5 tricks to save money in your procurement - using data

In August 2023 the Special Interest Group of Municipal Authorities (SIGOMA) reported that at least 1 in 10 of the councils they represent could soon declare themselves effectively bankrupt.

Amidst rising costs and stagnating investment, contracting authorities are under significant pressure to drive down costs while continuing to deliver effective local services.

Making more cost-effective procurement decisions is one way to achieve this.

More often than not, however, procurement decisions are not taken in a 'smart' way - procurement teams often rely on anecdote, circumstance and assumptions to make purchasing decisions.

Procurement teams neglect how impactful having the right data can be when deciding which suppliers to opt for, how much they should charge you, and which procurement routes you could be using.

In this blog, we wanted to highlight how harnessing smart procurement data can help your team make more cost-effective, long-term purchasing decisions.

Skip ahead to read about how can data can enable you to:

1. 📊   Benchmark your team's procurement performance

2. 🤝   Spot opportunities for joint procurement

3. 💪   Drive better value in your supply chain

4. 🔎   Find the right frameworks

5. 🌱   Boost social value in your procurement

📊  #1 - With data you can: benchmark your team's procurement performance

Context is important in procurement.

Knowing what other authorities are buying, who from, and (crucially) for how much can provide the intelligence you make more cost-effective decisions. 

To better understand whether your team is, say, being overcharged for existing products or services, you need to stand back and compare how much your peers are spending on similar procurements.

Let's imagine, for example, that you're from the Royal Borough of Greenwich and want to understand whether you're being charged competitively for the Microsoft Enterprise Agreement contract you signed back in March 2021 for 3 years, priced at £3.9mn with Softcat.

Looking through Tussell for similar contracts awarded by Local Government, we can see that the London Borough of Hackney awarded a Microsoft Enterprise Agreement contract in November 2020, also for 3 years, with CDW - only this time at £1.5mn.

With this benchmark, you might ask yourself whether you could find a more competitively priced provider for your Microsoft Enterprise needs when your current contract comes up for renewal.

Doing this exercise across your major soon-to-expire contracts could result in thousands or even millions of pounds worth of savings, just through a more contextual understanding of what's being procured around you.

🤝  #2 - With data you can: spot opportunities for joint procurement

Each contracting authority is unique, but many share common needs.

Whenever your team is considering running its own procurement process, you should step back and ask yourself: could we run this in tandem with another authority?

If you're looking for a new waste management provider, for example, there's a good chance that one of your neighbouring authorities is about to do the same.

Running this procurement collaboratively would save both of your teams time and resources.

But how can data help you identify opportunities for shared procurement?

Let's imagine, for example, that we're a London-based authority with a major telephony contract coming up for renewal soon.

Rather than re-running the procurement process on our own, we can find other authorities who may also be going out to market for telephony services in the near future.

Filtering through Tussell shows that Enfield Council and the LB of Tower Hamlets have telephony-related contracts expiring in the next 12 months.

It'd be well worth getting in touch with the procurement teams behind these contracts to see whether there was scope to run the next iteration of this procurement in tandem, rather than going it alone.

💪  #3 - With data you can: drive better value from your supply chain

Procurement teams underestimate the leverage they wield during contract negotiations.

It's unfortunate how often contracting authorities feel forced to yield to the terms set by their suppliers.

This can sometime lead to you being charged above the market rate for goods or services, and/or becoming unintentionally over-reliant on a given supplier.

Again, turning to the data can provide you with the insights you need to bolster your bargaining position when its time to (re)negotiate a contract.

Let's imagine that you're the LB of Tower Hamlets and your Cleaning & Associated Services contract with Wetton Cleaning Services is coming up for renewal soon. If we were to re-run this contract, how could we drive a better value outcome?

Looking at Wetton Cleaning Services' public sector footprint in Tussell, we can see that the LB of Tower Hamlets is their largest source of public sector revenue by a sizeable margin.

Now, we can enter negotiations with Wetton Cleaning Services with the knowledge that they're heavily dependent on us for their public sector business, leveraging this fact to drive more competitive pricing and terms.

You and your procurement team shouldn't enter into any tender or contract negotiation blind: utilise hard data to know the market like suppliers do, and get better outcomes for your contracting authority.

🔎  #4 - With data you can: find the right frameworks

Framework agreements & Dynamic Purchasing Systems are being used more and more to award work in the public sector.

The trouble is actually finding the best, most compliant route-to-market for your team to use.

Trawling through search engines can eat up hours of your team's time - and even after finding a promising framework, it can be difficult to know which suppliers are on it, what work's gone through it in the past, and whether it's been tried-and-tested by other authorities.

Harnessing an aggregated view of the framework landscape can save your team huge amounts of time when finding and qualifying frameworks.

By manually matching call-off contracts to the procurement framework they were awarded through, Tussell can give a unique view of which frameworks are being used to award what work, by whom, to whom, and for how much.

Looking for an ICT & software framework? Tussell shows which live frameworks are being used to award these kinds of services, and which suppliers are on each framework.

Tussell data indicates that at least £3bn worth of ICT & software-related contracts have been awarded via Technology Services 3, for example.

Of these, Fujitsu have won the most, at £560mn.

Having this kind of data at your fingertips can revolutionise how your team approaches finding and qualifying which framework agreements to use.

Dig into which frameworks being used most in your category - access our July 2023 Top Frameworks PDF.

🌱  #5 - With data you can: boost social value in your procurement

All contracting authorities are looking to promote social value through their procurement.

Integrating more SMEs, VCSEs and locally-based suppliers into your supply chain boosts your local economy, diversifies your supplier base, and exposes you to ideas and solutions that larger suppliers may not provide.

The difficulty lies in actually finding and encouraging these organisations into your supply chain.

Turning to the data allows you to speed-up your market engagement processes, by pinpointing exactly which smaller and local businesses are already working in the public sector.

Let's imagine we're a local authority based in the South West. We need to go out to tender for management consultancy-related services, but don't fancy turning to one of the larger consultancy firms this time around.

By searching through management consultancy-related contracts awarded to SMEs based in the South West in the last 24 months, a list of local SMEs emerges.

With these organisations now on your radar, you can dig even deeper into their public sector records to see who they've been working with, and what work they're delivering.

A significant proportion of Higher Ed International's contract award value, for instance, comes from Sheffield Hallam University.

Turning to the data can provide your team with a qualified, data-backed list of smaller organisations you can reach out to to deepen your supply chain's social value.

Want to see how your local authority's social value procurement compares nationally? Access the 2023 Local Government Procurement Index.

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Contracting authorities across the public sector are feeling the pressure to deliver sustained public services, with less at their disposal.

To drive value-for-money, socially-oriented outcomes, you can't keep relying on the same old habits and anecdotal knowledge when going out to market.

To make a tangible difference to how you make procurement decisions, your team needs to start harnessing the power of smart, aggregated data - otherwise, you're effectively flying blind.

To learn more about how Tussell can help your team access and utilise the data your team needs, book in a quick chat with our team.