Environmental Scanning: An indicator of strategic significance

19th Annual IPSERA Conference May 2010, Lappeenranta, Finland

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Environmental Scanning:

A primary indicator of strategic significance

J. Gordon Murray PhD


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Is it possible to have a primary indicator of

whether or not procurement is strategic?


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Does it matter whether or not procurement

is strategic?


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Researchmethod

Findings,conclusions

& implications

Scope of paper

Strategic Procurement

Environmentalscanning

Procurement strategy

Recession


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Environmental scanning

Scanning for information about events and relationships in an [organisation’s] outside

environment, the knowledge of which would assist top management in its task of

charting the [organisation’s] future course of action

(Aguilar, 1967)


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Environmental scanning literature

Largely unexplored in terms of top managers tools and processes procurement strategy

Can be generalised as asking leading question

‘Do you carry out environmental scanning?’


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The recession

5% of council ‘strategic/critical suppliers ‘at risk’ Procurement’s response represents an interesting

opportunity for research


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Strategic procurement

A recognition that organisational success will be compromised without the contribution of procurement.


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Procurement strategy literature

Should be aligned and linked with other strategies

Assumes a linear and sequential development process

Environmental scanning at the start, or in terms of using the supply market as a

source of innovation


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Research question

What has been the impact of the recession on councils procurement strategy?


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Research approach

Exploratory 26 homogenous councils, previously

identified with strategic objectives of local economic development

Personalised email survey One year into recession Response rate: 73% (19 of the 26 councils) Only 46% of respondents procurement

managers


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Findings

57.9% had a written procurement strategy 21% linked with economic development

strategy 55.6% felt procurement strategy wasn’t

owned by elected members“Little interest from members” (Dir of Corporate Services)

61% could not say procurement strategy reviewed in light of recession

“It was produced to provide a strategy, not to promote results” (Procurement Manager)


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Conclusions & discussion

Recession could have been expected to have been a major cause of concern of councils

Even though evidence of procurement strategies in place

Response to recession? Business as usual yet regular review of strategy an

indicator of strategic procurement. While we debate ‘is procurement strategic?’, the

argument can be distilled into how important is procurement environmental scanning


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Hypothesis

A primary indicator of strategic procurement is that on-going environmental scanning will

required by and reported to the organisation’s leadership.


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Does it matter whether or not procurement

is strategic?


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Does it matter if procurement is strategic? What matters is whether organisations are

making optimum use of the resources at their disposal.

This exploratory research suggests they aren’t.


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Implications

Practitioners Reflect on how environmental scanning is embedded in

culture as part of risk management and strategic response Research

Test the findings of this exploratory research and the hypothesis

Why is procurement not being making its optimum contribution?

Educators Consider perception that environmental scanning is ‘task and

finish’ as opposed to on-going process. Draw on the teaching example of the recession.


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Environmental scanning: A primary indicator of

strategic significance?

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Environmental Scanning: An indicator of strategic significance

Business

procurement strategic

councils procurement

contribution of procurement

procurement professionals

procurement strategy

processes procurement

written procurement

strategic response research