The Missing Jigsaw Piece: Customer Voice & Procurement
In collaboration with Altair’s Consumer Regulation Team, this article explores the current policy landscape and organisational practice to understand how the crucial link between procurement and the customer is being somewhat overlooked in the sector.
This article provides practical suggestions for social landlords to consider when engaging customers with strategic procurement exercises.
The Overlooked Link
The relationship between procurement and customer voice is vital in ensuring customer satisfaction and overall success in your organisation.
Often procurement is seen as only an operational standalone function, which involves acquiring goods and services for a business, but this significant process can greatly impact the customer experience and an organisation’s reputation.
Our previous article demonstrates that your procurement function is not just about operationally buying, but in fact, procurement should be seen as a strategic enabler utilised for the organisation to meet its purpose and objectives.
The changes to the regulatory environment increases expectations for transparency and accountability for decision-making, as well as providing good service outcomes. A good use of customer voice for procurement can result in much better service outcomes as well as a shared understanding of organisational challenges in delivery.
What does linking Customer Voice and Procurement together mean?
- Decisions made are informed by listening to customer voice with the goal of enhancing customer satisfaction.
- Suppliers are selected based on meeting the quality expected by customers, where customer feedback and preferences are built into strategic procurement.
- Supplier Relationship Management (SRM) ensures suppliers share the same commitment to customer satisfaction, aligning with your organisational purpose and strategic objectives.
- Cost Management balances customer preferences and organisational affordability in terms of monetary and social costs.
- Innovation is driven by customer insights with a focus on added value.
Procurement functions do not necessarily have contact with customers on a regular basis, however, social landlords should proactively engage with and encourage customer involvement and insight during the procurement process.
Therefore, any engagement with customers should always be meaningful rather than seen as tokenistic.
Public Contract Regulations (PCRs) do not provide any guidance on who should be involved in evaluating public procurement bids. Regulation 58 describes the Selection Criteria and implies that contracting authorities should pick and choose based on substantiated professional, economic, or technical knowledge. Therefore, anyone, including staff or customers, involved in selection at any stage must be suitably trained and/or qualified (formally or informally) to make the decisions within a procurement, or risk a legal challenge later.
Policy & Regulatory Landscape: A Paradigm Shift
At present, regulation expects social housing landlords to involve customers in decision-making in relation to:
- The safety of their building under the Building Safety Act,
- The Regulator of Social Housing’s Consumer Standards,
- Section 20 notice process and the need for leaseholders to be involved.
Over the last few years, the regulatory landscape and policy focus has been predominately about customer voice and customer satisfaction, following a number of tragic events that have been defining moments in the sector.
Two of the three regulatory requirements for customer involvement in decision-making were developed in the post-Grenfell policy landscape. Following the Grenfell Inquiry, there has been a significant shift in the sector’s approach to the safety and quality of residential property. In particular, there has been a focus on how landlords should engage with their customers and how they promote both transparency and accountability in the way they manage homes and provide services.
We’ve learnt that the tragedy of Grenfell is linked to multiple procurement and contracting failures. However, although we as a sector have learned this, we’re yet to see a strong response in addressing these failures from a procurement and contracting lens. The Hackitt Report made five recommendations on procurement, and we have summarised the main concerns:
- The lowest-cost approach amongst suppliers creates a race to the bottom.
- The lowest-price tendering does not mean money-saving.
- Make sure the split between quality and price is appropriate.
- A lack of technical procurement knowledge within organisations.
- Ineffective contract management and supplier relationships can impact service delivery.
After Grenfell, the regulatory focus and overall emphasis in the sector continues to concentrate on consumer regulation, building safety and improving service delivery. But how do social housing landlords listen to and act on customer voice in an effective and meaningful way during the procurement of key goods and services?
What are the next steps you can take?
Both local authorities and housing associations can enhance their procurement practices beyond what is required through the PCRs by embracing a customer-centric approach, leading to improved customer satisfaction and enhanced service delivery in the long run.
Incorporating customer voice meaningfully into your procurement processes is no longer an option—it’s a must when meeting the increasing expectations and needs of customers.
The missing jigsaw piece in completing your procurement puzzle is found by actively engaging with customers, understanding their perspective, and aligning with procurement decisions.
If you are interested in exploring how you organisation can further enhance customer voice in your procurement process and with strategic supplies, please contact:
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