(Solution) PDV ROSHN Syndicate Cohort

Executive Summary

These modules, “Developing Value through Procurement and Supply and Managing Expenditures with Suppliers,” provide a report that concentrates on the procurement, supply, and management (PS&M) function to attain value-for-money results. The entity of interest is ROSHN in procuring IT services in their different operations. This research also includes an evaluation of cost control strategies for IT services. The conclusions in this study are derived from internal records at ROSHN, credible research from reputable sources, and supplier analysis. Additionally, various theories and models, including STEEPLED, Mendelow, Kraljic, and Supplier Preferencing from CIPS Module notes and advice, have been employed to provide relevant conclusions.

The report’s main findings demonstrate that ROSHN collaborates with multiple stakeholders to achieve success in their PS&M, particularly in obtaining IT services. Moreover, given that ROSHN operates within a competitive oligopolistic market, it is essential to achieve value-for-money results in their PS&M activities. The main finding is that the company employs a strategic methodology to attain value-for-money results. This methodology presents both benefits and drawbacks, with opportunities for enhancement highlighted in the recommendations.

Based on the study findings, a series of gaps have been identified that can be addressed through the proposed recommendations:

Conduct a comprehensive analysis of stakeholder positioning to prioritize collective interests.
For IT services, collaborate with various potential suppliers to prevent monopolistic demand and supply that may impede competitiveness.
Consult with PS&M experts and specialists to gain insights on enhancing value-for-money outcomes.
Evaluate budgetary allocation in IT services procurement and incorporate modern approaches in sourcing methods

1.0 Introduction

1.1 ROSHN Background

ROSHN was established as a key initiative under Saudi Arabia’s Vision 2030, aimed at contributing to the Kingdom’s housing and infrastructure development by delivering high-quality residential communities. ROSHN, owned by Saudi Arabia’s Public Investment Fund (PIF), seeks to build and operate sustainable neighborhoods that meet the country’s strategic objectives (Vision2030.gov.sa, 2023). The company is actively developing large-scale projects across Saudi Arabia, with a focus on modern urban infrastructure, eco-friendly spaces, and integrated services, aligning with the national vision to foster social and economic growth.

Summary of ROSHN Projects in Saudi Arabia

Figure 1: Summary of ROSHN Projects in Saudi Arabia
Source: Precised from Vision 2030

ROSHN’s efforts play a significant role in realizing Vision 2030 by providing integrated, sustainable, and modern residential solutions that contribute to economic prosperity and the well-being of Saudi society.

1.2 Rationale of Report

In project execution, ROSHN collaborates with multiple technology and innovation providers within its extensive IT services sector (Vision2030.gov.sa, 2023). This study assesses the impact and significance of these collaborations on stakeholders. A brief market analysis reveals effective practices for attaining value-for-money. IT services and other expenditure categories are managed by the Procurement and Supply Management (PS&M) function, with core activities directed by i-Sourcing, available exclusively to registered corporate suppliers participating in various procurement activities (RFQs/RFPs). The PS&M oversees the management of operations across several domains as depicted below:

ROSHN PS&M Operation Areas

Figure 2: ROSHN PS&M Operation Areas

Source: ROSHN (Vision2030.gov.sa, 2023)

ROSHN’s PS&M manages an annual budget dedicated to various procurement categories, collaborating with numerous divisions within the company to acquire essential goods and services to drive success in the housing sector. This partnership supports cost management and ensures value-for-money outcomes in line with Vision 2030 goals.

2.1 IT Services Category

ROSHN’s operations in several sectors of KSA real estate necessitate the procurement of IT systems for both workers and consumers (home owners). IT and vending services in the real estate industry are managed either internally or by contractors appointed by real estate administration (ROSHN, 2024) .The IT services in KSA’s real estate sector encompass a vast market. The IT services market is estimated at $1,109.32 million in 2023, with a projected compound annual growth rate (CAGR) of 8.82% through 2029 (TechSci Research, 2024). This entity is distinguished and a frontrunner in the hotel and IT industry in KSA. An overview of the various categories of IT services for ROSHN is presented as follows:

Table 1: Overview of the subcategories of IT services obtained

Source: ROSHN Internal Documents

IT Services Sourcing in ROSHN	Explanation	Budget allocated (QAR Millions)
IT systems sourced by workers	The employees use the IT systems in the different projects in real estate for success in their operations	20
IT for the houses use	ROSHN provides IT systems for facilitating operations in the houses in a seamless manner	80
Technology for accessing homes	In accessing different housing projects, IT systems are used (Nilson, 2023)	100
Preparation and merging of all IT systems of different house ownership groups	Various sorts of workers in ROSHN real estate projects from diverse cultures and tourists with differing needs for the IT systems	110

2.2 Analysis of Importance

To ascertain and demonstrate the significance of IT services in ROSHN, it is imperative to employ the Kraljic Matrix. CIPS (2024) identifies this as a technique utilised in procurement and supply chain management to recognise and mitigate supply chain risks. This involves establishing groups based on profit effect and supply risk.

Kraljic Matrix Analysis Components

Figure 1:Kraljic Matrix Analysis

Source: CIPS (2024)

Leverage Items- This group has several customers and providers, facilitating competition among vendors and so mitigating total risks. IT services are included in this category as several firms in KSA provide these offerings. The various services are offered by the vendors as seen below;

Table 2:Kraljic Matrix Analysis

Source: Précised from ROSHN internal document

ROSH IT systems sourced	Sub-categories	Likely suppliers
IT systems sourced by workers	Office automation, computers and decision support systems	Microsoft, Alibaba
IT for the houses use	Internet, telephone networks	Small and large organisations in KSA
Technology for accessing homes	Security, lighting and operations	Smart appliances, smart homes and teams

Consequently, in accordance with the analysis of Table 2, ROSHN possesses significant authority to determine the best suitable provider for their IT services subcategories.

Strategic Items – This category comprises high-risk items owing to reliance on a limited number of suppliers, coupled with substantial profitability. For Saudi Aramco, IT services cannot be strategic due to their sensitivity and relevance to the performance of ROSHN. By utilising i-Sourcing, PS&M in ROSHN establishes balanced procurement and performance-oriented relationships with suppliers.

Bottleneck Items – These are low-value items that carry significant risks, resulting in increased costs due to a scarcity of alternatives. ROSHN possesses minor supplies, including office items and stationery, utilised for staff tasks throughout several real estate projects.

Routine Items – This category excludes crucial supplies; hence, i-Sourcing and systems-based contract management are implemented. ROSHN implements this for their logistics and staff uniforms. IT services are excluded from this category.

2.3 Spend Area Impact

The culinary services expenditure is projected

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