1. Chris Newman MBA Director ArcBlue Consulting 8 October 2014
Procurement Power: How Local Government Can Drive Reform Through Procurement Transformation’
Chris Newman MBA
Director ArcBlue Consulting
8 October 2014

2. ArcBlue Government Procurement Development Activity across Australia/NZ
QLD State Government
Contract Management Capability Assessment & Development Program
WA Local Government
Procurement Training Program
Spend Analysis
Gold Coast Council – Capability Development and Contract Management
Procurement Capability Assessment / Development
NSW State Government
Accreditation Program – preparation and assessment
SA Local Government
Roadmap Program
Regional Opportunity Analysis
NSW Local Government
Roadmap Program with LGP
Procurement Leadership Program
Social Procurement Development
Sydney Metro Councils Joint Procurement Development Program
VIC State Government
CIPSA Certification
Federal Government
Federal Government
Contract Management Development
Regional Procurement Development Programs
VIC Local Government
Procurement Roadmap development
Contract Management Guidelines and Training
State Government
NZ Government
Departmental reviews
Local Government

3. Procurement Development
Why Procurement?
Represents a large component of council activity and expenditure
Victorian Councils spend over $4 billion each year (estimate)
More than half of most councils’ overall expenditure
Has received little focus (administrative – not strategic)
Procurement Development Programs
National and State Government Procurement Development Programs across Australia and New Zealand
Local Government Procurement Roadmap and Spend Analysis Programs
Councils now recognising the importance of a structured approach to procurement capability development
Supported by Regional Groups and other peak Local Government Procurement Bodies around Australia
180 Councils across 3 States have participated since 2010
2014 Regional Programs –
NSW: NOROC, Riverina, WSROC, Centroc
SA: Eyre Peninsula, ERA, Barossa Region, Council Solutions

4. Procurement Local Government
State
Regional
Local

5. Why the focus on procurement ? The benefits
Reduce external supplier costs
Increase internal efficiencies
Efficiency and financial stability
Build confidence
Reduce risk
Demonstrate professionalism
Probity and process
Support council objectives
Project delivery
Environmental sustainability
Regional/local economic development
Social Objectives
Enabler of broader reform
7bn across local gov aus
50% of spend
Vital role in supporting communities and delivering council objetives
Capital works and budget planning
Project management and delivery
Regional and Sector Collaboration

6. Organisational Assessment
Strategic
Procurement
Contract
Management
Category
Results and
benefits
Strategy
People
Organisation
Economic
Development
Sustainability
Social
Framework
Policy
Systems
and Data
Compliance
External Focus
Internal Focus
Mission
Delivery
Enablers
EMERGENT
BASIC
DEVELOPING
ADVANCED

7. Program: Objectives and Process
Support Councils and the region in driving savings and improved performance through their procurement practice
Identify and explore further opportunities for regional collaboration and the most effective role for regional groups in supporting regional projects and programs
Support participating Councils at an individual and regional level in better understanding and managing and identifying opportunities for improved performance
Joint Council Kick-off
Data and Information Collection
Joint Spend Analysis and Assessment
Regional Opportunity Analysis Workshop
Develop Council Solutions Strategy
Develop Regional Roadmap
Individual Council Roadmaps
On-going Support

8. Regional Roadmap Example
Priorities – Wave 1
Wave 2
Road Reseal
Street Sweeping
Bulk Cartage
Waste Management – including leverage NORMA contract
Line Marking
EWMS
Building Maintenance & Cleaning
ICT
Services Panel - Including Shared Portal
Rubble Raising & Crushing
Heavy Plant & Equipment sharing
Materials supply

9. Procurement Transformation and Collaboration Benefits
Sustainable savings in external expenditure, e.g.
Blue Mountains $800,000
Murray Bridge $500,000
Burnside $600,000
Riverland Region – Over 20% savings through regional contracts
Increased usage of local suppliers, e.g.
Gold Coast spend through local suppliers increased from 49% to 63% over 2 years
Improved performance, e.g.
Increased completion rates for Capital Works
Streamlined internal processes
Targeted productivity savings
Improved probity and reduced risk
Social Procurement - Employment generation for local and disadvantaged communities, e.g.
G21 GROW Project – cross sector development of job creation strategies through procurement
© ArcBlue Consulting 2014

10. Data Analytics

11. Data Analytics Transforming Local Government
Data analytics is transforming our understanding of local government procurement.
Regional Procurement Roadmap Programs across NSW and SA in 2014 have incorporated new technology and data collection and analysis ‘Dashboards’ tailored specifically for local government.
The ‘Dashboards’ create a new understanding and capacity for driving cost savings, compliance and regional economic development outcomes.
There is much broader application of data analytics in transforming our capacity to understand and drive individual development and regional and sector collaboration across a wide range of council activities
© ArcBlue Consulting 2014

13. Individual Council Procurement ‘Dashboards’
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14. Local Spend Dashboard
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15. Spend Summary
Regional Spend Analysis - example

16. Regional Categories & Suppliers
COUNCIL 1
COUNCIL 2
COUNCIL 3
© ArcBlue Consulting 2014

17. Regional Category Dashboard
© ArcBlue Consulting 2014

18. Regional Demographics
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19. Why analyse spend?
LG Sector generally has a poor understanding of what we spend and who we spend it with
Reduces Councils ability to:
Analyse spend and transaction patterns, and strategically plan for better procurement (opportunity analysis)
Easily track spend and performance by category, supplier or contract
Track compliance, cumulative/purchase card spend etc.
Quickly and effectively report on procurement and performance
Reduces Regional/ sector ability to:
Track spend patterns and identify opportunities to improve existing contracts or identify new ones
Accurately monitor and measure contracts and suppliers
Benchmark performance
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20. Spend analysis challenges
Reasons for lack of spend analysis in LG Sector:
Range of financial systems used: Civica, Tech One, Oracle etc. makes it difficult to extract and then consolidate data
Systems are set up for finance processes, not procurement
Data in the systems is often poor quality (not ‘clean’ – not categorised, inconsistent supplier names used, etc.)
Spend analytics done in-house is often time consuming and expensive because skills are underdeveloped in the sector
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21. ArcBlue Dashboards overview
Tailored application using modern Business Intelligence software → standardised set of interactive, user driven Dashboards designed specifically for Local Government
Displays categorised areas of spend with the ability to drill down to enable detailed review
Data can be both aggregated at national, state and Regional level or drilled down for use by individual Councils
Intuitive and visually attractive
Easy to use and understand
Online interactive ‘Dashboards’ that allow flexible analysis and reporting
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22. LEAP - Procurement Continuous Improvement Program

23. MAV LEAP Program - Background
Procurement leaders conference May 2014
40 LG procurement professionals
Focus on individual and sector wide capability development
Identified successful STEP program methodology (Asset Management, Planning) as applicable
Need for spend analysis, benchmarking and performance reporting across the board
Priority to support structured collaboration and enable local/regional economic development
© ArcBlue Consulting 2014

24. CONTINUOUS IMPROVEMENT
Program Design
Phase 1 ASSESS
Phase 2 DEVELOP
Phase 3 IMPLEMENT
Detailed LEAP Plan
Council workshops
Implementation support for delivering LEAP Plan
Informing priorities for MAV Central Capability Development support activities eg. Training, Documents, Guidelines, Events etc/.
Spend Analysis
Maturity assessment
Practices & Priorities survey
CONTINUOUS IMPROVEMENT
PREPARATION
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25. Maturity/Capability Assessment
Online maturity/capability assessment based on 12 procurement dimensions
Input into sector and regional benchmarking and presented in dashboards
Inform the development of priority actions for Phases 2 & 3
Annual update to track movement and achievements
Results reported back via dashboards
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26. Practices & Priorities Survey
Procurement Practice and Priorities Survey to be deployed online to each Council to capture outline of current practices
Survey to capture information regarding each individual councils current focus and priorities including:
Social procurement and local economic development objectives
Current contracts and renewal schedule
Procurement technologies being used
Major upcoming procurement projects (procurement plan)
Analysis of survey results to inform benchmarking, regional collaboration opportunities and contract priorities
Results including benchmarking reported back via dashboards
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27. Workshops and Presentation
Workshop with Stakeholder group to review spend analysis results and benchmarking identified through the ASSESS phase activities
Training in on-going usage of Council’s individual Procurement ‘Dashboards’
Facilitated Senior Management Presentation to put forward the outcomes of the ASSESS phase,
Development of individual Council LEAP Plan developed as part of the workshop
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28. Regional Development
The LEAP Program presents an ideal opportunity for Councils to strengthen collaboration across regions in both metropolitan and regional Victoria.
For no extra cost, regions with 5 or more LEAP participating Councils will have access to:
A fully developed regional spend analysis
Online regional ‘Dashboards’
Regional Opportunity Analysis Workshop to support the development of opportunities for a wide range of collaboration.
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29. Example Leap Program Modules
Phase 3 - IMPLEMENT
Implementation support to ensure that priority action areas are being implemented
Example Leap Program Modules
Savings & efficiencies program
Procurement process and systems review
Probity and compliance diagnostic
Procurement reporting and KPI development
Training program
Purchase card strategy
Social procurement & Local Economic Development program
Collaborative procurement program
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30. Practices/Priorities survey Maturity assessment Update of LEAP Plan
LEAP Ongoing
Annual Cycle:
LEAP progress review
Spend analysis update
Practices/Priorities survey
Maturity assessment
Update of LEAP Plan
Report back on progress, performance and benchmarking
On-going priority continuous improvement plan implementation
ASSESS
DEVELOP
IMPLEMENT
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31. Letter to go to all CEOs in mid October
Next Steps
Letter to go to all CEOs in mid October
Annual cost per participating Council including full spend analysis is $9,000
Information Session at the MAV on October 31st
Registration for Stage 1 Councils by November 31
More information will be available on:
Or contact Cameron Spence on or
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