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FCW : June 30, 2016
The federal government is the single largest buyer of goods and services in the world, with annual spend- ing of approximately $450 billion. “Category management” is what the Obama administration calls its approach to capitalizing on the government’s buying power to save money and improve efficiency and performance. Used by state and local govern- ments and the private sector for many years, category management now seems to be catching on at the federal level. That is good news for American taxpayers. Category management presents attainable and lasting benefits for all of government because of its focus on the entire acquisition life cycle. It’s time for agency executives to rigorously apply category manage- ment practices to demonstrate improvements that can be made in how the government operates, with particular attention paid to the talent and resources needed to sup- port it. Here are just some of the benefits of category management: • Drives better procurement data. The administration’s initiative not only emphasizes increased use of existing data, but also acknowl- edges the need for more accurate and detailed governmentwide procurement data. The Office of Management and Budget and the General Services Administration are leading efforts to build a govern- mentwide spending taxonomy using product service codes. Those codes don’t align directly with category markets, however, and we must define allocation rules to effectively divide spending between categories and subcatego- ries. Modifying the Federal Procure- ment Data System to align with a category hierarchy based on market dynamics would make it easier for users to more effectively analyze procurement trends. That action alone would likely accelerate category management planning and execution. Cat- egory managers would enjoy data transparency similar to that in the private sector, giving them more influence over spending, demand, buying behaviors, acquisition solu- tions and supply management. • Professionalizes the procure- ment workforce. A nice by- product of category management is enhanced capacity among the acquisition workforce. Acquisition professionals now have access to data and market intelligence that help them do their jobs more effectively. Providing such intel- ligence and assigning acquisition professionals to categories based on their technical expertise enable the workforce to better use existing knowledge of contract types, terms and conditions, and best practices. And it means acquisition profes- sionals have the opportunity to specialize and form trusted partner- ships with program and category managers early in the acquisition process, which lends itself to new, distinct career paths. • Saves money. Some say category management mainly benefits GSA and other agencies that adminis- ter governmentwide acquisition contracts. The concept of buying as one and actively managing procure- ment spending across government, however, benefits the whole govern- ment — and taxpayers. The focus on managing spend- ing allows agencies to drive that spending to preferred buying channels and encourages con- tinuous improvement of them. It also strengthens the partnership between categories and stakehold- ers so they can shape best-in-class vehicles, aggregate requirements and drive economies of scale through volume purchases. Agen- cies can then reinvest their savings to support agency-specific, mission- critical buys, reducing overhead expenses and expediting commod- ity purchases. What’s needed now is buy-in from leaders to support the inte- gration of key functions into daily operations. n The time for category management is now Buy-in from leaders is the key to locking in lasting benefits, which include saving money and strengthening the procurement workforce Category management presents attainable and lasting benefits because of its focus on the entire acquisition life cycle. Commentary | JENNIFER GLAZER AND MEREDITH BARNARD JENNIFER GLAZER is a senior manager and MEREDITH BARNARD is a manager at Grant Thornton Public Sector. 10 June 30, 2016 FCW.COM 0630fcw_010.indd 10 6/6/16 1:55 PM
June 15, 2016
July 15, 2016