In recent years, the procurement landscape has been undergoing significant transformations, driven by the push towards innovation. The Innovation Procurement Empowerment Centre (IPEC) has been at the forefront of these efforts, aiming to embed innovative procurement practices within public sector organisations. A recent study sheds light on the current sentiment in the procurement world, revealing both challenges and opportunities.

Growing Awareness but Limited Understanding

Awareness of innovation possible within procurement is varied among professionals in the public sector. Our recent study found that only about 14% of respondents are very aware of the concept, while a significant 19% are not aware at all. This discrepancy highlights a critical need for education and consistent terminology in the field. The mixed use of terms like “innovation procurement,” “innovation-friendly procurement,” and “innovative procurement” often leads to confusion, underscoring the necessity for a clear and unified lexicon.

This inconsistent terminology creates confusion among professionals, as it is unclear whether these terms refer to the same practices or different ones. Because of this confusion, there is a need for a clear and standardised set of terms (a unified lexicon) to ensure everyone in the procurement field understands and communicates these concepts consistent.

The Role of IPEC

The Innovation Procurement Empowerment Centre (IPEC) is a specialised initiative focused on bringing innovative solutions to procurement. Our mission is to empower councils and local authorities to adopt innovative practices that drive better, cheaper, faster, greener, and safer outcomes through market innovation.

IPEC offers guidance, resources, and support, including access to best practices, training programs, expert consultations, and networking opportunities. We partner with industry experts and stakeholders to identify, evaluate, and implement innovative solutions tailored to public authority needs.

Despite being relatively new, IPEC has raised significant awareness, with 42% of respondents aware of our efforts and 13% very aware. Engagement has been beneficial, fostering community building, sharing best practices, and highlighting the importance of innovation in procurement.

Since its inception two years ago, IPEC has facilitated the adoption of innovative procurement practices, leading to streamlined processes, cost savings, faster project timelines, reduced environmental impact, and enhanced safety standards.

We provide innovation guidance, training, and shared learning to tackle procurement barriers and run a funded annual cohort programme to find innovative solutions for specific challenges.

Barriers to Innovation

A significant portion of procurement professionals does not yet view public procurement as a driver of innovation. Only 14% see it as very much an enabler, whereas 10% believe it is not an enabler at all. The main barriers identified include risk aversion, restrictive procurement rules, and limited budgets. These challenges are compounded by a lack of understanding of the concept itself, indicating a pressing need for training and development.

Embedding Innovation

Embedding innovation within procurement practices remains a challenge. The survey revealed that only 27% of respondents are in the early stages of learning about innovation within procurement, and an equal percentage are not exploring or adopting the concept at all. This indicates that while there is interest, practical implementation is still in its infancy.

Benefits Realised

Despite the challenges, those who have adopted innovative approaches to their procurement practices have reported tangible benefits. These include improved relationships with suppliers, stimulation of internal and external innovation, better value for money, and increased staff motivation. Pre-engagement with suppliers has also been identified as a key strategy, leading to a better understanding of market solutions and pricing structures.

The procurement world stands at a crossroads where traditional practices are being challenged by the need for innovation. With continued efforts from organisations and a collective push towards education and support, the potential for transformative change is immense. By addressing the barriers and leveraging the identified opportunities, the public sector can harness procurement as a powerful tool for driving innovation and achieving greater value.

IPEC will continue to monitor the procurement landscape on an annual basis with our second survey release in the autumn. If you are interested in inputting your views into this then sign up here to stay updated. For more insights and to stay updated on the latest developments in innovation within procurement, and the work local authorities are doing join the conversation on our LinkedIn group and follow our IPEC company page.

By Kayleigh Hadjimina

Senior Marketing and Communications Manager for IPEC