Programme Assurance Resources

Procurement For Programmes

The information in this guide is intended for general purposes only. For more specific guidance around your organisation’s projects, please get in touch with our team.

In this section, you will find:

The decision to choose a supplier or vendor for a large scale programme is not easy. Procurement in NZ’s public and large enterprise sectors is a discipline taken very seriously. When a supplier is brought on board, they’re often done so with certain time and financial commitments, so when things don’t go to plan, it’s a very real risk to the health of the programme. Getting out of a bad supplier relationship is stressful and expensive.

Luckily, New Zealand has plenty of very talented procurement experts that ensure the process of researching, RFP, short listing and ultimately the decision making is thorough. As quality assurance providers, we can wrap that extra layer of confidence around procurement teams and the wider business, to make sure that every known angle is being explored.

In this guide, we talk to the topic of procurement in more detail, and how these decisions ultimately affect the programme’s success.

Procurement Programme IQANZ

Why procurement for a programme is higher stakes

Programmes are long term business initiatives, often associated with the idea of major transformation from one business state to another. Projects are more delivery based and while they individually may contribute towards a strategic objective, they’re often more functional in their purpose, such as embedding a new internal communication platform or creating new processes and guidelines for an organisation. Procurement for a project on its own is still complex, but the requirements are more centred around specific delivery with a completion date within sight in many cases.
A 3rd party that will be involved in the programme roll out of many years requires a deeper level of vetting and assessment given the bigger commitment the business is making. Failed programmes can set back an organisation significantly, so there needs to be confidence that those involved with rolling out the programme are there for the long haul and capable of delivering.

Whilst organisations can simply engage vendors at the project level only and make changes between projects, there’s much to gain from the efficiency of a consistent vendor(s) across the life of the programme – reducing the onboarding process entirely being just one example.

Who is involved in procurement for a programme?

Procurement’s a multifaceted process, especially in a large organisation. A procurement team may include a manager or director, leads, officers, specialists and coordinators. The senior members of the team will hold an accountability to run the business through a stringent process of running a robust, compliant tender process and facilitate the acquisition of proposals from potential suppliers. Their direct reports will help this all come together and contribute to request for proposals (RFP), managing the bid platform (such as GETS for public sector), communicating with potential suppliers, documentation and any other tasks involved with procurement.

Contract negotiations will often be done by the senior procurement role in the business, but these will be fed heavily by senior leadership generally. As far as the final call to go with a supplier and sign on the dotted line, this will be done by one or multiple ‘decision owners’ who ultimately make the call. Decision owner isn’t a job title, but a function played by someone in the business.

Things to look at closely for a supplier to a large programme

Long term suppliers across many years are an extension of your business. As such, there are many considerations to make before committing. Here’s just some of these in no particular order:

    • Does the vendor have a good history with other organisations in long term programmes?
    • Is there a close alignment in values and culture?
    • How long have the vendor’s people been in the business for?
    • Is their pricing fair but also open to adapt to changes to business needs long into the future?
    • Can they demonstrate depth of knowledge in all the areas you may need them for?
    • Do they complement your own internal teams?
    • Are they able to commit to a good cadence of meetings?
    • Does the supplier have the right strategic and leadership personnel to work with programme owners and senior leadership?
    • Do they demonstrate a good understanding of your requirements both at a functional project level but also the strategic objectives?
    • Are they clear lines of escalation if required?
    • Can they work well with other 3rd party suppliers without fear of IP sharing or conflict of interest?

References are an essential part of the procurement process as you’ll get a sense of what long term relationships were like with other businesses. The first 6 months to a year is often the best foot forward, the best programme partners are those that remain effective and reliable years down the track.

How the programme framework protects the business during procurement stage

Programme and project methodologies when applied effectively in a business put a sturdy framework around how things are conducted – or ‘governance’. With good governance, the programme has a well-defined scope and outcomes. This enables everyone involved in procurement to refer back to these objectives as a means for decision making around the search for and appointment of suppliers.

A well-realised scope can help the procurement process by:

  • Giving steer around the non-negotiable requirements a supplier needs to offer.
  • The things that are not needed by a supplier (out of scope)
  • The budget range that the organisation has to work with to complete the work.
  • A clear brief to the supplier around delivery
  • Set deadlines and timeframes that potential suppliers must meet to engage.
  • Some strategic context for suppliers to know ultimately what change in the client’s business they’re helping to affect.

How does reporting work for procurement initiatives?

This will vary depending on the business and the stakeholder’s requirements around updates. For longer procurement processes such as those that may involve a programme, reporting may need to reach leadership and stakeholders with regards to the planning around supplier requirements, progress of the RFP development, and the sourcing of suppliers itself. The procurement process should ideally be subject to the same reporting cadence and requirements set out in the programme’s governance. Reporting practices this early in the programme’s life is an opportune time to refine how reporting is done, pre delivery.

Reporting in this stage will have a strong financial element, especially once the proposals are received. But there will also be a need to communicate progress to stakeholders around the potential options for suppliers and any roadblocks that need to be worked through with the support of the business.

Are there still stakeholder sign offs required for procurement

Yes. Ultimately the financial controller or accountabilities in the business will need to sign off large commercial engagements such as those between suppliers and organisational programmes.

Stakeholder sign off isn’t just about money though. Senior leadership and business unit leaders are typically part of the final decision making process and signing off contracts. The procurement manager or team don’t usually make the final signature, but circulate this to key roles in the business to do so. They are most responsible for the day to day management of firming up the contract details and being the go between for negotiation.

Procurement Programme IQANZ

When is the procurement completed?

Well technically it isn’t; the procurement functions in a business don’t just stop once the contract is signed. Contracts may come under review, need renegotiating or updating. Things happen during programmes and projects that need to be dealt with both commercially and practically to keep the work rolling. Procurement teams often help manage this process like they do tenders and new contracts. But once a supplier is engaging with the business successfully, the procurement team doesn’t frequently interact with them outside of contractual matters.

Where to learn more about procurement within New Zealand’s public sector

There is an excellent guide online by the NZ government that explains the process and best practices in relation to public sector procurement. You can read this over at the Procurement.govt.nz website.

Getting assurance around procurement

Are you finding that your organisation’s programmes are having challenges with translating strategic outcomes into good procurement documentation and practices? Our team can help all parties involved to establish a coherent programme scope and plan that will be much easier for procurement teams to work with. We also help before this stage with business case development. If you’re interested in learning more about how we may be able to help your programme, get in touch today.

Where to next?

Read our other programme resources:

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