How Procurement Strategy as an Instrument for Good Drove Change Management in an Immature Procurement Environment: the Case of ABS University

EasyChair Preprint 9815

Abstract

This paper presents the case of an academic institution which has grown over the last 2 decades to over $500 million pa revenue. Expenditures are in the region of 45% of revenues. Most purchasing was carried out tactically, by user departments and functions.

Following a lengthy internal report, the university president agreed to support a procurement development program to increase the transparency and impact of procurement function, deliver organizational strategies related to core mission, achieve bottom line cost savings, and enhance the value delivered by procurement. Existing perceptions of the role of procurement were very archaic – senior administration associated budget authority with purchase authority.

The notion of procurement as a force for good was central to effecting change. First, every $ spent by an organization has a multiplier effect across the upstream supply chain, which has been shown to generate up to 7 times the economic value of the purchase cost. Second, the choice of suppliers, for example focusing on expanding minority, small and local businesses as an increasing proportion of the supplier base targets not on MWBE policy but serves to enhance the anchor role played in local communities by the procurement organization. Third, extended supply chains present significant challenges to organizations in verification of practices and social impact far upstream – supply chains can contain exploited labor practices that are not only remote from the purchaser, but difficult to identify and audit. However, it is known that many supply chains in sectors such as automotive have unpalatable labor practices in higher upstream tier operations. Fourth, engaging employees in procurement policies that focus on not only providing goods and services, but enhancing the reputation and social good of their organization embodies greater feelings of wellbeing and engagement.

Keyphrases: Change Management, Procurement Strategy, Strategic Alignment

@booklet{EasyChair:9815,
  author    = {Simon Croom},
  title     = {How Procurement Strategy as an Instrument for Good Drove Change Management in an Immature Procurement Environment: the Case of ABS University},
  howpublished = {EasyChair Preprint 9815},
  year      = {EasyChair, 2023}}