Planning in procurement involves consulting key stakeholders to define our ‘real’ need, analysing how the supply market works, assessing risks and ultimately defining the best Procurement Strategy to meet the organisations requirements.
P1 Analyse Business Need
The business need is a multi-dimensional expression of the requirements of the business’ spend stream both now and in the foreseeable future.
The key steps to analyse business needs are:
• Determine if the spend is a critical one for the agency, based on an assessment of value and risk, and adopt a Supplier Relationship Management (SRM) approach if criticality is high.
• Identify and understand internal stakeholders.
• Engage internal stakeholders and win their commitment.
• Brainstorm different opinions about what the business requires from this project and think about alternative options to deliver the same outcome in a better way.
• Determine and agree our business needs.
Resources you need for P1:
• Risk Assessment Tool
• Supply Positioning Tool
• Stakeholder Analysis Tool
• PRACTISE – Needs Assessment Tool
• Desired Outcome Statement Tool
P2 Analyse & Engage the Market
Our goal is to develop a comprehensive profile of the dynamics of the supply market in order to decide how best to interact with it:
• Have a clear profile of the supply market, its capabilities and its key drivers of change which will shape it over the next 12-36 months.
• Ensure we are aware of new and innovative solutions that the supply market could implement to deliver better value for money to the agency.
• Get an appreciation of the balance of power between the agency and the market.
The key steps to analyse and engage the market are:
• Identify first any arrangement that may exist at the Whole of Government level (for example, pre-qualification schemes and panels) or agency arrangements with a piggyback clause and use them.
• Undertake a thorough analysis of the supply market.
• Interact and engage with the supply market in compliance with probity rules.
Industry engagement consists of consulting the industry (or supply market) around a particular problem or opportunity. It is to be conducted at all phases in the procurement life cycle.
When considering an Industry early engagement approach, consider the following basics:
• Engage with key industry existing and potential suppliers at all stages of the procurement cycle, not only during the sourcing stage.
• Ask to be educated in what the supplier thinks is important for the agency to know.
• Include as many potential suppliers, including small and medium enterprises as is feasible.
• Generally avoid meetings with more than one supplier at a time.
• Always respect the commercial significance and intellectual property of the supplier.
Resources for P2:
• Supply Preferencing Toolkit
• Porters Five Forces Analysis Guide
• Balance of Power Toolkit
• Procurement Board Industry Engagement Guide
• Market Summary Tool
P3 Finalise Procurement Strategy
Our goal is to develop a strategy to interact with the market based upon our understanding and analysis of:
• The business needs and demand-related opportunities.
• The dynamics of the supply market.
• Key risks and opportunities related to the spend.
The key steps to finalise the Procurement Strategy are:
• Summarise our key findings about business needs, the supply market and key risks and opportunities.
• Determine the level of business criticality of the project and what top priority opportunities should be driven out of the arrangement.
• Understand the different strategic options to get the best out of the supply market to deliver optimum value for the agency:
How do we approach the market?
What will success look like?
How do we manage risks?
• Identify benefits to be realised and strategy to achieve them.
• Select and define an appropriate strategy and develop a plan to implement it.
• Ensure that we have support for our chosen strategy and get it signed off by the appropriate delegate and/or group.
Resources for P3:
• Procurement Strategy Template
• Opportunity Analysis Toolkit
• Benefits Realisation Framework
You must design resources based on your business. If you need examples, please send email to me: