Public Transport Victoria (PTV) - Procurement Reform Journey

Transcription

1 Public Transport Victoria (PTV) - Procurement Reform Journey Government Procurement Conference 18/19 Nov 2014 Canberra Lisa Williams 1

2 Agenda Welcome and Introduction The PTV Procurement Reform Journey: A clear vision Key changes ensuring strategic alignment with business requirements The effective use of policy, procedures and enablers Using procurement reform to deliver results Procurement through complexity assessment Lessons learnt Questions 2

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4 The PTV Procurement Journey a clear vision...to provide PTV with a strategic procurement capability, consistent with government procurement objectives, leveraging commercial best practice for the effective procurement of goods and services... PTV s addressable spend in FY14 was $750 million there is significant value-add to be extracted from the procurement activities 4

5 Procurement Reform - key changes OLD NEW 1 Threshold based model Complexity assessment based on business requirements and market environment Greater flexibility offered to ensure that procurement processes are efficient and the approach to market is the most appropriate, based on PTV s requirements and market conditions 2 Centralised procurement Business Partner support Proactive collaboration between Procurement and the business, facilitating improved speed to market and sourcing outcomes 3 Unplanned procurement events Planned and leveraged procurement event Early engagement with Procurement enables the development of a strategic approach, designed to maximise leverage opportunities and achieve value add 4 Limited resources Full suite of procurement enablers Deployment of clearer and more user friendly tools and templates, supported by a full training roll-out including a refreshed Procurement Intranet to act as first port of call for procurement needs 5

6 The effective use of policy, procedures and enablers Transition away from a threshold model to one based on a complexity assessment of procurement requirements and market capability. This results in improved commercial outcomes and value-add to PTV Procurement Policy Policy Provides the foundation for ensuring the quality of PTV s procurement activities, including the achievement of probity, value for money and accountability Procedures Enablers Strategic Planning End to End Procurement Procedures Systems and Tools Monitoring and Performance Reporting Learning and Development Standardised and agile processes to support the achievement of quality procurement for PTV and uphold a consistent approach to procurement within the complexity-based environment Enable robust procurement through the provision of systems, tools, templates and procurement intelligence that supports business owners, improves procurement outcomes and advances the efficiency of the procurement process A targeted approach to communications and change management has been developed to support the implementation of the Procurement Strategy and ensure successful transition of PTV Procurement to its future state. 6

7 Using procurement reform to deliver results 1. Commercial imperative Align business requirements to market conditions Leverage scale of PTV s spend to achieve better value-add outcomes Implement regular reporting to monitor effectiveness and identify opportunities 2. Risk mitigation Improve compliance to public sector procurement requirements Reduce risks related to procurement activities Incorporate IBAC and audit recommendations 3. Increase effectiveness Support business owners through the process with standardised and agile processes Align the procurement process to Investment Lifecycle Management Reduce resource effort required to allow PTV to focus on core capabilities 7

8 Procurement through complexity assessment assessment Procurement expenditure is assessed using a complexity approach in conjunction with the business to determine the best sourcing option The Complexity Model assesses procurement complexity based on: 1. CRITICALITY/SPECIFICITY OF PROCUREMENT Level of customisation Criticality to core services Number of suppliers or substitutes Supply market dynamics 2. VALUE CREATED THROUGH PROCUREMENT Procurement spend Impact of leverage Indirect Impacts 8

9 Complexity assessment - How is it used? The complexity of the goods and services to be procured determines the procurement process that will be used Project Procurement Very complex specifications Customer facing and critical to profitablity& operations Strategic Small number of qualified suppliers Complex specifications Leveraged/ Focussed Large amount of suppliers in the market Some customisation Low Complexity Low value Little risk to PTV No/little customisation 9

10 Lessons Learnt Adopt a business partner approach when designing the Procurement team Collaboration between Procurement and the business is key to achieving objectives Start with process and organisation, followed by technology Regular reporting and monitoring are key measures to drive compliance Ongoing training for all staff/contractors regarding policies, procedures and associated corruption risks Controls to ensure suppliers have the requisite skills and financial viability to deliver the required goods/works and services Process for regularly screening employees/contractors to highlight conflicts of interest Understand your supply chain, in particular sub contracting arrangements 10