Oxygen Finance

Why Data-Led Procurement Is Saving The Public Sector Both Time And Money

With millions of pounds spent buying private services for public use every day by local authorities, scrutiny on how this money is being spent with their supply chain is only increasing.

Procurement leaders are turning to intelligence tools to help both understand and benchmark their spend in different markets and with different suppliers, but also to look at how their counterparts in other parts of the country are buying services to join forces.

We spoke to James Jordan about the Insights solutions Oxygen Finance provide, and also chatted to two frequent users, to understand the part buying intelligence plays in today’s public procurement process.

“We’ve been providing actual insight on procurement activities for the public and private sector for over two decades,” explains James Jordan, Sales Director for Oxygen Insights.

We asked James whether changes in funding and the move towards data driven decision making had been a factor in the growth of take-up in big data and procurement analytics: “The growing funding gap is rarely out of the media spotlight and council budget decisions are under increased scrutiny. Helping them to achieve cost savings and influence local economies is our goal. Oxygen Insights is reaching more public sector decision makers than ever before, providing easily accessible, accurate insight to support strategic decision-making as local government face turbulent times.”

Oxygen Insights offers two key benefits for Public Sector buyers, as James explained: “Insights Spend gives decision makers the ability to interrogate over 100 million cleansed and categorised invoice records provided by in excess of 1,000 public sector organisations that spans across local government, central government, the NHS, and emergency services – that’s over a trillion pounds of spend.”

“Procurement professionals use Insights Spend to understand how they’re spending ranks against their peers, by market by supplier and by organisation, helping them to identify ways in which they can work smarter, save money, and provide value for money for their citizens.”

“In addition, local authorities are rethinking the way they operate. Councils are changing working practices and introducing new shared service arrangements and collaborative procurement by providing councils with early sight of procurement activities being planned by their peers,” James explained.

“Insights Notices helps councils to identify opportunities for joint procurement, as well as helping them to find other councils that have recently undertaken similar procurement processes to the one they are planning. This opens up opportunities to share best practice specifications and contract documentation.”

“Users of Insights Notices gain access to a comprehensive dataset. This combines data gleaned from contracts awards, notices and registers, with details found in strategy papers and forward plans from local authorities, NHS Trusts and CCGs. Insights Notices identifies organisations that have procured similar products or services in the past. This helps support negotiation of suppliers commercial terms.”

So that’s the pitch. But how are tools used for effective procurement in practice? Here’s Andy Perrins, Category Manager at YPO, a central purchasing body owned and governed by a group of county, metropolitan and borough councils in Yorkshire and the North West England: “I use Insights Notices personally around the health and social care market. A lot of commissioning is planned way in advance. So, understanding the intentions of those commissioners without having to sift through hours of committee papers and save looking on council websites… Insights Notices really helps draw that information together and saves hours of time in trouble.”

Andy goes on to explain how he has used Insights Notices: “Recently, I was looking at the council’s intentions around purchasing equipment as whole people in their own homes and Insights Notices identified a particular Council. We’ve contacted that council and we’ll be working with them. Typically, those sorts of contracts are worth several £100,000’s, which means that we will speed up their potential procurement process and earn some reasonable rebate from that.”

To hear about how Insights Spend is used, we spoke with Nigel Denton, Commissioning Development and Procurement Manager at Shropshire Council: “As a council we spend over £200m with external contractors. So, it’s important that we get on top of who we’re spending with and try and get efficiencies out of that in order to meet funding gaps. We’re trying to drive out efficiencies and savings from our contract arrangements.”

“We started using Insights Spend a few years ago to help us inform our commissioning and our procurement decisions. We took it on board because we wanted to be able to analyse our expenditure detail, and have it categorised so that we could see what we’re spending and how much we’re spending on it. We find that Insights Spend provides us with good, clean, quick data that saves us time, gives us efficiencies in our use of resources, and provides assurance around our contract-in arrangements.”

Nigel went on to discuss what life had been like before buying Insights Spend: “Prior to having Insights Spend, we had to analyse our own data from our finance system. Any categorisation couldn’t really be relied on because we were relying on users to categorise. It took a lot of time and effort to get to the bottom of certain expenditure information that we were after. With Insights Spend that information is there at the touch of a button – literally, two or three minutes from logging on. I would certainly recommend it’s use by other local authorities because I think they will gain the same advantages and efficiencies that we experience,” Nigel added.

The need to find savings and potential suppliers, as well as the benefits in collaborating with other authorities who have already solved the procurements problems you are facing, will continue to drive the uptake of advanced analytics to speed up and improve decision making and operational efficiency.

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