Category: Uncategorized

By: Ramzi Ibrahim, FCIPS
www.procumart.com

The first and arguably most critical step in successful category management is profiling your category. Before jumping into strategy formulation or market engagement, it’s essential to build a detailed understanding of the category’s internal dynamics and external environment. This is achieved through a combination of spend analysis, market analysis, and demand analysis—each providing a unique lens into the category’s strategic importance and opportunities.

1. Spend Analysis

This involves reviewing historical procurement data to understand what is being bought, from whom, how much is being spent, and how often. Through this lens, you can identify fragmentation in spend, opportunities for consolidation, and potential compliance issues with existing procurement policies. It also highlights cost trends, helping you to prioritize high-value or high-risk areas within the category.

2. Market Analysis

Understanding the external supply market is crucial. This includes evaluating supply base concentration, barriers to entry, market maturity, competitive dynamics, and key risks (e.g., geopolitical, economic, technological). A robust market analysis allows you to assess supplier power, leverage sourcing opportunities, and mitigate external threats.

3. Demand Analysis

This is where internal stakeholder engagement becomes vital. Demand analysis assesses business needs, future demand projections, usage patterns, and specification requirements across departments. It often reveals opportunities to standardize specifications, challenge demand assumptions, or drive demand management initiatives—all critical for aligning procurement strategies with organizational goals.

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In Conclusion
Category profiling is more than a data exercise; it’s a strategic enabler. By combining insights from spend, market, and demand analysis, procurement professionals can tailor category strategies that reduce cost, minimize risk, and deliver long-term value.

Risk Management in the Public Procurement Context

Risk management in relation to procurement services within the public domain can be identified in two dimensions:

1- Procurement Process Risks, for example : Public Authority does not have legal capacity to procure, No allowance made for whole life costs, proper procurement process are not followed in accordance with the Policy, delay or not obtaining appropriate approval; lack of enough or inappropriate budgeting; and conflict with existing contact.

2- Product and/or service Risks, for example : delay in the delivery process, failure of new technologies, incompatibility of the new products with existing systems; product/service doesn’t meet the desired outcomes; and lack of in-house knowledge to develop effective specification or scope of works.

To identify, manage and mitigate these risks, a Risk Management Framework (RMF) should be used; generally consisting of the following steps:

a) Identify what are the key activities in each phase of the procurement process or what are the key features of the products and or services.

b) Identify what are the critical success factors in each phase of the procurement or what are the most important factors in the products / services and identify “what may go wrong” – the Risk.

c) Identify what controls are in place to manage these risks.

d) Assess the level of the risk in terms of Consequences and Likelihood; each organization would have different “Risk Reference Tables” and the level of the risk should be based on that table.

e) Decide whether the level of risk is acceptable, if not put an action to reduce the risk (e.g. indemnity and insurance clause in the contract).

d) Monitor, learn and adapt control as necessary.

Risk management is an integral part of the procurement, commercial and contracting processes and RMF together with risk registers should be used to achieve an effective and sustainable outcomes