Royal Commission of AlUla (RCU) CIPS Managing Expenditures with Suppliers- PDV

Executive Summary

For this assessment, the impact of products/service category of spend to stakeholders of an organisation has been evaluated. By pursuing a brief market analysis, an illustration of the role of procurement function in achieving value for money has been attained. Information Technology (IT) system category of spend by the Royal Commission for AlUla (RCU) has been selected for evaluation. For the purpose of achieving this project purpose, various models have been used in evaluating the market environment and the best approach for attaining value for money. These tools include STEEPLE, Kraljic Matrix, Porters 5 forces and 5 Rights Analysis model.

In this assessment, the findings obtained have evidenced that RCU IT and technoloty department initiate relevant standards and specifications which inform the demand and supply of the IT systems. The costs management is achieved which has a positive influence on achieving value for money. Furtyer, a set of Key Performance Indicators (KPIs), long-term contracts have also been noted as eliciting an impact on increasing ability to prioritise on easing success in post-contract management pracrices.

At the end of this assessment, in line with the sourced findings, a set of recommendations are offered to RCU for successfully managing their IT system category of spend have been generated and include;

  • To ensure in the different sub-categories of the IT main category of spend, RCU need to engage the superior providers in Saudi Arabia and larger Middle East region
  • RCU need to ensure that for achieving value for money, IT systems are produced offshore for instance in Asia and Africa through an exploitation of 12 weeks’ time forecass
  • To offer discounted prices gathered from suppliers for the sake of achieving the best value for money in their operations
  • To achieve call off-stock to recuse cash flow management recuse cash flow restrictions which have been prevalent owing to prevalence of COVID-19 pandemic
  • To maintain the need for consistently attaining value for excellence, fair practice, innovation embrace and increased trust

Table of Contents

1.0 Introduction. 3

1.1 Royal Commission for AlUla (RCU) Background. 3

1.2 Procurement and Supply Management (PS&M) in RCU.. 4

1.3 Selected Category of Spend. 4

1.4 Context/Scope of the Assessment. 5

2.0 Importance and Impact to Organisation Stakeholders. 5

3.0 Research Analysis for RCU Category of Spend. 7

3.1 Business Environment Analysis. 7

3.2 Market Environment. 7

3.3 Industry Competition for the IT Systems Procurement and Supply by RCU.. 8

3.4 Impact of the Changes in the Market 8

3.5 Suppliers preferencing Matrix. 10

3.6 Market Analysis. 12

3.6.1 SWOT Analysis. 12

3.6.2 Kraljic Matrix Analysis 13

3.6.3 STEEPLEED Analysis. 14

3.6.4 Porter’s 5 Forces Analysis Tool 15

4.0 Procurement and Supply Chain Value in RCU.. 17

4.1 RCU Value for Money in PS&M Approaches. 17

5.0 Conclusion. 19

6.0 Recommendations. 19

References. 21

Figure 1:AlUla Areas of Operations. 4

Figure 2:Summary of RCU PS&M operations. 5

Figure 3:RCU Category of Stakeholders. 6

Figure 4:Mendelow Stakeholders Tool Analysis. 7

Figure 5:RCU Market Environment 9

Figure 6:Levels of Industry Competition. 9

Figure 7:IT System Procurement Value in RCU Organisation. 11

Figure 8:RCU 3P’s Triple BottomLine. 12

Figure 9:Supplier Preferencing Matrix Model 13

Figure 10:Business Environment Analysis Tools. 14

Figure 11:Kraljic Analysis Matrix Model in RCU.. 16

Figure 12:Porters 5 Forces Analysis. 18

Figure 13:PS&M and value for money approaches 19

Figure 14:RCU Value for Money in PS&M Approaches 20

Figure 15:RCU 5 Rights of procurement 20

Table 1:IT System Procurement in 2021 and 22 sub-categories of spend. 11

Table 2:SWOT Analysis. 14

Table 3:RCU IT System Procurement process STEEPLED Analysis 17

1.0 Introduction

1.1 Royal Commission for AlUla (RCU) Background

In this assessment, Royal Commission for AlUla (RCU) organisaton has been selected for evaluation. RCU is an organisation which was established in July 2017 as a Saudi Commission with their core purpose being preservation and development of the 2,000 year-old archaeological and historical site of AlUla in North-Western Saudi Arabia (RCU, 2021). RCU core target is to embark in a long-term strategy for developing and delivering a sensitive, sustainable transformation of the region while ensureing they reaffirm it as a major important archaeological and cultural destinations. This is while ensuring it is prepared for welcoming visitors globally. As illustrated in figure 1, the organisation invests in several areas which guarantee their success in their operations.

Figure 1:AlUla Areas of Operations

In the different areas of practice as illustrated in figure 1, they intend to harness and cultivate tourism and leisure in Saudi Arabia (KSA) in line with the Vision 2030 stipulations. To evidence the organisation relevance to KSA economy, PR Newswire (2022) report had indicated that the organisation overall development value was upward of $15 billion (SAR 57 billion representing the largest oasis regeneration project. This is $2 billion being invested in primary infrastructure with ready opportiunities for private investments. For the success of these investment, their procurement and supply department must be in place to ensure procurement of the appropriate IT system. This is with optimum value for money attained.

1.2 Procurement and Supply Management (PS&M) in RCU

RCU operates an independent Procurement and Supply Management (PS&M) department tasked with ensuring the organisation partners with suppliers to harness a leverage on competitive advantage and sustainable stakeholders engagement. As evidenced in SPA.GOV (2019), RCU PS&M operates a streamlined channel for their new and existing business partners for advancing new opportunities for future years. This ensures the organisation achieves value for money by embrace of modernised technology to harness registration of all their suppliers. For the procurement and supply chain success, they partners with all the organisation departments to achieve the organisation objectives. This is guided by terms and conditions which are set in the PS&M department (CIPS, 2022). The roles of RCU PS&M are as summarised in figure 2;

Figure 2:Summary of RCU PS&M operations

1.3 Selected Category of Spend

In this assessment, Information Technology (IT) system for RCU has been selected for evaluation. As evidenced in Afalula (2022), over the years, the organisation has been focusing on setting a technological innovation at the service of the organisation economic, social and environmental development. This innovative incubation program has also been involving the RCU population in pursuing digital transformation of their territory. Particularly, since the emergence of COVID-19 pandemic, utilisation of IT system has been instrumental for the organisation success in their operations.

1.4 Context/Scope of the Assessment

In IT system sourcing in RCU, they engage multiple stakeholders who are also involved in ensuring their operations in different archaeological and historical sites in KSA. Hence, the IT system is a facilitator of their operations owing to the broad area of operation and the required scope of efficiency. Despite of RCU partnering the Dassault Systemes to introduce a fully-fledged innovation and technology system to aid their operations, this system has not guaranteed the organisation of sustainable IT system which is self-sufficient (Afalula, 2022). Hence, in this report, other than evaluation of the stakeholders responsibilities in the identified category of spend procurement, the scope of driving value for money in their procurement and supply has also been put into consideration.

2.0 Importance and Impact to Organisation Stakeholders

Adopting the definition of CIPS (2022a) stakeholders are the people or organisations possessing an intrrest or influence to a particular investment, product, service or any other category of spend. Considering RCU case study, various stakeholders categories impact a direct/indirect influence on procurement process decision making. These categories are internal, connected and external (see figure 3);

Figure 3:RCU Category of Stakeholders

Additionally, apart from the identified stakeholders’ categories, noting on their influence and power is essential. A model which can be used is the Mendelow’s Matrix (CIPS, 2021) which prioritise on evaluating the stakeholders held power and also interests. The model therefore evidence the stakeholders held influence and power as a major factor influencing engagement in the procurement and supply approaches. Mendelow stakeholders analysis is as illustrated in figure 4;

Level of Interest

Figure 4:Mendelow Stakeholders Tool Analysis

High-Power; Low-Interest– The North-West community, government institutions (MNGHA) and other regulatories hold a lot of power for the sorucing of IT system. This is despite of their interest being substantially low impacting the success of their PS&M and little concern with stakeholders relationships.

Low-Power; High-Influence– RCU management and innovation department have reduced power for the organisation success in PS&M process. Besides, the scope of their influence in the procurement and supply decisions in IT system spend area is important.

High-Power; High-Influence– Suppliers teams, PS&M department and accountants significantly hold immense power and hence influence the importance of the procurement and supply of identified spend category. For successful practice, they enhance the scope of collaboration, consulting with experts and information exchange.

Low-Power; Low-Interest– For the KSA government and competitors leverage on low power and interest in the procurement process. The rationale of this is that they are primarily involved in facilitating role and influencing development of various policies and stipulating direction embraced by the entity.

3.0 Research Analysis for RCU Category of Spend

3.1 Business Environment Analysis

In order to come up with strategic marketing plan, Sahir and Rosmawati (2020) note on the need for evaluating the micro and macro environment factors can be evaluated by focusing on RCU organisation. The micro environment for RCU is inclusive of the different engaged suppliers, clients, procurement teams and shareholders. This is with macro environment involving the government legislations and competition. As opposed to micro-environment factors impacting an organisation operations, macro-environment impact the entire economy (Yang et al., 2020).

3.2 Market Environment

As evidenced in Banshwar et al. (2019),…………………………….

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