Social housing procurement requires a new breed of leader

Take procurement in smaller housing associations. Of the 1,500 registered providers in England, nearly 80 per cent have less than 1,000 homes. For many of these landlords, a large procurement team isn’t tenable. Smaller organisations often have one person managing all activity and it’s no longer good enough for them to be a whizz at compliant purchasing. In the current economic climate, procurement is being scrutinised like never before and the ability to work co-operatively with internal stakeholders and external suppliers could be key to generating extra savings and social benefits.

One example is a relatively small housing association I worked with that had a high turnover of procurement staff and an unsatisfactory cost-cutting performance. The latest procurement manager had just left and, after speaking to stakeholders, we discovered that they wanted to award a higher proportion of contracts to locally based businesses. Feedback from suppliers suggested that previous tender exercises were overly complex with short contract terms, creating pricing challenges because of a lack of commitment from the landlord.

These issues could have been overcome through more proactive communication and networking with colleagues and suppliers and in the end, we helped the housing association find a procurement manager who could do just that. They worked with stakeholders on an equal footing, breaking down barriers, listening to priorities, analysing data and viewpoints and responding in the best commercial interests of the organisation.

This case illustrates the importance of a procurement leader acting as the glue. They must liaise with various departments, carefully managing major purchases. They should coach and mentor these staff, keeping them on the straight and narrow when purchasing goods and services but also offering advice and support. For the finance team and board, they have to provide a strategic vista – offering up the intelligence they gather from having a hand in all parts of the business.

As artificial intelligence, smart analytics, chatbots and intelligent workflows slowly take their place in social housing procurement, digitisation is an important issue for function leaders. Technology-based workplace skills seen as vital now will be very different in five years’ time, so as well as having a curiosity about this new world, procurement leaders must be adaptable and determined to cultivate the value that digital can offer.

They also need to be familiar with the foundation to all ‘smart’ procurement (and, today, to all negotiation) – good quality data. Not long ago I worked with a social landlord that didn’t have strong practices around spend analytics. We showed them that robust spend analysis could highlight important expenditure that required attention. But on top of this, they also saw the value of data analysis in highlighting contract compliance, spend by department and overall spend under management and how these metrics can actually act as a PR tool for the procurement function, increasing awareness and recognition from the wider organisation.

Employing the wrong type of procurement head can be costly on many levels. Not just for recruitment and salary bills but also for the harm caused by lost opportunities to drive savings, diminished buying performance or damaged stakeholder relationships. It pays to think very carefully about the type of procurement leader who is right for your organisation and be ready to hire someone who might be quite far removed from the stereotypical deal-maker.

Dan Gibson, procurement consultant, Procurement for Housing