARATION

GROUP Monitoring and evaluation of strategic

procurement

COMMUNICATION AND MARKET DIALOGUE

Monitoring and evaluation of strategic

procurement

INTERNAL OPERATIONAL MODELS THE PROCUREMENT COORDINATION GROUP • Send and receive messages conveying information about

strategic procurement in industries • Updating the procurement roadmap • Presentation of own timely procurements • Handling and combining needs and ideas recorded in an

shared electronic tool • Identifying possibilities for cooperation • Selection of procurement communications priorities

(thematic priorities and strategic procurements) • Design and implementation of business forums to support

business • Shares information, the procurement center will execute

short sparring sites as needed

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Preliminary evaluation of procurement strategy

Background information

The procurement target, need.

Organizations that are involved and

impacted

Potential Benefits (Points per Category

0-10)

1. Productivity / savings potential Small Moderate Large

2. Potential for improving service quality Small Moderate Large

3. Environmental impacts and

improvement of resource wisdom

Small Moderate Large

4. Social impacts on different population

groups

Small Moderate Large

5. Cooperation benefits within the city Small Moderate Large

6. Market readiness to meet the city's

needs

No ready

solutions Semi-finished,

requires

experiments

Available

solutions are

available

7. Possibility of duplication of the

solution in the market

Small Moderate Large

8. Local innovation and growth potential Minor Moderate Large

9. Risk potential Small Moderate Large

Practical implementation

• Procurements are management, not a separate issue

• As the operating environment and needs change, the road map will need to be updated and completed

• Forecasting supports the coordination of development projects and helps identify strategic development targets.

• The introduction of the model requires a change in work processes:

• Foresight in procurement planning

• Strengthening the city's internal cooperation

• Creating new practices for business collaboration and interaction

• The change is implemented through pilot procurements directly in the industries

• The change is supported by the introduction of a continuous market dialogue model and service molding of communication regarding strategic procurements

Starting point:

• Strategic planning of procurement is

part of the city's overall planning and

operating cycle.

• As a rule, existing structures are utilized

• The Coordination Group and the

Operational Group support the

development of strategic procurement

COMMUNICATION AND MARKETING

• The most important goal is to identify and reach businesses that have what the city needs, or the willingness to develop it – How to reach with the information and how to attract interest in the

city as a client

• Engaging our own staff and training communication skills

• Procurement message and speech with all business communications and collaboration

• Newsletter

• Market spirit in the preparation phase of procurement

• An inspiring and integrating future procurements website

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CHALLENGING THE MARKETS

• VANTAA IS BUYING - EVENTS – Every month

– Future need for interesting procurement, for which something new is particularly desired and needed from companies

– Prepared in the coordinating group at a citywide level

– Business activity is responsible for corporate contact

– The city's messaging is complemented by digital marketing tools as needed

– A permanent approach with a clear process (timetable, goal, co-operation practices, utilization of knowledge, and development of competence)

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As a result

City challenges and procurements - the city's needs

Market dialogue - the markets implement responsibility

Promote partnerships Innovation promoting procurement-

co-development, piloting

Development of competence

Leadership = productivity

Learning = Better Results

Communication = informing of

goals

Effectiveness = implementation of the strategy

Co-operation = vitality, external

resources

STRATEGY OBJECTIVES

Work situation (2)

• Urban Agenda -partnership Innovative and responsible procurement

• KEINO – network-based expertise center collaboration

• 10 municipalities in the procurement network

• Finnish Purchasing and Logistics Association LOGY's procurement forum team – Public procurement team

– Responsibility team

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EU URBAN AGENDA

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Objectives of the EU Urban Agenda partnership • Integration of procurement management into a management system

– How should this be done in the city organization? – What are the challenges facing the city and how do market players

respond to this challenge? – How does the city collaborate with different actors? – Understanding the roles of different actors and coordinating

cooperation and goals

• How to respond to rapidly changing business environment challenges

• Production of reliable supply and analysis models

• Identifying effective market dialogue models and creating a partnership

• Development and experimentation of procurement methods

• Development of know-how and knowledge sharing

• Development of financial instruments for the needs of cities

PARTNERSHIP INNOVATIVE AND RESPONSIBILE PROCUREMENT

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Work schedule and monitoring & evaluation

• BF funding until 10/2019 – Reporting progress 2 times a year

– Make an internal query on the success of the operating model implementation

• Monitoring the Strategy Program – 2 x to the City Council during council periods in conjuntion with mid-

term and final evaluations

– Tip of the spear objective: Strategic procurement supports the city's strategic goals

– Measure: Annual measurement of environmental, business, social and cost/productivity impacts, realized as a questionnaire for road map procurements

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IMPACT AND MEASUREMENT

• We need spending information and its analysis

• We need linking of financial information to procurement contracts

• We need monitoring of the achievement of the strategic goals and measuring of the procurement contracts

• There is a need for operating models, know-how and electronic tools to monitor strategic goals at a contract level

• Analytical know-how is needed in order to evaluate the quality/magnitude of the effectiveness of the performance (9 categories) of the contractual work and its results

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City of Vantaa

Group Services, Procurement Center

Kielotie 14 A, 01300 Vantaa