Procurement as a shared service in English local government

Abstract

PurposeSmall councils may not have access to professional procurement resources – one potential solution is to create a procurement shared service with another council. The purpose of this paper is to focus on evidence of the emergence and existence of inter‐organisational procurement shared services and its benefits; a structural approach significantly different from the intra‐organisational centralised/decentralised organisational models and the use of consortia.Design/methodology/approachCase studies, making use of stakeholder, semi‐structured interviews, were used to probe the experience of six English procurement shared‐services covering 15 councils.FindingsThe findings demonstrate evidence of that some smaller councils are benefiting from collaborating in inter‐organisational procurement shared service. The collaborations were engaged in strategic procurement initiatives which would not have otherwise been possible through the use of consortia. However, there was an absence, within the cases, of formal business cases and strategy.Research limitations/implicationsThe paper provides evidence that procurement shared services can be inter‐organisational delivering the benefits of intra‐organisational “hard core/soft core” procurement structures and inter‐organisational consortia. The paper also suggests that the benefits gained from procurement shared services have more akin to inter‐organisational collaboration than intra‐organisational shared services. This research is limited in that it only relates to the experience of a purposive sample of small councils that had already decided to pursue a procurement shared service. The research limitations also include the absence of a political perspective.Practical implicationsA procurement shared service appears a viable structural option for smaller councils, whether they have, or have not currently, access to a procurement professional. The research highlights the need to adopt an incremental approach and also sets out suggestions for a strategic approach to shared services procurement strategy.Originality/valueThere is an absence of literature on delivering procurement as a shared service, and shared services in general – in that respect this paper represents research into a new emerging procurement structural model, not previously reported.