By Scott Pryde
Last week, I published the first in a series of posts on the NHS eProcurement Strategy.
Today’s post will concentrate on Procurement Intelligence & Transparency - What’s in and what’s out?
In the past decade, the spend analytics, benchmarking and supply chain intelligence industry has grown apace across the wider private and public sectors. Core competency in analytics and procurement intelligence have been recognised as specialist capabilities and have delivered value in almost all other industries. Just imagine Tesco or Amazon running their business without comprehensive supply chain business intelligence.
Years of under investment, under resourced DIY efforts, commercial secrecy and ambiguous non-disclosure agreements with key suppliers, have meant that the NHS lags behind in adoption of procurement intelligence solutions. The NHS remains in the dark ages in comparison with these other industries.
As with any form of specialist business intelligence implementation; clinical, financial or procurement, the options are simple; either an internal effort which diverts internal resource from their core competency or contract with a best in class provider, fund their solution and drive them to do it well.
The eProcurement strategy raises a number of questions about what the intention and timescales of the department are. On the one hand, right up front there is a promise that;
‘We will centrally fund and procure a single, national spend analysis and price benchmarking service’
Last week, I published the first in a series of posts on the NHS eProcurement Strategy.
Today’s post will concentrate on Procurement Intelligence & Transparency - What’s in and what’s out?
In the past decade, the spend analytics, benchmarking and supply chain intelligence industry has grown apace across the wider private and public sectors. Core competency in analytics and procurement intelligence have been recognised as specialist capabilities and have delivered value in almost all other industries. Just imagine Tesco or Amazon running their business without comprehensive supply chain business intelligence.
Years of under investment, under resourced DIY efforts, commercial secrecy and ambiguous non-disclosure agreements with key suppliers, have meant that the NHS lags behind in adoption of procurement intelligence solutions. The NHS remains in the dark ages in comparison with these other industries.
As with any form of specialist business intelligence implementation; clinical, financial or procurement, the options are simple; either an internal effort which diverts internal resource from their core competency or contract with a best in class provider, fund their solution and drive them to do it well.
The eProcurement strategy raises a number of questions about what the intention and timescales of the department are. On the one hand, right up front there is a promise that;
‘We will centrally fund and procure a single, national spend analysis and price benchmarking service’
And then we find that part or all of this service will be done in the Health and Social Care Information Centre underpinned by new transparency guidance.
‘As part of the transparency guidance, all NHS providers will be required to electronically submit a monthly file of all accounts payable and purchase order transactions to the national data service. Arrangements for the submission of data, including commencement dates, will be managed through the Health and Social Care Information Service ROCR23 (Review of Central Returns) processes’
Spend transparency in the public sector has been a policy imperative since the last election and adoption has been gradual. Working with the resulting data sets is difficult and the data quality is highly variable at an organisation or supplier level, never mind a product or service level.
Will increasing the scope of the centralised data collection and classification work for the NHS and in lead to the outputs described?
‘As part of the transparency guidance, all NHS providers will be required to electronically submit a monthly file of all accounts payable and purchase order transactions to the national data service. Arrangements for the submission of data, including commencement dates, will be managed through the Health and Social Care Information Service ROCR23 (Review of Central Returns) processes’
Spend transparency in the public sector has been a policy imperative since the last election and adoption has been gradual. Working with the resulting data sets is difficult and the data quality is highly variable at an organisation or supplier level, never mind a product or service level.
Will increasing the scope of the centralised data collection and classification work for the NHS and in lead to the outputs described?
The principal of consolidating data collection and classification seems intuitive. If providers all do spend analysis individually, then there will be a high variety of methodologies and quality of output which will undermine comparability of data and analysis. If the data is centralised and all classified the same way then we enable comparability. But actually, after all that work is done...does it? The main point of reference for many, as mentioned in the strategy document, is the work that the National Audit Office did a few years ago to identify ‘medical device price variances’.
Trusts are also being encouraged to source their own analyses from a variety of partners.
‘.....for the NHS provider to undertake their own analysis of their spend, or for the NHS provider to share their data with other NHS providers and procurement partners such as procurement hubs, NHS Supply Chain and the Crown Commercial Service, or with external spend analysis providers and spend recovery providers’
Full procurement intelligence includes not only the invoice and PO data, but extends to other wider contextual information. Market intelligence, category strategies and contracts and contact with the originating organisation are all essential to understand why prices and volumes are as we find them in the raw data and to discover real savings opportunities.
Additionally, if the objective really is to support trusts in having a comprehensive view to ‘encompass all non-pay expenditure across the organisation’ then we know that other transactional datasets e.g. Pharmacy and NHS Supply Chain data, are just a couple of the extra datasets often required alongside PO and Invoice data.
There is an urgent need and appetite for analytics and benchmarking now as well as information and knowledge sharing so that real world best practice can be shared and new savings delivered. I suspect that whatever can be funded and done centrally will be taken and used where useful, but also that the need for trust level solutions to answer critical local issues will also be essential.
The final post of this series will be published shortly – What’s Missing? The Virtual Procurement Landscape and what about Primary Care?
Subscribe here to receive the next post.
Trusts are also being encouraged to source their own analyses from a variety of partners.
‘.....for the NHS provider to undertake their own analysis of their spend, or for the NHS provider to share their data with other NHS providers and procurement partners such as procurement hubs, NHS Supply Chain and the Crown Commercial Service, or with external spend analysis providers and spend recovery providers’
Full procurement intelligence includes not only the invoice and PO data, but extends to other wider contextual information. Market intelligence, category strategies and contracts and contact with the originating organisation are all essential to understand why prices and volumes are as we find them in the raw data and to discover real savings opportunities.
Additionally, if the objective really is to support trusts in having a comprehensive view to ‘encompass all non-pay expenditure across the organisation’ then we know that other transactional datasets e.g. Pharmacy and NHS Supply Chain data, are just a couple of the extra datasets often required alongside PO and Invoice data.
There is an urgent need and appetite for analytics and benchmarking now as well as information and knowledge sharing so that real world best practice can be shared and new savings delivered. I suspect that whatever can be funded and done centrally will be taken and used where useful, but also that the need for trust level solutions to answer critical local issues will also be essential.
The final post of this series will be published shortly – What’s Missing? The Virtual Procurement Landscape and what about Primary Care?
Subscribe here to receive the next post.
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