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Procurement v asset management: The road to reconciliation

As a procurement professional in the housing sector I have heard those rasping statements on many an occasion from long serving asset managers – ‘we are more than capable of defining our requirements and negotiating with our suppliers, therefore there is no need for procurements involvement.  Procurement participation proves to be time consuming, costly and, due to a lack of understanding of asset management, does not always generate the correct solution.’

In this highly stressful environment we are often seen as an unnecessary bureaucracy, adding little value and creating barriers or slowing the process down.

To a sensitive soul this may be disheartening, but to a world class procurement professional it is merely the fact that they have not experienced your collaborative, value focussed tenacity yet!

So how can that enthusiastic, tough skinned, value ninja hurl down the gauntlet and convince the asset team to let them in.

Walk in their shoes

The asset management world is a decidedly complex, results driven, high risk, customer challenging environment.  Often there is daily fires to put out, reputational risk to manage, supply chain challenges all of which mean asset managers are extremely sensitive towards any potential disruption or change.  With this as a setting it is understandable that asset managers can lose sight of the overall commercial impact of the current supplier set-up.

Immersing yourself in their work is crucial to understand their critical requirements, the daily challenges they face and the performance of existing suppliers.  Speak the same language and listen to their experience and detailed technical knowledge.  Pick up on the key measures and targets they have and address these in any solutions proposed.  Learn from their past experiences, the impact of lead times, the impact of stock issues, the impact the contractor has on tenant satisfaction, the resource constraints they have, the total cost of ownership or the challenge of training a workforce in new product installation.

Only from this level of understanding can you create the opportunity to bring together a bottom up strategic commercial analysis.

Become an adopted team member

Make sure you take every opportunity to collaborate, work as one team and align goals.  Continuously and evangelically reassert that you want to help them achieve their objectives and goals and show that, not only through words but actions.  Add value in their eyes as well as the wider organisation and never stop challenging yourself about this.  Show your commercial and analytical capability to enable them to understand and challenge the existing status quo and recognise the need for change.

Know the housing market better than your colleagues

As a procurement professional you should have a unique position that you understand and know the suppliers in the market, their capabilities, emerging innovation, technological developments – anything less and you will have no credibility.  Knowing the daily challenges that the asset team faces from ‘walking in their shoes’ gives you the opportunity to engage with the broader market, probe incumbent suppliers, engage with prospective suppliers or new entrants on how to overcome these challenges.  Identify from your network how other organisations are dealing with these challenges and improving service delivery.  Look at how innovation is driving continuous quality and cost improvements.  Try to encourage the asset team to explore a broader view of the supply chain and facilitate learning opportunities for them that will shift their mind set that ‘only one supplier can deliver their needs.’

Shine a light on your commercial capability

As a procurement professional make sure you do your job properly.  If you only accept invitations to manage an EU procurement process or manage the sourcing and implementation process as an extra pair of hands then you will not be able to influence and change the mind set of the asset management team.  You need to become part of the team, know the market and walk in their shoes but you also need to be relentless in ‘doing your job’.  Complete your bottom up commercial analysis as part of your continuous supplier relationship and contract management process.  Analyse spend, identify opportunities, measure performance, create benchmarks and assess against external information, obtain data and interpret it.  Spend the time educating the asset management team on this so that they can assess the capability, innovation, risk, commercial models of both the incumbent suppliers and prospective suppliers.  Spend time educating and agreeing with the asset team what they require, the negotiation strategy to be deployed, the risk profile they are prepared to adopt, the key measures of performance that will drive quality, value for money and ultimately tenant satisfaction.  Show your commercial prowess and wait for the moment when your true value is recognised!

 

Procurement and asset management can and must become a complementary pairing if housing organisations are going to deliver on their business plans.  Both have critical roles to play and value to add – it is imperative that you understand the effort required to achieve your organisations goals – now make it happen!

 

As the dedicated procurement services provider to the housing sector, PfH works with you to assess procurement and asset management effectiveness – enabling us to identify opportunities for short-term as well as sustainable efficiencies and improvements.

Many of our Members achieve step-change improvements through our combined approach of delivering immediate cost savings at the same time as driving insightful long-term benefit through smart and strategic procurement.

If you’d like to discover how you can reconcile procurement with asset management within your organisation, contact our Consultancy team for a no obligation discussion:

consultancy@pfh.co.uk

01925 282398

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