Tried and tested technology

The use of cutting edge spend data analysis and manipulation tools by organisations seeking savings and efficiencies through improved procurement is expected to increase substantially thanks to the launch of new arrangements by OGCbuying.solutions.
    
The Spend Analysis framework agreement provides all public sector organisations with a tried and tested route to technology that, for many, will enable them to assemble, for the first time, a full and accurate picture of procurement spend, buying patterns, suppliers and the use of approved contracts.
    
By having a clear picture of current buying behaviour, procurement teams are able to identify opportunities for aggregated spend, improved collaboration and the elimination of rogue spending. The new framework agreement was launched on 1 October for a period of four years. This follows a rigorous, EU compliant competitive tender process.
    
By using this framework agreement public sector organisations can access the services
they need swiftly and easily, secure in the knowledge that suppliers have been selected for their ability to understand and deliver in the public sector environment. It also removes the need for individual organisations to carry out their own costly and time consuming procurement exercise.

Clarifying spend
Robert Knapman, director of eCommerce at Buying Solutions, says: “For all public sector organisations, establishing a clear and accurate picture of current spending patterns has to be the starting point. Without that certainty at the outset, it is very difficult to institute changes and improvements with confidence.
    
“What we are all striving for is the information that enables us to negotiate from a position of strength, identify commodity or supplier aggregation opportunities and achieve efficiencies.”
    
According to Rob Knapman, finding the underlying cause of what the current position is can be quite difficult. Organisations have many different structures, existing IT systems often present barriers and the regular round of reorganisations that take place in the public sector can also muddy the waters.
    
These new provisions will provide customers with an extremely useful yet simple process of aggregating, classifying and leveraging spend data for the purpose of reducing costs, improving operational performance, enabling compliance and increasing opportunities for collaboration.
    
The technology also provides organisations with vital management information needed to assess the impact of measures put in place in order to improve performance and efficiencies.
    
“The appointed suppliers all have a strong track record in helping organisations achieve success in this area, while our team at Buying Solutions is on hand to help advise customers about how to make the best use of both the technology and these procurement arrangements,” concluded Rob Knapman.

Complex picture
Trying to make sense of the complex picture of spend across public sector organisations – especially central government departments – can appear a daunting task.
    
The first challenge is identifying sources of data. Whilst some organisations may have tools to manage purchasing spend, process and procedure inadequacies sometimes leave gaps in the data. The obvious solution is to use payment data from the accounts payables modules of finance systems. Though spend may not always go through Purchasing it will always generate some kind of payment record.
    
This data is, however, usually coded to reflect consumption, with identifiers for who consumed it and how they consumed it. In addition this usually reflects an internal classification that does not align well to the marketplace from which goods and services are bought.
    
A further problem is that supplier databases are often riddled with duplications and fail to identify relationships that can be important when negotiating. The second issue to address is the cleansing and rationalisation of supplier data. By eliminating these duplications and tracking the ownership of supplier subsidiaries, a more accurate picture of where money is spent and, more importantly, the true extent of leverage with suppliers, begins to emerge.
    
The third requirement is the re-coding of spend into a market facing classification aligning the things we buy with the way the marketplace itself is organised. This is essential to understand how to best organise expenditure for maximum value. Most of the suppliers appointed to the Spend Analysis framework agreement employ a combination of proven databases, automated predictive coding and vast experience to build the spend database and load it into a search engine capable of multi-dimensional analysis.

Key priority
The application of the tools provided through the Spend Analysis framework agreement will also help to complete the big picture of how the public sector spends its budget of more than £150 billion each year – which has been a key priority for government as it pursues its Transforming Government Procurement agenda.
    
The collaborative teams working to identify the opportunities to deliver billions of pounds of procurement savings and efficiencies rely upon accurate spend data.
    
Speaking earlier this year after a wide ranging review of public sector procurement, Richard Abbott, OGC’s executive director of Collaborative Procurement said that “there was a fundamental lack of basic information about spend – and little application of technology to try to overcome this.
    
“And there are very few mechanisms for the transfer of knowledge or the sharing of immensely valuable information between departments - or even within individual departments.” Though this position has undoubtedly improved during 2008, it is anticipated that the Spend Analysis framework agreement will provide fresh impetus to the intelligence gathering process.
    
Buying Solutions’ Spend Analysis framework agreement delivers a range of data manipulation and analysis tools including extraction and aggregation of dispersed data, cleansing and enrichment of aggregated data, validation of data and web deployed user analysis tools.
    
Services are split between the provision of technical solutions for analysing customer spend data and the provision of consultancy support to configure data analysis so that they deliver the greatest benefits for customers and comply with EU public procurement legislation.Suppliers
The successful suppliers appointed to deliver spend analysis services are:

  • @UK Plc
  • Accenture (UK) Limited
  • Bravosolution Plc
  • Emptoris Inc
  • Etesius Limited
  • IBM United Kingdom Limited
  • Purchasing Index UK Limited
  • Spikes Cavell Analytic Limited

For more information
For more details about the Spend Analysis framework agreement visit the Buying Solutions website at www.ogc.gov.uk or call the Buying Solutions Customer Service Desk on 0845 410 2222.

Please register to comment on this article