Strategic Procurement and the Triple Bottom Line Leading Change Chris Newman PMMS Consulting

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1 Strategic Procurement and the Triple Bottom Line Leading Change Chris Newman PMMS Consulting DME

2 Strategic Procurement and the Triple Bottom Line Leading Change Chris Newman PMMS Consulting Group 2

3 New Approaches to Achieving TBL Objectives All levels of Government (and the Private Sector) have social, economic and environmental objectives (TBL) Innovation New ways to address complex, multi causal and long standing community, economic and environmental issues Integrating social, environmental and economic objectives into procurement, service design and employment For Government these may include: breaking cycles of long term disadvantage; providing pathways to training and sustainable employment; addressing skills shortages; ensuring local and regional benefit from investment; Reducing carbon footprints, water use, environmental damage or pollution 3

procurement, service design and employment For Government these may include: breaking cycles of long term disadvantage; providing pathways to training and

4 Strategic Procurement and the Triple Bottom Line Procurement is moving from an administrative role to a strategic one It represents over half of Council s overall expenditure (avg.) LG spends more than $1.5b/ year significant market power to: Deliver high quality, value for money goods, services and works Drive sustainable cost savings Require the delivery of social, local economic and environmental outcomes; Stimulate the markets to develop strategies and processes which support triple bottom line outcomes 4

5b/ year significant market power to: Deliver high quality, value for money goods, services and works Drive sustainable cost

5 What is TBL Procurement? TBL procurement is a strategic approach to meeting organisational objectives through procurement TBL procurement involves using procurement processes and purchasing power to generate positive TBL outcomes in addition to the delivery of efficient goods, services and works. 5

objectives through procurement TBL procurement involves using procurement

6 Why TBL Procurement? Integration Achieving TBL goals, and addressing community issues as part of the way you do business Innovation Encourages innovation and the development of new forms of partnership and service delivery models. Organisational Identity and Reputation Building and broadening the organisational identity. Competitive Advantage Directly demonstrating the capacity to add social/ environmental and economic value in delivering on Government funded projects Planning Ahead Rather than responding in an ad hoc way as community and Government expectations grow, TBL procurement can be introduced through a managed, systemic and achievable program. 6

of partnership and service delivery models. Organisational Identity and Reputation Building and broadening the organisational identity.

7 Growing field of Activity Internationally Government and Private Sector TBL Reporting Indigenous Enterprise Activity Centre Developments ECOBuy New Social Procurement Focus Victorian State and Local Government practice Social Enterprise development NSW Guidelines 7

Developments ECOBuy New Social Procurement Focus Victorian State

8 SA LGA Procurement Development Survey Based on PMMS Procurement Capability Analysis (PCA) methodology undertaken with over 300 organisations Capability Assessment benchmarked against over 100 Victorian and NSW Councils 39 Councils participated in the survey 15 Adelaide metropolitan councils 24 regional councils 8

Assessment benchmarked against over 100 Victorian and NSW Councils 39 Councils

9 Procurement Maturity Model 9

10 Procurement best practice dimensions 10 10

11 SA LG Procurement Capability Self Assessment Summary Emergent Basic Intermediate Advanced Procurement Dimensions Level 1 Level 2 Level 3 Level 4 Leadership & Influence Procurement Strategy & Organisation Process & Governance People & Skills Supplier Management Use of Technology Sourcing & Collaboration Triple Bottom Line Procurement Regional Councils Metro Councils 11

Strategy & Organisation Process & Governance People & Skills Supplier Management Use of

12 Triple Bottom Line Procurement 8.1 Which of the following does your Council have in place? Triple Bottom Line Procurement Environmental procurement Social procurement Local economic development procurement % of Councils Regional Metro Policy 4% 36% Guidance 4% 29% Targets 0% 7% Policy 0% 14% Guidance 4% 29% Targets 0% 0% Policy 13% 29% Guidance 22% 29% Targets 0% 0% 12

development procurement % of Councils Regional Metro Policy 4% 36% Guidance 4% 29% Targets

13 Triple Bottom Line Procurement Findings Environmental priorities widely recognised by Councils Not consistently incorporated into procurement practice Economic development a key priority for many councils particularly in regional areas Councils are often the biggest purchasers in a region Inconsistent approaches (not part of an integrated strategy) Social procurement becoming more prevalent Often in partnerships with State Government, social enterprises and private sector e.g. Indigenous employment & place based disadvantage 13

biggest purchasers in a region Inconsistent approaches (not part of an integrated strategy) Social procurement becoming more

14 Steps to Being TBL Procurement Ready Securing leadership support (Senior Management, Councillors) Building awareness and understanding across the organisation, including staff training Reviewing organisational procurement policies, frameworks and processes to incorporate social outcomes; Integrate into procurement planning to enable early identification of TBL opportunities through strategic procurement 14

organisational procurement policies, frameworks and processes to incorporate social outcomes;

15 TBL Procurement Development Organisational Objectives Where would you like to be Take a whole-ofcouncil approach Work together Build on your strengths Integrate into Council practice 15

16 Today s Workshop 16

Data Analytics Transforming our Understanding of Procurement in Local Government

Data Analytics Transforming our Understanding of Procurement in Local Government Chris Newman MBA Director ArcBlue Consulting 21 November 2014 ArcBlue Consulting Group www.arcblue.com.au @arcblueconsulting