The introduction of a category management approach in many Councils has, without a doubt, improved not only the procurement approach in many service areas but also the connection between procurement and service area when it comes to understanding what both are looking to deliver for their organisation and the individuals these organisations serve.
I met with the LGA as they were developing their recent paper ‘National social care category strategy for local government’, which details the need to better engage procurement within the commissioning process. The paper makes the point (as previous papers have) that the category management approach is important in developing a joined up understanding across council departments to ensure that services are commissioned in the right way for the recipient and also, and in many ways just as importantly, for the suppliers of these services.
The commissioning cycle is commonly seen in documents and presentations. What this model usually lacks is the position the supplier has in the process. A truly representative cycle, certainly at the macro-level of service commissioning, illustrates the critical role suppliers have in the procurement dynamic. Suppliers don’t just charge for a service; they are critical in shaping service needs of buyers. Quality providers can be the turkey that votes for Christmas, in reducing demand for their own service. They can not only fill gaps in need but also identify upcoming demand and develop new offerings.
So, then, the question is this: Is it OK to just manage categories? Should we look to be developing categories instead?
We recently published a paper that talks directly to this point. Councils need to be looking to do things differently if they are to expect any different outcomes. The funding crisis brings this into even sharper focus. Precept or not, the answer is not to pay more for the same but rather look to change what you do, look at different commissioning models that develop categories by fully engaging the procurement and business areas and also the suppliers.
So how could you develop a category?
Obviously you need systems and technologies to support processes and this is no different for commissioning. Now, the traditional approach is to look to consolidate into the fewest systems possible. This has no doubt delivered savings in technology costs, but in nearly every example I can think of, the technology ends up delivering against the lowest common denominator. In the same way a document management system needs to work very differently for planning departments and HR teams, how can you expect the same system, which ensures you get paperclips at the best price, to commission you an outcome focused re-ablement package from the best suited provider with a track record of delivering against agreed milestones?
The truth is it can’t. It also can’t join up not only procurement and service area with the suppliers in an open and transparent commissioning cycle.
So whilst Councils look at innovating commissioning models, these too often rely on manual based processes because the Councils enterprise solution isn’t up to scratch. Principally because enterprise usually means a system that, as a minimum, delivers against those requirements that are common to every department and misses those that aren’t.
So the answer is not the fewest amount of systems; it’s about the right amount of systems.
If you want to develop a category, you need a Category Development System.
A Category Development System not only allows you to create your supply chain but also to commission flexible services in a structured way. A system that tracks outcomes and milestones to manage service need. A system that can develop a supply chain and also engage them in the process, that identifies market trends, supplier compliance, quality of service and crucially makes that process a fair and transparent one.
A Category Development System manages the end-to-end process of service buying to allow you to manage the entire commissioning cycle, from on-boarding through buying to payment and service delivery. How else can you know where your exceptions are when using manual processes, because your enterprise-wide system stopped working about four steps ago!
The truth is, whilst Commissioners are rightly doing away with traditional approaches, Councils need to also look at new technology in order to make sure the benefits are realised and they can move beyond managing a category to fully developing it.