GATE O: STARTING POINT FOR SUCCESS
Key ingredients for the procurement of innovation, from definition to engagement.
This section offers knowledge and guidance for public-sector professionals on the following:
Why should you innovate?
The need to do more with less is very apparent as public agencies manage their ever-tightening spending plans. However, with advances in technology and the emergence of new suppliers, the ability to increase innovation through procurement becomes key. It provides an important lever to create more overall value and outcomes for our citizens. Innovation through procurement is therefore a vital factor in improving the quality and driving the efficiency of public services.
Some of the potential outcomes from procurement innovation can help to:
- Support innovative businesses and stimulate the growth of innovation
- Support small to medium enterprises (SMEs)
- Accelerate the adoption of new technology
- Develop new partnerships that are built around collaboration
- Transform public bodies to become Intelligent Clients
Developing the Business Case
- The business case is a formal and iterative tool that can be used to frame the problem, the opportunity and the solution. It is used to support cost-benefit and options analysis, also to record and share progress updates, plus keep a record of decisions.
- The business case helps justify and initiate a project. Though it is developed at the early stages of a project, it should be revisited, revised where applicable and used on an ongoing basis to help decision-makers determine whether the project is worth continuing.
Resources & Support
- The Business Case Guidance for Projects and Programmes offers comprehensive advice on developing robust business cases in line with HM Treasury’s Green Book standards. It provides support in crafting compelling, well-structured business cases using the "Five Case Model," ensuring that proposed investments are justified and strategically aligned with organisational goals.
Challenge Definition: Do you have a hypothesis?
Typically, a procurement is developed around a specification. This is a detailed document that provides the exact requirements and comprehensive instructions. An innovation challenge definition replaces the specification where it defines the problem and the required outcomes.
Developing that challenge definition is a key element to evolving an innovation procurement.
In order to understand the strategic emerging theme that needs addressing around policy, process or people, users must clearly articulate what the problem is that they want to solve (the challenge).
To fully develop a challenge the following steps should be taken:
- Clarify outcomes, priorities and goals. Are these in line with the organisation’s mission? When defining the outcomes of the challenge, consider the long-term benefits of solving the issue. What does success look like?
- Identify the route of the problem. Is the procurement trying to solve more than one issue? Is there a priority in terms of what needs to be resolved?
- Foster alignment. Evidence that a diverse internal group are working towards common goals rather than pursuing their own individual priorities.
- Focus efforts and resources on reaching those goals. If appetite is strong amongst various stakeholders, could the goals be consolidated along with resources to tackle the challenge.
- Understand the parameters including cost, time, quality and environment. Stakeholder engagement is key here in order to ensure multiple perspectives have been considered.
- Impact of a solution.
- What is the impact if the problem is not solved?
- Who could it affect?
- Is it really needed?
- Why does the problem matter?
- What is the value to the organisation?
- How can change and improvement be measured?
- Hypothesis: if this challenge was solved was does good look like in 3, 5 and 10 years’ time?
Resources & Support
- Watch this webinar by team IPEC on Challenge Scoping to understand how to define an innovation challenge through a live case study example.
- Read this case study available on Connected Places Catapult’s website to understand how Network Rail used Geofencing to tackle the challenge of improving worker safety.
- Read this case study available on IPEC’s website to learn about Greater Cambridge Partnership using innovation to address city challenges in the Smart Cambridge Programme.
Internal Stakeholder engagement
The challenge definition highlights the requirement to foster alignment. A project team often relies on market engagement to validate their business case, however, internal engagement with stakeholders is just as valuable and necessary.
This tool gives the opportunity to campaign your mission, vision, and purpose. By increasing internal alliances this could help increase resources and expertise on the project
Resources & Support
- Watch Mobilising Internal Allies Webinar on IPEC’s website to learn how three councils used internal stakeholder engagement to deliver successful innovation projects.
- Read this case study available on IPEC’s website to learn how The London Borough of Barnet overcame challenges to deliver EV Charging Programme Barnet.
What is Preliminary Market Engagement and why do you need it?
Preliminary Market Engagement (PME) is the process that contracting authorities use before proceeding with a procurement to consult with suppliers and the market, informing them of their requirements and procurement plans. After the challenge has been robustly defined internally, it is time to test it externally. PME is a powerful tool to explore innovative and creative solutions with suppliers and develop an ongoing community of innovators.
By engaging with suppliers, this process should help validate and refine the challenge. There is also the opportunity to discover additional options and assess whether the challenge statement is applicable to potential solutions in the market.
Procurement also needs to provide the opportunity to listen to the market, by testing assumptions and the requirement against reality. This provides for a better understanding of any barriers to the procurement, which ultimately helps achieve the best result.
PME enables a user to be an intelligent client before embarking on a solution.
Key to success
- Switch off ‘Solution Mode’ – it’s not what you are you procuring that matters, it’s what outcomes you want to achieve.
- Continuously reassess the challenge definition and strategies.
- Align the project with the right people.
For further guidance on PME under the new regulations, refer to Gate 2: The Procurement Act 2023, specifically the ‘What has actually changed?’ section under New Notices & Early Market Engagement.
Additional Resources & Support
- Read the guidance from GOV.UK on conducting Preliminary Market Engagement (PME) under the Procurement Act 2023, outlining its purpose, benefits, and best practices.
- The Procuring Innovation Playbook as IPEC publication, is a valuable source of guidance. The playbook provides advice on a range of public procurement issues, from articulating problems and prescribing solutions, via market analysis and PME, to setting budgets and running pilots, even myth-busting.
- Read the Unlocking innovation in public procurement: A practical guide to pre-market engagement by IPEC for a comprehensive guide on using PME to drive innovation within the procurement process. It outlines best practices for engaging with suppliers early in the procurement cycle to identify innovative solutions, foster competition, and shape market expectations. The guide offers practical insights for public-sector procurement professionals on how PME can help unlock value, reduce risks, and enhance outcomes in public-sector contracts.
- Read this case study available on IPEC’s website to learn how The London Borough of Barnet overcame challenges to deliver EV Charging Programme Barnet.
Innovation projects go through different phases from the moment a problem emerges until the technology is commercialised and on the market. For this reason, a tool is needed to quickly and universally measure the R&D stage of a project. In response, the TRL (Technology Readiness Level), is used as a unit of measurement on the technological maturity scale. The TRL level is often established through preliminary market engagement, or the authority may have an overview of where a technology is currently at, and the level of R&D required to bring that technology to market.
If you have integrated the key elements outlined above into your innovation procurement process, you may proceed to the next step.
- Gate 1: Discovery of Innovative Solutions This will help you develop a better understanding of the innovation challenge and the market.
- If the challenge is mature (measures as TRL6+) and existing solutions are available and have been tested for your innovation challenge, you may consider proceeding to
Gate 3: Routes to Market to Scale. - Visit Gate 2: The Procurement Act 2023 to explore the changes coming with the new regulations.
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