The hidden costs in the drive for efficiency

Government has set demanding targets for the public sector to achieve efficiency and cost improvements through the adoption of best procurement practices and the implementation of e-procurement technologies. But, at the same time, it has recognised the need to balance the efficiency drive with consideration for its impact on local business communities. The public sector has been called upon to “promote the advantages of e-procurement to local suppliers and retain economic development benefits within the local community” as well as “ensure corporate procurement strategy is addressing sustainability and equality issues, helps to achieve the community plan and involves the voluntary sector”.

The Observatory has been designed to provide a valuable insight into the potential impact on those local businesses with whom you trade in the event that efficiency initiatives results in trade with an existing local, SME or recently created business being significantly curtailed or suspended. It addresses issues such as:

Analyse

• How much do you spend locally?
• How much do you spend with suppliers who are SMEs?
• How much do you spend with newly created suppliers?
• How much do you spend with the Third Sector?
• How many of your suppliers are ‘at risk’ as a result of cessation or curtailment in trade?
• Which suppliers are overly dependent on you for the bulk of their income?
• How many employees might be at risk as a result of an initiative designed to deliver efficiencies?

Compare

• In which categories are you spending more or less than might be expected given the averages for your sector and/or region?
• What proportion of your overall non-pay spend is a realistic goal for spend locally, with the Third Sector, with SMEs or with newly created businesses?
• Is the proportion of suppliers overly dependent upon you a real issue or would you better directing effort at procurement related issues elsewhere?

To arrange a meeting to discuss how implementation of the Observatory can help you to quantify the potential economic impact of initiatives designed to deliver savings in your own organisation then please contact us.