Centralized Buying and Staff Reductions at The Heart of Whitehall Plan

Posted on November 16, 2010

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What stands out the most to me based on a preliminary review of the Cabinet Office’s “plans to slash administration costs, including procurement operations, by £100 million in 2013-14,” is that the approach from a purchasing standpoint is at once a courageous acknowledgment of the need to make hard and even unpopular decisions, tempered by a balanced view of how process centralization can be leveraged to achieve stated objectives.

Francis Maude, Minister for the Cabinet Office, Paymaster General

In short, a reversal of sorts from the norm in that historically initiatives of this nature have often involved overarching centralization ambitions while strategically minimizing job loss.

Based on a November 10th, 2010 SupplyManagement.com article titled “Whitehall buyers prepare for huge cuts programme,” it would seem that this ineffective approach may have finally been abandoned.

According to SupplyManagement.com’s Angeline Albert, a key part of a new Cabinet Office business plan which includes a clarification of departmental priorities, will involve significant job cuts – including purchasing personnel.  Conversely, it was “also confirmed that a national procurement system to centralise buying of commonly used categories and commodities such as energy, office supplies, professional services, ICT and marketing will begin across government in March 2011.”

This is big news in that there appears to be a quantitative element to centralizing the acquisition of certain categories and commodities that is actually based on a true spend intelligence visibility versus a project or technology investment justification.  I haven’t been this excited from a purchasing standpoint since . . . well, never.  And you have to remember that out of what now looking back has been a long career, I have built and sold a company for $12 million, successfully launched a procurement initiative that saved one government agency significant sums of money and had the opportunity of writing about one of the most successful public sector procurement programs anywhere . . . Virginia’s eVA.

While this is still in the very early stages, and as we discovered last week with the derailed Ariba-driven North Carolina At Your Service program, promising beginnings are no guarantee of sustainable success.  Having said that, what is happening in the UK is nonetheless promising and definitely makes for one of the top stories to follow for the remainder of 2010 and probably well into 2011.

Part of a Much Larger Public Sector Reform Strategy?

 

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