Innovation in Procurement Plan (IPP)

Contents

Introduction

This Plan is HM Revenue & Customs (HMRC's) response to the Department for Innovation, University and Skills (DIUS) White Paper 'Innovation Nation', March 2008, which recommended that all Government Departments establish and develop an Innovation Procurement Plan (IPP).

Background

HM Revenue & Customs (HMRC) are responsible for the administration of the UK tax system. Our primary aim is to help 38 million individuals and businesses pay the tax due and receive the credits and benefits to which they are entitled.

We are responsible for ensuring that money is available to fund UK public services and to help families and individuals to receive targeted financial support. We are committed to closing the tax gap, ensuring our customers regard our systems as simple and even-handed and, within the constraints of the 2007 Comprehensive Spending Review, to improving continuously the cost-efficiency and quality of our services. In the current financial climate this takes on an even greater importance.

The Office of Government Commerce (OGC) identified that organisations can gain advantage through their ability to innovate and improve, driven not only by pressure and challenge from demanding customers and but also through working collaboratively with suppliers to benefit from new developments in technology, services and process improvements.

Ownership and objectives

Within HMRC, Commercial Directorate runs a centralised purchasing function and is responsible for, or has influence over, all commercial arrangements covering the Department's £2 billion annual external spend. Our key aim is to support the Department (and, where appropriate, OGDs) to achieve value for money in procurement through our strategic policies and framework contracts.

Commercial Directorate also leads in developing innovative procurement processes and solutions. As Head of Profession, HMRC's Commercial Director owns the Innovation Procurement Plan (IPP) on behalf of the Department. This plan will support and complement existing Departmental and commercial plans and the delivery of business objectives and targets. The IPP has three main objectives:

  1. to encourage and deliver innovation in HMRC's procurement strategy, contracts, purchasing and operational services and processes
  2. to ensure both customers and suppliers consider and, where appropriate, incorporate innovative procurement solutions in the delivery of HMRC's services
  3. to realise the benefits of innovative procurement and share best practice across Government and with suppliers

Procurement innovation is a strategic aim that complements our Corporate Social Responsibility (CSR) agenda and the Department's continuing drive to understand total cost of ownership, achieve VFM and lower costs of trading. HMRC intend this IPP to be the vehicle to drive innovation in the delivery of goods and services and realise added value from procurement across the Department. It will link to:

  • Commercial Directorate's Strategy and Business Plan
  • Stakeholder Engagement/Management Plan
  • Procurement Capability Review (PCR) Action Plan
  • Assurance Framework
  • Departmental Governance procedures

Achieving innovation - Action plan

Innovation in HMRC is integral to providing improved equipment, procurement processes and service delivery for the diverse range of goods and services we acquire on behalf of our customers. These are managed on a category basis and include:

  • Print, post and office supplies
  • IT hardware, software and services
  • Professional services
  • Travel and transport
  • Specialist goods and services
  • Estates

Commercial Directorate has already implemented and will continue to develop a range of procurement activities and systems which provide scope for innovation. Our action plan comprises:

  1. Working collaboratively with customers, suppliers, OGC and OGDs to align business plans and develop innovative solutions.
  2. Reviewing our standard procurement guidance to ensure innovative approaches are included in strategy formation and opportunities identified throughout the full procurement lifecycle.
  3. Involving commercial staff as business requirements are formulated and specified, to ensure new products or novel approaches are considered.
  4. Providing opportunities through existing channels for procurement staff and customers at all levels to submit innovative ideas, for example, the Commercial Director's Hotseat and Procurement Expert Workshops for internal customers.
  5. Changing customer/users' mindsets to accept and deploy innovative solutions – our Streamline++ savings initiative, for example, has already realised significant savings in a number of areas, including travel, transport, print and post, where we are delivering a unified function capable of delivering a step change in our service to stakeholders and customers alike.
  6. Re-engineering business processes – for example, by providing just-in-time delivery of goods and streamlining stock management processes to reduce storage costs and eliminate the costly holding of contingency items.
  7. Robustly managing category demand, centralising budget control and eliminating poor supply chain management.
  8. Closely and effectively managing commercial relationships with incumbent suppliers, ensuring early strategic engagement on product/service development and innovation through Key Supplier Briefing sessions and Blue Sky Thinking Days.
  9. Incentivising suppliers and introducing risk/reward strategies so that we encourage innovation and focus on activities which are integral to the delivery of HMRC's core business.
  10. Monitoring service delivery and contractually requiring suppliers to report gains made through the use of new products or innovative developments.
  11. Providing opportunities for potential suppliers, smaller businesses and specialist enterprises (SMEs) to engage more easily with HMRC commercially – in 2009 we will work with our suppliers to implement the Glover report recommendations relating to SMEs.
  12. Delivering sustainable procurement and supporting environmentally friendly purchasing – we have already successfully aligned our vehicle management strategy and CSR agenda to ensure optimum fleet performance and we intend to exploit further opportunities to reduce carbon emissions. In 2009-10 we will invest in a CSR toolkit to capture the impact HMRC has on the environment and commit to embedding sustainable procurement within all purchasing categories.
  13. Identifying relevant research groups and developing our market analysis capabilities so that we can act as HMRC's 'intelligent customer' and can take advantage of developments in technology and service delivery.
  14. Utilising market leading technology to drive out efficiencies in our procurement lifecycle – we have successfully introduced a SAP ERP system to enable full electronic Purchase to Pay (P2P) for our customers, including online ordering and receipting of goods and centralised invoice payment.
  15. Introducing an e-commerce toolset for spend analysis, electronic sourcing, e-contract management and supplier performance management, which we aim to deploy the full toolset across all commercial areas.
  16. In line with the recommendations of the OGC Procurement Capability Review, appointing a procurement champion at HMRC Board (ExCom) level and maintaining/developing a cadre of professionally qualified procurement staff who are encouraged to seek innovative ways of doing business.

Other HMRC commercial areas encouraging innovation

The Department runs the UK's second largest IT infrastructure and as such has developed complex and innovative procurement and contract management processes with its global IT suppliers. We are keen to exploit the benefits of working with our IT partners to provide innovative technology solutions for the delivery of ongoing service requirements and meet changing business demands.

A further major area where HMRC needs to introduce innovative solutions in order to achieve challenging delivery targets and cost savings is the management of its estate and support services (ESS). Two key programmes of work are currently being implemented, the first to consolidate and rationalise HMRC's estate and the second to transform the delivery of support and facilities management. Neither of these programmes will meet their stretching delivery targets without supplier innovation. Commercial Directorate is aligning its business activities to support these programmes as appropriate.

Measuring and reporting success

The IPP is a forward looking document. Following implementation, it will be updated and managed as follows:

  • Publicise IPP and updates across HMRC, including procurement professionals, key stakeholders and suppliers
  • Post Implementation Review after 6 months
  • Update IPP on annual basis, ensuring it remains compliant and consistent with EU law, OGC guidance and Departmental policy and commercial best practice
  • Report progress through HMRC Directors' monthly Performance Pack
  • Provide DIUS and OGC with progress reports and share best practice with OGDs and Buying Solutions Category Forums

Publication and further information

The IPP will be published on the Commercial Directorate website and supporting guidance will also be developed.

Further information on HMRC procurement and commercial arrangements can be obtained from:

Paul Greenwood
HMRC Commercial Directorate
Ralli Quays
3 Stanley Street
Salford
M60 9LA

Email: Paul Greenwood