Guilhem Lavabre
Guilhem has founded K Consulting back in 2003, having previously held management positions in Strategic Sourcing and Procurement in various industries (including Procurement Director responsible for a €2.5bn budget) as well as in KPMG Management Consulting and a specialist Procurement consultancy.
Can Procurement go beyond Value for Money and rise to the true challenges now faced by the Public Sector?
- By Guilhem Lavabre
- Published 31 March 2010
[An extract from the May/June 2009 issue of Public Sector Executive, written by Guilhem Lavabre, K Consulting's MD]
Guilhem Lavabre explores how do advanced Procurement functions in the Public Sector add value well beyond the usual contribution
Discussing in the previous issue of PSE why devolved Procurement was not the most effective organisational model, we were touching on somewhat basic Procurement objectives, primarily securing and demonstrating Value for Money. However, some readers may have felt that their Procurement organisation is already there, and may now be looking at the next stage of Development: how can Procurement more effectively support essential, strategic objectives?
Taking the following critical challenges as examples:
- Adapting to an overall economic system so heavily loaded with a massive debt to serve
- Dealing with the inexorable increase in demand for Social Support beyond the immediate impact of the economic downturn, the time bomb of a longer life expectancy and an overall ageing population
As a pre-requisite, a common trait of Public Sector organisations benefitting from advanced Procurement functions, truly geared up towards the delivery of such or similar objectives, is that the top managements expectation as to their contribution is not pigeon holed in some kind of supplier interface-only role: their remit expands well beyond such boundaries, up to challenging how services are being delivered.
Commenting on the current standing of Procurement, David Lynn, who has worked with a number leading authorities as a Finance Director explains "There is clearly a need for Finance and Procurement to work together more closely balancing the necessary Finance budgetary control function with more innovative Procurement initiatives".
The burden of our massive national debt requires breaking away from a very bad habit: turning a blind eye to Capital Expenditure. The prevailing mindset in financial management is to focus on balancing the revenue budget; meanwhile, CapEx is regarded as a somewhat inevitable matter, and one for which cost reductions dont really matter, as their impact will be spread over i.e. be divided by a large number of years.
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