As the business worlds in the private and public sectors continue to try and survive in this erratic market place, it can be hard to think about strategy. The fact that our only strategy, for decades, was to feed our largest trading partner, shows the fallacy of not diversifying. That might be easy to say in hindsight with today’s headlines but it reiterates the problems with complacency. We think we must be on the right track because everyone else is doing the same thing. Procurement patterns followed the best practice – which, as it turned out, was mainly the common practice.
Strategy
Procurement strategies start with ensuring policies reflect the long-term needs of an organization. Arguably, private sector organizations can pivot faster than governmental institutions, for a wide variety of reasons. Private sector organizations can also fail. Government agencies, right or wrong, must be maintained. What is changing, is the recognition that government procurement strategies need improvement.
While it is early days for our Prime Minister, he has signalled that the Federal procurement strategies involving military sourcing are not meeting Canada’s needs. For far too long, the procurement was heavily weighted on the lowest bid to get the order. Whether it was office supplies, steel or military equipment. Now Canada is launching the Canadian Corporation for Defence Investment. The impetus is to take an ineffective governmental bureaucracy and install a responsive decision-making body to protect the sovereignty of Canada. Prior to this, its main purpose was to manage its budget within its spending. That is a lesser strategy than identifying with strengthening the defence of a nation.
The change in strategy might be overdue, but never waste a good crisis. The revised procurement strategy must deliver on value. This will require a level of centralized competencies which meet expectations. Not only for our armed forces and coast guard but the taxpayers as well. From the supply side, there will be increased opportunities for Canadian suppliers to build the infrastructure requirements to support the demands of the military. As part of the governance model, there will be a CEO, a Board and ministerial oversight for the CCDI operations and administration. This is a critical part of the strategy. Having accountability as part of the strategic transition for procurement.
There will be an expectation, from the same taxpayer who funds federal, provincial, municipal, health, and other governmental services to get a better return for their tax dollars. Without providing an overview of the many failed government projects, suffice to say, strategies need to be reviewed to reflect the market conditions today and projected out, as far as reasonable. Generational contracts, especially involving military, IT/AI, or complex health equipment, need a value driven strategy. Not one heavily weighted on “this year’s budget.” It hasn’t been working and now is the time for change.
Strategy feedback tools
One of the acronyms that has been in effect for several years, and works if applied to strategy reviews is PESTEL – political, environmental, social, technical, economic, and legal. An organization should take an annual assessment of its procurement strategy and tactics to ensure it is effective and / or responsive. We can take PESTEL and add one more component, Canadian. Translate the acronym into SPECTLE, where the C is for Canadian.
The SWOT analytical tool complements the SPECTLE tool. Applied concurrently, they will reveal where procurement strategies have strengths, weaknesses, opportunities, threats, and gaps to close.
Many taxpayers have railed against contracts going to foreign companies, at the expense of Canadian businesses. Part of the dilemma was the lack of Canadian capacity. This where governments at all levels have opportunities to increase their Buy Canadian strategy.
At a strategic level, how do sourcing decisions add to the Canadian economy over the next 5-10 years, when we are starting from a smaller base? There are not easy answers. They can’t be left to a few politicians with a short shelf life. They will need to be vetted through an organization’s senior strategic group, including external expertise and advisors. The private sector brings in non-biased experts to assess their sourcing strategies. Bring in academia and other business experts, with input on a public sector’s strategic procurement development and correlation to its policies. Competencies need to be tested and built.
While we see Buy Canadian as part of a strategy, we need to juxtapose this against an increase of business in the EU market. The 10-year Comprehensive European Trade Agreement (CETA) has not delivered to date as promised. However, as Canada continues its divorce proceedings with the US, procurement in private and public sectors needs to refresh its understanding of EU supply and demand opportunities.
Training
Knowledge transfer is not done through osmosis. Procurement has access to many types of trainers and training materials. Much of this has been reliant on US-based expertise. New strategies invite new voices to present progressive strategies. Referencing the EU opportunities, the precautionary principle is largely ignored in US contracting deals. This has many implications for Canadian industry development. Over the past couple years, the principles of diversity, equity, and inclusivity have not been allowed into many US governmental agreements. Not so in the EU or Canada, where DEI is still a commitment.
Objective training through accredited organizations will be necessary to deliver the required and desired competencies for Canadian governmental decision-makers. Drawing on more Canadian and EU content will be one of the components of the training. If we move away from a US-based trade dependency, we need to learn the business language and practices of our new potential partners.
Public Procurement In Canada:
Procurement professionals play a pivotal role in the public procurement world. These experts are well-equipped with the knowledge and skills needed to navigate the intricacies of procurement processes. Whether you’re looking to enhance your procurement acumen through procurement management courses or seeking valuable insights through procurement webinars, the landscape for public procurement offers many opportunities to explore.
The Procurement School encompasses a wide range of activities aimed at achieving the best value for taxpayer money. Procurement service providers work closely with public sector procurement consultants to streamline processes, maintain transparency, and uphold ethical standards. This collaborative effort ensures that the procurement landscape remains fair, competitive, and cost-effective.
Obtaining a procurement certification or a purchasing certificate can be a wise decision for those aspiring to excel in public procurement. These certifications validate your expertise and demonstrate your commitment to professionalism in the procurement arena. Procurement professionals are highly regarded for their ability to make informed decisions that benefit both the public and the government agencies they serve.
Public procurement is not just about acquiring goods and services; it’s about contributing to the well-being of communities and the country. The individuals in this field understand the significance of their roles and strive to uphold the highest standards of ethics and accountability.
Whether you’re a seasoned procurement professional or just starting your journey, the public procurement landscape offers a wealth of opportunities for growth and development. From procurement management courses to ongoing procurement webinars, resources are available to help you stay informed and up-to-date with the ever-evolving world of procurement.
Written by: Larry Berglund