Can Elements of Contract Management Systems Build NHS Procurement Practices?
Posted on: 10/03/16
“More needs to be done to ensure that decisions about resourcing are made based on full visibility of health need and future requirements and that the contract is awarded to a provider with a balance sheet and leadership team capable of suitably managing any transferred risk.”
- PublicFinance.co.uk, (2016). ‘The keys to healthy procurement practices in the NHS’. Online <http://www.publicfinance.co.uk/opinion/2016/02/keys-healthy-procurement-practices-nhs/> Access Date: 26th February 2016
The article examines how the NHS and health care industry currently manage contracts data and the contract process when a contract goes out to tender. It describes that NHS Partners Network members have been involved in some of the most complex NHS procurement processes of recent years.
Procurement processes should be established in organisations so the tendering process can be carried out efficiently and effectively to ensure value for money and ‘best fit’ as well as reduce risk and unintentional spend. The principles of procurement are well understood in all modern industries and organisations because of the business growing alongside the technology and developments made in contract management systems; therefore, even though the NHS is unique to other businesses it is important they start to look at the elements of robust contract management systems to deliver value for money.
“Bad execution in the letting of a tender can lead to poorer outcomes for local patients, wasted resources and a loss of public faith in reform. This is unacceptable and damaging to all parties involved. It is in everyone’s interests to have a system that works well. Healthcare providers – whether public, independent or voluntary – need to know that the procurement framework they are engaging with is viable and deliverable.”
The article states that NHS procurement practices need to make changes that are applicable in more robust contract management systems and identifies three core elements that are key to healthy procurement practices in the NHS.
- Understanding Budget.
Budget plays a large role in the NHS and is always the topic of discussion. Every contract needs to be based on a realistic budget. However, the issue in procurement practices is that buyers don’t have full visibility on spend and their supply chain; it is important for NHS procurement staff to recognise that contracts have to be financially viable and worth their value. Making decisions on resourcing can be helped by a contract management system’s ability to store and manage all contract and supplier data, and then show all the information on a dashboard so informed decisions can be made in accordance to the most valuable and respected provider and automated reports showing a ‘real time’ budget allowance.
- Effective support.
Complex and larger contracts can make it difficult for NHS procurement departments to develop and procure sustainable services. The article states that procurement needs effective support to be able to deliver on a project. Contract management systems offer procurement departments a helping hand by providing them with the tools to effectively and efficiently handle contract and supply chain data. Contract management systems are not only helping with the control of data in procurement departments but it can help build NHS practices by providing valuable business intelligence, such as creating notifications and alerts for to create actions that should be took next to help in the contract development to deliver more efficient services and supplies.
- Establishing and putting processes in place.
The issue with procurement departments is that everyone has their own unique system for how they carry out their day to day tasks. The article highlights that better and established processes need to be put in place to better support and create an effective NHS Procurement Practice. “Procurement needs to be transparent, nimble and fair to ensure that the best decisions are made and the interest of patients, the taxpayer and the providers who wish to deliver the services are safeguarded.” Contract management systems is the start of a procurement departments collaboratively working together and establishing better processes that should to be put in place to ensure everyone is working in the same efficient and effective way, to ultimately reduce risk and improve compliance and savings. An established process will improve overall visibility and insights into contracts, supply chain and reports so NHS Procurement are able to negotiate and make important decisions in a timely manner.
Contract management systems can provide the tools needed to help build healthy procurement practices in the NHS. A focus on workflow and new ways of working will lead to significant changes across the service and will deliver large efficiencies to ensure hospitals are paying the right price for medicine, supplies and services.