Six Building Blocks to Enhance Local Government Procurement
Primarily, from the 'top down', the right procurement strategy, associated plans and performance measurement methods need to be built to drive the procurement function. The second row of blocks enables a direct link to the wider council organisation through a procurement governance framework and the management of the organisational interface, particularly with internal customers, executives and suppliers. All upon a foundational layer of people, processes, and technology, built upon your council’s core values and guiding principles.
Today, we are going to focus on mastering the “organisational interface”.
Mastering the Organisational Interface
American founding father John Hancock said many years ago, “The greatest ability in business is to get along with others and to influence their actions”, and this still rings true today.
To optimise value, procurement professionals need to augment procurement governance with managing the organisational interface. Although governance provides procurement legitimate authority and decision rights around some organisational elements, a lot of what procurement needs to do to be successful can only be delivered through managing the organisational interface.
Managing the organisational interface is about getting buy in from key stakeholders regarding procurement strategies, activities and goals. It encompasses leadership, communication, the ability to form relationships, build credibility and influence internal customers and senior executives, as well as get the best out of suppliers. Simply, a procurement professional needs to make or at least influence internal decisions where it has no decision rights (i.e. governance) to do so.
A procurement contract with a supplier may be full of terms and conditions and managed via structured contract performance management activities. Notwithstanding, to maximise the value from the engagement, procurement professionals also need to manage the supplier relationship as a component of managing the organisational interface.
Conceptually, Procurement facilitates and supports the relationship between internal customers and suppliers. It’s not in the middle - it's a strategic enabler of a strong, direct relationship between the two.
What it means:
- Procurement becomes a facilitator, creating space for internal stakeholders and suppliers to connect, align, and thrive.
- There is a strong emphasis on collaboration, innovation, and value creation.
- Procurement facilitates conversations, ensures alignment, and supports long-term partnerships.
- Procurement is seen as a value-adding business partner.
- Transparent relationships, higher innovation and agility, and stronger supplier performance result.
Tools for Mastering the Organisational Interface
The following tools can assist you to master the organisational interface in your Council.
1. Performing a Stakeholder Analysis - including identifying, categorising and analysing stakeholders, and developing strategies to manage stakeholders.
2. Clear Procurement Policies and Procedures
- Sets expectations and processes to follow.
- Creates consistency across departments and reduces ambiguity.
3. Communication Plans
- Structured approaches to when, how, and what to communicate to different stakeholder
4. Digital Platforms & Procurement Software
- Procurement intranet site is the single repository for all procurement information.
- Software (e.g. Vendor Panel) streamlines processes.
5. Performance Dashboards & KPIs
- Provide data on spend, supplier performance, and process efficiency.
- Helps stakeholders understand the impact of procurement and builds trust.
6. Regular Engagement (Meetings, Workshops, Surveys)
- Ongoing dialogue with customers to understand needs and challenges.
- Prevents siloed decision-making and encourages joint ownership of outcomes.
7. Feedback Mechanisms
- Provides a channel for internal stakeholders to give input or raise concerns.
- A review is undertaken after every ‘project’ (e.g. tender) Procurement performs with/for a customer.
- Includes customer satisfaction surveys.
- Results from reviews and surveys are used to evaluate procurement strategies and activities and helps procurement continuously improve.
8. Training and Awareness Programs
- Educate internal teams about procurement’s role, benefits, and processes.
9. Cross-Functional Teams
- Involve representatives from different departments (finance, WHS, legal etc.) in procurement decisions.
- Builds alignment, improves transparency, and strengthens relationships.
10. Service Level Agreements (SLAs)
- Defines expectations - outlines what services will be provided, how they’ll be measured, and the acceptable performance standards.
- Establishes accountability - holds both parties responsible and ensures services delivered support strategic and operational goals.
- Enables performance monitoring.
11. Category Management - a grouping of similar goods or services with common supply and demand drivers and suppliers.
- Provides the optimum view of a good or service to maximise competition in the market.
- Best represents the link back to the internal users of the goods/services.
- Assists Procurement to:
- Integrate and develop key relationships with internal customers
- Accurately understands and supports customer challenges and priorities
- Proactively identifies improvement opportunities in customer areas.
Conclusion
Mastering the organisational interface is key to procurement success in local government. While strong governance and clear processes provide the foundation, it is the strength of relationships with internal stakeholders, executives, and suppliers that determines how effectively procurement can deliver value.
By building trust, communicating effectively, and actively engaging across departments, procurement professionals can move beyond transactional roles to become strategic business partners. Leveraging tools like stakeholder analysis, communication plans, feedback mechanisms, and cross-functional collaboration allows procurement to influence decisions, align priorities, and facilitate outcomes that support both operational needs and long-term organisational goals.
In a time where collaboration, innovation, and value creation are more important than ever, investing in the organisational interface is not just beneficial—it’s essential.
If you would like any further information or support in mastering the organisational interface in your council, please contact Peter Morichovitis at pmorichovitis@wearepeak.com.au, P 07 3000 2123, M 0480 221578