Getting the best out of purchasing catalogues
February 18, 2016
Purchasing catalogues can make a procurement manager’s job a lot easier. In fact it’s pretty much impossible to run an e-procurement process without them. They can save money, allow prices to be compared across suppliers, offer cost-savings from bulk-buying, and ensure that products of the right specification and quality are used consistently across a whole organisation. There are particular benefits in the public sector, where the same catalogue is often shared not just by different government departments but local government, the NHS, and other public sector bodies.
So far, so good. But the obvious benefits for product procurement get a lot more complex when it comes to services. It’s much harder for suppliers to define the exact nature of services, compared to products, and much harder for buyers to be sure they’re getting what they really need. All too often, buyers are faced with two bad choices: buy something that’s not quite what they want, or go through the time and extra expense of procuring and scoping a new service from scratch. At which point all the benefits of price transparency and replicability go out of the window.
Some of our recent work illustrates the different challenges here. For example, we’ve been working with a public sector health body on the procurement of a range of back office services, including payments, and storing and moving records. There would be significant benefits from including these in a catalogue, so other related bodies could compare prices and possibly use the same supplier. The issue we faced was that the client’s particular services were rather too specialised to be generally applicable, so we needed to create a more generic version of the service which could be included in a catalogue, but which would also be customisable to particular needs, both now and in the future. There were other issues too, relating to the different IT systems in use in different bodies, which also made full standardisation tricky.
So what’s the answer?
The answer we developed was to break down the services into components, which could be priced more easily. We were also able to establish a framework for future negotiations, covering key factors such as agreed profit margins. In other words, it was about both the specific and the general: buyers need to ensure the catalogues they use are flexible enough to meet particular needs, as well as general enough to offer all the advantages of transparency and economies of scale.
To learn more about key themes related to contract management in the public sector, read our new publication, 'the Negotiator'.
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