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Introduction to Social Procurement for Social Enterprises

Social procurement is procurement – but with impact.

 

Social Procurement Checklist

You may have heard the term social procurement, but what exactly does it mean and how does it work? This practical guide is for organisations that are interested in engaging in social procurement and understanding its rationale and benefits. It is also designed to demystify the language surrounding social procurement.

Social Procurement  

Social Procurement is the intentional purchase of social impact, beyond the products and services that are required. 

Procurement

The process that organisations go through to acquire the goods and services they need to operate.

Note: This can include purchasing the raw materials needed to manufacture or build things, as well as purchasing the goods and services needed to operate, like office supplies, cleaning, consulting services, etc.

Social Procurement

The process that organisations go through to acquire the goods and services they need to operate
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Generation of social , cultural & environmental outcomes.

Note: Social procurement may be referred to as sustainable procurement or another term

Social Procurement is procurement plus impact and has four key aspects: The buyer, the supplier, procurement and impact. Let’s look at how these four aspects fit together in a little more detail:  

  • A Buyer is a public or private organisation that is acquiring the products or services. In the Social Traders marketplace, buyers are called ‘business and government members’.
  • A Supplier is the organisation that is providing the products or services to the buyer.
    ST certified social enterprises are one of the primary vehicles sought after by buyers to deliver on social procurement.
  • Procurement is the process of acquiring and delivering products, services and physical works. It is often a business function within large organisations.
  • Impact is the positive social, cultural and/or environmental change that happens as a result of procurement.

 

Impact

The aspiration of social procurement is to incorporate impact into procurement and supply chains.

A broad range of social, environmental and other community impacts are of interest to buyers. One of the most common areas of social impact sought is employment of people that are disadvantaged in the labour market. 

While impact is the difference between procurement and social procurement, there still needs to be a robust procurement process undertaken between a Buyer and a Supplier. 


Impact is one of those terms that has many different names, but they mean the same thing. Governments in Australia often speaks about impact using terms like social value, social benefits, or social and sustainable outcomes. The UN devised 17 global, cultural and environmental goals called the Sustainable Development Goalswhich is another way to think about impact.

Changing the value lens of procurement 

In procurement, value has traditionally been defined across the five ‘rights’: quality, quantity, place, time and price. Increasingly, buyers are redefining value and looking for impact in addition to price, quality, and risk considerations. 

Social Procurement: Rationale & Benefits 

For buyers:

  • Generate positive impact through supply chains
  • Competitive advantage, particularly where government is a client
  • Improved staff and stakeholder engagement
  • Provide greater benefits to the communities in which buyers operate

For social enterprise suppliers:

  • Access to a large market: business to business (B2B) trade
  • Increased recognition of the value of impact in procurement, giving a point of difference and competitive advantage
  • Opportunities for more significantly-sized contracts, leading to more sustainable revenue, financial security and impact growth

Social Procurement: A Global Movement 

There is an international movement that seeks to do procurement differently. This is evidenced by changing supply chain management practices that are looking across a wide range of impact areas and global challenges such as modern slavery, carbon management and environmental footprinting. 

Global supply chains are complex and changing behaviours takes times. However, the opportunity for greater positive impact is significant and can create meaningful change. 

Tips for social enterprises 

  1. Focus your efforts
    Identify market opportunities that are well aligned with your core capabilities and area of impact, and that are progressed in social procurement (e.g. because of government policy).
  2. Know your target market
    Build your understanding of relevant industry standards (including social enterprise certification), required procurement processes and the competitive landscape in your sector.
  3. Practice your pitch
    Whether it’s online, on paper or face to face, your high level pitch needs to clearly articulate what you sell, your impact and evidence of credibility.
  4. Build a sales pipeline
    Patience, timing and responsiveness are key to building and realising new market opportunities, so be realistic and factor in long lead times with new buyers. 

 

Watch our 40 minute video tutorial “Social Procurement Fundamentals for Social Enterprise” to learn more.
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Download our Social Procurement Checklist to understand what you need for your social enterprise to be optimised for social procurement.
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Considering ST Certification? Use this Certification Checklist to help you understand if you meet the ST certification and what documentation you’ll need to provide.
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