Procurement Capability Assessment 2010

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Section 1

PROCUREMENT LEADERSHIP AND GOVERNANCE

1. Is there clear direction from the top with clear support for getting best value in procurement?

1.1 Does the organisation give sufficient recognition to procurement and its contribution to best value?

Question

McClelland Attribute

7 Cs

Level 0

Level 1

Level 2

Level 3

A. Does the organisation provide clear leadership of the procurement activity?

Organisational

Capability

There is no defined distinct Procurement function and no clear leadership for the procurement activity in the organisation.

Procurement activity is primarily transactional.

Procurement is seen as a distinct function with a Procurement Manager.

There are clearly defined roles, responsibilities and reporting lines for procurement.

Procurement provides management reports on a periodic basis.

The Head of Procurement can and does access board level meetings to discuss procurement.

Procurement function is accountable and provides regular management reports to the Board.

The Head of Procurement is considered part of a senior 'peer group' with other business leaders; sits on appropriate key steering groups, project boards etc.;

Plays a full leadership role in wider public sector, professional and collaborative initiatives; provides active personal leadership of wider networks.

B. Is the Procurement function responsible and accountable for all procurement spend for the organisation? BPI 7e and cross reference BPI 5a

Should be supported by evidence of Influencable Spend

Organisational

Coverage

There is no distinct Procurement function, procurement activity is seen as a transactional activity and procurement spend is not formally delegated/ devolved or controlled.

It is not recognised as core to the organisation's operation. No areas or only some areas of spend have procurement involvement.

Governance and accountability detailed within Policies and Procedures.

A low percentage of organisation's spend (50%-70% spend) is influenced by the Procurement function.

A medium percentage of organisation's spend (70%-80% spend) is influenced by the Procurement function.

A high percentage of spend (>80% spend) is influenced by the Procurement function.

1.2 Are there clearly defined roles, responsibilities and reporting lines for procurement?

Question

McClelland Attribute

7 Cs

Level 0

Level 1

Level 2

Level 3

A. How effective is the organisation at managing relationships with internal stakeholders to ensure an effective procurement process?

Organisational

Capability

For procurement activities the stakeholder interface is on an informal, sometimes unrecorded basis.

Ad hoc recorded reviews with internal stakeholders.

Some clarity of roles with stakeholders, although inconsistent composition & attendance at meetings.

Regular recorded reviews with internal stakeholders.

Clarity of roles with stakeholders, appropriate to needs with consistent composition and attendance at meetings focusing on joint development of business cases, PIDs and commodity strategies.

Formal process for stakeholder management and partnership focusing on joint development of business cases, PIDs and commodity strategies.

B. How is Customer feedback incorporated into everything you do? Will include BPI2

Practices and Processes

Capability

No formal mechanisms in place. Limited customer feedback obtained for routine procurement and individual key projects.

Documented processes and customer feedback obtained as appropriate for routine procurement and individual key projects.

Consistent documented processes and two-way feedback is the norm with customer feedback being obtained during the process or at post project review.

Formal customer feedback survey is completed at least once a year.

From the documented process formal action plans are in place to improve customer satisfaction.

There is clear evidence that results from previous customer feedback surveys are actioned and show improvements in customer excellence.

C. Is there an integrated approach to procurement activity and the various systems used which enables key data to be accessed?

Organisational

Capability

There is little process integration between the Purchase Order, Planning, Goods or Services Receiving and Accounts Payable.

Evidence of some level of integration between the Purchase Order, Planning, Goods or Services Receiving and Accounts Payable Departments.

There is a focus on procurement basic key performance indicators e.g. basic commodity spend, contract register, management of payments to suppliers.

The procurement basic key performance indicators are reviewed and developed into appropriate commodity strategies and supplier performance reviews.

This will help to advise and inform budget management.

Fully integrated procurement management information which is integral to the commodity strategies and supplier reviews.

Reported to senior management with efficiency improvements.

1.3 Is there a clear system of delegation and authority which is audited?

Question

McClelland Attribute

7 Cs

Level 0

Level 1

Level 2

Level 3

A. How clear is the system of delegation and authority for procurement?

Organisational

Capability

There is no clear system of delegation or authority for procurement.

The published scheme of delegated purchasers sets out authority levels which are reviewed internally on a regular basis.

The delegated purchasers are formally designated with appropriate training and are accountable to the Head of Procurement or equivalent.

This system is subject to regular internal audit.

The separation of duties and authority levels are embedded into systems to ensure compliance and appropriate authority for transactions.

Separation of duties is regularly reviewed and there is accountability to the Head of Procurement or equivalent. These systems are subject to regular internal or external audit.

1.4 Is there an effective and efficient quality assurance framework for the procurement process?

Question

McClelland Attribute

7 Cs

Level 0

Level 1

Level 2

Level 3

A. Does internal audit provide assurance that the organisation's internal control systems for procurement are adequate and effective?

Practices and Processes

Capability

There is no evidence of internal audit review over the last 3 years.

There is an audit strategy or framework to provide assurance that basic standards of procurement practice are adequate and effective.

Gaps or issues have been identified by audit however audit actions have not been fully implemented within the last 3 years.

The internal audit service has reviewed procurement risks and improvement priorities within the last year.

There is a clear action plan demonstrating progress.

The internal audit service review within the last year shows full compliance with procurement risks which are being managed.