1. The Organisation
The North East Centre of Excellence (NECE) is one of nine
regional Centres of Excellence across England set up to improve
efficiencies and highlight best practice within local authorities.
Launched in 2004 in response to recommendations in the
Government’s National Procurement Strategy and the
Gershon Efficiency Review, the Centres of Excellence were
initially charged with improving procurement processes by
encouraging buying consortia and trading partnerships,
highlighting best practice and supporting collaborative
working between local authorities. Their role and
responsibilities were subsequently expanded to support
councils aiming to achieve the requirements of the wider
efficiency agenda, rather than focusing solely on procurement
issues, in order to improve overall service delivery to citizens.
Problems Faced
Traditionally, spending within local government has been
devolved, so keeping track of procurement, past, present and
future, when many people are involved at different levels
within an organisation, can be a problem.
“Whilst many local authorities have financial management
and ERP systems in place, disparate data sources, poor quality
information and a lack of reporting tools lead to one thing – poor
visibility of spend. Without this knowledge, local authorities can
find it difficult to identify how revised procurement practices can
help to generate savings and internal efficiencies and benefit the
local community and the wider region,” explained Duncan Olive,
Programme Manager at NECE.
NECE was tasked with working with the 25 local authorities
to develop a more strategic approach to procurement across
the region. The aim was to realise the efficiency, social,
economic and environmental benefits of smarter procurement
practices. Better spend visibility at a local and regional level
was viewed as critical to this process as it would help to
identify opportunities to drive down the cost of buying goods
and services through collaborative procurement, collective
buying power and bulk discounts, and better negotiation
with suppliers as well as knock-on economic benefits to
the region as a whole.
Strategy Followed
As the market leader in business intelligence, Cognos analysis
solutions were selected to help improve spend visibility at both
a local authority and North East regional level.
The first step in the process was to equip local authorities with
the tools they needed to undertake an audit of spending
habits. This helped them to identify buyers, suppliers and
contracts, and develop plans to optimise practices for bought
in goods and services.
In the initial phases of the project, NECE developed a series
of analysis and reporting models, using Cognos, that could be
implemented across each of the 25 local authorities.
The technology works by consolidating buyer, supplier, spend
and contract data, from multiple sources such as financial
management systems and spreadsheets. The models, developed
by NECE, can then be used by the local authorities to review
and assess spend and procurement behaviour. They include a
Industry:
Local government
Geography:
UK
Information needs:
Spend analysis
Platforms:
Windows Desktop
Users:
Local authority procurement officers
Solution:
Cognos analysis solutions
Benefits:
• Improved visibility of spending leading to greater
control over procurement
• Cost savings generated through better management
of suppliers
• Opportunities identified for collaborative procurement
to negotiate improved terms providing better value
for money for citizens
• Economic regeneration
• Compliance of procurement practice with policy
North East Centre of
Excellence (NECE)
© 2007 JupiterImages Corporation
North East Centre of Excellence calls on Cognos to support local efficiency drive
~ analysis solutions used by 25 local authorities to support procurement practice review
and improvement ~

2. procurement dashboard as well as regional spend, vendor
transactions, key performance indicators and price analyses.
The Cognos solution presents a top line view of the spend
analysis data for the region as well as allowing each of the
local authorities to undertake specific queries when further
detail is required.
“Procurement departments across the region are now using the
Cognos technology extensively for in-depth spend analysis,”
said Duncan Olive. “Having a detailed picture of buying habits
and spending levels means they are much better equipped to
challenge certain behaviour, such as off contract and maverick
spend, leading to significant efficiency gains and cost savings.”
The technology also allows users to search for opportunities
to improve procurement practices such as consolidation of
suppliers, better supplier negotiation and compliance with
procurement policy.
At a regional level, this level of information means
councils are much better placed to look for opportunities
for collaborative and collective procurement to achieve
better value for money and contribute to the economic
and social well being of the region.
Benefits Realised
“Cognos technology is helping change the approach to
procurement right across the region,” continued Duncan
Olive. “Taking a strategic rather than a tactical approach is
enabling our local authorities to generate significant operating
efficiencies which can only benefit the citizen.”
“We’re using a model which enables local authorities to keep
their expenses low by only investing in the licence investment.
NECE has helped to set up the models and infrastructure
meaning that local authorities can just get on and use the
technology quickly,” he added.
Local authorities are now able to see what is being bought,
from whom as well as the volumes and values. This is enabling
them to develop contract programmes hand-in-hand with
NECE to deliver direct savings and also identify collaborative
opportunities with neighbouring local authorities.
Newcastle City Council is one of the local authorities
benefiting from the approach. Tasked with making
efficiency savings of £1m in 2007/08, the Cognos
technology has proved invaluable.
Opening up access to spend and procurement analysis has
helped to support decision making around procurement,
supplier and budgetary management, and identifying
potential efficiencies.
For example, as part of this process, the council undertook a
detailed review of a number of low cost, high volume items
including travel, stationery, postage and printing to assess
where savings could be made.
By analysing who was buying what, from whom, how often
and on what procurement terms, the council has been able to
establish a current procurement baseline from which it can
identify cost saving opportunities across a number of areas.
These include the identification of non-contractual spend,
a reduction in maverick spend as well as new contract,
e-procurement and collaborative procurement opportunities -
all leading to greater efficiency and cost savings.
Feedback from other councils has also been
overwhelmingly positive.
Paul Davies is an Assistant City Treasurer at Sunderland
City Council
“As a result of building a comprehensive spend analysis model
using Cognos software, we now have full sight of all third-
party expenditure incurred by the Council. This is leading
to an extensive programme of spend reviews that will bring
the Council significant savings through a new
comprehensive contracting programme.”
Martin Skipsey is Procurement and Payments Manager at
Stockton-on-Tees Borough Council
“Cognos has, for the first time ever, provided me with the
tools and subsequent spend visibility to develop a more
strategic approach to procurement. We are already reaping
the rewards in terms of efficiency savings.”
Cliff Appleby is Strategic Development Manager at North
Tyneside Council
“Cognos has enabled the Council to identify its unknown and
non-contract spend. When Cognos was first used, only 25 per
cent of the spend was identified as contracted. To date, this
figure now stands at 60 per cent.”
Moving forward
Using the Cognos technology and buying experts E-Three,
NECE has recently completed a macro spend analysis
identifying £1.5 billion annual spend on bought in goods and
services and evidencing the magnitude of the opportunity.
Using this information the organisation is now starting up
a project, the ‘Regional Category Sourcing Programme’, to
realise the efficiency, social, economic and environmental
benefits for the North East of England through harnessing the
spend. Cognos technology will play an important part in this
project providing valuable analysis on the opportunities, risks
and the means to measure impact.
NECE is now looking to develop a regional procurement
observatory with a wider group of regional stakeholders
at both a public and a private level and Cognos analysis
solutions will play a key part in this. This will involve
looking at the impact of procurement processes and spend
in order to develop collaborative opportunities that will
deliver efficiencies and benefit the whole region socially,
economically and environmentally.

3. Feedback from local authorities working with NECE and
using Cognos is overwhelmingly positive. Here’s what just a
few of them have to say on the subject.
“Cognos has, for the first time ever, provided me with the
tools and subsequent spend visibility to develop a more
strategic approach to procurement.
“Not only has Cognos provided the ability to analyse spend
within the local authority, but has also provided a better
understanding of the impact our procurement decisions make
on the wider local, sub-regional and regional economies.
“It has provided us with a tool to challenge our own approach
to procurement and consequently to develop a better
approach to co-ordinate our procurement activity. We are
already reaping the rewards in terms of efficiency savings.”
Stockton-on-Tees Borough Council
Martin Skipsey, Procurement and Payments Manager
“Cognos has been a major tool used in our 5 Stage Strategic
Procurement Plan. It has enabled the Council to identify its
unknown and non-contract spend. As a result of this the
Council now has a strategy in place to move this spend to
contracted spend.
“When Cognos was first used, only 25 per cent of the spend
was identified as contracted. To date this figure now
stands at 60 per cent contracted.”
North Tyneside Council
Cliff Appleby, Strategic Development Manager
“As a result of building a comprehensive spend analysis model
using Cognos software, Sunderland City Council has full
sight of all third-party expenditure incurred by the Council.
This is leading to an extensive programme of spend reviews
that will bring the Council significant savings through a new
comprehensive contracting programme.”
Sunderland City Council
Paul Davies, Assistant City Treasurer
“Cognos has been a very useful tool for Durham County
Council. Its ease of use and the ability to analyse data in
varying degrees has enabled high areas of spend, non-
contracted spend, high invoice generation and maverick
spend to be identified, analysed and taken forward into
programmes of work.”
Durham County Council
Lorraine Helliwell, Procurement Analyst
“Berwick-upon-Tweed Borough Council will be using the
NECE approach to inform and build on the expenditure
analysis that commenced during the budget setting process
of 2007/08. A formal project to enhance our efficiency
identification and planning processes will be supported by
NECE during 2007/08.”
Berwick-upon-Tweed Borough Council
Charles Oakley, Head of Finance
“Gateshead Council, as one of a number of local authorities
within the North East region, has implemented Cognos
software to analyse spend to a degree not achievable
though the existing financial management system.
“By building a comprehensive model we are able to identify
and prioritise areas for improved procurement activity across
the Council. The model will also help us to determine
whether the contracts should be organised at a local level
or collaboratively across the sub-region or region.”
Gateshead Council
Andrea Tickner, Head of Corporate Procurement
“Using the Cognos approach to spend analysis, the data
available within our existing purchase order system can
now be converted into a more user friendly format. For
example, the graphical displays, such as pie charts, are
extremely useful as a presentation tool and, combined
with the ability to drill down and report at multiple levels
of information, provide an excellent method of producing
relevant information for the audience.
“The alternative to this approach would be to trawl
through lots of spreadsheets, constantly sorting and
deleting, in order to find the appropriate information.
With Cognos this has been as simple as selecting filters
and double clicking.”
Alnwick District Council
Alison Simpson, Procurement and Special Projects Manager
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(09/07)
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