Sunday 8 June 2014

Analogies between purchasing and #Indyref

I blog for all sorts of reasons. Generally topics cover procurement, business, communications or wellbeing - writing about everyday insights that I feel minded to share. Every now and again I stray from this 'safe' list and share subjects that just won't let me go - however unsafe the topic may feel. Today's not so safe topic is the independence referendum (indyref) here in Scotland. 

Last year I wrote a blog entitled 'strategies need evidence' and suggested the same was true for the Yes/No sides of the debate. I realise now the analogy was flawed. At the time I compared the request for a Yes vote to a request for a change of strategy in a business. The problem is that in business those wishing to change strategy have to include the pros and cons of their preferred option in their analysis, and the opposition don't often need to put forward a paper at all. That's not the case here.

I realise the closer analogy to the Indy ref is tendering. The business (Scotland) wishes to explore two different suppliers
  • stay as we are with the current supplier (No) or 
  • go with a new supplier and independence (Yes). 
The difference with this new analogy is I don't have any expectation of the supplier to do anything other than tell me they are the best option. That is I don't expect an unbiased response. As there is no independent body analysing the data for us it's therefore up to everyone voting to compare the options, and to do this we need data (in tables or a series of worksheets - certainly not hidden amongst lots of words nor to be provided once the decision has been made.)

'No' invites us to stay as we are - so we just need to understand the baseline from which to compare the option of yes. (In reality in business we'd also be asking the No supplier what changes they may wish to offer going forward if they were successful. For Scotland that information has been delayed to the general election in 2015. So we can only compare Yes with the current situation.) 

In order to compare the new proposal with the current baseline we need to issue a request for proposal (RFP).

I'd suggested the white paper is the nearest we're going to get to a response to an RFP. That said if a supplier sent me a 670 page document with so few tables or appendices of data in it, and no detailed costs, they wouldn't get through to the short list. After all how can we make a decision without the data?

In this instance, however, Yes is through to the short list - so what supplementary data do I think we need to make a decision? 

I'd suggest we need to identify the profit and loss account and balance sheet of the supplier once the changes have been made. To assist with this we need to clearly understand the increase or reduction in revenue, cost or risk for each the following headings:
  • Finance (currency, banking, taxation, pensions etc)
  • Infrastructure (governance, highways, transport, international development and relations etc)
  • Health
  • Education 
  • Environment
  • Policing, justice, national security and defence
  • And all the other things that go into building, maintaining and developing a flourishing country
We also need to understand the % of costs unable to be determined until after the decision has been made. Generally we'd want this to be less than 20% to avoid any surprises. 

I'd love to tell you I know we have the answers to all these questions - I can't. Until I can then my vote can't be anything other than No. No use trying to persuade me with emotion - I get that every day from internal stakeholders wanting to go with their preferred supplier. My answer to yes persuaders is the same as I give to my stakeholders - where's the data to support it.

Becoming an independent country is more important decision than all the change of suppliers I've ever been involved in as a procurement professional. My worry is the data available is woefully less than any of those changes of supplier even if the RFP has more pages and words in it.

Over forth coming blogs I'll be sharing other analogies between the #indyref and purchasing.

1 comment:

  1. Interesting approach.

    I have seen Ivan McKee compare it to more of a management buy-out scenario. If you had an opportunity to buy you own business would you look to have complete control of something you know very well, and would have the confidence to grow. Or would you look to put the same amount of your own money in and have 8% of the shares, and influence, in a far bigger organisation?