1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1.
Define
Business
Need
1.1
Identify Business
Requirement
1.2
Knowledge
Capture
1.3
Stakeholder
Consultation
1.4
Risk
Assessment
1.5
Scope and
Communication
2.
Develop
Procurement
Strategy
Objectives
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1. Capture the business requirements
2. Obtain full stakeholder buy in to any resulting plans and
timelines
What you need before you start
1. Key Contact Details
2. Business Requirements
Deliverables
1. Formal Business Requirement statement
2. Confirmed buy-in.
3. Budget Estimate
1.
Define
Business
Need
1.1
Identify Business
Requirement
1.2
Knowledge
Capture
1.3
Stakeholder
Consultation
1.4
Risk
Assessment
1.5
Scope and
Communication
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1.1 Identify Business Requirement
Ensure that it is the business requirement that is captured and not the anticipated solution to
the requirement. e.g. When the business requirement is expressed like this: “We need a
software package to deliver presentations on the intranet”, the business requirement is to be
able to deliver presentations on the intranet. The software package is a potential solution. It
may be that outsourcing the work is more cost effective than buying software, support and
training to use it.
Challenge the business in terms of how requirement might best be delivered. Again, make sure
you and your stakeholders know the difference between the requirement and the solution.
Once you establish the difference it is more straight forward to challenge the preconceived
ideas about how best to deliver a solution.
Timescale – be realistic and recognise that timing may be a critical component of the business
requirement. If the solution is needed yesterday, a quick solution might be the most pragmatic
– even if it’s not the most cost effective. But beware – the need for speed is often over
emphasised. Ensure that all stakeholders are aware of the risk to cost and quality of solution by
prioritising speed of delivery.
Make sure there is not already a solution in place. Another part of the business may have
already dealt with this business problem.
1.
Define
Business
Need
1.1
Identify Business
Requirement
1.2
Knowledge
Capture
1.3
Stakeholder
Consultation
1.4
Risk
Assessment
1.5
Scope and
Communication
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1.2 Knowledge Capture
Perform a thorough fact-find. Understand the current situation and the problem that
requires a solution. Get beneath the skin of the issues and understand the wider
implications. Without gathering solutions, gather a set of needs (SPIN – Solution, Problem,
Implication, Need)
Identify any initial risks to the procurement process. Examples of common risks to a
procurement project include: falling foul of IT security policy; failure to get budget sign off;
failure to meet implementation deadline; failure to get project sponsorship.
1.
Define
Business
Need
1.1
Identify Business
Requirement
1.2
Knowledge
Capture
1.3
Stakeholder
Consultation
1.4
Risk
Assessment
1.5
Scope and
Communication
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1.3 Stakeholder Consultation
Identify all of the relevant stakeholders who have an interest in the business requirement. This
will include budget holders as well as others on whom a solution is dependent e.g. IT security
and ensure that input from all correct areas is received
Identify what roles and responsibilities each stakeholder has and ensure that their agreement is
obtained and that commitment is gained from all those stakeholders to drive the project towards
to a successful result.
Key stakeholders to identify are: Sponsor (person who can ensure that the requirement is
agreed, resources are made available and a solution approved), procurement team (the people
who will act on a day to day basis to drive the project forward) and a budget holder (the person
who can make appropriate funds available).
1.
Define
Business
Need
1.1
Identify Business
Requirement
1.2
Knowledge
Capture
1.3
Stakeholder
Consultation
1.4
Risk
Assessment
1.5
Scope and
Communication
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1.4 Risk Assessment
Assess the initial risk (high level), anything that may get in the way of a
successful conclusion to the procurement activity
Pay particular attention to any health & safety issues associated with the
procurement activity or the solution.
Also pay particular attention to environmental or sustainability issues as
well as ethical and international sourcing issues
1.
Define
Business
Need
1.1
Identify Business
Requirement
1.2
Knowledge
Capture
1.3
Stakeholder
Consultation
1.4
Risk
Assessment
1.5
Scope and
Communication
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1.5 Scope and Communication
Confirm the scope of the procurement exercise. In which businesses/regions
will it cover. What is the budget likely to be and what impact if any, will that
have on scope. What are the quality constraints?
Communicate and clarify the business requirement across all stakeholders
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.1
Team Kick
Off
2.2
Market
Research
2.3
Define
Success
2.4
Agree
Strategy
Objectives
What you need before you start
Deliverables
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1.
Agree Procurement Approach and timescales
2.
Evaluate current environment and decide on the procurement
process
1.
Formal Business requirement statement
2.
Resources identified and committed
3.
Buy-in obtained from all stakeholders
1.
Procurement Plan
2.
Estimated budget
3.
Sign off on estimated budget
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.1
Team Kick
Off
2.2
Market
Research
2.3
Define
Success
2.4
Agree
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
2.1 Team Kick Off
This is an opportunity to bring the team together to gain
mutual understanding & buy-in to project objectives, roles,
responsibilities & actions.
Bear in mind that the scale of this event depends on the
scale of the procurement activity. It could range from as
trivial as a quick chat over a coffee to an off-site
conference.
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.1
Team Kick
Off
2.2
Market
Research
2.3
Define
Success
2.4
Agree
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
2.2 Market Research
Gather as much information as possible in order to establish a range of
approaches, products and services that will meet the business need.
Identify what traditional and innovative solutions may be available.
Use as many sources of information as you have access to including the
internet and the existing knowledge from stakeholders
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.1
Team Kick
Off
2.2
Market
Research
2.3
Define
Success
2.4
Agree
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
2.3 Define Success
Define the criteria by which a successful solution will be
judged.
Define the minimum quality criteria, the cost range and the
deadline for delivery.
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
2.1
Team Kick
Off
2.2
Market
Research
2.4
Define
Success
2.4
Agree
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
2.4 Agree Strategy
Compile market research and make recommendations as the
proposed strategy. e.g. outsourced solution vs. in-house
developed and managed.
Include within the strategy, some thinking about the purchase to
pay processes to identify potential problems or opportunities for
efficiencies
Collaborate with stakeholders to ensure that they all have input
to the procurement approach and strategy.
Obtain formal agreement to the strategy before moving the
process forward
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
Objectives
What you need before you start
Deliverables
3.
Supplier
Evaluation &
Selection
3.1
Develop Pre-qual
Strategy
3.2
Score, Filter
& Notify
3.3
Develop &
Launch Tender
3.4
Assess
& Filter
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
1.
To select the right suppliers and value proposition to be taken
forward to final negotiation.
1.
Procurement Strategy
2.
Market Research
1.
Shortlist of suppliers
2.
An agreed procurement approach with shortlisted suppliers
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.1
Develop Pre-qual
Strategy
3.2
Score, Filter
& Notify
3.3
Develop &
Launch Tender
3.4
Assess
& Filter
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
3.1 Develop Pre-qualification Strategy
It is important that the number of suppliers taken forward to negotiation is a small as possible therefore it is
important to develop some strict criteria that must be met in order to eliminate suppliers which would ultimately
not succeed.
Agree and document the key criteria by which the supplier will be selected and develop a qualification
questionnaire to be completed by responding suppliers.
Develop a scoring mechanism and apply weighting to each criteria to ensure that priorities are addressed. Don’t
be too rigid at this stage. It may be that new information is learned as suppliers submit responses that will change
your view of the criteria.
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.1
Develop Pre-qual
Strategy
3.2
Score, Filter
& Notify
3.3
Develop &
Launch Tender
3.4
Assess
& Filter
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
3.2 Score, Filter and Notify
Based on suppliers responses, score each response
against the weighted selection criteria
Confer with stakeholders and agree which supplier to
shortlist based on preferred commercial model and
pricing principles as well as the weighted selection
criteria scores
Document which suppliers are unsuccessful including
rationale for non-selection and notify successful and
unsuccessful suppliers
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.1
Develop Pre-qual
Strategy
3.2
Score, Filter
& Notify
3.3
Develop &
Launch Tender
3.4
Assess
& Filter
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
3.3 Develop and Launch Tender
Amend the tender based on lessons learned from
responses and prepare the relevant documents to
be issued to shortlisted suppliers.
Develop a set of weighted criteria by which tender
responses will be assessed and agree this, together
with the rest of the tender, with stakeholders
Prepare all relevant communication to ensure that
suppliers are aware of what is expected of them
and issue all tender documentation to suppliers.
Consider contractual terms and conditions as well
as day to day operational considerations. Matter
such as health and safety, invoicing and payment
arrangements should all be clarified at this stage.
For goods and services that will be ordered
regularly, ensure that the internal procedures for
placing and approving orders are understood and
documented as this may have an impact on the way
the supplier is expected to interact with the
business
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
3.1
Develop Pre-qual
Strategy
3.2
Score, Filter
& Notify
3.3
Develop &
Launch Tender
3.4
Assess
& Filter
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
3.4 Assess and Filter
The purpose of this stage is to assess the
capability of the suppliers that have
responded to tender and to ascertain if and
how they can fulfil the requirements of the
tender.
As they are received, score the responses
against agreed weighted criteria. If
possible, filter further to eliminate weaker
suppliers.
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
4.1
Prepare Negotiation
Strategy
4.2
P2P Design
4.3
Conduct
Negotiations
4.4
4.5
Objectives
What you need before you start
Deliverables
5.
Induction &
Integration
Finalise
Contract
Award
1.
Complete Negotiations and select best supplier
2.
Award contract
1.
Filtered List of Suppliers
2.
Knowledge of Purchase to Pay process stakeholders
1.
Agreed Purchase to Pay processes and KPIs
2.
Signed Contract
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.1 Prepare Negotiation Strategy
Prepare for the negotiation with short listed suppliers. Decide
on the approach (face to face conversations, a collective
supplier conference and auction etc.) Based on the
submissions , the pricing principles, the commercial model,
services level and the contract terms and conditions may have
been amended.
Finalise the approach to these and ensure that there is legal
support available if necessary
4.
Negotiation
and Award of
Contract
4.1
Prepare Negotiation
Strategy
4.2
P2P Design
4.3
Conduct
Negotiations
4.4
4.5
Finalise
Contract
Award
5.
Induction &
Integration
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
4.1
Prepare Negotiation
Strategy
4.2 Purchase to Pay process design
4.2
P2P Design
Explore the process by which goods and services will be
purchased. Look for opportunities to reduce business risk
reduce process time and effort and develop efficiencies.
4.3
Conduct
Negotiations
Will there be a need for a requisition and approval process. Will
there be purchase orders and how will they be placed? How will
payment be made? Against a schedule, in response to invoices?
Will invoices be paper or electronic. Will invoices be sent
directly to AP or will the business need to see them first? How
will segregation of responsibilities be employed to minimise
risk? Will the supplier need to put in place new or revised
processes? Will there be training required either internally or
within the supplier?
4.5
Document the Purchase to Pay processes including details of any
authorisations that will be required .
Identify and agree relevant Key Performance Indicators
4.4
Finalise
Contract
Award
5.
Induction &
Integration
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.3 Conduct Negotiations
4.
Negotiation
and Award of
Contract
4.1
Prepare Negotiation
Strategy
4.2
P2P Design
4.3
Conduct
Negotiations
There are two primary goals in the negotiation:
4.4
1. To negotiate prices that deliver lowest total cost of
ownership while maintaining the suppliers’
commercial viability.
2. Minimise/transfer risk: Commercial, reputational
health and safety etc.
4.5
Finalise
Contract
Award
5.
Induction &
Integration
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
4.1
Prepare Negotiation
Strategy
4.2
P2P Design
4.3
Conduct
Negotiations
4.4 Finalise Contract
4.4
Finalise commercial agreement and contractual terms
with the supplier in preparation for award and agree
achieved savings with budget holders and log them
on the savings register
4.5
Finalise
Contract
Award
5.
Induction &
Integration
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.5 Award Contract
Communicate the award of contract to successful as well
as the unsuccessful suppliers. Communicate also to
relevant internal audiences. Ensure the contract is in place
prior to commencement of the service or product being
purchased
Be prepared to provide feedback to the suppliers about
their performance throughout the process. Apart from
being a professional courtesy it can help maintain a
positive relationship with the unsuccessful suppliers
4.
Negotiation
and Award of
Contract
4.1
Prepare Negotiation
Strategy
4.2
P2P Design
4.3
Conduct
Negotiations
4.4
4.5
Finalise
Contract
Award
5.
Induction &
Integration
1.
Define
Business
Need
Objectives
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
5.
Induction &
Integration
4.1
Launch
Supplier
4.2
Post Procurement
Review
4.3
Continuous
Integration
1.
To ensure that the supplier is fully prepared to deliver all aspects of the contract
2.
To ensure that all parties are familiar with agreed P2Ppolicies and procedures
3.
To initiate the relevant performance measures and reporting
What you need before you start
1.
Signed contract in place
2.
P2P policies and processes agreed
3.
SLAs and KPIs agreed and understood
Deliverables
1.
Business Requirement met
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
4.1 Launch Supplier
Ensure stakeholders are aware of key changes to the agreement and
processes Develop and agree communication plan. This can range from
distributing an email to interested parties to a full scale event to launch a
major supplier
Initiate training programmes internally and ensure that supplier training
is underway
5.
Induction &
Integration
4.1
Launch
Supplier
4.2
Post Procurement
Review
4.3
Continuous
Integration
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
4.2 Post Procurement Review
Monitor and review P2P process to identify
weaknesses and learnings
Document learning points and recommend
amendments
5.
Induction &
Integration
4.1
Launch
Supplier
4.2
Post Procurement
Review
4.3
Continuous
Integration
1.
Define
Business
Need
2.
Develop
Procurement
Strategy
3.
Supplier
Evaluation &
Selection
4.
Negotiation
and Award of
Contract
4.3 Continuous Integration
Initiate performance monitoring and amend processes as
improvements are identified
5.
Induction &
Integration
4.1
Launch
Supplier
4.2
Post Procurement
Review
4.3
Continuous
Integration