(Solution) Driving Value through Procurement and Supply PDV
Task
Identify a product, service or category of spend and outline its importance and impact to your organisation’s stakeholders.
Prepare a brief market analysis and demonstrate how your procurement function will produce value for money outcomes.
Your final submission should also review the current approaches to managing prices and costs for the product, service or category you have identified, as well as highlighting the impact of markets to secure cost savings for your organisation.
Solution
Executive Summary
In this first assignment of the module “Driving Value through Procurement and Supply”, using a specific spend category, evaluation of impact of stakeholders is pursued. The organisation of focus is Abu Dhabi Sustainable Water Solutions (ADSWS) operating in United Arab Emirates (UAE) sewerage and water sector. In order to achieve this evaluation, an analysis of the market analysis has been pursued noting the best practice for ADSWS achieving value for money outcomes. The sourcing of Information Technology (IT) spend has been used to evaluate how value for money outcomes is achieved and relationships with all stakeholders. The evaluation has been supported by application of different tools which include SWOT, Porter’s 5 Forces, Mendelow and STEEPLE analysis to evaluate spend category and stakeholders relations. The evaluation has been based on the available primary data in ADSWS and secondary research. The market analysis has informed on the necessity for ADSWS to harness cost management for achieving value for money outcomes successfully.
The findings in this report note that the procurement department in ADSWS is involved in improving capacity of achieving value for money outcomes in IT systems sourcing. This is while working collaboratively with the entire organisation to improve sustainable sourcing.
Supported by findings and conclusions, a set of recommendations were generated to manage the identified limitations of achieving value for money outcomes and stakeholders relations;
- ADSWS need to broaden supply chain by involving international suppliers and stakeholders
- PS&M restructuring to integrate more divisions for efficiencies
- PS&M collaborate with learning institutions for improving knowledge
- Budgetary review to accommodate the varying needs of their different stakeholder
- Collaborate with R&D in order to source high-level quality IT systems fitting for the organisation
Table of Contents
1.1 Abu Dhabi Sustainable Solutions (ADSWS) 4
2.0 Importance, Impact of ADSWS Stakeholders. 5
3.0 Research and Market Analysis. 9
3.2 Market Positioning Analysis. 9
4.0 Value for Money Outcomes and Procurement and Supply Management (PS&M) 10
4.2 Suppliers Preferencing Matrix Analysis. 11
4.3 Kraljic Matrix Analysis 14
4.4 Porter’s 5 Forces Analysis Process. 16
5.0 Management of Prices and Costs for IT Systems Sourcing. 19
6.0 Conclusions and Recommendations. 20
Figure 1:Summary of ADSWS Business Portfolio. 4
Figure 2:Categories of stakeholders 6
Figure 3:Mendelow Matrix Analysis Tool 8
Figure 4:3P’s Triple Bottom Line. 11
Figure 5:Suppliers Preferencing Matrix Summary. 12
Figure 6:Summary of 4Ps and 4Cs in the procurement process. 13
Figure 7:Kraljic Matrix Analysis. 15
Figure 8:Porter’s 5 Forces Model Analysis 17
Figure 10:5Rights of Procurement Summary. 20
Table 1:Analysis of ADSWS Stakeholders. 7
Table 3:Summary of PESTLE Analysis for ADWSW… 18
1.0 Introduction
1.1 Abu Dhabi Sustainable Solutions (ADSWS)
Abu Dhabi Sustainable Water Solutions (ADSWS) is a company responsible on wastewater collection, treatment, and reuse in Abu Dhabi Emirate. With around 1.4 million m3 wastewater collected daily through the distance of 12,000 km network line supported by more than 200 pumping stations and 42 treatment plants (ADSWS, 2023). Also, the company works to reduce the usage of natural water resources and encouraging sustainability. The organisation headquartered in Abu Dhabi is a leader in specialising in sustainable water solutions for transformation of their valuable natural resources, contribution to sustainable economic development and improving the overall quality of life. As a best practice, the organisation manages to offer innovative-based services for management of their water resources and improving their commitment in delivery of world-class solutions meeting the industrial demand and community expectations. A summary of ADSWS business portfolio is as illustrated in the following;
Figure 1:Summary of ADSWS Business Portfolio
Source: Summarised from (ADSWS, 2023)
Hence, in order to successfully achieve the areas in figure 1, ADSWS invests in strategic procurement and supply chain. In all their spend categories, they leverage on existing opportunities for achieving value for money outcomes and immense stakeholders relations. The organisation achieves this by having an independent procurement and supply chain management (PS&M) department fully funded by the organisation. This is despite of the challenges encountered Post-COVID-19 in regard to budgetary allocation of their operations which need to be reviewed appropriately. The organisation PS&M engage different suppliers both locally in UAE (Abu Dhabi) regionally (MENA Region) and internationally (globally). Through their strategic sourcing arrangement, they have been able to initiate global networks which harness their ability to leverage on water and sewerage market and profitability (CIPS, 2023).
1.2 Scope of Assignment
In line with background information of this report, ADSWS operates in UAE water and sewerage sector mandated with a responsibility of managing waste water and maintaining environment by embrace of innovation. Hence, the organisation embraces the use of technology and innovativeness as part of their operations. This guide the need to source for IT systems being the main spend category. Considering the different identified business portfolios in UAE, IT would enhance the scope of coordination and efficiency. By active partnerships with IT systems vendors, quality systems are normally sourced by the organisation. Based on this, this assignment will focus on evaluating the stakeholders relationship in ADSWS and the best practice in PS&M achieving value for money outcomes.
2.0 Importance, Impact of ADSWS Stakeholders
As defined in CIPS (2023a) stakeholders are “people/groups impacted positively or negatively by/benefit from organisation decisions or strategies and hence require their interests to be prioritised by an organisation”. In ADSWS for example, stakeholders are either internal, external and connected;
Figure 2:Categories of stakeholders
Source: CIPS (2023a)
Hence, in line with figure 2, for internal stakeholders, they represent those found inside the organisation such as staff and administration influencing organisation decision making process. External stakeholders further include individuals and organisation not involved in a direct manner in guiding their operations. Hence, the stakeholders analysis can further be analysed in table 1;
Table 1:Analysis of ADSWS Stakeholders
Source: ADSWS Internal Documents
| Stakeholders Identity | Internal; External; Connected | Key Players | Keep Informed | Minimal Effort | Advocate/Blocker |
| ADSWS Shareholders, administration | Yes | Yes | Yes | Yes | Advocate |
| Sewerage and water sector investors | Yes | Yes | Yes | No | Advocate |
| Staff | Yes | Yes | Yes | Yes | Advocate |
| Board of management | Yes | No | Yes | Yes | Advocate |
| Directorate and teams | No | No | Yes | No | Blocker |
| Management | Yes | Yes | No | No | Advocate |
| Communities where the sewerage systems are found | Yes | Yes | Yes | Yes | Blocker |
| Legal, finance and audit | Yes | Yes | Yes | Yes | Blocker |
Further, from the findings obtained in the analysis of the different stakeholders categories (table 1), there is a need to determine power and influence. This is possible by using the Mendelow Matrix Analysis tool (Mohamadian et al., 2022). The summary of stakeholders analysis using this tool is illustrated in the following;
Figure 3:Mendelow Matrix Analysis Tool
Source: (Mohamadian et al., 2022)
Keep Satisfied- For the employees in ADSWS, the contract management and the management are involved in ensuring success of the procurement process. By collaborating with the other departments including budget, they ensure that they have appropriate systems to guide their operations. A review of budget is essential for appropriate operations of the or
Key Players- For the board of directors stakeholder, PS&M teams and others have immense power to influence IT systems sourcing. This means they are significantly engaged in the entire sourcing process.
Keep Informed- With a limited power and interest, the stakeholders such as suppliers, Ministry of Information in UAE are involved in establishing quality of the systems. Hence, they guarantee involvement of the stakeholders is managed appropriately.
Minimal Efforts– The IT department in ADSWS is involved in identifying specifications of the required quality of systems to be sourced. They are involved in determining the system operationalisation and its impact. They guarantee success of the IT system procurement.
3.0 Research and Market Analysis
3.1 Market Analysis
This involve pursuing an analysis in order to understand the operations in a business environment/sector (Baloch & Rashid, 2022). This is by an evaluation of prospects of an industry in regard to their volumes and values, customers segmentation, competition and other factors. In UAE for example, the September 2021 Federal Decree Law on Personal Data Protection demand subjects in an organisation to ensure that they appropriately use technology for optimum gain. This opens more opportunities for different suppliers who are involved in ensuring success in their operations. This is with ADSWS setting an appropriate budget to ensure successful sourcing of IT systems.
For ADSWS practices, to guarantee leveraging….
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