PROACTIS Blog

Survey: Compliance & Risk Mitigation Top Procurement Concerns

Charlotte Sutton
Charlotte Sutton,
PROACTIS
Interested in understanding what the state of Procurement is in the Charity and Not-for-Profit (NfP) sector? Check out the summary to a new survey compiled in the first of a series of invite-only roundtable events with senior procurement executives. A copy of the full roundtable report with survey findings, "Procurement in the Charity and NfP Sector" (July 2013) is available to download
The survey clearly shows that compliance and risk mitigation are the greatest concerns of procurement chiefs despite ongoing pressure to reduce costs: 56% of panel members selected compliance and a further 22% selected risk mitigation ahead of cashable savings, efficiency savings, business continuity and regulations.

The roundtable discussed what Spend Control means to NfP organisations today, the role of Procurement in facilitating better performance and what kind of investments need to be made by leadership, and the risks involved in not facing emerging challenges in the sector. There were some great sound bites from the roundtable highlighted in the report from PROACTIS, for example:
 
"If our processes are not correct, people will not continue to donate - they will vote with their purses.”
 
"There is a "let's forget" culture when it comes to buying. People forget that once a contract is in place this is when the hard work actually begins. We have to educate people what a contract should mean, who should own it, and just because you have something on a purchase order, it doesn't mean the work stops there. We need to create an understanding and culture that gets staff to work those contracts for the organisation and therefore challenge suppliers when they fail to perform under criteria."
 
"Part of our role is to find measures for best value and also ensure people understand the language we use. In the past, a lot of contracts have been awarded on lowest price or because someone has liked the supplier and there isn't a lot of science about that. Equally, creating most economically advantageous tender models and quality-price splits etc. comes as a shock to the business."
 
"One of the difficulties we can face is monopoly-like situations where, in certain markets, the power resides with the supplier and uses it to set high prices. We need to find ways to redress the balance. This could be from collaborative working to increase knowledge about suppliers and markets or the formation of buying clubs to leverage spend volume and be taken seriously in the markets we buy from."
 
"There is a history of collaboration in this sector and a perception that charity buying schemes and central government contracts are more expensive. This is born out of factual information. We have found more advantageous deals ourselves in categories such as fleet, travel, hotels and print. If your focus is on cost then this is not really the right place to go. But if you don't have the time, skills or capacity to conduct a due-diligent tender then it offers an alternative."
 
A copy of the full roundtable report with survey findings, "Procurement in the Charity and NfP Sector" (July 2013) is available to download.