Procurement Transformation & Supply Chain Digitalisation at the Department of Culture and Tourism
As a government agency, the Department of Culture and Tourism – Abu Dhabi (DCT Abu Dhabi) is tasked with a major goal: to further the development of Abu Dhabi as a dynamic and fast-evolving global destination of distinction through diverse leisure, business, culture and entertainment experiences for residents and international tourists. With a responsibility driven by government, achieving this places greater scrutiny on the organisation’s resources, budget and in turn its procurement function. Waleedi AlSaeedi, Director of Procurement at DCT Abu Dhabi, recognises this responsibility. “In order for the organisation to best serve the people of the UAE, my procurement department has to consistently innovate and operate with agility and foresight in order to ensure that our operations have the goods, services and materials that it needs, and that the most cost-effective resources in the market are procured,” he says.
DCT Abu Dhabi’s departments use a variety of inputs, ranging from ‘common types’ such as training, facilities management contracts, computers, furniture and other standard items, to ‘rare services’ such as the transportation and handling of antiquities, hiring performing artists and the refurbishment of historic buildings. As a result of this, the organisation’s supplier base is extensive, complex and requires procurement to “cast its net far and wide in order to find the right solutions to the organisation’s needs”. Since 2015, the organisation’s strategy has focused on cost minimisation and the implementation of a more business-oriented approach. While previously DCT Abu Dhabi was tasked with just providing services, today its various departments are also required to make business cases for their initiatives and look for ways in which they can pay for the services that they offer to the public and to other government entities. Following his appointment as Procurement Director in 2013, AlSaeedi was required to undertake a complete review of the spend under management against DCT Abu Dhabi’s five-year corporate objectives and look for ways in which it could rationalise purchasing in order to be ready for the 2015 agenda. “Among many of the decisions we made, we put in place a catalogue system for frequently purchased items, so that end-users could use direct purchasing and we also identified the critical high-risk and high-value contracts that needed a different strategy,” he says. “We also put an emphasis on supporting DCT’s strategy in developing Abu Dhabi’s supplier base with three core purposes: to support local businesses, particularly the SME sector; to help to develop local capabilities – which will benefit us in terms of costs and simpler supply chains; and to reduce the risk of depending on just one or two major suppliers.” Over time, AlSaeedi has seen these approaches deliver on DCT Abu Dhabi’s ambitious goals and ultimately deliver success in serving the organisation’s agenda. This, he feels, has resulted in the procurement department becoming a critical and influential department within the organisation, recognised across the board as a key player driving the organisation forward.
DCT Abu Dhabi is a merger of three authorities: the Abu Dhabi Authority for Culture and Heritage, Abu Dhabi Tourism Authority and the cultural department of the Tourism Development & Investment Company (TDIC). This has seen an internal restructuring over the past five years, to create three units focused on spend: Procurement Operations (Buyers), Strategic Sourcing (Business Partners), which manages all the pre-tender work, and a section that looks after Performance Management, which develops and manages information systems and identifies improvement areas. “As an employer of choice for the profession we were able to attract industry experts and enhance our internal capabilities,” says AlSaeedi. “As part of our efforts to streamline, all the low-value direct purchasing has been devolved to end user departments. By no means do we ignore this important aspect of DCT Abu Dhabi’s operations, but we are primarily focused on and responsible for setting up blanket purchase agreements (BPAs) and managing Purchase Orders (POs). By devolving responsibility to our end-users, we have freed up resources to look at more strategic activities such as performance sourcing and contract management improvements.”
DCT Abu Dhabi has also redefined how it manages and approaches its business in order to maximise its resources and avoid unnecessary costs; achieved not only by finding the cheapest suppliers for a project but in assessing total cost of ownership of assets and the long-term impacts of BPAs and contracts. “Ultimately, our market knowledge enables us to advise the organisation’s departments on the most financially efficient way they can achieve their goals,” adds AlSaeedi.
With technology redefining the procurement function globally, DCT Abu Dhabi has had to undergo a digital transformation of procurement in order to truly embrace the digital age. AlSaeedi notes that implementing new technologies and digital processes has been a key method to increasing efficiency in the department’s systems and processes while also enhancing transparency, accountability and data analysis. Some of the projects that fall under digitalisation include a new Contract Management System that allows DCT Abu Dhabi to capture risk, implement digital signatures to reduce cycle time analysis. DCT also implemented a procurement dashboard, which has enabled, and will continue to enable, the company to make evidence-based decisions using accurate data. “By implementing these along with a few other projects there have been considerable improvements made to processing time, oversight and accountability,” he says. “Our procurement dashboard, for instance, gives us the ability to analyse data and supports DCT Abu Dhabi in its competitive analysis of the market, strategic insights on spend as well as with improving individual employee metrics. It’s fair to say also that the use of our digital cloud systems enables us to capture meaningful data from operations in real time; for example, I can see the status of our tenders on our dashboard or review supplier performance reports as soon as they are uploaded. It enhances tactical decision making but also allows for evidence based strategic planning,”
With technology comes a demand for agility and flexibility and so procurement managers, buyers, sourcing specialists, category managers and others have to be able to adjust to meet an ever-evolving digital landscape. AlSaeedi expects to see disruptive technologies take a stronger hold of procurement as computing capacity and generational forces push digital and technological approaches even more into the mainstream, such as the use of machine learning and AI in contracts management and the greater use of online and automated tools for inspection and performance management, creating more data that DCT Abu Dhabi can use. One area of particular interest to AlSaeedi is the ever-increasing ability of smart systems to accrue expanding data sets and consequently, the methods and approaches to interpreting said data. “It will create new challenges for procurement that we’ll need to respond to,” he says. “Overall though, it’s clear to me that despite these changes we are not replacing the ability of people to make procurement decisions. The difference, in fact, will be the strength of evidence, backed by smart data and tools, to make and execute those decisions.”
Key to this has been the implementation of automation software in the source-to-pay process. DCT Abu Dhabi has automated most of the low value, less complex engagements and works intensively on creating solutions and models to accommodate high value complex engagements which require multiple different stakeholders being included in the process. Standalone systems are already in place e.g. Oracle, Dashboard and a Contract Management System (CMS), and the company is currently working on integrating all of these into one combined system. “The benefits of this are pretty obvious: the amount of time this saves to my team in terms of closing communication gaps and avoiding endless paper trails is exceptionally high and as a result we focus on adding more complexity to our requirements of suppliers for instance, by requesting environmental or social responsibility data,” he says. “We’ve also looked at Strategic Category Management (SCM) under the Business Partnering roles, which has enhanced the focus on analytics as an increasingly critical new approach to procurement best practice. As a first step, we have developed an advanced dashboard which provides data points from our procurement operations covering all aspects i.e. spend tracking and management for instance. The next phase will be to start using data analytics reports, manage the spend performance and visualise the data.”
A supply chain and procurement function can only be as strong as its supplier and vendor network and as DCT Abu Dhabi has streamlined its procurement and embraced technology, it has been able to reassess the way it categorises and measures its suppliers of choice. “Our supplier relationship management framework is designed to match risk and value with supplier capabilities,” says AlSaeedi. “It is a question of strategic clarity and building trust through fair and open tendering and working closely with suppliers during contract implementation.” Supplier relationships can change and DCT’s core strategy is to leverage its data to measure and track performance, so relationship strength assessments are based on evidence. “Technology will help us to manage these relationships: for example, data from supply histories can be used to identify the share of spend under management that goes to each major firm, and we will then be able to look at areas where we need to work on widening the base.”
With technology continuing to evolve, digital transformations never end but simply evolve alongside the technology. AlSaeedi notes that DCT Abu Dhabi’s immediate digital future will see the roll-out of a central, digital procurement portal; DCT is one of nine government entities involved in piloting the portal. “We will need, naturally, to review and change certain things as we see how they work in practice but I'm confident in the job the steering committee has done over the past few years having witnessed the work first hand. The second phase will be launched later this year, by which time the portal’s functionality should be at 100% and we use can it to its full capacity.”
The portal implementation will involve training for DCT Abu Dhabi’s procurement team as well as increased work with suppliers to accommodate digital procurement processes. “In the coming year we will most likely review the procurement and supply management strategy with reference to DCT Abu Dhabi’s corporate strategy and will no doubt revise our category management approach as to better leverage the capabilities of the portal,” says AlSaeedi.
Whatever the future holds for digital procurement, DCT Abu Dhabi’s efforts to streamline and to further embrace technology and innovation has created a foundation that it can build on. AlSaeedi is keen to stress that as an organisation, DCT Abu Dhabi is consistently looking for new ways to innovate in the digital and technological area. “Technological and digital transformation is at an advanced stage where now the questions are: how do we make this better and how do we take it to the next level?” he says. “And thankfully, I’m confident that my young, skilled but also very experienced team has the answers to those questions and will continue setting the high standards I’m accustomed to.