It’s one thing to imagine a better world, but another to deliver it. Donor organisations, implementing partners and NGOs responsible for delivering aid programmes need a strong and reliable procurement partner; one that understands the environment in which they’re operating and can meet their needs. Delivering Procurement Services for Aid (DPSA) was created to do just that – to procure and transport goods and equipment around the world in support of global aid programmes, right down to the last mile. Here Darron Cox, CEO of DPSA, explains how the approach of ‘doing procurement differently’ will benefit the sector
How will DPSA do procurement differently?
Procurement can be one of the greatest sources of risk within any organisation, but it can also be a source of value and innovation. Doing procurement differently is about moving away from focusing solely on ‘what’ is being procured, to ‘why’ and, in particular, ‘how’ items are being procured. By taking a strategic approach to managing third-party spend, an organisation can drive innovation, influence strategy, identify cost and efficiency drivers, and control risk. DPSA works with donors and implementing partners to design their procurement programmes and identify solutions to deliver the greatest impact, rather than just developing a ‘shopping list’ of goods that need procuring. That is what strategic procurement is all about: integrating programme design and procurement goals from the outset, and working in partnership with our customers to achieve the maximum impact.
How does strategic procurement differ from traditional approaches?
Strategic procurement comprises three distinct phases of activity: planning, tendering and delivery. Traditionally, the greatest amount of time and effort is spent on the second – tendering – phase, as this is where it is often believed that value is derived. However, by taking a strategic approach and refocusing effort on the planning and delivery phases, we can achieve greater impact. Procurement strategies should be designed with the programme, not as an afterthought. Where DPSA has worked closely with implementing teams, we have seen much better results. This is because tailoring procurement requirements and specifications to desired programme outcomes encourages the market to respond with innovative approaches that interpret ‘value’ more broadly than just price.
How can taking a more strategic approach benefit international development?
As a significant provider of international development and procurement services, our customers benefit from years of experience and know-how. Our customers face a broad range of challenges every day and we understand the benefit that a strategic approach to procurement can deliver. While procurement always seeks to achieve the optimum value for money for a programme, it can also support wider strategic benefits for the customer.
Building a strong and vibrant local economy is important to many programmes and little things like ensuring that tender documentation is available in local languages will encourage small, local businesses to tender for contracts. In some cases, choosing a local supplier has the potential to meet these wider programme goals as well as reducing cost and maximising the commercial benefits delivered. This kind of procurement doesn’t just create value, it also sustains it. There is, of course, also a place for global sourcing and we always consider the balance of local versus global in making sure we deliver value for the customer.
You talk about adding value. Can you define that?
Procurement has the potential to deliver benefits beyond those that come directly from the purchase of goods and equipment. These include developing markets and economies, enhancing skills, building capacity and adopting sustainable approaches that enhance the environment. By working with customers and implementing partners at the beginning of the process, we’re able to ensure that procurement isn’t just an after-thought but adds value to the programme strategically and operationally. In essence, we help customers to simplify complexity, reduce risk and deliver results.
On a practical level, how does what you are describing differ from traditional approaches?
Take the case of procuring preventative medication to protect an entire population from malaria. There are commercial, financial and technical elements that come into play when you are dealing with such serious procurement needs, and this is where strategic procurement adds value. If you ran a simple tendering process to obtain quotes from the marketplace, without designing a robust and specific evaluation approach, you might just focus on prices and conclude that buying from the cheapest supplier is the best option.
In taking a strategic approach to procurement, working alongside the customer to understand what drives their programme and the outcomes they are looking to achieve, you might reach a different conclusion. Optimum value could, for example, be realised by using a local supplier who also provides working opportunities for women meaning the price differential is outweighed by the wider programme benefits. We challenge thinking and bring experience to guide our customers in making the right choices for their needs.
Does strategic procurement mean there is also a difference in DPSA’s ways of working?
Firstly, we aim to make working with DPSA straightforward. Our Customer Relationship Managers (CRMs) are a single point of contact for customers within each region. They work alongside our customers to keep them informed throughout the procurement process, from initial engagement right through to following up on the final delivery. This process ensures that the delivered solution doesn’t just meet requirements but also adds value. While the CRMs are the ‘face’ of DPSA for the customer, each of them is supported by our global network of industry-leading supply chain experts and service-providers.
Secondly, when goods and equipment are needed for international development programmes, particularly in crisis situations, you need a fast, efficient and reliable service. We work in some of the world’s most fragile states and understand the challenges that weak infrastructure, combined with volatile political and economic conditions, can create locally. Our processes are simple to use, yet robust enough to get it right first time.
How else do you help your customers?
Our team is also able to support customers through procurement-related Technical Assistance programmes. These are wide ranging advisory programmes which could, for example, develop output-based specifications or problem-based procurement approaches that encourage the market to innovate, or help customers define complex specifications. We don’t just take an order and fulfil it; we help our customers make the right choices for their needs, budget and timescales, from initial thinking right through to after-sales, helping to build capability and capacity as part of our work.
So you’re confident that doing procurement differently adds value?
Absolutely. That’s one of the main drivers behind the creation of DPSA and is core to the service we provide to the UK Department for International Development (DFID), implementing partners and international NGOs. I believe that strategic procurement plays a valuable role in helping aid to go further, one that enables our customers to fulfil their commitments and support people in need.
Darron Cox is the CEO of Delivering Procurement Services for Aid (DPSA) and a Senior Director within AECOM, leading its Procurement Advisory Service across Europe, the Middle East, India and Africa (EMIA). DPSA is an AECOM-led service in partnership with TWI, Damco, Eagle Scientific and Olive Group. With 60 years’ experience in delivering international development services and running outsourced procurement services on behalf of clients, the alliance is able to access local and global markets and apply our regional knowledge to deliver a first-class service for our customersAbout this Content