Electronic Guide for the Development of a Procurement Strategy

The Ministry of Government Administration and Reforms’ eProcurement secretariat has created an online guide for the development of a procurement strategy for public enterprises. This guide will assist public entities in achieving the Norwegian government’s target of beginning the work on developing targets, strategies and action plans for their procurements which includes the use of electronic tools, before the end of 2007.

The Norwegian Government has decided that all public entities should start work on developing targets, strategies and action plans for using electronic tools for procuring goods and services by the end of 2007. Earlier this year the procurement secretariat held seminars to assist public enterprises in this process. These will be repeated in the fourth quarter of 2007, supplemented with an online guide for self-study for those who cannot join the seminars.

Large cost-saving potential

The Minister of Government Administration and Reform, Heidi Grande Røys, has stressed the importance of getting those who have not yet started this work to do so as soon as possible. She emphasised the importance of getting public procurement under control. The Norwegian public sector spends approximately 125 billion NOK pr year in operation-related procurement expenditure, and if we can save 5-10% of this amount annually, through efficient use of electronic procurement tools, that will release more money for other purposes – such as health, children, school and old age welfare services.

Top management supported strategy is vital

The experience of the eProcurement secretariat shows that if a public entity tries to implement eProcurement without a proper strategy in place, or if their strategy is not deeply rooted and in line with the top management’s other strategies, the implementation of eTools tends to be ineffective, or sometimes totally unsuccessful. However, when the top management clearly directs the strategy, and ensures that it is being fully implemented in the organisation, we see great success, and with success, profits.

Electronic guide

For this reason, the electronic guide for development of procurement strategy is only available to Norwegian public entities that get a username and password from the eProcurement secretariat. After getting access to the first two workrooms (steps of the guide), the users have to send a report to the eProcurement secretariat with results, and show that the top management is involved in the project. Thereafter the user is given access to the next two workrooms, and in the same way later to the last two rooms. The steps in the process are called

• Step 1. Analysis of figures (the organisation’s own figures are analysed)
• Step 2. The situation today (current purchasing patterns are mapped)
• Step 3. Goals and ambitions (definition of future procurement goals)
• Step 4. Strategic position (guide to defining the organisation’s strategic position)
• Step 5. Action plan (creation of an action plan for procurement in preferred order)
• Step 6. Decision document (results of all decisions made, for the top management)

Each step gives the users templates to use in the strategy development process.