An Introduction to the
Procurement Process
How
to
use
a
professional
approach
to
procurement
to
reduce
risk
and
get
best
value
for
money
What is covered?
• In
the
next
10
minutes
we
will
show
you:
– How
to
hit
the
ground
running
by
using
a
professional
process
template
– How
to
avoid
many
of
the
procurement
pi>alls
– How
to
deliver
a
professional
standard
procurement
project
– How
to
get
further
support
and
informa@on
for
free
Where does this fit?
• Limited
professional
procurement
support
– Small/Medium
sized
organiza@on
– Non
core
business
project
– Procurement
resource
constrained
• Procurement
for
a
highly
technical
project
– Highly
specialised
procurement
e.g.
SoIware
– Procurement
need
specialist
skills
• For
the
procurement
professional
– S@ll
on
your
learning
curve
– Suppor@ng
non
procurement
people
Why follow a procurement process?
• Why
learn
from
your
own
mistakes
when
you
can
learn
from
others’
mistakes
• The
process
template
gives
a
framework
to
work
within
– Save
@me
– Avoid
acquiring
the
wrong
solu@on
to
a
problem
– Pay
the
right
price
– Avoid
overlooking
vital
steps
in
the
process
• Poten@al
suppliers
know
what
to
expect
• Minimize
the
risk
of
making
a
costly
mistake
A few words of warning
• Every
project
is
different
• Some
projects
are
very
easy
• Some
projects
are
highly
complex
or
regulated
• All
procurement
follows
the
same
broad
process
• Let
common
sense
prevail
1.
Define
Business
Need
Iden@fy
Business
1.1
Requirement
Knowledge
1.2
Capture
Stakeholder
1.3
Consulta@on
1.4
Risk
Assessment
1.5
Scope
and
Communica@on
Objectives 1. Capture the detailed business requirements
2. Obtain full stakeholder buy in to any resulting plans and
timelines
What you need before you start 1. Key Contact Details
2. Basic Business Requirement
Deliverables 1. Formal Business Requirement statement
2. Confirmed buy-in.
3. Rough Budget Estimate
1.
2.
Define
Develop
Business
Procurement
Need
Strategy
Team
Kick
2.1
Off
Market
2.2
Research
2.3
Define
Success
2.4
Agree
Strategy
Objectives 1. Agree procurement timescales
2. Evaluate current environment (internal and market environments)
and decide on the procurement process
What you need before you start 1. Formal business requirement statement
2. Resources identified and committed
3. Buy-in obtained from all stakeholders
Deliverables 1. Procurement plan
2. Detailed estimated budget signed off
3. Market research
1.
2.
3.
Define
Develop
Supplier
Business
Procurement
Evalua@on
&
Need
Strategy
Selec@on
3.1
Develop
Pre-‐qual
Strategy
3.2
Score,
Filter
&
No@fy
3.3
Develop
&
Launch
Tender
3.4
Assess
&
Filter
Objectives
1. To select the right suppliers and solution to be taken forward to
final negotiation.
What you need before you start 1. Procurement Strategy agreed and signed off
2. Market Research
Deliverables 1. Shortlist of suppliers
2. An agreed procurement approach with shortlisted suppliers
1.
2.
3.
4.
Define
Develop
Supplier
Nego@a@on
Business
Procurement
Evalua@on
&
and
Award
of
Need
Strategy
Selec@on
Contract
4.1
Prepare
Nego@a@on
Strategy
4.2
P2P
Design
4.3
Conduct
Nego@a@ons
4.4
Finalize
Contract
4.5
Award
Objectives
1. Complete Negotiations and select best supplier
2. Award contract
What you need before you start
1. Filtered List of Suppliers
Deliverables 1. Agreed Purchase to Pay processes and KPIs
2. Signed Contract
1.
2.
3.
4.
5.
Define
Develop
Supplier
Nego@a@on
Induc@on
&
Business
Procurement
Evalua@on
&
and
Award
of
Integra@on
Need
Strategy
Selec@on
Contract
4.1
Launch
Supplier
4.2
Post
Procurement
Review
4.3
Con@nuous
Integra@on
Objectives 1. To ensure that the supplier is fully prepared to deliver all aspects of the contract
2. To ensure that all parties are familiar with agreed P2P policies and procedures
3. To initiate the relevant performance measures and reporting
1. Signed contract in place
What you need before you start
2. P2P policies and processes agreed
3. SLAs and KPIs agreed and understood
Deliverables
1. Business Requirement met
For further information
• Use
the
free
interac@ve
procurement
process
diagram
at
purchasinginsight.com
– Drill
down
into
the
detailed
sub
tasks
– Read
further
guidance
notes
on
sub
tasks
– Simply
click
on
any
stage
of
the
process
to
see
further
detail
– Revisit
the
process
or
use
it
as
a
training
tool
