PROCUREMENT MATURITY ASSESSMENT (PMA) PROGRAMME

OVERVIEW & OUTCOMES

March 2015

Judith Russell

CONTENTS

o Coverage

o Approach

o Structure

o Deliverables

o Benefits

o Findings

o Features of Good Procurement

PMA COVERAGE

o There are currently 96

English HEIs that have

undertaken a

procurement maturity

assessment.

o Also two Non HEIs

o HEI Clients per

Consortium

o LUPC 17

o NEUPC 16

o SUPC 48

o NWUPC 15

PMA APPROACH

PMAs are a structured approach to understanding

the effectiveness of procurement within an

institution and across the sector

PMA programme is a key recommendation of the 2011 and 2015 Diamond Reports

SUPC received funding from Innovation and

Transformation Fund to accelerate the programme

across England

PMA question set based on questionnaire used in

Scotland: developed following McLelland efficiency study.

Undertaken by independent, experienced procurement

professionals

Process is action oriented with institutions receiving

assessment report, action plan and access to live benchmark

data

Results are collated to provide sector trends and work with

HEPA to support the sector as a whole

PMA STRUCTURE

o Evidence based assessment: 53 Questions (October 2013)

o 9 procurement attributes addressed: Governance, Reporting and KPIs Organisational, Resources and Skills, CSR, Collaboration IS/P2P, Supplier Strategy and Policy and Category Management

o Assessed against 4 levels of maturity

o Developing

o Tactical

o Planned

o Superior

o Benchmark scores for how your institution compares overall with others and in specific aspects of Procurement

o Establishes a baseline for your institution allowing you to visibly demonstrate procurement improvements

PMA DELIVERABLES

o Detailed report outlining your current procurement maturity over 9 the different attributes that can be used as a blueprint to develop procurement across your institution

o A comprehensive action plan outlining the steps that should be taken to move towards a higher level of procurement maturity

o A sector benchmark comparing your level of maturity with other HEIs

o Sector performance measures included with commentary

o On-line access to dynamically updating benchmark

WHAT DO INSTITUTIONS SAY?

o Raised procurement profile with SMT and procurement committees

o A structure to demonstrate capability

o Independent objective confirmation of capability

o Clear targets and measurements for improvement

o Informed decision making on staff training and work priorities

o Confirmed support for additional investment and quantified scope for improvement

o Identified areas to improve

o Enabler for change

o Clear action plan, especially helpful for a new HoP

KEY FINDINGS

MATURITY STAGE BY NUMBERS AND NON-

PAY SPEND

76% of institutions are in the lower maturity levels - accounting for 61% of spend

SCORES ACROSS THE MATURITY SCALE

ONE HEI DEMONSTRATES SUPERIOR PERFORMANCE

MANY LARGER INSTITUTIONS STILL AT LOWER MATURITY LEVELSRED LINE – SECTOR AVERAGE SCORE: 36.7%

SCORES ACROSS THE MATURITY SCALE

WITH NON-PAY SPEND

S L VL

Smaller institutions are predictably less mature on average

than larger institutions. Average VL just progressing into

Planned

Average

24%

Average

36%

Average

48%

S= Small HEIs: <£100m Income

L= Large HEIs: > £100m and < £400m Income

VL= Very Large HEIs: >£400m Income

2015: 96 INSTITUTIONS

Key

Sector minimum and maximum score for the attribute

Sector average score

Institution achieved score

2nd and 3rd Quartiles

EXAMPLES OF SUPERIOR PERFORMANCE

o Governance: Fully documented and communicated procurement strategy -strong link to institution’s strategy.

o Reporting/KPIs: Clear performance measures in place. Comprehensive metrics

o Organisational: Complete coverage across whole institution, visible impact, senior ‘peer group’

o Skills: Strong skills and fully trained staff within the central procurement team covering all spend including estates

o CSR: Embedded CSR factors in the core procurement processes. Widest view on sustainability

EXAMPLES OF SUPERIOR PERFORMANCE

o Collaboration: Active in sharing and leading collaboration efforts.

o IS/P2P: Strong process automation and e-procurement coverage.

o Supplier Strategy: Good supplier relationship mgt and senior mgt buy-in.

o Category Management: MI available to inform category management. Good supply market research

PROGRESS OF EARLY ADOPTERS

16 early adopters have made an average improvement of 13 percentage

points

FOLLOW UP PMAS BY ATTRIBUTE

Demonstrable improvement across all attributes- on

average 22% points since 2010/11. Organisational most

improved.

SUMMARY OF KEY FINDINGS

o Institutions who have been re-assessed have made demonstrable improvements. There has been an average increase in maturity of 22 percentage points from the start of the Programme.

o 76% of institutions are in the lower half of procurement maturity and hence there is opportunity for improvement and efficiency gains

o Beacons of superior performance now exist for all attributes

o Skills, Collaboration and Organisation are now strongest areas

o Category Management, Reporting/KPIs and CSR are now the weakest

o Many procurement teams do not cover Estates Procurement

o There is a weak correlation between savings and maturity level - possibly not all institutions are reporting all their savings

ATTRIBUTES

GOVERNANCE

REPORTING & KPIS

ORGANISATION

RESOURCES & SKILLS

CSR

COLLABORATION

IS/P2P

SUPPLIER STRATEGY & POLICY

CATEGORY MANAGEMENT

FEATURES OF GOOD PROCUREMENT

o Clear procurement strategy aligned

to Institution’s overall strategy with

visible senior management support

o Regular reporting against strategy

implementation with metrics

o Agreed category strategies inc.

market analysis, make vs. buy

evaluations and supplier strategy

o Procurement seen as strategic

function and engaged early in key

projects

o Procurement is a regular topic in

senior mgt discussions with Audit

Committee taking an active interest

in procurement effectiveness

Strategic Positioning Operational Performance

o Well resourced and capable

procurement team

o Good understanding of what is

being bought across institution

o Full coverage across all spend

types including projects & estates

o Effective policies, processes and

systems ensuring spend is

controlled and directed towards

the best deals available

o Strong collaboration with common

specifications and demand pooling

©Southern Universities Management Services 2015

Copyright in this report is held by Southern Universities Management Services. Procurement UK shall seek the consent of Southern Universities Management Services to copy or reproduce material in whole or in part, the source shall be acknowledged and the material shall not be used for commercial gain.

This report has been produced for and reviewed by Procurement UK. The statements and views expressed represent the understanding of the author arising through the approach described at the time of writing.