A needs identification process defines the reasons why you plan to buy goods, works or services. When starting your procurement planning, it’s important to define the reasons why you need to buy goods, works or services and plan for associated risks.
How needs arise
Procurement needs for goods, works or services may arise from various sources, including:
- government decisions, such as to acquire a new or revised capability
- a decision made by your organisation's management
- market or social demand
- technology impacting how your organisation operates
- feasibility study
- advice from management or a consultant to upgrade an IT system, replace equipment or refurbish a building
Defining and analysing needs
You should document the needs of your procurement. A needs analysis should outline:
- who you are buying for and who needs the goods, works or services
- how the goods, works or services you plan to buy benefit the people you are buying for, now and in the future
- when these goods, works or services are needed
- geographical areas that need the goods, works or services
- the expected outcomes of your procurement
Ask your stakeholders what their needs are. Stakeholders can include customers, clients and suppliers.
Look at existing agreements that are similar to what you’re doing. You could use information from existing agreements to support your procurement. Speak to your procurement governance unit about how to find this information.
Information to consider when defining the need
Think about how you can address:
- what represents value for money
- the estimated cost
- budget, environment and time
- organising the availability of subject matter experts
- technical requirements and compatibility with current systems
- maintenance, warranty, upgrades, performance guarantees and spare parts
You may be required to list this procurement on your organisation's forward-looking activity plan. Speak to your procurement governance unit for more advice about defining the need or if there are any reporting requirements at this stage.