THE PMA ROUTE TO A HIGH PERFORMANCE PROCUREMENT TEAM

September 2015

Judith Russell

CONTENTS

o Coverageo Approacho Structureo Sector performanceo Driving high performanceo Examples of Good Procurement

PMA COVERAGEo There are currently 96

English HEIs that have undertaken a procurement maturity assessment.

o This represents about 75% of the sector and hence provides a very substantial data set for benchmarking

o Also two Non HEIs

PMA APPROACH

PMAs are a structured approach to

understanding the effectiveness of

procurement within an institution and across the

sector

PMA programme is a key recommendation of the

2011 and 2015 Diamond Reports

SUPC received funding from Innovation and

Transformation Fund to accelerate the

programme across England

PMA question set based on questionnaire used in

Scotland: developed following McLelland

efficiency study. Undertaken by

independent, experienced procurement professionals

Process is action oriented with institutions receiving assessment report, action

plan and access to live benchmark data

Results are collated to provide sector trends and

work with HEPA to support the sector as a

whole

PMA STRUCTUREo Evidence based assessment: 53 Questions (October 2013)o 9 procurement attributes addressed: Governance, Reporting

and KPIs Organisational, Resources and Skills, CSR, Collaboration IS/P2P, Supplier Strategy and Policy and Category Management

o Assessed against 4 levels of maturityo Developingo Tacticalo Plannedo Superior

o Benchmark scores for how your institution compares overall with others and in specific aspects of Procurement

o Establishes a baseline for your institution allowing you to visibly demonstrate procurement improvements

SECTOR PERFORMANCE

MATURITY STAGE BY NUMBERS AND NON-PAY SPEND: 2011/15

75% of institutions are in the lower maturity levels - accounting for 63% of spend

SCORES ACROSS THE MATURITY SCALE

TWO HEIS DEMONSTRATES SUPERIOR PERFORMANCEMANY LARGER INSTITUTIONS STILL AT LOWER MATURITY LEVELSRED LINE – SECTOR AVERAGE SCORE: 38%

SCORES ACROSS THE MATURITY SCALE WITH NON-PAY SPEND

S L VL

Smaller institutions are predictably less mature on average than larger institutions. Average VL just progressing into Planned

Average25%

Average41%

Average49%

S= Small HEIs: <£100m IncomeL= Large HEIs: > £100m and < £400m IncomeVL= Very Large HEIs: >£400m Income

2015: 98 INSTITUTIONS

Key

Sector minimum and maximum score for the attribute

Sector average score

Institution achieved score

2nd and 3rd Quartiles

PROGRESS FROM 1ST TO 2ND PMAS

38 institutions that have undertaken a 2nd assessment have made an average improvement of 12 percentage points

SUMMARY OF KEY FINDINGSo Institutions who have been re-assessed have made

demonstrable improvements. On average an institution is progressing 12% between assessments

o 75% of institutions are in the lower half of procurement maturity and hence there is opportunity for improvement and efficiency gains

o Beacons of superior performance now exist for all attributeso Skills, Collaboration and Organisation are now strongest

areaso Category Management, Reporting/KPIs and CSR are now the

weakesto Many procurement teams do not cover Estates Procurement o There is a weak correlation between savings and maturity

level - possibly not all institutions are reporting all their savings

DRIVING HIGH PERFORMANCE

RAISE PROCUREMENT PROFILE AND INFLUENCE

o Detailed report outlining your current procurement maturity - a blueprint to develop procurement across your institution

o Share across institution across all levels.

o Participants viewso Raised procurement profile with SMT

and procurement committeeso Independent objective confirmation

of capabilityo A structure to demonstrate

capabilityo Moving up against benchmark –clear

visibilityo Enabler for change

CLEAR RESOURCED PLAN WITH BUY IN

o A comprehensive action plan outlining the steps that should be taken to move towards a higher level of procurement maturity

o Participants views o Confirmed support for additional

investment and quantified scope for improvement

o Identified areas to improveo Clear action plan, especially helpful

for a new HoPo Informed decision making on staff

training and work priorities

BENCHMARK AND SET YOUR TARGETS

o A sector benchmark comparing your level of maturity with other HEIs

o Participants viewso Clear targets and measurements for

improvemento Identify ‘best in class’ levelso Sharing best practice. HEPA links

RETAINING MOMENTUM

o Future assessmentso Fullo Interimo Single attribute

On-line access to dynamically updating benchmark

On-line Action Plan Implementation support

Spend Analysis   P2P Implementation Procurement Strategy and

Implementation Plan with Resource Planning

Performance Measurement and Reporting 

EXAMPLES OF SUPERIOR PERFORMANCEo Governance: Fully documented and communicated

procurement strategy -strong link to institution’s strategy.

o Reporting/KPIs: Clear performance measures in place. Comprehensive metrics, regularly reported.

o Organisational: Complete coverage across whole institution, visible impact, senior ‘peer group’

o Skills: Strong skills and fully trained staff within the central procurement team covering all spend including estates

o CSR: Embedded CSR factors in the core procurement processes. Widest view on sustainability

EXAMPLES OF SUPERIOR PERFORMANCE

o Collaboration: Active in sharing and leading collaboration efforts.

o IS/P2P: Strong process automation and e-procurement coverage.

o Supplier Strategy: Good supplier relationship mgt and senior mgt buy-in.

o Category Management: MI available to inform category management. Good supply market research and stakeholder involvement