Outmoded procurement practices are choking NHS innovation

Date Posted: 16/10/2018 Category:
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Outmoded procurement practices are choking NHS innovation

Date Posted: 16/10/2018 Category:

Long-standing NHS procurement processes that lock out small and medium-sized enterprises must change if the health service is to become fast-moving and innovative, a technology expert says.

Matt O’Donovan of enterprise WiFi provider, WiFi SPARK, argues that vast NHS procurement frameworks, such as RM1045 and the practice of locking-in to lengthy contracts with dominant suppliers, some of which have lasted over 30 years, boil down to two outcomes: minimal return on investment for the NHS customer, and extensive, automatic profit for large suppliers.

So, what about core procurement functions, such as cost reduction, strategic sourcing, opportunity assessment, and agile supply relationship management? With practices such as those O’Donovan describes in place, they fall too far down the priority list. As O’Donovan says, “… with the NHS looking ahead to how it can progress in the digital age and enhance patient care, it is imperative the sector considers products from small and medium-sized enterprises.”

The technological means of reaching out to these smaller suppliers already exists in the form of the Government’s G-Cloud initiative, a framework designed to enhance the public sector’s access to cost-effective suppliers, but too few NHS organisations are making use of it.

Research conducted by the International Institute for Advanced Purchasing recently showed that public sector organisations using G-Cloud achieved sourcing savings and cost reductions of around 50% compared to legacy contracts.

From March 2018, 48% of sales by value, and 70% by volume from all reported G-Cloud sales went to SMEs, proving that organisations using G-Cloud to source smaller suppliers are finding the optimal price points and services for their purposes.

O’Donovan is emphatic that more needs to be done to strengthen this trend. Major problems continue to need solutions, and smaller, more innovative and agile providers are both more motivated and more inventive to deliver them than the ‘big beasts’ of the supplier jungle that too many NHS organisations still depend on.

Nick Ford

Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.

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