How do we buy things that haven’t been invented?

Procurement is one of those things I struggle with.  It puts me in a dilemma.  I understand the need to be fair to the market and be transparent with your process, especially when you are spending public money.

What I don’t get is that I have the suspicion that it doesn’t work.  My feeling is, and it is only a feeling at this stage, that going through an elaborate procurement process raises the threshold to entry into the public sector market.  Because of this it is the larger firms that end up bidding for business at the expense of smaller, more fleet of foot companies.  This must, in the end, reduce competition and as everyone knows, reduced competition leads to higher prices.

Paradoxically, buying a product that is more expensive in the short term but from a smaller organisation may lead to a more competitive market, with more players leading in the long run to lower prices overall.  I hope you are still with me.

The question is, therefore, ‘is procurement there to buy cheaper or to buy better?’  Now I know that the Social Value Act can help here and I must speak to our procurement lead about this yet I would like to put out a challenge to anyone that is in that line of work.

Procurement seems to be geared to buying things better that already exist.  I have one of these and I would like a better deal on its replacement.  The tech industry though is adept at creating new and innovative products and it will only continue to do this if there is a vibrant and sustainable market.  What we really need procurement to do is to buy the products that haven’t yet been created.

We need more of going out to market with ideas for new products and services, for products that rather than replace something, provide the same outcome in a different way.  We also need to accept a degree of speculative products that the market brings us to try.  Yes, some of this money will be wasted.  Some products will fail yet more companies will flourish.

Better procurement will lead to more competition, more jobs and lower costs.

2 thoughts on “How do we buy things that haven’t been invented?

  1. I hope your blog triggers a debate, I’ve just posted a response on Facebook posing the same question. In my current module ‘Global Account Management’ we’re debating this question.The tender process (unless it follows the line of due diligence), doesn’t seem to address the question of long-term customer value

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