Transforming the UK public procurement from transactional/relational practice to strategic commercial management

Abstract

The thesis is about the shift of UK public sector procurement from the current transactional and tactical procurement processes into a strategic commercial management function in order to create and retain value. Strategic Commercial Management being the adoption of the most appropriate and relevant procurement approach in determining supply chain management relationships i.e. transactional, relational or a combination of both approaches. This is informed by the influences that the structure and configuration of supply chain management has on value creation and retention. The study addresses two primary research issues. The structure and organisation of public sector procurement groups determines their ability to manage highly complex public sector procurement requirements and the type of procurement approach adopted is likely to determine their ability to deliver greater value. The methodology is based on cases of three UK Government Departments (Department for Work and Pensions, the Ministry of Justice and Her Majesty’s Revenue and Customs). In which quantitative analysis (multiple linear regression modelling) was used to determine the effect of procurement approaches on value creation and retention and qualitative analysis used in the identification and analysis of the critical success factors. The study concludes that a shift towards the procurement of standard services based on output or outcomes provides the optimum strategic commercial management. That the adoption of a combination of transactional and relational procurement approach provides the most effective basis for increasing the delivery of value and ensuring that it is not eroded. This thesis provides a framework for value creation and retention for practitioners. It also provides the basis for leveraging adopted procurement approaches and develops a number of critical success factors for implementation. The thesis offers up a theoretical model with specific predictions by predicting the effect that transactional, relational or the combination of both approaches has on value creatio