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Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Procurement Plan – 10 Easy Steps to Create One Yourself

Table of content

• Procurement Plan
• How to Write your own?
• The Importance
• What should be included?
• The Benefits
• Procurement Expert’s Advice
• Frequently Asked Question

Key takeaways

A procurement plan is essential for efficient procurement processes, outlining key steps, roles, and responsibilities.

Successful procurement planning leads to cost savings, optimized timelines, and effective stakeholder collaboration.

Key elements of a good procurement plan include contract types, performance metrics, and vendor management techniques.

Do you have a procurement plan ready? As a procurement manager, it’s your job to always create a good procurement plan and to have it ready and up to date all the time.

And so, we are going to discuss just that. We are going to learn about the procurement plan and how to create one using simple yet proven effective steps.

Once you’re done with this article, you will be able to write your own procurement plan and your team can start calling you “The King of Procurement Plans.”

What is a Procurement Plan?

A procurement plan, also known as a procurement management plan, is a document that is used to direct the process of selecting and finding a supplier. 

It justifies the necessity for an external supplier and describes how the process of finding a supplier will be done.

The objective of a procurement plan is to improve the efficiency, transparency, and effectiveness of the procurement process. 

It explains how products or services are acquired and how the suppliers will be supervised during the project. 

The plan includes the types of contracts that will be utilized, terms of delivery, metrics used to evaluate supplier’s performance, and how the procurement process will commence.

How to Write Your Own Procurement Plan

Writing the procurement plan may sound like a big task, but if you have everything that is needed right, then you should have no problems writing and building the plan.

1. Explain the procurement process

This is where you provide a section of the procurement plan that needs to be taken to get the needed products or services from a supplier. There should also be an explanation of what must be done to manage the process

Featured Download : Enjoying this article? If so, click here to accelerate your career: Here is Sourcing Calendar Template to help you plan your procurement activities.

2. Identify roles and responsibilities

This section is where you identify the different people who are working on the project and all stakeholders who will be affected by the project. The different roles involved in the procurement process should include:

• Technical managers who create the statement of work and oversee the technical vendor requirements.
• Project managers monitor the process and control the budget, schedule, and project risks.
• Contract managers who provide advice and documentation related to the project’s contract requirements.
• C-level executives who provide services on a contract and make decisions related to the contract. These executives are responsible for reviewing and approving the final contract agreements.
• Lawyers who help with the creation of the contracts and provide advice for any related legal requirements.

3. Identify the procurement needs and requirements 

The first section of the procurement plan should describe the services or products the company is looking to buy. It should also have an explanation and justification for why the products or services are brought from an external supplier.

4. Define the procurement timeline

This section is all about the timeline for the project and it describes the timeframe in which the services or products are needed. This section helps procurement teams better by understanding when the procurement process should be started and when it needs to be completed.

5. Define change approval processes

This part is where the company’s change management processes, specifically how changes can be made to the procurement processes and documentation. The section should include an explanation of how to ensure the changes are necessary, understood, and approved by the right people.

6. Identify vendor management techniques

This section of the procurement plan should explain the techniques used to manage vendors once they have signed the contract. The goal of this area in the procurement plan should be to ensure vendors must fulfill their side of the deal and provide the company with the products or services they requested at the quality that the company expects. 

Vendor management should include the following:

• Creating an SOW that outlines the project timeline, deadlines, and compliance requirements.
• Detailing vendor selection criteria that are based on cost and risk analysis.
• Using key performance indicators (KPIs) to measure the product or service quality.
• Conducting regular meetings.
• Requiring the vendor to provide the project owner with regular project updates.

7. Define relevant legal jurisdiction

Legal requirements for the procurement process must be identified to ensure the company and vendor follow the law.

Legal requirements must also be identified to ensure all stakeholders are aware of the laws and that they do not violate the legislation.

8. Identify payment methods

This section of the procurement plan identifies the different payment methods and currencies that will be used and accepted during the procurement process.

If payments are to be made periodically, such as monthly or annually, then the terms for these payments must be detailed to ensure that there is no conflict between the company and the vendor regarding payments.

9. Explain risk management processes

Working with an external supplier can expose you to new risks to a procurement process that would not be relevant if the process was internally sourced . This section of the procurement plan should explain the risks of the project, including:

• Risk tolerance
• Risk probability
• Risk severity
• Types of contracts used
• Policies and procedures outlined in the contracts
• Review and approval processes for requirements

The statement of work is an important element of an organization’s risk management processes. The SOW defines the necessary project activities, deliverables, and timelines that the vendor needs to follow to fulfill half of the deal. Giving vendors a SOW reduces risk by ensuring that the supplier knows exactly what is expected of them.

10. Identify project constraints and limitations

A procurement process is not one without limitations and constraints. This section provides all the constraints and limitations that the procurement team and vendor must deal with. It can include the following:

• Legal compliance
• Budget restrictions
• External stakeholders
• Scheduling limitations
• Geographic restrictions
• Security requirements
• Specifications and standards

Procurement Planning:  The Basics 

Procurement planning is the process of consolidating and identifying requirements and determining the timeframes for procurement to have them as and when they are required. 

To put it into simple terms, procurement planning is about creating a schedule of when and where the procurement will happen . The planning also includes making sure that the items or services procured are in good condition and exactly what you are looking for.

In order to plan for procurement, it is essential to have a comprehensive understanding of all the elements involved in producing your company’s goods and services.

This includes being knowledgeable about material utilization rates, skillful negotiation techniques for securing favorable pricing, efficient coordination of transportation and supply chain processes, and the ability to address and minimize the impact of potential challenges. Additionally, incorporating a supply and demand analysis into the planning process can be beneficial.

Procurement Planning: The Importance 

Creating a procurement plan is a must. It’s not just because a company demands a plan must be made, but because the law also in some areas requires the creation of a procurement plan:

1. Aggregating Requirements

The plan aims to consolidate and streamline requirements within procuring entities and the organization itself. This approach helps optimize procurement processes, ensuring value for money and reducing overall procurement costs.

2. Utilizing Rate or Running Contracts

The plan encourages the use of rate or running contracts when necessary. These contracts offer an efficient, cost-effective, and flexible means of purchasing the necessary supplies for the company’s ongoing operations.

3. Integrating with Expenditure Program

A well-designed procurement plan integrates seamlessly with the expenditure program of the company. This alignment ensures that procurement activities are in line with the broader financial goals and objectives of the organization.

4. Avoiding Procurement Splitting

The plan addresses the issue of splitting procurement to deal with a larger procurement concern. By avoiding such practices, the company can maintain transparency , fairness, and efficiency in its procurement processes.

What to Include In a Procurement Plan

As stated, the procurement plan is an important tool for the procurement manager. You need it. You can’t start the procurement process without it. You and your procurement team should build a concrete procurement plan to buy the supplies needed in a timely and orderly fashion.

The procurement plan should always have the following elements for it to be efficient:

• Identification of the type of contract that will be used in the deal.
• An explanation of the metrics that will be used to judge the supplier’s performance.
• Identification of the organizational standards that must be followed.
• Planned delivery or implementation dates for the products or services being provided.
• The number of suppliers involved and an explanation of how they will be managed.
• An explanation of how acquiring the new services or products will affect the constraints and limitations of the project plan.
• Identification of all vendors who have prequalified for the project.
• An alignment of lead times with the project schedule.

The Benefits of a Good Procurement Plan

Procurement plans provide documentation for the whole procurement process, which is very valuable to all procurement teams in any company. They can use the procurement plan as a reference or guide if there is a need for a procurement project once again.

Other benefits of having a procurement plan include:

1. Help consolidate similiar requirements under one contract

By grouping similar requirements for goods or services together and awarding them under a single contract, organizations can benefit from bulk purchasing power.

This approach often leads to more favorable terms with suppliers, lower unit costs, and reduced administrative overhead. Moreover, managing fewer contracts simplifies the procurement process, making it more efficient and easier to monitor.

2. Divide complex requirements into multiple contract packages

When faced with complex procurement needs, dividing them into smaller, manageable contract packages encourages a broader pool of suppliers to participate. Increased competition drives suppliers to offer more competitive bids, potentially lowering costs.

Breaking down large projects also allows for more targeted supplier expertise and facilitates better risk management, as smaller contracts are generally easier to monitor and control.

3. Assess additional staffing needs

Developing a procurement plan involves evaluating the scope and volume of anticipated procurement activities. Based on this assessment, organizations can identify whether they require additional procurement staff or resources to efficiently manage the workload. Adequate staffing ensures that the procurement process runs smoothly and can meet deadlines effectively.

4. Optimize cost savings

Aggregating similar requirements leads to economies of scale, reducing costs per unit. Additionally, breaking down complex requirements into smaller contracts promotes competition among suppliers, driving down prices and achieving cost savings. This strategy also provides flexibility, allowing companies to negotiate more tailored terms and conditions with suppliers.

5. Facilitate stakeholder collaboration

Engaging stakeholders throughout the procurement planning process ensures that the needs and preferences of various departments and individuals are considered. This collaborative approach helps avoid potential misunderstandings, enhances the accuracy of requirements, and increases stakeholder buy-in, fostering a smoother procurement process.

6. Estimate procurement timelines

Developing a clear timeline for each procurement activity helps project managers and teams plan their tasks effectively. It allows for better resource allocation, monitoring progress, and meeting critical project deadlines. Timelines also help anticipate potential delays or bottlenecks, enabling organizations to take proactive measures to address issues and ensure a timely and successful procurement process.

Procurement Expert’s Advice on Procurement Plan

For this article, we asked a seasoned procurement professional to share his insights regarding procurement plan.

Sjoerd Goedhar t Owner, Goedhart Interim Management & Consultancy

LinkedIn Profile: https://www.linkedin.com/in/sjoerdgoedhart/

1. What should readers know about procurement plan?​

“The procurement plan is an important tool for the procurement manager. A procurement manager can’t start the procurement process without a procurement plan. He and his team should build a concrete procurement plan to buy the supplies needed in time.”

Follow-up Question: In your experience, what are some challenges or obstacles that organizations may face when attempting to create or implement a procurement plan?

“Organizations often face challenges in creating and implementing a procurement plan due to competing priorities, limited time, and workload constraints. The importance of procurement may be overshadowed by other urgent matters, leading to insufficient attention and resources allocated to this critical aspect of business operations.”

2. What is the biggest misconception about procurement plan? What do most people get wrong about this topic?

“Creating a procurement plan is not something you just do. You do this not only because the company wants it, but in some areas, this is even legally required. Without a good procurement plan, there will be no good result.”

Follow-up Question: How about in a startup or small business, is a procurement plan still needed when acquiring goods or services?

“Yes, a procurement plan is essential for startups and small businesses when acquiring goods or services. Even for a digital marketing agency, purchasing services requires strategic planning. Prioritizing procurement, especially in less mature organizations, is crucial for efficient operations and growth. It’s advisable for founders to invest in expertise if they lack it, as strategic planning can significantly impact business outcomes.”

3. What are the essential elements of a comprehensive procurement plan?

“Essential elements of a comprehensive procurement plan include:

• Type of contract used in the tender.
• Metrics for evaluating supplier performance.
• Organizational standards to be followed
• The number of suppliers involved
• Planned delivery or implementation dates for products or services.
• An alignment of lead times with the project schedule”

Follow-up Question: How often should procurement plans be reviewed and updated, and what factors might prompt revisions to the plan?

“Procurement plans should be reviewed and updated annually, with the frequency of adjustments based on business priorities. Factors prompting revisions include changes in purchasing strategies, market conditions, and business requirements.”

4. How should a procurement plan be adapted to respond to changing market conditions and business needs?

“The business environment and market conditions are always changing, so the strategy should be adaptable. Continuous improvement is key to maintaining relevance and effectiveness. This can be done by:

• Periodically review your procurement strategy to ensure it aligns with current business goals and market conditions.
• Integrate feedback mechanisms within your organization and with suppliers.
• Be updated about market trends, new technologies, supplier landscape shifts, and best practices.
• Invest in training and development for your team
• Use data to gain insights into your procurement processes. Data can reveal trends, inefficiencies, and opportunities for cost savings.”

5. Up to what extent should stakeholders be involved in the development of the procurement plan?

“Engaging with your stakeholders can be challenging, but it’s one of the most critical contributors to your organizational success. Stakeholders must be involved from start to finish. Depending on which type of stakeholder, stakeholders will need to be involved in each phase of the process. The most important stakeholders will have to be involved in the entire process.

Interacting and communicating with crucial decision-making stakeholders helps your organization strategize its short and long-term goals.”

6. When should procurement professionals take into consideration when making a procurement plan?

“The procurement process is fundamental for ensuring that an organization operates efficiently and effectively. It’s necessary for several reasons:

• Strategic Alignment
• Compliance and risk management
• Cost efficiency
• Quality assurance
• Supply chain reliability
• Innovation and improvement”

Frequently asked questions

What is a procurement plan.

A procurement plan is a detailed walkthrough of how the procurement process should go from start to finish.

How to make a procurement plan?

To make a procurement plan, you need to have all details fleshed out. Details include vendors selected for the procurement, the budget allocated, and contracts used for the procurement.

How do you plan the procurement process?

To plan the procurement process, you and the team must discuss how the procurement should start, how to source vendors, make sure the contracts follow the law, and that the supplies procured are in good condition.

About the author

"> "> My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

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How to Make a Procurement Management Plan

Project management planning is made up of many parts. There’s the schedule, the stakeholder matrix, the managing of resources. Speaking of the latter, there’s the matter of how you’re going to procure resources that require vendors of goods and services. That’s procurement management.

The procurement management plan is part of the overall project management plan. Over the life cycle of a project there are likely to be many points where it will intersect with vendors. This process needs to be managed. To manage these relationships and keep the flow of those goods and services moving without interruption requires a procurement management plan.

If it seems like we’re going too fast, it’s because we are. The act of procurement, its management and planning are all deeply embedded in the methodology of project management. Let’s slow down and take a moment to unpack these terms.

What Is Procurement in Project Management?

To begin with, what do we mean when we say procurement? Procurement is when the project is working with outside suppliers to buy or rent goods and services for the project. These relationships are usually contractual to make sure that the goods and services work within the timetable of the project.

In project management, there is a process for project procurement, and it begins with planning. This is where you identify what resources outside of your organization will be needed for the project. These are collected in a statement of work.

Related: Free Project Plan Template

Bidding & Contracts

Once you have a list of what external resources you need, then you can start the work to acquire them. This is called the bidding process, where contractors bid for your work. Once you have some bids in-house, then they must be studied to determine which is the best fit for the project.

When you go into a contractual agreement with these suppliers, they require management just like every other aspect of the project. It’s crucial to the well-working of the project that these contractors are doing what they were contracted to do, on schedule and within the allotted budget .

Finally, once the procurement is done, the contracts must be closed properly. This is yet another process that makes sure everything has been delivered as stated in the contract before being signed off on.

Why Do You Need a Procurement Management Plan?

The importance of having a procurement management plan is that it defines what you need from the project that cannot be provided by the organization. This means that you have a greater understanding of planning the whole project. That includes managing the suppliers, who are key to keeping your project schedule .

Incorporates Stakeholders

Another positive is that a procurement plan can involve stakeholders and get their input in the process. Stakeholders are the reason for the project and their satisfaction is the measure of the success of that project. They can express the requirements they want for procurement. You can use a RACI chart to identify stakeholders and their involvement before contacting them about procurement needs.

Informs Strategy

Without a procurement management plan, there can be no procurement strategy and without a strategy, there can be no plan. They both inform the other and involve things like market surveys to better define the procurement necessary to fulfill the project.

What Does a Procurement Management Plan Do?

Obviously, the first and perhaps most important thing that a procurement management plan does is list all the procurements needed for the project and what requirements are expected to be associated with them. This is a key part of schedule development.  It creates timelines for implementing a procurement for the project and therefore helps with estimating the larger project schedule.

A procurement plan helps monitor the whole procuring process. When the project is executed, the actual procurement can be compared against the procurement plan to track progress. If there are discrepancies, then the procurements can be adjusted to right those wrongs.

Evaluating the success of your procurement plan is made significantly easier with the help of capable project planning software. Things like communicating with team members, tracking results, making adjustments and producing reports can all be automated with the help of the right software. Watch the video below to learn more:

Eight Steps for a Procurement Management Plan

The project manager is the project team member responsible for overseeing the procurement management plan, but it’s not a one-person job. Since the procurements will be project-wide, it’s important that everyone is on board with the process. Everyone should have some involvement in approving and even managing contracts.

The procurement management plan can be broken down into these eight steps.

1. Define Terms

To begin, start by defining the procurement terms. This means listing what you need to procure in detail: how many, what size, for how long, etc. Then you want to know what service is provided to the project and why this is important. Now add a date of use to each of these procurements and who on the project team is authorized to make these purchases. This information will be necessary when you’re ready to make a purchase order which specifies the price, quantity, delivery window and terms of payment of the goods/services you purchase. It’s a legally binding document that makes sure that you and your vendor are on the same page. Our purchase order template can help you create one that fits your project.

2. Outline Type of Agreement

The contract is how everyone agrees on the terms of service. There are different types of contracts, for instance, a fixed price and cost reimbursement are two. Therefore, the type of agreement must be decided on and how it will be managed.

3. Identify and Mitigate Risks

Risks are inherent in every part of a project process, and so they lie dormant in procurement until they show themselves. It is now time to figure out what those risks might be and list them. Once a thorough list has been collected, each must have a way to resolve them. It’s also good to assign a team member with the task of mitigating those risks, so they have the ownership to follow through on closing them. A risk register template can help.

4. Define Costs

What are the costs involved with the project procurements? Once those have been figured out, it is likely that a request for proposal will be issued, with the needs outlined and requesting bids from suppliers. Be thorough and note everything required. The suppliers will come back with their costs for products or services.

5. Identify Constraints

It helps to try and identify any project constraints before starting the project to avoid getting blindsided by unforeseen limitations during execution. Once this list is complete it can be looked at throughout the project phases. Constraints related to procurements include cost, scope, limited resources and technical specifications.

6. Get the Contract Approved

Review the bids and do a service and cost analysis. Then have a list of who the decision-makers are in the project group and pass the bids on to them for review (a DACI framework can help identify decision-makers). This process makes sure that everyone who needs to oversee the contract approval is involved and can provide input.

7. Make a Decision Criteria

You have a workflow, but now you need criteria by which to decide on which bid to go into contract with. Every person who reviews the bid should have these criteria at hand to measure their response.

8. Create a Vendor Management Plan

Once a contract is signed, the procurement management plan will segue into a vendor management plan . The terms of the contract must be met. And, to make sure that happens, a management plan surrounding the suppliers will help ensure that goods and services are delivered as specified and on time. It is a good idea to add a performance metric to rate how well each supplier does their job, so you can improve relations on the next project and know who is worth contracting with again.

ProjectManager Helps with Procurement Management

Each procurement is a project or a subset of the larger project. Therefore, each procurement can be planned, tracked and reported on just as you would the larger project. ProjectManager is an online project management software that can make that process easy and effective.

Procurement management can feel overwhelming. ProjectManager helps with executing your procurement plan with its kanban boards, Gantt charts, dashboards and other project management features.

Using Kanban for Procurement Management

By making each supplier a project on a kanban board , you can then track what stage their inventory is in and not get any unpleasant surprises. ProjectManager has customizable columns, so you can name them ordered, shipped, stocked and need to reorder. This way you’re always on top of your resources. Plus, you can add tags and priority levels to make sure everything is well-organized and tracked.

Gantt Can Link Tasks and Make Timelines

Sometimes procurement is dependent on other tasks. Maybe the visual kanban doesn’t give you the control you need. No problem, switch over to the Gantt view . Now you can link dependencies and see timelines. Timing is important of course. If your resource isn’t here on time, then the whole project can be delayed!

They say, “Don’t put all your eggs in one basket.” But in project management software you want to have all your tools in one place. ProjectManager keeps you organized, so you can work better.

ProjectManager is a cloud-based project management software that helps control procurement throughout the project phases. Workload and resource management features keep track of supplies and calculate planned versus actual costs. ProjectManager assists project managers with planning, monitoring and reporting projects. Team members get a collaborative platform to work together more productively. Try it today with this free 30-day trial .

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10 steps to create an effective procurement plan

Procurement

Find out what’s involved in procurement planning, and learn the ten steps to need to take to write a procurement plan that cuts costs and mitigates risk.

The most effective procurement teams develop a blueprint for buying before diving into the purchasing process.

This process — procurement planning — helps purchasing teams develop a thorough understanding of stakeholder requirements, analyze risks, and reduce procurement costs.

Find out what’s involved in procurement planning, and learn the ten steps to take to write a successful procurement plan.

What is procurement planning?

Procurement planning is a strategic process that occurs before procurement itself begins. In the planning process, the procurement team and key stakeholders clarify business needs and justify the requirement for an external supplier.

During the procurement planning process, the team and stakeholders also discuss and record:

• How the procurement team will identify and decide on suppliers
• What kind of contract to use
• Who is responsible for which aspects of the procurement process
• What risks might exist, and how the team will mitigate them
• Realistic expectations around quality, cost, and delivery timeframes

The outcome of this process is the procurement plan , a master document that serves as the blueprint for purchasing as the procurement team and key stakeholders move forward with the procurement process.

What are the components of a procurement plan?

A good procurement management plan includes:

• An outline of the major steps involved in the procurement process
• Assignment of key roles and responsibilities, including required approval pathways
• Identification of the key metrics that measure vendor performance
• Recognition of the type of procurement contract that will be used
• Key project requirements (such as non-negotiable features when sourcing SaaS products )
• Planned dates for delivery, implementation, and onboarding
• Criteria to use to assess and choose vendors

10 steps for writing an effective procurement plan

1. outline the procurement process.

Start by detailing the steps to acquire the product or service in question.

For instance, the steps might look like this:

• Conduct market research and issue a Request For Information (RFI)
• Perform a make-or-buy analysis
• Compare potential suppliers against the description of procurement needs
• Choose the most favorable vendor
• Negotiate contract terms
• Sign an approved agreement
• Begin onboarding and implementation

This step is critical for ensuring team members don’t rush to completion and skip stages, like jumping into vendor discussion before completing a make-or-buy analysis.

Every procurement process looks slightly different. Learn more about designing a process that makes sense for your organization with our guide, How to build a procurement process at any stage of growth .

2. Describe needs and requirements

Detail the exact products or services needed and any specific requirements for them.

Say the business is looking for a financial modeling software platform. They might specifically require that the tool offers scenario analysis as a feature. Include this in the description of requirements.

Here’s an example of what that might look like.

3. Assign roles and responsibilities

In this section of the procurement plan, identify the team members working on the procurement project and any stakeholders who its completion will impact.

Aside from members of the sourcing and procurement team, this may also include:

• Department heads (for instance, the VP of Sales if procuring a sales automation tool)
• Project managers (if the good or service needed is only for a specific project)
• C-level executives who may be responsible for aspects of the approval process
• Legal team members who might assist with aspects of contract creation, such as developing termination clauses

Detail the tasks each person is responsible for, like this:

Assigning roles and responsibilities early on ensures tasks don’t slip through the cracks because everyone thought someone else was handling them.

4. Define the type of agreement required

Most pricing for software contracts falls into one of three categories:

• Fixed price. A firm price is negotiated and agreed upon for the goods or services provided. Used in most cases, especially when purchasing software or supply chain components.
• Cost reimbursement. The vendor pays for the project's costs up front, and they’re reimbursed at the end of the project—with a fixed or percentage fee on top. Generally used for service-based projects (such as marketing services).
• Time and materials. The vendor is paid an hourly or day rate plus the cost of materials. Used mostly for physical services, such as construction projects.

Determining the type of contract up front helps the vendor selection process. For instance, some vendors may be unwilling to engage in a cost reimbursement agreement, as they have to foot the bill for expenses upfront.

5. Detail the procurement timeline

Lay out key dates, milestones, and timeline expectations for procurement. Gantt charts are a popular way of visualizing this information.

For example, assign dates for the following milestones in the procurement process:

• March 31 - Market analysis
• April 14 - Vendor selection
• April 21 - Contract negotiation
• May 27 - Delivery

Putting these dates in stone helps keep the procurement team on track and prevents timelines from creeping out.

6. Identify decision-making criteria

By what criteria will vendor bids be judged? Beyond price, factors to assess may include:

• Delivery guarantees
• Financial strength (to minimize financial risk)
• Regulatory compliance
• Sustainability
• Customer references

Identifying selection criteria before beginning conversations with vendors helps ensure the decision is objective and allows multiple project team members to analyze vendors individually.

7. Define processes for change approval

In this section, detail how the team will handle changes to the procurement plan if required.

For example, if the market analysis identifies that one of the required features is outside the budget, either the budget or the need for that function must be reassessed.

Use this section to explain how to manage that change, who is responsible for making changes, and how those adjustments should be communicated to key stakeholders.

8. Outline the vendor management strategy

When the procurement process is complete, the vendor management plan kicks off, so it’s a good idea to have an outline of this prepped during the procurement planning phase.

This section should outline the techniques to use to manage vendor relationships, including:

• How often to meet with vendors
• Which internal stakeholders are responsible for supplier management
• What metrics and measurements to use to define vendor success
• How to handle issues with contract non-compliance or poor KPI performance
• How often to reevaluate the value of the vendor relationship

Outlining this information before beginning the procurement process helps set clear expectations with vendors, so they know what to expect from the supplier management team if a partnership is created.

9. Identify risk management processes

All vendor relationships come with some degree of risk, be it financial, operational, or security risk .

The procurement plan should detail how to identify and mitigate risk.

Learn more about the different kinds of vendor risk and how to manage them in our guide, Vendor risk management: What to watch for and best practices .

10. Define costs and payment methods

The last step of the procurement planning process is detailing the expected budget for the deliverables, as well as ideal payment terms and methods.

Also note which factors are negotiable and which are not. For instance, it might be non-negotiable to pay via direct credit, as finance policies prohibit company card purchases above a certain dollar amount.

However, different pay structures may work, for instance, monthly, quarterly, or annual billing.

Drive procurement strategy success with Vendr

Procurement planning is only the beginning.

Once a solid plan is drafted, the procurement life cycle itself begins. That means initiating vendor conversations, assessing and comparing bids, and negotiating favorable agreement terms.

For SaaS buying , Vendr is a secret weapon for reducing costs and driving procurement efficiency.

You’ll benefit from:

• Automated approval workflows to cut down procurement time
• The largest set of SaaS purchasing data to help benchmark pricing and negotiate terms
• A single point of truth for managing vendor relationships and performance expectations

Find out just how much you’re overspending on SaaS tools today with our free cost savings analysis .

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• Business strategy |
• What is procurement management and why ...

What is procurement management and why is it so important?

Procurement management is the act of obtaining goods or services for a business by working with an external source. This article discusses the basic outline of the procurement management process and why it's important for project managers to understand. Always check with your internal legal team before beginning the procurement process.

When you have a small team, choosing tools that you want to use for your day-to-day is as easy as knowing what you want and then purchasing it. 

But when companies start to grow, this process may become unsustainable. The need for tools becomes more complex and companies want to minimize the amount of risk they take on when working with a potential partner.

This is why companies have teams dedicated to the procurement process.

What is procurement management?

Procurement management is the process of obtaining goods or services for a business through the acts of purchasing, renting, or contracting with an external resource to complete a project. 

This process involves a variety of procurement activities, which can include identifying the needs of a project, sourcing potential options, submitting a request for proposals (RFPs) if needed, and administering procurements back to the team. This process may be done by a team separate from the one requesting the product or service in an effort to protect the company from any potential risk. However, always check with your internal legal team to confirm the specific procurement process at your organization.

Procurement teams are typically experts in contract management. Your internal procurement team will likely be the one responsible for negotiating contracts to best fit your company’s  needs, negotiating pricing and packaging information with your potential partner, and running a risk analysis to protect your company from any potential threats. 

There are typically two main sides to procurement: the front-end strategic sourcing and the operational side of procurement management. 

Front-end sourcing is how the team goes about identifying the different partners and businesses that your company wants to work with. This process usually involves setting minimum qualifications that potential vendors should meet and identifying why the company needs to bring a third-party vendor in for a project. 

The operational component of procurement management is the individual steps a company needs to take to begin working with a third party. These steps vary depending on your internal company practices, but they may include using purchase orders, submitting RFPs, choosing bidders, or going through a quoting process.

4 steps of the procurement process

There are four main steps that procurement teams will take in a procurement management process. Here is a basic outline of how a procurement project team would go through the steps of procuring materials required to complete a project. Always check with your internal legal team for guidance on your company’s procurement practices and policies.

1. Create a procurement management plan

Your internal procurement professionals will likely evaluate resources the company currently has on hand in comparison to what the team is looking for. If it's more cost-effective to use resources that the team has on hand, they will likely suggest it in addition to negotiating costs down when they discuss options with bidders. 

This stage will also answer basic questions about the procurement plan. These questions may include:

Do stakeholders need this resource by a specific date?

Will there be a specific process for how the team evaluates different options?

Will your team release an RFP to potential suppliers?

2. Conduct procurements

During this stage, the procurement team will typically execute on a decision. Your internal legal team will guide you on how to gather bids and help your team evaluate the different options available.

Look to your internal team for guidance about which option best fits your needs. Once you have selected a vendor, your internal legal team will help you move onto the negotiations and contract signing as soon as the contract matches the project needs. This process typically ends with a document like a purchase order to seal all of the details of the deal––the purchase order may include details on the price, quantity, product delivery timeline, and how the payment will be made.

3. Administer (or control) procurement

Depending on the type of product your team is procuring, this is the stage in which the team implements the newly procured purchase into your project plan . This could mean managing and training a new team of contractors, installing new software, or moving raw materials to turn them into a new product. 

During this stage, it's a good idea to implement some form of change management into your process. This is especially true if you're adding additional team members into your workflow. This will allow you to monitor your business operations and verify if the new procurements have changed anything. For example, if a team procures new automation machinery for an assembly line, it's important to monitor the difference in production before and after adding the machinery. This difference represents exactly how much impact the machinery did to your operation. 

4. Close procurements

During the negotiation stage, your internal legal team and vendor will mutually agree on what constitutes “completed work.” Then, once both parties reach the stage where the actual work is completed, your internal legal team typically will finalize any paperwork and may perform a release of liability, if necessary. 

Typically, both sides will ensure that everything is completed according to the contracted agreements.

The project manager's role during the procurement process

A project manager is responsible for moving a project along the project schedule , and managing updates for stakeholders and other team members when it comes to the procurement process. However, the bulk of the procurement process should be run by your internal legal team, in accordance with your company policies. 

The project manager's main responsibility during the procurement process is to help coordinate information to the procurement team and anything they may need to push an RFP or a contract forward into the next stage. If the procurement team needs specific information regarding the needs of the project, the project manager can help gather and share that information. 

Some companies use dedicated procurement management software to keep information for the purchasing department organized. Others may streamline information using a work management tool that can keep major project milestones , vendor information, and stakeholder status updates all in one place. 

Work management tools like Asana can help keep documents like procurement contracts, RFPs, and important audits in one place where stakeholders can access that information. If you’re ready to get started, try our free RFP template today.

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How to Create a Procurement Plan in 9 Simple Steps

It can be devastating to hear when a key vendor goes bankrupt. Unfortunately, vendors may shut down for various reasons, which can hamper your own operations.

The next immediate step then is to find another vendor.

But do you have a process in place to source vendors? Does the purchasing team know what their roles and responsibilities are?

To ensure minimal disruptions to your operations, you need to plan for contingencies like vendor bankruptcies.

This is where a procurement plan comes in.

In this article, we’ll explain what a procurement plan is and why you should create one. We’ll also cover the steps to creating one for your company. Finally, we’ll look at how you can automate your purchasing processes with frevvo’s procurement automation software .

Click the links below to head to the section you want to learn more about:

What Is a Procurement Plan?

Why do you need a procurement plan.

• How to Create a Procurement Plan

Automate Your Procurement Process With frevvo

A procurement plan is a document that details the entire procurement process — the steps that companies follow to procure the goods and services they need to operate.

It also outlines roles and responsibilities for your purchasing team, defines vendor selection criteria, establishes the types of contracts you’ll use, and more.

The goal of a procurement plan is to streamline the procurement process. Instead of starting from scratch each time, you can simply pull up an approved plan and adapt it accordingly.

Procurement plans typically include the following details:

• Roles and responsibilities
• Needs and requirements
• Project timelines
• Project constraints
• Vendor selection criteria
• Contract types
• Payment terms and methods
• Risk management

We’ll dive into each of these in a later section. For now, let’s take a look at why you need a procurement plan if you don’t already have one. 

Prefer to see and hear it rather than read about it? Let us show you how easy it is.

Creating a procurement plan can help standardize your purchasing processes and even benefit your bottom line. 

Here’s how.

Reduces Supplier Risks

Managing supply chain volatility is one of the biggest challenges that many companies face. In fact, 56% of chief procurement officers have said that key suppliers have either gone bankrupt or have been severely hampered.

Creating a procurement plan to source and select vendors can help you reduce supplier risk. If a key vendor goes bankrupt or is unable to meet its obligations, your purchasing team can refer to the procurement plan to quickly find a suitable replacement.

Enhances Transparency

90% of business executives say that increased transparency leads to better decision-making across the organization. This also applies to purchasing. 

Without transparent processes, mistakes are bound to happen — employees may duplicate orders or make purchases using non-approved vendors. This can lead to overspending and even delayed projects.

A procurement plan makes the procurement process more transparent. And when you use procurement automation software , your purchasing team will be able to track each step of the process from one central location.

Helps Ensure Compliance

Creating a procurement plan can help ensure compliance with established policies.

Why is this important?

Aside from reducing the risk of errors, a procurement plan can prevent instances of maverick spending — when employees purchase goods or services outside of established policies.

Maverick spending can negatively impact your bottom line. In fact, companies lose as much as 16% of negotiated savings when purchasing teams don’t use preferred vendors. 

Enforcing a procurement plan can help ensure that all purchasing decisions comply with company-approved policies and vendors.

Lowers Procurement Costs 

With a comprehensive procurement plan, your company can source vendors faster, speed up negotiations, and pay invoices more quickly — all of which can help lower procurement costs.

In short, creating a procurement plan is extremely beneficial for your bottom line. It provides purchasing teams with everything they need and sets clear expectations.

Now, let’s look at how you can create a procurement plan.

How to Create a Procurement Plan 

Procurement varies from organization to organization. 

For example, large retailers will likely have different purchasing requirements than manufacturing facilities. However, there are certain details that every procurement plan should include.

Let’s take a closer look.

1. Describe the Procurement Process

In this step of the procurement plan, you’ll provide a complete breakdown of the procurement process starting from requisition to paying the vendor.

A typical procurement process involves the following steps:

• Identifying internal needs
• Evaluating vendors
• Negotiating contracts
• Approving an internal purchase requisition
• Releasing a purchase order
• Receiving and reviewing an invoice
• Confirming and auditing delivery
• Completing payment
• Maintaining records

No matter what products or services you’re procuring, having a formalized purchasing process is key to creating a procurement plan. Work with your purchasing team to detail each step.

2. Outline Roles and Responsibilities

The next step to creating a procurement plan is to establish the parties involved in the purchasing process, along with their roles and responsibilities.

Here are some of the key functions of purchasing departments:

• Identify internal needs for goods and services
• Source reliable suppliers to meet requirements
• Negotiate prices and delivery terms
• Coordinate deliveries and shipments
• Run quality control and product testing 
• Ensure compliance with all regulations
• Manage budgets and maintain accurate records 
• Manage relationships with vendors

The purchasing team will consist of various professionals who are responsible for overseeing these tasks. These include a purchasing manager to supervise procurement-related activities, purchasing agents to evaluate suppliers, and a contract manager to prepare contracts.

Make sure that you outline the roles and responsibilities of your purchasing team. You should also specify who can make and approve changes to any procurement documentation.

3. Determine Needs and Requirements

This section of the procurement plan describes the goods and services that your company is looking to procure. It can include tangible goods like office equipment or raw materials and intangible goods like software licenses.

Regardless of what you need to procure, you should include all pertinent details — sizes, quantities, technical requirements, etc.

Make sure to also include a statement that justifies why you’re purchasing certain goods or services from external suppliers instead of sourcing internally. 

4. Define a Project Timeline

The next step is to set a project timeline. This is important because procuring goods before you actually need them will only take up valuable space.

An efficient procurement plan will include specific timeframes to minimize holding costs. This will also give your purchasing team deadlines for when they need to start and complete certain tasks.

5. Determine Project Constraints

Every project has constraints and limitations that it must abide by. Cost constraints are the most obvious example, as you may have a limited budget for purchasing goods and services.

Other types of project constraints include:

• Quality specifications
• Scheduling limitations
• Scope and deliverables
• Security requirements
• Industry regulations

Make sure that you detail any project constraints and limitations in your procurement plan.

6. Define Vendor Selection Criteria

In a typical procurement process, the purchasing department will issue a request for proposal (RFP) and vendors will respond with proposals or bids.

Then once the solicitation process begins, your team can collect proposals and evaluate each one. Defining vendor selection criteria can help you narrow down your choices.

Selection criteria can include:

• Costs: If a proposal doesn’t fit within your budget, you could either move on to the next one or enter into negotiations with the vendor.
• Delivery: If a vendor can’t deliver goods or services within your desired timeline, then look for one that can.
• Quality: Vendors must be able to meet certain quality standards before you can consider their proposals.

Establish selection criteria to find the right vendors. In this section, you should also specify who will make the final decision. You can also establish a small selection committee whose purpose is to evaluate and select vendors.

7. Select a Contract Type

Vendor contracts or vendor agreements are legally binding agreements in which both parties agree to exchange goods or services for compensation. 

However, there are different types of contracts that you can use. Common vendor contracts include:

• Fixed price contract: An agreement in which the buyer and seller agree to a fixed price regardless of other factors. 
• Fixed price plus incentive contract: An agreement in which you agree to pay a fixed price and an extra bonus if the seller delivers earlier than expected.
• Cost-reimbursable contract: An agreement in which a contractor receives a standard fee and reimbursements for any costs they incur on the job.
• Time and materials (T&M) contract: An agreement in which your company pays a contractor for their time and the materials used. These contracts are typically used in instances when you can’t estimate the size of a project upfront.

When preparing a procurement plan for any purchases, make sure that you select the right type of contract and get it signed.

8. Determine Payment Terms and Methods

This section of the procurement plan details the payment terms that you and a vendor have agreed upon.

It includes:

• Total costs
• Expected deliveries
• Payment methods

Some vendors may require advance payment, while others may offer more generous terms like net 30 or net 60. If you’re making stage payments over a period of time, make sure to specify exact payment dates to avoid any confusion.

9. Identify Potential Risks

There’s always a degree of risk when working with external suppliers. In this section of the procurement plan, identify any risks and outline specific strategies to mitigate them. 

For example, let’s say that a contractor fails to meet their deadlines. What impact would it have on your project timeline? In this case, you could either extend the deadline (and risk upsetting your customers) or hire an alternate contractor.

Follow the steps above to put together a procurement plan that you can use.

With procurement software like frevvo, you can automate business processes like purchase requisitions, purchase orders, invoicing, and more.

The software includes pre-built templates and drag-and-drop tools, so you can easily customize your forms and workflows — without writing a single line of code.

Of course, any forms that you create for your purchasing processes will typically have to go through multiple parties for approval.

With the no-code workflow builder, you can incorporate dynamic routing into your workflows and ensure that your forms reach the right approvers.

Here’s an example of an automated purchase order workflow :

Once an employee creates and submits a purchase order, the system automatically routes it to their manager for further review.

Your forms and workflows are mobile-friendly out of the box, so your purchasing managers will be able to approve documents like contracts either from the office or on the go from a mobile device.

Start Automating Your Procurement Processes Today

Procurement plays a critical role for any business. 

However, purchasing the goods and services that your company needs to operate is a complex process. Missing any key information can result in delayed projects.

Creating a procurement plan can help you manage the purchasing process, from outlining roles and responsibilities to establishing vendor selection criteria and more. 

It can also make your purchasing process more efficient. If a vendor goes bankrupt, you won’t have to start from scratch to find an alternate vendor. You can simply pull up a procurement plan you’ve already created to speed up the process.

Of course, creating a procurement plan is only one aspect of purchasing. There are numerous steps involved between issuing a request for proposal and making a payment. Performing these steps manually will only slow down your purchasing process.

Fortunately, automation tools like frevvo make it easy for you to automate your purchasing processes. You don’t need a large budget or a team of developers either. The software is fully visual, so you can create your own automated workflows without coding.

Ready to get started? Sign up for a free 30-day trial to try frevvo’s procurement automation software for yourself.

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Procurement Planning 101: Definition, Importance, and Goals

What Is Procurement Planning?

A procurement plan defines how your company will acquire the necessary materials to produce its goods and services. Strategic procurement planning requires data and analytics to monitor the procurement procedure and its impact and effectiveness. In strategic procurement planning, key performance indicators (KPIs) are regularly measured and reviewed to improve processes and meet or exceed benchmark goals.

Procurement planning requires that you understand every aspect required to produce your company’s goods and services. You’ll need to know utilization rates or materials, how to effectively negotiate pricing, what transport and supply chain coordination will look like, and how to mitigate the effects of any issues that may arise. It’s also helpful to reference a supply and demand analysis while planning.

These objectives make up the foundation of a procurement plan, and should be established before approaching the suppliers or service providers. A well-devised procurement plan includes:

• A predefined aim. What is the primary goal? For example, "Services to be procured for digital enhancement and data application management to faster processing and storage to reduce manual interventions."
• A step-by-step procedure that may include consulting and outsourcing, data migrations, integrations, and maintenance.
• A strategic framework presented by the service provider to achieve procurement goals.
• Key performance indicators, evaluation criteria, and metrics to track the implemented procurement plan and evaluate the cost and outcomes.

Why Is Strategic Procurement Planning Important?

The COVID-19 pandemic disrupted procurement transformation for businesses worldwide. According to an Accenture report , 94% of fortune 1000 companies saw supply chain disruptions, and 75% had negative or strongly negative impacts on their businesses due to the pandemic.

The following reasons describe how a strategic procurement plan benefits your business even in the most challenging times.

Cost savings

Cost savings are always essential for businesses. Developing a procurement strategy cuts down on enlarged running costs and encourages cost optimizations. It helps develop price negotiations and, when using procurement software, makes it easy to back up your negotiations with up-to-date rate comparison data.

In addition, identifying and tracking tail spend and then putting procedures in place to rein it in will go a long way in cutting costs for any organization.

Risk mitigation

Exploring different procurement strategies can identify inaccuracies in prior analysis, process delays, non-compliance issues, and poor decision-making impacting the entire organization. Investing time into strategic procurement planning is all it takes to get your organization past these risks and curb them permanently.

Faster processing and executions

Though cost optimization and risk mitigation are critical for procurement, speedier processing of services and deliverables also takes a front seat. As an organization grows, the supply and demand ratio and the need for optimized procurement processes also increase.  By using procurement software and closely monitoring market analysis, supplier demand, and transaction turnovers, your organization can gain benefits such as a reduced processing time and sustained competitiveness in the market.

Supplier management and strategic sourcing

Procurement is determined by the strength of the supplier relationships. Organizations' loyalty and brand awareness lead to negotiating prices with the suppliers and concluding favorable scenarios for both parties. With COVID and the unexpected disruptions in procurement,  organizations now better understand the need to maintain relationships with reliable suppliers who allow supply scheduling. Finding and maintaining relationships with these suppliers is essential to undisrupted supply chain management.

Procurement optimization

According to a recent Accenture Strategy research , 76% of the business leaders believed current business models would be unrecognizable in the next five years. Business owners recognize the need to utilize technology, and those hesitant about new processes and advancements may be sidelined and curbed from further growth.

Procurement has proven itself as a significant player in an organization's development. Undoubtedly, it can help deliver the required business outcomes by giving prominence to planning. Though many companies know its advantages, they often find it difficult to move ahead. Studying strategic procurement market scenarios can help make procurement optimization and planning easier through proven results and showcased progress by organizations that adopt strategic procurement plans. Evaluating reports and data, measuring and analyzing progress, and implementing procurement expert advice contribute to your organization's learning path and improvement.

Sustainability

As eco-friendly, green-living lifestyles gain popularity, customers align with organizations supporting similar initiatives. Companies that keep customers' preferences in mind can benefit in a win-win-win situation, where strategic procurement reduces costs, provides sustainable and eco-friendly products to the customer, and positions the company for further growth. Holding the values and trust of your customer is a badge of honor for any business, allowing you to amplify your brand further. Progressive organizations have already adapted to sustainable procurement practices and products.

What Goals Should A Strategic Procurement Plan Work Towards?

Common procurement plan goals revolve around the following core elements:

• Identifying procurement objectives and defining purchasing procedures
• Consolidating sourcing and supply to optimize price negotiations and achieve overall cost reduction
• Introducing sustainable procurement practices
• Managing supplier relationships to maintain long-term relationships and loyalty with reliable suppliers
• Providing project management oversight in purchasing and movement through the supply chain
• Recognizing tail spend and creating strategies in advance to mitigate overspending
• Providing spend management oversight, keeping budget goals in check
• Managing risk management strategies to reduce negative outcomes

Examples of Strategic Procurement Plan Goals & Action Items

Many procurement managers may find themselves in a position where their goal is to reduce procurement costs. In this scenario, the manager can analyze their current processes, determine actual spending, and begin negotiation efforts to reduce costs directly or eliminate redundant processes that can reduce costs in a more roundabout way.

Another common procurement goal is to prevent lapses in deliveries—both to the company and the customer. By analyzing the entire procurement process, including ordering materials, producing goods, stocking, reviewing customer orders, packing, and delivery, procurement managers can identify and examine each step individually and identify any bottlenecks that can be optimized and eliminated.

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Start » strategy, 9 steps to creating a procurement process for your small business.

An effective procurement strategy is the foundation for implementation success. Learn how to plan your approach, choose the right technologies, and find suitable suppliers.

Disruptions, shortages, and out-of-stock situations impact your uptime and ability to meet customer expectations. Indeed, in the second quarter of 2023, supply chain issues remained a top concern for 23% of small business owners, according to the MetLife and U.S. Chamber Small Business Index . A procurement strategy increases supply chain visibility and resiliency while reducing your financial and operational risks.

In addition, a purposeful approach to procurement can save your company money and bolster relationships with suppliers. Follow this step-by-step guide to develop a procurement process suitable for your business goals and needs.

1. Assess your needs, goals, and budget

Procurement cycles differ by company; small and medium businesses (SMBs) should refrain from trying to create a one-size-fits-all plan. Instead, complete an internal review to learn what goods and services each department requires. Categorize these as direct (raw materials or services for production) or indirect (supports business activities). Then, break them into goods or services. Remember to include pricing and quantities to understand the spend for each group.

This step aims to see how much your business spends on direct and indirect goods and services. These figures will give you an idea of how procurement can benefit your company and how a strategy can help you overcome supply chain challenges .

[ Read more: 6 Ways to Protect Your Business From a Supply Chain Disruption ]

2. Establish metrics to measure your procurement performance

Procurement key performance indicators (KPIs) track your company’s efficiency and process goals. Monitoring metrics increases visibility into your supply chain and shows where you’re improving or need further action. You should set small business KPIs before beginning any new process.

Consider tracking the following metrics:

• Rate of emergency purchases.
• Procurement return on investment (ROI) and benefits.
• Supplier defect rate.
• Purchase order (PO) and invoice accuracy.
• Compliance rate.
• Supplier lead time.
• Vendor availability.
• PO cycle time.
• Cost per invoice and PO.
• Procurement ROI and benefits.
• Spend under management.
• Price competitiveness.

[ Read more: Big Brands’ Inventory Management Partners Share Top Tips to Slay Supply Chain Snarls ]

3. Consider current and new procurement technologies

Capterra stated, “Nearly 30% of SMBs plan to implement a new supply chain management tool in 2023.” Moreover, MHI predicts that “digital supply chains will be the norm” by 2033.

Although companies can choose an all-in-one procure-to-pay suite, Capterra found that many organizations opt for specialized tools. Niche programs are easier to use, integrate, and deploy.

See if your current software supports your procurement process, and while planning your strategy, look for opportunities to automate tasks using supply chain tech . Doing so can decrease errors and save time, allowing your procurement team to focus on high-value activities instead of data entry.

Procurement software solutions fall into the following categories (and several tools cover multiple areas):

• Accounts payable and spend analysis: This software helps companies understand the procurement process and find cost-saving opportunities. Solutions include Coupa , SAP Ariba , Precoro , and PRM360 .
• Procure to pay: These end-to-end platforms centralize many procurement activities. Consider solutions like mjPRO , Procurify , Precoro , Basware , and MHC Software .
• Purchasing: Automate your approval workflows and view real-time spend data with SAP S/4HANA Cloud , Emburse Certify Expense , Spendwise , Veeqo , Unleashed , Planergy , Teampay , and Order.co .
• Request for proposal (RFP): Create a central database for your procurement documents and use artificial intelligence (AI) tools to improve your workflows. Software solutions include Responsive (formerly RFPIO), Loopio , Avnio Response Cloud , RFP360 , QorusDocs , and RocketDocs .
• Spend management: Manage your expenses automatically and visualize your costs with software like BILL Spend & Expense (Formerly Divvy), Ramp , Brex , Airbase , and Spendesk .
• Strategic sourcing: Automate your sourcing and procurement process with software such as aPriori , Procol , and Anvyl .
• Vendor management: Review, track, and manage suppliers with solutions from QuickBooks Online , Vanta , SAP Fieldglass , Venminder , Ncontracts , and Tradeshift Pay .

4. Find and evaluate suppliers

Identify vendors for each good, electronic component, service, raw material, or service your business requires. Obtain supply market intelligence using free resources from the U.S. Small Business Association and the U.S. Census Bureau . Also, consider paid services, such as IBIS World , Crain’s , Bloomberg , and Gartner . Consider each vendor’s cost structure, market information, past performance, and commodity profile.

This prescreening process is enough to move to the next stage for some services and goods (office supplies or standard maintenance items like grease). However, you should further evaluate complex parts and essential production components when the products substantially impact your budget and production capacity. The more risk that’s involved, the more time you should dedicate to the vetting process.

Consider criteria such as the following:

• Location: Review the geographic stability, distance from your company, and supply chain infrastructure.
• Cultural and language differences: Determine if barriers will cause communication issues during the process.
• Working conditions: Focus on health and safety practices, child labor usage, and general working conditions.
• Employee capabilities: See if there is a history of labor disputes or strikes, the turnover rate, and the workforce skill level.
• Cost structure: Go over the total costs, including production, marketing, material, administrative, and supply chain expenses.
• Technological capabilities: Consider the company’s approach to technology in design, equipment, processes, methods, and any current or future investments in research and development.
• Quality control: Look at what system they use and record to ensure consistency for current and anticipated demand.

In the second quarter of 2023, supply chain issues remained a top concern for 23% of small business owners, according to the MetLife and U.S. Chamber Small Business Index.

5. Choose a sourcing strategy

After approving a purchase, your procurement team must select a supplier and either buy directly from them, send an RFP or a request for quote (RFQ), or enter into an agreement.

An RFP solicits bids from suppliers. It should outline your project and provide delivery requirements, financial terms, pricing structure, and product or service details. Alternatively, a company uses an RFQ when they only need a price quote, not information about products or services.

[ Read more: Do You Have a Supply Chain Backup Plan? How to Plan Ahead ]

6. Select suppliers and negotiate

Once you review the documents and choose a supplier, it’s time to negotiate vendor contracts . The agreement should outline the scope of work, delivery dates, budget, contract duration, legalities, terms, and conditions.

It’s important to remember that, ideally, you’re building a long-term relationship. You need to get the best deal possible. At the same time, compromise is part of negotiation.

7. Finalize documents and keep records

The onboarding process begins immediately after signing and approving the contract. Larger organizations often require individuals to complete a purchase requisition (PR). This form requests the procured goods or services and requires approval from an internal department manager or leader.

From there, the business creates a purchase order (PO). This document goes to the supplier and details the services or goods and negotiated terms and conditions.

Small businesses should keep all records on file, whether those records are paper files or digital forms. Doing so helps show your overall ROI and can support you when negotiating future vendor payment terms . Moreover, it’s essential for business tax and audit purposes.

Store the following documents:

• Supplier invoices.
• Delivery reports.
• Company policies.
• Purchase orders.
• Packing lists.
• RFPs and RFQs.
• Procurement budget approvals.
• Goods received note.

8. Inspect shipments and pay suppliers

Check out your first shipment to ensure everything is in good condition and in the correct quantity. Also, note if the supplier met the delivery schedule and satisfied the services outlined in the contract. If you have any concerns, contact the vendor for a meeting. Otherwise, you can go over the invoice for payment.

Companies often use the three-way matching method. It compares the purchase order, invoice, and itemized list for accuracy. From there (depending on your payment terms), your financial department will process the payment and send it to the supplier.

9. Review and adjust your procurement strategy

All business strategies are living documents. Nothing, including contracts, is set in stone.

Your procurement KPIs will highlight opportunities for improvement and areas where you could save money by adjusting your process or negotiating better contract terms. Likewise, you may realize inefficient processes are driving up administrative costs. In this case, automated spend management software or vendor management tools can boost productivity while reducing errors and ensuring policy compliance.

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CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here .

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Six Best Practices for Elevating Procurement at Your Organization

Sponsor content from Workday.

Among the countless insights to emerge in this era of sudden and accelerating digital transformation, your enterprise may have experienced the fragility of a supplier ecosystem that’s easily disrupted by unpredictable events.

With your critical suppliers so fully integrated into your operations, rethinking your procurement and spend management practices and adopting cloud-based technology can help bring business advantages to your organization.

If your enterprise tends to view procurement as a matter of logistics and cost containment, this practice is overdue for greater consideration. According to Shashi Mandapaty, chief procurement officer for the corporate tier at Johnson & Johnson, “Cost management still matters, but progressive procurement organizations have evolved to address nonfinancial aspects as well—priorities like innovation, risk management, resilience, and corporate citizenship.”

High-performing procurement organizations are driving enterprise growth and resilience by facilitating internal collaboration with stakeholders, identifying new sourcing opportunities, strengthening organizational agility and efficiency, and reducing risks and costs.

Key Steps to Take

To help your organization achieve the full potential of a high-performing procurement organization, adopting a start-up mentality toward changing your spend management processes and tools may be a rich opportunity for growth.

Regardless of where you are on your journey to high-performing procurement, it’s a good time to consider implementing six procurement best practices:

• Establish a unified core for data. Making the right decisions, based on shared knowledge and common data and analysis, requires all information to exist with a shared viewpoint, language, and methodology—ideally, on a cloud-based platform.
• Create a dynamic information flow. When your information moves in a continuous flow among finance and planning, internal customers, and suppliers, your organization can manage its procurement planning with greater confidence, collaboration, accuracy, and flexibility.
• Automate manual processes. Adopting digital acceleration tools can help your organization eliminate manual transactional processes, providing easier access to procurement services by seamlessly routing work between procurement and finance systems, simplifying onboarding, and automating risk assessment and governance.
• Improve collaboration with critical suppliers. With emerging business opportunities, growing risk management and regulation, and an increasing awareness of corporate responsibility, your relations with your supply network call for continual maintenance and communication of evolving operations.
• Adopt an automated, consumer-like model. While sourcing and procurement have traditionally been reactive practices, dependent on incoming requests, your organization can take a more proactive approach that lets internal stakeholders access applications to initiate early engagement with procurement.
• Enrich planning capabilities. By using a cloud-based platform, your procurement practice can provide internal stakeholders and partners timely, forward-looking analysis that empowers them to make better decisions, explore more scenarios, and support a continuous, agile planning model.

Adopting the Right Procurement Tools

Forty-five percent of respondents to a recent Harvard Business Review Analytic Services study report that the pandemic is accelerating the automation of the procurement process. In fact, enterprises that responded to the pandemic by accelerating the digitization of once-disjointed and risk-prone procurement processes may be starting to see the advantages of incorporating real-time insights into sourcing projects and performance.

Connecting procurement, stakeholders, finance, and suppliers with easy-to-use cloud-native spend-management technology can drive several immediate business results:

• Expedited workflows: Cloud-based sourcing and supplier management tools can enhance collaboration, streamline processes, and provide anytime accessibility, aggregating information quickly and increasing efficiency.
• Agility to support business continuity: More agile spending and supplier management can improve your organization’s cash flow, minimize risk, and ensure business continuity—all critical capabilities, particularly in a downturn.
• Overall spend optimization: Enterprise leaders must ensure that their spend delivers returns on investment. Automating spend-management processes, including sourcing and procurement, through collaborative and easy-to-use technology can support alignment across the enterprise to meet business objectives and improve margins.
• Intelligent supplier insights: With strong supplier relationships and a better understanding of their suppliers’ financials and criticality to the business, procurement professionals can act as scouts in the global marketplace to help identify new revenue opportunities, ensure business continuity, reduce risk, and support cost savings.

Your Future of Procurement

In an unpredictable and rapidly changing environment, the ability to compete may depend on managing your enterprise spend by automating your sourcing processes and sharing information to help you boost your agility, visibility, and digital connectivity.

An organization’s procurement practice can help offer competitive advantages by embracing new processes and adopting new technologies that give it a greater strategic role, helping you improve your offerings and your suppliers’ capabilities.

Beyond greater financial opportunities, procurement leaders using new tools and processes can introduce other advantages to your business, such as environmental stewardship and enterprise resilience. And adopting technology that automates transactional work can free your organization’s employees to forge new supplier partnerships, re-engineer products, and build a new model for sourcing and procurement processes and relationships.

Click here to learn more about procurement at Johnson & Johnson and see how Workday can help your procurement practice grow your business.

Procurement Management Plan Template to Boost Project Success

Procurement management is crucial for project success. Whether you’re an experienced pro or just starting out in project management, having a solid procurement plan is key. A well-crafted procurement plan helps you control costs, minimize risks, and maintain a good relationship with your suppliers. Plus, it establishes clear communication channels and effectively allocates your project resources.

In this article, we’ll explore the importance of a procurement management plan and introduce a comprehensive template for improving procurement success. We’ll discuss the template’s components, and key considerations, and provide practical insights on leveraging it effectively. Keep reading.

What is a Procurement Management Plan?

Importance of a well-defined procurement management plan, components of a procurement management plan template, how to create a procurement management plan, when to use a procurement management plan.

A procurement management plan is a comprehensive document that outlines the strategies, procedures, and guidelines for managing procurement activities within a project. It serves as a roadmap for procurement processes, ensuring that the right resources are acquired at the right time and cost. The plan is developed by the project manager in collaboration with relevant stakeholders and is an integral part of the overall project management framework.

The primary purpose of a procurement management plan is to provide a structured approach to procurement activities, from identifying procurement needs to contract administration and closeout. It serves as a central reference document for the project team, providing clarity on how procurement processes should be conducted, who is responsible for each task, and what procedures should be followed.

A well-defined procurement management plan is essential for ensuring successful procurement outcomes within a project. Here are several key reasons why a plan is crucial.

1. Streamlined Processes : The plan establishes a standardized approach, reducing errors and delays in procurement activities.

2. Clear Roles and Responsibilities : Clearly defined roles promote accountability and effective collaboration among stakeholders.

3. Risk Mitigation: The plan includes strategies to identify and manage procurement risks, ensuring proactive risk mitigation.

4. Cost Control : Effective procurement management controls project costs through estimation, budgeting, and monitoring.

5. Compliance and Legal Considerations : The plan addresses legal requirements, and facilitating contract compliance.

6. Stakeholder Satisfaction : Successful procurement meets project requirements, enhancing stakeholder confidence and project outcomes.

A procurement management plan Template consists of several key components that provide a comprehensive framework for managing procurement activities within a project. Below are the key elements of a procurement management plan template.

Project Details and Document Control

This section of the template captures essential information about the project, including the project name, description, objectives, stakeholders, and timelines. It serves as a reference point for understanding the context and scope of procurement activities within the project. Additionally, document control procedures are outlined to ensure proper management of procurement-related documents, such as contracts, proposals, and correspondence.

Procurement Design and Processes

In this section, the template focuses on the design phase of procurement. It includes a detailed analysis of procurement needs, requirements, and specifications. It outlines the strategies and methodologies to be employed for procuring goods, services, or works. The section may also cover make-or-buy decisions, vendor selection criteria, and the process of developing procurement statements of work.

Procurement Process

The procurement process section provides a step-by-step guide to executing procurement activities within the project. It encompasses planning and preparation, solicitation and evaluation of proposals, negotiation, and contract award, and contract administration and closeout. Each step is described in detail, including the necessary documentation, timelines, and key considerations.

Contract Types

This section explains various types of contracts that may be employed in procurement. It outlines the characteristics, advantages, and disadvantages of contract types such as fixed-price, cost-reimbursable, time and materials, and incentive-based contracts. This helps project teams select the most appropriate contract type based on project requirements, risks, and the nature of the deliverables.

Procurement and Contract Risks

Risk management is crucial in procurement. This section focuses on identifying and assessing potential risks associated with procurement activities and contracts. It provides guidance on developing risk mitigation strategies, contingency plans, and monitoring mechanisms to address these risks effectively. The section may also include considerations for managing intellectual property rights, quality control, and compliance risks.

Procurement Milestones

Procurement milestones are key events or deliverables that mark significant progress in the procurement process. This section outlines the important milestones throughout the procurement lifecycle, such as the completion of procurement planning, issuance of requests for proposals, evaluation, and selection of vendors, contract award, and contract closeout. Clear milestones help track progress, facilitate communication, and ensure the timely completion of procurement activities.

Integration of Procurement Activities

This section emphasizes the integration of procurement activities with other project management processes. It highlights the importance of collaboration and communication between procurement stakeholders and project teams. Integration of procurement activities addresses coordination with other project functions, such as finance, legal, quality assurance, and logistics, to ensure seamless integration and alignment of procurement efforts with the overall project objectives.

Performance Metrics

Performance metrics are essential for evaluating the effectiveness and efficiency of procurement activities. This section discusses the selection and tracking of metrics, such as cost savings, supplier performance, delivery time, and quality. It provides guidance on establishing benchmarks, collecting data, analyzing performance, and reporting on key procurement metrics to monitor progress and identify areas for improvement.

Roles, Responsibilities, and Sign-off Authorities

This section defines the roles, responsibilities, and authorities of individuals involved in the procurement process. It clearly outlines the duties of project managers, procurement officers, contract administrators, and other stakeholders. It helps ensure accountability, clarity, and effective decision-making by assigning specific responsibilities and sign-off authorities at various stages of the procurement lifecycle.

Assumptions and Constraints

In this section, project-specific assumptions and constraints related to procurement are documented. Assumptions are factors or conditions that are considered to be true but are not yet validated. Constraints are limitations or restrictions that may impact procurement activities. Identifying and documenting these assumptions and constraints help stakeholders understand the context and potential limitations of procurement planning and execution.

Legal Jurisdiction and Currency

This section addresses legal and jurisdictional considerations in procurement contracts. It specifies the applicable legal framework and jurisdiction for resolving contract-related disputes. It also outlines considerations for currency exchange rates, billing, and payment terms in international procurement scenarios. Compliance with legal requirements is crucial to ensure contractual validity and mitigate legal risks.

Independent Estimates

This section emphasizes the importance of independent cost and price estimates in procurement. It provides guidance on obtaining accurate and unbiased estimates from external sources to validate budgeting and negotiation processes. Independent estimates serve as benchmarks for evaluating vendor proposals, ensuring fair and competitive pricing, and minimizing the risk of cost overruns or inflated pricing.

Prequalified Sellers

This section focuses on the process of prequalifying sellers or vendors before engaging in procurement activities. It outlines the criteria, evaluation process, and registration requirements for prequalification. Prequalifying sellers ensures that only qualified and reliable vendors are invited to participate in procurement processes, reducing the risk of selecting unqualified or non-performing suppliers.

Creating the perfect procurement management plan involves careful planning and consideration of various factors. Here are the key steps to follow:

1. Understand Project Requirements : Thoroughly grasp project goals and stakeholder input to identify procurement needs and necessary resources.

2. Define Procurement Objectives : Clearly establish procurement objectives aligned with project goals, such as cost savings or quality improvement.

3. Identify Procurement Risks : Conduct a comprehensive risk assessment to identify potential risks and prioritize mitigation efforts.

4. Develop Procurement Strategies : Create strategies that align with project goals, considering factors like vendor selection and risk mitigation.

5. Establish Procurement Processes : Define step-by-step processes, outlining roles and responsibilities for needs assessment, negotiation, and performance monitoring.

6. Determine Contract Types : Select suitable contract types based on project requirements, complexity, and desired control.

7. Set Performance Metrics : Define metrics and KPIs to measure procurement effectiveness, such as cost savings and on-time delivery.

8. Assign Roles and Responsibilities : Clearly define roles and authorities for procurement planning, negotiation, and contract administration.

9. Incorporate Legal and Compliance Considerations : Address legal requirements, regulations, and ethical considerations in the procurement plan.

10. Review and Update : Regularly review and update the plan to adapt to evolving project needs, risks, and stakeholder feedback.

Interesting Read : Stakeholder Management Plan Templates

A procurement management plan should be used in any project that involves the acquisition of goods, services, or works from external sources. Here are some scenarios where a procurement management plan is essential:

1. Complex Projects : Projects with high complexity, large budgets, and multiple stakeholders often require a procurement management plan. It helps ensure proper planning, coordination, and execution of procurement activities to meet project objectives effectively.

2. Resource-intensive Projects : Projects that heavily rely on external resources, such as materials, equipment, or specialized services, require a procurement management plan. It enables efficient allocation and acquisition of resources to support project execution.

3. Regulatory Compliance : When projects must adhere to specific legal or regulatory requirements, a procurement management plan becomes crucial. It ensures compliance with applicable laws, regulations, and policies throughout the procurement process.

4. Risk Mitigation : Projects with significant procurement-related risks, such as supplier non-performance, cost overruns, or delays, benefit from a procurement management plan. It helps identify, assess, and mitigate risks associated with procurement activities, minimizing their impact on the project.

5. Cost Control : A procurement management plan is essential for projects with strict budget constraints. It provides mechanisms to control costs, negotiate favorable contracts, and monitor expenses throughout the procurement lifecycle.

6. Strategic Procurement : Projects that prioritize strategic procurement, such as sourcing innovative solutions, establishing long-term partnerships, or leveraging market opportunities, require a procurement management plan. It guides the strategic decision-making process and ensures alignment with project goals.

7. Collaboration with Multiple Stakeholders : Projects involving collaborations with multiple stakeholders, including suppliers, contractors, or subcontractors, benefit from a procurement management plan. It facilitates effective communication, coordination, and integration of procurement activities across different parties.

8. International Projects : When projects involve cross-border procurement, including global suppliers or multiple currencies, a procurement management plan is essential. It addresses international legal considerations, currency exchange, and cultural factors impacting procurement processes.

9. Project Continuity : A procurement management plan ensures continuity in procurement activities, even if there are changes in project team members or leadership. It provides a standardized approach that can be followed consistently throughout the project’s duration.

10. Best Practices Implementation : Organizations aiming to establish consistent and best practices in procurement can benefit from a procurement management plan. It serves as a framework for implementing standardized processes, roles, and responsibilities across projects.

Developing and implementing a well-structured procurement management plan is essential for ensuring the success of procurement activities within your project. By utilizing the comprehensive procurement management plan template provided, you can streamline processes, mitigate risks, and maximize value delivery to stakeholders. Each section of the template, from project details and document control to performance metrics and prequalified sellers, plays a crucial role in optimizing your procurement outcomes.

With this template as your guide, you have the tools and framework to enhance your project’s procurement success. Customize the template to align with your project’s unique needs and requirements. By doing so, you can create a tailored procurement management plan that will effectively manage procurement processes, control costs, and minimize risks.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

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Software engineer turned tech evangelist. I handle marketing stuff here at Creately including writing blog posts and handling social media accounts. In my spare time, I love to read and travel.

The role of procurement extends beyond transactional activities. A procurement strategy allows an organization to navigate an increasingly complex global supply chain, adapt swiftly to market fluctuations, and achieve cost optimization, operational efficiency and growth.

By assessing and proactively managing risks inherent in the supply chain , organizations can shield themselves from disruptions and strengthen the resilience of their operations. In addition, a well-crafted procurement framework fosters innovation and sustainability . It can nurture collaborative partnerships with suppliers and integrate ethical and environmental (green purchasing) considerations into the sourcing strategy.

A procurement strategy is not merely a series of steps for acquiring goods and services. It should be a strategic roadmap that, when effectively designed and implemented, aligns with the mission of the organization and greatly contributes to its success.

What is a procurement strategy?

A procurement strategy is a structured plan that an organization develops to guide its purchasing process in a way that aligns with its business needs. The goal of a procurement strategy is to ensure the efficient, cost-effective and sustainable acquisition of goods or services that are essential for the organization’s operations. The strategy should outline and provide specific guidance for performing the steps of the procurement process, which often include:

• Identifying needs of the business
• Sourcing potential suppliers
• Negotiating contracts
• Managing relationships with the suppliers
• Maintaining records of every step

The strategy used to guide these steps can differ from organization to organization, depending on its industry and needs. Examples of goals that are common to many procurement strategies include eliminating maverick spending, increasing delivery efficiency, minimizing errors and complying with applicable regulations. Building strong supplier relationships to encourage favorable contracts and service is also a common goal.

A balance of talent, technology, compliance, ethics and sustainability is needed to align procurement activities with corporate objectives. An effective procurement strategy should be open to new approaches and encourage ideas that bring value, efficiency and continuous process improvement to the organization. This enables an effective and adaptive approach to sourcing that creates value and minimizes risk.

When implemented with clear objectives, the procurement strategy will provide a roadmap for procurement managers to follow. It will outline their purpose, responsibilities and goals and the critical role they play in the overall success of the organization.

Steps to a successful procurement strategy

Key steps to develop an effective procurement strategy include:

1. Conduct a current state analysis (CSA)

Assess the efficiency and effectiveness of the current procurement strategy framework (if there is one) and determine if it will meet current and future needs. Do a spend analysis; identify strengths, weaknesses and opportunities. Evaluate and categorize the components of procurement costs, from direct costs—such as the costs of goods and services—to indirect costs—such as administrative expenses and overhead. Examine costs related to specific suppliers, cost variables and trends, and the total cost of the procurement process to clearly understand what is being spent and where.

2. Determine organizational needs

Businesses always want to improve the bottom line; but how, specifically? Understand the organization’s needs—whether it’s increased sales, managing cash flow, shorter time-frames, improved forecasting, quality management or sustainability—and how they align with the overall business strategy and long-term plan. A procurement strategy that is integrated with these needs ensures that the procurement process will contribute directly to the organization’s profitability and success. 

3. Engage stakeholders

Identify and collaborate with internal departments, suppliers and all those who may be impacted by the plan. Some may not agree with the proposed changes. Gather diverse insights, understand needs and manage expectations. Stakeholder engagement is key to ensure the strategy is well-planned and supported throughout the organization.

4. Determine business objectives

Define specific measurable, achievable, relevant and timely (SMART) objectives for the procurement function. These objectives should directly support the overarching business goals and provide a clear framework for the procurement strategy. For instance, if cost savings is a goal, a corresponding procurement objective might be achieving a level of cost reductions. Additional goals might be risk management and mitigation, supplier relationship management and sustainability considerations.

5. Define procurement policies

Establish and agree on clear procurement policies, procedures and operating models that align with organizational goals. This is a good time to review current processes and adjust them to suit the new approach. Tasks such as vendor selection criteria, contract management and compliance initiatives should be clearly defined. Communicate the opportunities these changes bring and explain their benefits for stakeholders. Be flexible. Policies serve as guidelines for the procurement team, ensuring consistency and adherence to ethical standards.

6. Integrate new tools

Explore the tools and technologies that will support the success of the new strategy. Procurement is no longer an analog process; a growing percentage of it takes place online (e-procurement). Procure-to-pay (P2P) software links procurement practices to accounts payable and can streamline steps such as supply management, purchase orders and invoicing. Additional procurement software includes spend analytics tools and supplier relationship management (SRM) software. These increase accuracy and productivity, track purchases and offers data visibility that informs decision making and reduces risk, inefficiencies and time-consuming delays.

7. Develop the strategy

Develop a comprehensive procurement strategy based on the insights gathered in the previous steps. This involves creating a strategy statement, outlining the approach to procurement, including supplier management, risk mitigation and cost optimization. The strategy should be flexible enough to adapt to changing market conditions and organizational needs.

8. Define success

Establish key performance indicators (KPIs) that will be used to measure the success of the procurement strategy. These metrics should align with the defined business objectives and provide quantifiable benchmarks for evaluating performance. Common success criteria include error reduction, leveraging savings opportunities and improving supplier performance ratings, workflows, procurement cycle times and compliance.

9. Implement the strategy

Execute the procurement strategy in a phased and well-coordinated manner, deploying the defined policies, procedures and technologies. Provide necessary training to ensure procurement success.

10. Measure and refine the strategy

Regularly measure the performance of the strategy against the established success metrics. Determine if it is fostering change and improving the organization’s overall performance. Utilize data and insights to analyze outcomes, identify areas for improvement and refine the procurement strategy accordingly. Continuously monitor and adapt to ensure that the strategy remains responsive to changing market dynamics, evolving business goals and emerging opportunities or challenges.

Benefits of a successful procurement strategy

By implementing strategic sourcing and purchasing opportunities, organizations can achieve substantial cost savings. Moreover, an effective procurement strategy enhances operational efficiency by streamlining processes and introducing automation technologies. This results in reduced administrative tasks and faster procurement cycles.

A successful procurement strategy also mitigates risks inherent in the supply chain. Using risk assessment and management practices, organizations can safeguard against disruptions and ensure agility and continuity. The strategy can also foster improved supplier relationships, collaboration and innovation. Collectively, these advantages empower organizations to navigate the complexities of modern business with resilience, agility and a competitive advantage.

Procurement and IBM

By systematically navigating through these steps, organizations can establish a procurement strategy that meets immediate needs and can evolve to contribute to sustained success for the organization.

IBM’s procurement consultants collaborate with clients to create intelligent workflows that combine your procurement team’s expertise, exponential technologies like AI and automation, and internal and external data sources—all enabled on your hybrid cloud. By building smarter end-to-end procurement workflows, we help companies empower employees with powerful insights to do higher value work and transform sourcing and procurement strategy initiatives.

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Procurement Management Plan in 10 Steps

Handling a company’s procurement is one thing—effectively managing it is quite another. Procurement processes have the power to save time and money while increasing organizational compliance. Yet procurement can often be time-consuming and inefficient. To effectively manage an organization’s procurements, it’s necessary to have a thorough plan based on solid information.

This is a 10-step guide on how to make a procurement plan that will help any procurement professional optimize their processes.

What is a Procurement Management Plan?

A procurement management plan helps define the requirements for a project and effectively manage the steps required to get to the final contract. The plan should be flexible enough to change as acquisition needs are altered, and will address important issues such as which items need to be procured, how contracts will be approved, the criteria decisions will be based on, risk identification, cost determination, and contract lifecycle management, to name a few.

The Role of the Project Manager

The project manager’s responsibility is to clearly define the project from the start and manage it going forward. This will ensure that everyone involved understands the steps necessary to take the project from its initial stages to completion. The project manager’s goal is to ensure the project stays streamlined and easy to manage, so those involved won’t become overwhelmed. In order to accomplish this, it’s necessary for all project team members to work together with the purchasing department and those responsible for approving and managing contracts.

Step 1: Define the Procurement Terms

The first step to start the procurement process is outlining what items will be procured in specific terms. Detail the items and sizes, along with the service it will provide, and the justification for it. For instance, is it a tool that this organization doesn’t make? Is it required for the manufacturing of an item needed to complete the project? If there is any technical information pertinent to the procurement process, it should be listed here.

Next, specify the date the items are required by. Each item will have a different date, depending on where it is needed in the timeline for the project’s completion. Finally, there is likely a list of people who are authorized to approve the purchase of each item. This ensures the approval process isn’t hampered by misunderstandings.

Step 2: Determine Which Type of Agreement to Use

A contract is the agreement between a company and a vendor and specifies how costs will be handled. Fixed price and cost reimbursement (also known as cost-plus) contracts are two broad categories of contracts. There are also time and materials contracts, which are based on fixed hourly billing rates, actual materials costs, and fixed add-on amounts.

In addition to the type of agreement, the specifics of the contract management details should be identified at this point. This generally includes the contract lifecycle management platform processes, including e-signature requirements, approvals, and post-signature management procedures.

Step 3: Identify the Risks

All projects carry risks that could threaten the project’s completion or schedule, and it’s the role of the project manager to identify the ones that pertain to the procurement process. These risks could include things like vendor conflicts, unrealistic schedules, idealistic cost expectations, potential shipping delays, and a vendor’s inability to meet deadlines or perform up to standards.

Step 4: Mitigate the Risks

In order to ensure the success of the project, the plan should include a section to mitigate any of the identified risks. For example, if the specialized subcontractor fails to complete their portion of the project, a replacement contractor should be identified to call. There should also be a section naming who has the authority to approve issue resolution actions for any risks that come up and are not specifically outlined.

Step 5: Cost Determination

In this step, it’s important to outline exactly how the costs associated with the project will be determined. For most procurements, a request for proposal (RFP) will be issued, outlining the needs and asking vendors to provide bids. In their responses, they will outline what products or services they will provide, how they will do the work, their experience in providing the types of goods or services, schedules, and a line-by-line outline of their costs. The initial RFP should be clear about the exact requirements, such as critical schedule dates or cost.

Step 6: Identify Which Forms are to be Used

Many procurement professionals prefer to use standardized forms to ensure the project is more easily managed. Identifying which forms, formats, and templates will be used for the project will ensure there is cohesion within the groups associated with the project, simplify the process, and make the ongoing management of the process easier. A contract lifecycle management platform should have the ability to create forms that people across the organization as well as third parties can use in the procurement process.

Step 7: State the Project Constraints

Identifying the constraints before the project begins will help ensure its successful completion. If limitations aren’t recognized early on, they may hinder the successful completion of the project. Once outlined, these should be taken into consideration every step of the way until the project’s completion. For instance, if the schedule is not negotiable, state it in this section and all personnel will understand that an on-time schedule should dictate their decisions during the process. Some other constraints in relation to the procurement process can be cost, scope, limited resources, and technical specification.

Step 8: Contract Approval Rules

This section outlines the process by which contracts will be approved. First include the steps that lead up to approval, such as a review of all bids and proposals, as well as a service and cost analysis. Then include the names, roles, and order in which decision makers will review and approve the contracts. Creating an approval workflow will ensure that each contract is reviewed and approved in an appropriate manner. A contract lifecycle management platform should offer workflow capabilities that streamline these approvals to make the agreements easier.

Step 9: Identify the Decision Criteria

In this step of the procurement management process, clearly outline the criteria the review board will use to decide which vendor to award the contract to. For example, items like the vendor’s ability to meet the schedule, cost, quality of the work or product offered, performance history of the vendor, and compliance of each vendor to the RFP will likely impact the final decision.

Step 10: Create a Vendor Management Plan

Part of the procurement management plan should be managing the vendors themselves. Draft an outline to ensure the required products or services are delivered on schedule and with the proper levels of quality. Include how often the project manager should meet with the purchasing department and vendors, how they will meet, the purpose of the meetings, and what each meeting should accomplish. These meetings will keep the project manager informed about the progress of the procured products or services.

Finally, establish performance metrics for each vendor involved with the project. Rate them on the quality of the product or service, their delivery as it pertains to the schedule, the final cost, and other metrics important for evaluating the vendor’s performance on the project. These ratings will help identify areas that can be improved in the process, as well as provide critical data when considering the vendors for future projects.

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8 steps to build an effective procurement strategy

A procurement strategy should highlight new approaches in thinking that deliver higher customer value, cost efficiencies, and process improvement.

Updated: Aug 22, 2023

A comprehensive procurement strategy defines how an organization strategically manages its procurement activities. In other words, it's a directional roadmap.

It's a medium-to-long-term plan that includes policy and processes that drive cost optimization, value creation, and management of resources.

The procurement strategy determines how goods and services are acquired at optimal cost and best available quality so that this process supports your organization's strategic objectives and enables competitive advantage.

In this article, we'll lay out 8 steps you can follow to build an effective procurement strategy. 

Why do you need a procurement strategy?

The importance of a well-defined strategy cannot be overstated.

However, in practice, long-term plans may be well defined but cannot be translated into concrete behavior and action that harnesses the benefits. The beautiful yet theoretical vision may get lost in the noise of operative tasks.

A well-thought-out procurement strategy should highlight new approaches and push change in thinking that delivers higher customer value, cost efficiencies, and continuous process improvement.

Commonly, procurement strategies will revolve around several objectives, including, for example:

• Better spend visibility and control,
• Cost efficiency through strategic sourcing ,
• Better contract delivery and coverage,
• Improved key supplier relationships ,
• Quality management and product development,
• Improved customer experience and value,
• Process and policy compliance,
• Fewer errors and lost opportunities on purchase transactions,
• Sustainable development goals , such as reduced carbon footprint,
• Increased supplier diversity ,
• And many more!

Without a clear strategy, prioritization, and tracking of progress, such opportunities are lost - or there are simply too many to agree on and effectively push forward!

What’s your vision for procurement?

An effective procurement strategy should answer these questions:

• What are you trying to achieve?
• What is your procurement vision and mission?
• How will it be implemented?
• What are the best companies doing?
• What tools and resources will be needed to get there? How will success be measured?
• How does all this fit with the broader business strategy?

Answers to these questions should produce a strategy statement, an action plan with time frames, and success metrics. If there is a current strategy, this may be the time for a review.

Your proposed strategy must consider the organization’s goals and initiatives, its financial position, and its current level of procurement maturity. Consider the current state, available resources, and realities.

All the elements in a procurement strategy are interlinked and depend on clear visibility of your realized expenditure.

1. Current state analysis (CSA).

The basis for developing a procurement strategy is to document the current expenditure and market situation per category. This refers to understanding the full historical spend and analyzing it in relevant segments.

Identifying categories with a taxonomy that represents the business reality and market environment is vital to successful analysis.

The analysis will highlight spend trends, where the opportunities lie, and where cost reduction is possible. This knowledge base is the foundation of a functioning procurement strategy. The best way to go about this is through spend cube analysis . Document how you plan to harness the identified opportunities, manage costs and mitigate risks.

Consider: What does your past performance and expenditure look like? 

2. Engage stakeholders.

Firstly, identify all those who may be impacted by the plan. These include business management teams, suppliers, finance, end-users and subject matter experts. It is vital to manage their requirements and expectations. Some may not be in favor of all the proposed changes. Without stakeholder engagement, any strategy is doomed to fail. Some may have additional insights and business requirements you haven't taken into account. Stakeholder engagement is key in defining potential risks and opportunities as they hold vast substance and market knowledge.

Consider: Who are the stakeholders you will need to convince?

Consider: Who has the best market understanding and insights?

3. Align strategy with organizational goals.

The strategy must align with the overall strategic intent of the business. Fact-based spend analysis will help you align and prioritize your strategy to corporate goals across all functions. Inputs to the strategy should include:

• corporate vision and mission
• corporate medium-term plans
• annual budgets and projected revenue
• economic forecast
• commodity indices

Consider: What is the business vision and mission?

Consider: How does your strategy support business plans? 

4. Adopt the tools for success.

Big data can no longer be managed manually, it is time-consuming, inaccurate, and slow. Educated decision-making leaders need insights that are both relevant and timely.

Visibility is enabled using a suitable software solution. A dedicated spend analysis solution will identify opportunities, improve effectiveness and value-add from the teams, and reduce errors and costly mistakes.

Accenture’s four-part blog series on digital procurement sums it up nicely: “digital procurement gives decision-makers better visibility, reduces risk, and boosts compliance—ultimately increasing spend under management and driving more value for the business.” In part three of the series , the authors lay out these five elements to consider:

• Data: the internal and external data that touches every aspect of the organization
• Technology toolbox: the software tools out there to leverage data for insights
• Intuitive user experience: the magic that makes those tools user-friendly and accessible
• Skills and talent: the critical knowledge and skills that team members bring to the table inside and outside of procurement
• Policies, procedures, and operating model: the nitty-gritty details of how responsibilities will be enacted.

Consider: What are the technologies and tools you will need for your plan to come alive?  

5. Agree on procurement policy.

This is the point at which new policies, procedures, and operating models will be agreed upon and rolled out. This is an ideal opportunity to review processes and practices and adjust them to suit the new approach.

Don't become process police, but instead communicate the opportunities and visualize the benefit for the stakeholders when making change. Remember to be flexible. Policies should be closely monitored and discarded if they are causing more hassle than good.

Consider: What needs to change in practice to get to the targets?

Consider: Are current processes supporting the realization of the plans? 

6. Define procurement priorities.

Procurement is dynamic in its nature and a list of sourcing opportunities is never-ending. Armed with reliable spend data that has been cleansed, classified, and categorized, areas of opportunity will emerge.

When the most business-critical areas of spend are covered in action plans, sub-categories that are underperforming can be identified and addressed. Certain low value/high volume transactions can be highlighted for attention.

Align and agree on a set of priorities with stakeholders, so you have a shared understanding and license to operate. Set realistic objectives that can be achieved in a given timeframe. Define the tactics and strategies that will be used to achieve them, like e-auction, strategic sourcing, renegotiation of contracts , and streamlining processes.

Consider: What are the priorities guiding your strategy execution?

7. Define measures of success.

Tracking supplier and procurement performance open opportunities for continuous improvements and innovation. Measuring, monitoring, and reporting on supplier and category performance with pre-determined Key Performance Indicators (KPIs) creates a performance-driven environment in which people are engaged and accountable.

Measures should be aligned with business KPIs to ensure you're going in the same direction and delivering business impact.

Consider: How do you track progress and define success?

8. Execute and adjust strategy.

Strategy is a living document. External and internal circumstances change, and so must your plans. Don't be too fixated on your precious document, but instead consider it as a starting point. You will be wiser after you start executing your plans.

Stakeholder feedback should be used to fine-tune the strategy. Utilize data and insights to improve your strategy and the effectiveness of your actions. New opportunities may emerge that have a higher likelihood of success than the existing ones in your plan. This may require prioritization of projects and timelines.

Consider: Have the circumstances changed along the way?

Consider: Are the business priorities still the same as when you started?

Final thoughts

The main goal of a procurement strategy is to deliver business value and competitive advantage for the organization.

Commonly this is achieved with cost optimization, increased efficiency, and improved performance. Spend analytics provides the key to developing a clear procurement strategy. Identifying savings opportunities, managing risks, and optimizing an organization's buying power are accelerated with the application of the right technology to spend management.

With optimized cost structure and cash flow, there will be more resources available for product development and customer value creation. 

Interested in learning more about how to level up your procurement strategy with insights while improving stakeholder collaboration? Then read more in our full-length eBook Procurement Loves Data .

Header photo by: Robert Tjalondo (unsplash.com)

Jasmiina Toikka

Jasmiina is Head of Content Marketing at Sievo with broad expertise in procurement and category management.

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How To Create and Implement a Successful Procurement Plan

• Written by Rob Biedron

The procurement manager’s responsibilities go far beyond approving purchases. To manage a project effectively, you’ll need a well-planned strategy based on comprehensive information.

In simplest terms, a procurement management plan outlines and documents the purchasing requirements to meet the needs of the project. The plan should include plan objectives and specific protocols for method of procurement.

Requirements for Successful Procurement Planning

To achieve successful procurement planning, it is important to meet certain requirements, here they are:

Procurement Team

List everyone authorized to participate in the procurement planning and decision-making process, with their contact information.

Item Requirements

Plan requirements include several levels of information about every item that needs to be purchased.

Gather information about all materials required by the project. Depending on the type of project, this list might include tangible assets, like building materials or equipment, and intangible assets, like software licenses.

Include all pertinent information about each item: size, quantity, technical requirements and specs, any information that ensures purchase of the correct tool or material for the job.

Along with the item specifics, include the reason or justification for the purchase. To define the purpose, answer these questions:

• What is the item used for?
• Who needs this item?
• Why is this item necessary to complete the project?

Set a purchasing timeline. Purchasing items before they are needed can put a strain on storage space. Your purchasing plan should include a “need by” date for each item.

An efficient purchasing plan may leverage bulk purchases across different departments, take advantage of seasonal discounts, negotiate minimal order quantities over the length of the contract, and reduce storage and processing costs with just-in-time delivery.

Finally, list the people authorized to request each item.

Supplier Selection

If bids are required, outline the specifics of the bidding process, including the minimum number of bids, the terms that must be met before a bid is considered and whether bidding is open or drawn from a list of preferred vendors.

Bids and Acceptance

In a typical process, the procurement department will issue a request for proposal (RFP) detailing the project needs. Suppliers respond to the RFP with proposals or bids, providing information such as cost, delivery time, and scheduling considerations.

In this section, include the criteria by which vendors will be selected and contracts awarded, and who will make the final determination (usually a selection committee).

While each project is different, here is a typical selection criteria breakdown:

• Supplier capability to deliver materials on time
• Delivery schedule
• Cost comparison of outsourcing vs in-sourcing
• Vendor history with company
• RFPs will be reviewed by the selection board.

List the names of all decision makers and order of review to establish a workflow process.

To manage the procurement for a project effectively, you’ll need a well-planned strategy based on comprehensive information.

Types of Contracts

Since a project may require tangible goods, like manufactured parts with a fixed cost, and also require contractor work, the procurement plan may include different types of contracts.

Detail the types of contracts that will be used in the procurement process for each category of item. Some (but not all) types of contracts:

• Purchase Order (PO) – Used to purchase goods and materials.
• Firm-fixed price – Negotiated prices for goods or contracted services.
• Fixed price plus incentive – Negotiated price with built-in performance based incentives for faster delivery or completion.
• Fixed-Price with Economic Price Adjustment Contracts – For long term contracts where the price of materials can be adjusted for inflation.
• Time and materials (T&M) – Includes subcontractor rates for installation and materials cost.
• Cost-reimbursable contract – Fixed cost plus reimbursement for unpredictable expenses or contract changes.

Identifying Risks and Risk Management

Dealing with suppliers always incurs related risks. In this section, list examples of potential procurement risks and outline strategies to manage and mitigate risks while maintaining established company relationships with preferred suppliers.

Potential risks are anything that causes a breakdown in the supply chain, and in turn, project delays and cost overruns. This may include circumstances like shipping delays due to unforeseen events, substandard product delivery, or vendor conflicts.

Risk can also come from inside the company. In-house risks include unrealistic budget constraints or schedule expectations.

Outline strategies for mitigating risks that include who will address issues, who will approve the mitigation plan, and specific solutions like alternate subcontractors in case one fails to deliver.

Purchase Order Process

List the steps for purchase orders and procurement policy. For example, using three-way matching authentication:

• The purchasing department sends a purchase order (PO) to authorize a purchase.
• An invoice is returned the vendor to the purchaser, referencing the PO.
• The goods arrive with a packing slip, which is verified against the PO and the invoice to make sure everything arrived as ordered.

All three documents are reconciled and logged. Digital purchase ordering systems compare the data and flag any anomalies.

Project Constraints

Every project has a budget limit and time considerations. To mitigate scope creep while meeting procurement requirements, carefully define the project constraints in detail, including timeline, costs, and technical specifications.

Project constraints should be considered at every step of the decision-making process and verified against procurement activities.

Vendor Management and Accountability

The purchasing department serves as liaison between the project manager, department heads, and suppliers. Schedule regular meetings, define how the meetings will be accomplished, and define what information should be exchanged during each meeting.

Verify that deliveries are on schedule and will continue to arrive as contracted.

Vendor Metrics

Track delivery data and assign a quality rating to assess each vendor’s performance. Note quality and quantity of goods and services, delivery time, and track invoice costs. Use metrics to address any issues, identify problem patterns, and evaluate suppliers for future consideration.

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How to Create a Procurement Management Plan in 7 Steps

Whether you are going for a trip or setting up something new, a structure is essential to guide you in the process. Similarly, building up a plan towards a successful procurement process is equally important.

It is to note that having a procurement plan is one thing, and effectively managing it is another.

An organization can be good in procurement only if the right plan supports it. After understanding the critical role of the procurement process, the next step is to have a thorough plan based on the organization's information and whereabouts.

In this article, we will discuss the process, components, and steps to create a procurement management plan along with the following:

• What is Procurement Management Plan

• Why Procurement Management Plan matters

• Components of Procurement Management Plan

• Role of Procurement Management Plan

• Process of Procurement Management Plan

• Create Procurement Management Plan in 7 steps

• Procurement Management Plan template

• How can Deskera help in creating Procurement Management Plan

What is Procurement Management Plan?

A procurement management plan is a plan that defines requirements for a particular project and lays down the steps required to get into the final contract. Here, the specific project means the process required to purchase or acquire the products or services the organization deals in.

The plan sets and defines everything related to procurement, i.e., the items to be procured, contracts, contract approval process, cost determination, and decision criteria.

Overall, the procurement management plan decides the framework of the project. It can act as a guide for the organization and related stakeholders throughout the life of the project.

A procurement management plan is always flexible and can be modified as per the changes happening in the environment or the organization, enhancing smoother business operations.

Why Procurement Management Plan matters?

A good procurement plan always opens the door to save money, time, and effort, resulting in organizational compliance.

It is because a plan helps to define the project from start to end clearly. It also ensures that everyone involved understands every step right from the initial stage to the completion.

Let's take a look at a few of the important reasons bringing insights towards the need for a procurement management plan:

• It helps to analyze the previous procurement process and compare the related activities.
• It lists down the overall demand expected to be procured during the timeline of the project.
• It helps to set a procurement schedule that can effectively carry out the procurement process and establish timelines to fulfill the demands.
• It enhances software and tools that can handle the routine work and drive concentration towards a significant part of the procurement process.
• It ensures that the project is streamlined and easily managed by the stakeholders involved in the process.
• It establishes cordial and coordinated efforts between the project team members to work together towards a common goal.
• It is based on the possible predictions that may occur in the future and provides room for transparency of the overall procurement process.
• It allows c onsolidation of similar demands under one contract or may create different divisions for different sets of agreements and packages.

"A goal without a plan is just a wish. It is with a plan; you can move nearer towards your goal."

Components of Procurement Management Plan

A procurement management plan deals with the overall strategy and the management of the project.

It also outlines the different sets of requirements laid by other groups of stakeholders.

As per the plan, the following are the overall nine main components of a Procurement Management Plan. It includes:

1.     Estimating

2.     Project scheduling

3.     Vendor control

4.     Pre-qualified Vendors

5.     Roles and responsibilities

6.     Risk management

7.     Legal jurisdiction

8.     Payments

9.     Constraints and assumptions

1. Estimating

Money is vital at every step!

Before bidding with the procurement process, it is crucial to estimate the funds required for the project. In estimation, factors like net present value analysis, capital budgeting , cost-benefit analysis should be compared and analyzed for future reference.

2. Project scheduling

A project schedule clearly defines a task, start date, finish date, and the project's budget. It is crucial to divide the work into different tasks for different roles, including external contractors, vendors, and suppliers of service providers.

3. Vendor control

Vendor control is an essential function in the process. It helps to ensure that the work of vendors is acceptable. Vendor control techniques should be a part of a plan that clearly defines the statement of results and references.

4. Pre-qualified vendors

After setting up the vendor control techniques, it is vital to pre-qualify the vendors you want to work with. You can set your criteria for their qualification through past works, project team descriptions, work methodology, etc.

5. Roles and responsibilities

A procurement management plan defines the roles of the people involved to run the process smoothly. It clearly defines the role of project managers, technical managers, contract managers, operational managers, and lawyers and set their work boundaries

6. Risk management

When you are working with a different set of parties, the element of risk is always high. A procurement management plan should have a risk profile for each project that involves risk level, risk tolerance, level of details, contracts, policies, and reviews.

7. Legal jurisdiction

A procurement management plan should always be addressed and equipped with legal jurisdictions. It helps bind the project, make stakeholders aware of their work, and act accordingly.

8. Payments

A procurement management plan should always define the terms of payment, modes, and methods based on the project. This component is essential to avoid any conflicts and issues that may arise in the future.

9. Constraints and Assumptions

A plan is constantly made, considering different constraints and assumptions that may occur in the future. It may include standard specifications, schedules, environment, geographical settings, ground conditions, quality, or security.

As you can observe, these are the set of components required to finalize the plan.

"Good procurement is equal to successful projects."

Role of the procurement management plan

The role of a procurement management plan is not just limited to understanding the project but also helps meet the requirements required to keep the project going.

Following are the five significant roles performed by the Procurement Management Plan in an organization:

• Create a well parallel strategy
• Incorporate stakeholders in the process
• Ensures timeliness of the project
• Monitor the progress
• Enhances comparison and rectify issues

1. Create a well parallel strategy

A procurement plan helps define the strategies based on the market conditions, external factors, price, and risk associated with carrying out the project.

It helps to define the items used in the overall process.

2. Incorporate stakeholders in the process

Stakeholders are the lifeblood of the projects. With a procurement management plan, you can get in touch with various suppliers and vendors by making them a part of your process. In return, they will provide the best services, leaving you satisfied in the end.

3. Ensures timeliness of the project

A proper procurement management plan lays down this specification associated with the different items involved in the process. It also helps to give timelines for implementation of the project, who will be responsible, and what is to be done by covering everything as a whole.

4. Monitor the progress

Monitoring and evaluating the procurement process is vital at every step. It is crucial to know about the progress of the work and record it for reference.

5. Enhance comparison and rectify issues

As soon as the purchasing process starts, it is essential to compare it with the actual process stated in the plan after a specific time. If your plan matches the current state, it's good, and if not, understand the deviations and adjust the plan to rectify the same.

The points mentioned above clearly define the role of a procurement management plan at every stage and step of the process.

Process of Procurement Management Plan

The process of the procurement management plan is based on the nine components that we discussed earlier in this article.

The process of the Procurement Management Plan can be categorized into the following steps :

• Decisions related to the inputs and items to be procured internally or externally
• Setting up budget constraints and financial scope
• Creating criteria and frameworks for the selection of potential vendors
• Setting roles and responsibilities to be assigned to different stakeholders
• Making a provision of risk factors that can be involved in the process
• Setting up legal requirements and jurisdictions for contract
• Ensuring payment protocols like mode, time of payment, currencies, etc
• Creating a plan based on constraints and factors affecting it
• Document the program based on organization policies and approval of stakeholders along with a common seal.
• Time to implement the project with your actions

And you are done!

Create Procurement Management Plan in 7 steps

A procurement management plan is not made randomly. Instead, it is based on a series of steps involved to create an effective plan. The plan is inclusive of the parts involved in the procurement process.

Thus, a procurement management plan can be divided into the following seven steps:

• Clearly define roles and responsibilities
• Create a schedule for operations
• Identify and mitigate the risk associated
• Determine the cost involved
• Establish criteria and workflow
• Set up vendor management
• Review and further approval processes

1. Clearly define roles and responsibilities .

The first step towards building a procurement management plan is to identify the people who will be working on the project. The action ensures that all the parties involved understand the responsibilities and scope of their work.

The importance of the step is easing out the process and setting boundaries such that there is no duplication of efforts or overlapping of responsibilities.

The different roles include project managers, corporate executives, contract managers, suppliers, and vendors.

2. Create a schedule for operations

Scheduling of operations means the setting of different timelines of the work based on the project.

For example, the purchasing process can be done in 10 days, and the packaging process can be done in 5 days.

Breaking out of these tasks with a set of different and estimated dates can help understand the procurement process well and set the completion time.

3. Identify and mitigate the risks associated .

Risks are an inherent part of a project. It is bound to happen, and that no organization can avoid it. Yes, you can surely minimize the risk by setting up a plan and figuring out its types and possibilities.

After you are done listing the same, mitigate your risk according to the plan and assign a team member to take care of the same.

4. Determine the costs involved

Cost determination is one of the most crucial steps in the procurement management plan because it is directly linked with the project's budget. It is essential to estimate the cost based on the term of the project, scheduled dates, details of vendors' work arrangements, instrument proposals, and bids.

5. Establish criteria and workflow

The fifth step explains the importance of establishing the criteria and workflow of the different contracts. Before finalizing the process, it's pretty standard that it is vital to ensure the other elements like reviews proposals, analysis, and establishing the workflow.

The criteria represent on what basis you are selecting a particular stakeholder like vendors or suppliers. You can assign different kinds of contracts to other people or amend the same agreement.

It also helps to ensure the capability of the vendor to give the schedule and the quality products required by the organization.

6. Setup vendor management

Vendors are the key stakeholders responsible for the success of the procurement process. To ensure success, this step specifies strategies and protocols for managing the vendors.

Through this, the organization can ensure the vendors, their details, type of work, and expected timeline to deliver the goods.

The setting of vendor management also includes processes like invoices , status, and timesheets for better flow and responsiveness of the process.

7. Review and further approval processes

The review and approval process is the final and the last step of the procurement management plan. It provides an overview of the steps that are taken to acquire a particular product or service. It has detailed explanations as to what to be done and what not to be done.

Moreover, it also helps to ensure flexibility and changes in the plan based on the factors and changes happening in the environment.

By creating a procurement management plan, an organization can avoid sudden changes and surprises or last-moment considerations. It also ensures realistic project expectations and requirements that can be completed in the proposed timeline project.

Procurement Management Plan Template

Here's a sample to show what a procurement management plan looks like!

The plan includes the major headings like:

• Project name
• Project manager
• Date of starting the project
• Scope of project
• Project justification

Further added by,

• Description of the product or services
• Date of request
• Requested person's name
• Procurement method selected
• Action date
• Delivery date
• Final status

The Procurement Management Plan can be modified as per the project laid out by the organization and the business.

How Can Deskera help in creating a Procurement Management Plan?

A business has to keep track and record accounting books, inventory, and overall procurement management plan.. This can become difficult when done manually. This is why it is wise and vital to invest in software to make journal entries , maintain inventory records, and generally carrying out the procurement process smoothly.

Deskera Books is software that makes the entire procurement process more accessible. It helps in making journal entries. It helps in automating the process of entering sales and purchases into double-entry accounts. The software will help you save time by keeping a clean record of debits and credits in books. With the software, you get an uninterrupted, ready-made Balance Sheet , Profit and Loss Statement, and many other financial reports.

In other benefits, Deskera also provides software solutions for HR, attendance, payroll management, inventory management, and customer relationship management. Deskera People lets your employees mark and see their attendance, apply for a day off, and claim expenses with just one click online, among many features.

Deskera CRM allows the user to manage sales and support from one platform. From sales pipeline preparation to generating leads through email marketing, Deskera CRM assists with it all. It also records the opening rate and the click-through rates for email marketing.

Deskera, in brief, is the software that helps you achieve a majority of your business goals. These goals are generating more leads, flawless record management systems, and effortlessly managing customers. It helps in providing a seamless digitized shopping experience to the customers. It also helps keep the employees and staff of the organization updated with their personal and professional records.

The software works on analytics to help the business identify the most common trouble the customers face. The software picks up the queries generated by the customers. These queries are then refined by the software to highlight the most common questions in the lot. The business then can rectify the trouble its customers are struggling with.

Key Takeaways

The article discusses everything related to the procurement management plan, the components, processes, and significant steps required to build an effective plan.

Following is a rundown list of the article highlighting the key takeaways:

• A procurement management plan is a plan that defines the requirements of a particular project and lays down the steps required to get into the final contract.
• A procurement management plan matters to the organization to save money, time and effort.
• Overall, nine components build a procurement management plan—estimating, project scheduling, vendor control, roles and responsibilities, risk management, legal jurisdictions, payments, and constraints.
• A procurement management plan performs five significant roles.
• The process of setting a procurement management plan is based on nine components inclusive of the ten steps.
• Creating a procurement management plan is based on seven steps, from clearly defining the roles and responsibilities to reviewing and approval processes.
• Procurement management plan template for reference
• How can describe help in creating a procurement management plan?

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Procurement Planning

What is procurement planning.

Procurement planning is the process of identifying and consolidating requirements and determining the timeframes for their procurement with the aim of having them as and when they are required. A good procurement plan will describe the process of the identification and selection of suppliers/contractors/consultants.

Understanding Procurement Planning

Procurement planning is essential for businesses to minimize their purchase costs while maintaining their quality and quantity of goods standards.

A procurement plan is a process in which a company decides what they need, who will provide the products, and when orders will be fulfilled. Many departments within an organization are involved in the procurement team to aid in decision-making processes and maintain efficiency. A team member is assigned to each stage, such as the request proposal, vendor research, and approval process, to determine what procurement strategy best meets the business needs.

An adequate procurement management plan will identify and define realistic product expectations, such as fulfillment time, cost, and quality of products. In turn, this allows a company to recruit the required staff to optimize the efficiency of the procurement process. In doing so, a business can aim to reduce stock ordering and labor costs without sacrificing the quality of goods and services.

Importance of Procurement Planning

Procurement Planning is important because:

• It helps to decide what to buy, when and from what sources.
• It allows planners to determine if expectations are realistic; particularly the expectations of the requesting entities, which usually expect their requirements met on short notice and over a shorter period than the application of the corresponding procurement method allows.
•  It is an opportunity for all stakeholders involved in the processes to meet in order to discuss particular procurement requirements. These stakeholders could be the requesting entity, end-users, procurement department, technical experts, and even vendors to give relevant inputs on specific requirements.
• It permits the creation of a procurement strategy for procuring each requirement that will be included in the procurement plan. Such strategy includes a market survey and determining the applicable procurement method given the requirement and the circumstances.
• Planners can estimate the time required to complete the procurement process and award contracts for each requirement. This is valuable information as it serves to confirm if the requirement can be fulfilled within the period expected, or required, by the requesting entity.
• The need for technical expertise to develop technical specifications and/or scope of work for certain requirements can be assessed, especially where in-house technical capacity is not available or is non-existent.
• Planners can assess the feasibility of combining or dividing procurement requirements into different contract packages.
• The Procurement Plan is the product of the procurement planning process. It can be developed for a particular requirement, a specific project, or for a number of requirements for one or many entities in the public or private sectors.

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Procurement Improvement Action Plan

From: Public Services and Procurement Canada

Backgrounder

The Government of Canada is committed to conducting procurements in an open, fair, and transparent manner. This starts by ensuring sound management and integrity of its procurement processes.

As the central purchasing agent for the Government of Canada, Public Services and Procurement Canada (PSPC) is committed to continually improving and strengthening all aspects of the federal procurement process.

Since 2017, PSPC has been modernizing government procurement practices, including deploying modern comptrollership, encouraging greater competition, making use of electronic procurement tools and leveraging data so that procurements are simpler, less administratively burdensome and demonstrate the integrity of the suppliers the government does business with.

As part of this modernization, PSPC began to implement advanced data analytics to review and monitor contracts across the Government of Canada. These efforts, along with recent reports by the Auditor General of Canada and the Procurement Ombud, as well as parliamentary committee studies, have revealed a need for action on many fronts to improve the management and integrity of Canada’s procurement processes.

Of particular concern are allegations of fraud, bid aiding and falsification of documents. PSPC ’s detection measures have uncovered instances where individuals, acting as sub-contractors to suppliers, have fraudulently billed the government while working on federal contracts.

In light of these findings, PSPC is taking taking action to strengthen oversight of federal procurement processes, through:

• advancing the modernization of procurement;
• actively detecting and responding to instances of fraud and fraudulent billing;
• implementing immediate improvements to contracting processes and procedures, beginning with professional services contracting; and
• introducing a new Office of Supplier Integrity and Compliance (OSIC).

Procurement modernization

Public Services and Procurement Canada is modernizing government procurement practices so that they are simpler, less administratively burdensome, deploy modern comptrollership, encourage greater competition and include practices that support our economic policy goals, including innovation, green and social procurement.

This includes:

• increasing the diversity of bidders
• better vendor management
• clear metrics
• making government data available
• prompt payment

For more on this, please see: Procurement modernization and improving e-procurement .

Fraud prevention and detection

Public Services and Procurement Canada (PSPC) has a framework of laws, regulations, policies, programs and services in place to prevent, detect and respond to wrongdoing and safeguard the integrity of the federal procurement system. This allows us to detect wrongdoing and actively respond to allegations that the Government of Canada is being defrauded in either a specific contract or on a broader scale.

On March 20, 2024, PSPC announced that it had detected several  fraudulent billing schemes undertaken by subcontractors (i.e. individuals) working on federal professional services contracts. This is the result of ongoing departmental efforts to strengthen its approach to detecting fraudulent activities and other types of wrongdoing.

PSPC has taken swift action to revoke or suspend the security statuses of the individuals (i.e. subcontractors) in question. Following administrative investigations, the department has referred the cases to the Royal Canadian Mounted Police.

The department is also moving forward to recover these illegitimate payments on behalf of the Government of Canada.

As today’s announcement demonstrates, PSPC has effective methods to detect and respond to instances of fraudulent activity. We will continue to refine and expand the use of our tools, including data analytics, to better detect and address wrongdoing, and to ensure that individuals or entities engaging in fraud or other illegal activities are held accountable for their misconduct, while seeking restitution to the Crown.

In addition, PSPC is regularly exploring lessons learned from identified schemes and cases of wrongdoing to further refine our prevention (including training) and detection measures in order to better respond to future potential instances of misconduct.

We encourage people who have information related to illegal or illicit activities in Government of Canada contracting to report it directly to our Special Investigations and Internal Disclosure Directorate, at spac.dgsdivulgationinterne-dobinternaldisclosure.pspc@tpsgc-pwgsc.gc.ca , or to the Federal Contracting Fraud Tip Line .

Changes to procurement processes

PSPC is actively exploring opportunities to improve and streamline the way the Government of Canada conducts procurement, and changes have already been made to procedures and guidance regarding professional services contracting.

In November 2023, PSPC wrote to government departments and agencies to inform them that it would be invalidating and replacing all master level user agreements with client departments. These agreements set out the conditions for access to select professional services methods of supply maintained by PSPC , namely Tasked-based informatics professional services, Solutions-based informatics professional services and the Tasks and Solutions Professional Services.

PSPC is working with client departments to finalize new master level user agreements, which will require the use of new contract provisions to increase costing and subcontractor transparency, and provide important clarifications on the role of client departments and agencies (i.e. technical authorities) in ensuring consistent practices when using these procurement instruments.

Important changes that are being implemented to professional services contracts include:

• proving evaluation requirements to more effectively validate that all resources have the necessary and proven work experience.
• requiring increased transparency from suppliers around their pricing and use of sub-contractors.
• improving documentation requirements at the time of contract award and when task authorizations are issued.
• requiring clearer descriptions of the work requirements and activities, and specifying which initiatives and projects that resources will be permitted to work on.

The department is actively engaging with client departments and agencies to ensure that these new measures are implemented quickly and efficiently.

In addition, a new position of Chief, Contract Quality and Records Compliance Office, has been created to ensure that critical elements of decision-making throughout the procurement process are properly documented, that guidelines and tools are put in place and that quality is being actively monitored.

Office of Supplier Integrity and Compliance

To help ensure the Government of Canada does business with ethical suppliers, a government-wide debarment and suspension program has been in place since 2015. That program holds suppliers accountable for their misconduct, and also encourages them to cooperate with law enforcement and take corrective action.

The marketplace has greatly evolved and requires more robust and agile tools to mitigate emerging risks of misconduct and fraud while protecting the integrity of the federal procurement and real property systems.

With the launch of the Office of Supplier Integrity and Compliance, PSPC is updating previous frameworks governing supplier integrity to expand the list of offences that would render a supplier ineligible to do business with the Government of Canada. This includes debarring suppliers who have been convicted of fraud; terrorist financing; the use of human trafficking/forced labour; or similar offences recognized in provincial and foreign civil judgments. It would also introduce the ability to render suppliers ineligible to participate in federal procurements when they have been debarred by another jurisdiction or an international organization. Finally, it empowers the Registrar of the Office to review whether contracting with the supplier may bring the federal procurement into public disrepute or otherwise be contrary to Canadian public policy (such as, in situations of false declarations, significant or persistent deficiencies in performance of any substantive requirement or obligation under a prior contract or contracts, final judgments in respect of serious crimes or other serious offences and professional misconduct or acts or omissions that adversely reflect on the commercial integrity of the supplier).

The Office of Supplier Integrity and Compliance will launch in May 2024, bringing necessary enhancements to the existing suspension and debarment program.

This action reinforces federal commitment to strengthen responsible corporate governance within the supplier community and strengthen our ability to better know who we do business with.

The new program will apply across the Government of Canada and provide further coherence and alignment of corporate compliance measures. The new Office of Supplier Integrity and Compliance will establish a more agile approach, with greater flexibility to respond to a broader range of misconduct and unethical behaviour. It will also provide the ability to respond in a manner that better reflects the risk posed by the implicated supplier. The new Office will allow for consideration of aggravating and mitigating factors in determining the duration of a supplier’s ineligibility.

In addition, the new Office will also provide additional tools to support federal efforts in other areas, such as eradicating forced labour from Canadian supply chains. It will enable a broader application of anti-forced labour measures and introduce additional measures to encourage compliance.

This new Office includes a revised Ineligibility and Suspension Policy, which will come into effect in May 2024 and apply to all applicable federal contracts and real property transactions. The Office will also be responsible for the development and deployment of additional data analytics capacity, which is a key tool for detecting fraudulent schemes and other types of wrongdoing.

The Office of Supplier Integrity and Compliance  is a concrete example of government action to respond to corporate misconduct, and will encourage the government’s industry partners to apply high ethical standards, in line with programs employed by close trading partners like the US and UK . It is designed to deter misconduct, promote self-disclosure of potential wrongdoing, foster better corporate compliance, and bring Canada in line with international best practices. This will allow PSPC to respond in a proportionate and measured manner that is commensurate with the risk posed by the supplier in question.

Further details on the Office of Supplier Integrity and Compliance and the new policy will be available in May 2024. In the meantime, the department is working closely with suppliers and industry partners to ensure a seamless transition.

Current regime and under the Office of Supplier Integrity and Compliance

The following few examples help to illustrate different gaps and shortcomings within the current program.

Similar provincial offences are not a trigger

While PSPC is able to consider whether foreign offences are similar to one of the listed offences in the policy (e.g., a test of similarity), the department does not have the ability to consider whether provincial offences are similar despite the misconduct being comparable.

Under OSIC , similar provincial offences would be grounds to engage with a supplier to review their status under the modified program. This case also illustrates that the consequences for the guilty plea for the federal tax offence would have included an automatic 10-year debarment period, thus showing a significant incentive for the accused to avoid that conviction and accept an offence that did not trigger a debarment.

Foreign civil judgements

There are some foreign jurisdictions that pursue civil proceedings against corporations (legal persons) rather than criminal courts (reserved for natural persons).

Under the current Integrity Regime, only criminal offences are considered as triggering events despite the misconduct being considered as similar to the type of malfeasance currently listed in the Ineligibility and Suspension Policy.

Under OSIC , for foreign civil judgements where the misconduct would be considered as similar to one of the listed offences, PSPC would be able to take action against the supplier in question.

Another jurisdiction debars a supplier

If a supplier to the Government of Canada is debarred by another jurisdiction or an international organization, PSPC does not have the ability to engage the supplier to obtain assurances that similar misconduct has not infiltrated their work with the federal government. This includes debarment or suspension decisions by a close trading partner (such as the US ) or a province (such as Quebec).

Under OSIC , a supplier’s presence on a debarment list in another jurisdiction would provide grounds to review that supplier’s status under the modified program.

Absence of offences

PSPC has encountered a number of instances where the department has adverse information related to a supplier to the Government of Canada, however, in the absence of criminal charges or convictions, the department is unable to take action under the Integrity Regime.

Under OSIC , PSPC would be able to act when it becomes aware of final judgments with respect to serious crimes or other serious offences and professional misconduct or acts or omissions that adversely reflect on the commercial integrity of the supplier. In addition, PSPC would be able to initiate a review of a supplier in instances where doing business with a specific entity would bring the procurement in public disrepute.

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Lawmakers are concerned the US isn't taking building the submarine force seriously enough as rival China expands its fleet

• Some US lawmakers are expressing concerns over limited attack submarine procurement.
• They are worried the latest budget plans might impact the industrial base and US efforts in the Pacific.
• China plans to expand its navy and could outpace the US's current submarine fleet by 2035.

Some US senators were uneasy on Thursday about low procurement of attack submarines given expectations of US allies and the threats posed by potential adversaries like China.

Failing to acquire enough subs "sends exactly the wrong signal to our allies, not only Australia but others in the region, when we reduce the output of such a critical weapons platform that is vital not only to our own defense but to deterrence and defense of others in the region," Connecticut Sen. Richard Blumenthal said during a Thursday Senate Committee on Armed Services hearing.

For years, the US has pursued a procurement plan for two attack submarines per year. Industry partners often weren't able to keep up on the production side with the purchase rate. Increased funding was meant to get production of attack subs up to at least 2.3 boats per year. But in the Department of Defense's fiscal year 2025 budget request, there's only enough funding to build one Virginia-class submarine.

Attack submarines, like the US Navy's nuclear-powered Seawolf-, Los Angeles-, and Virgina-class submarines, are hunter-killer boats capable of launching missiles and hunting down enemy submarines and other warships.

Limited attack submarine procurement and production makes agreements like AUKUS, in which the US will help build eight attack submarines for Australia in its first phase, difficult to accomplish on top of preparing for challenges from China in the Indo-Pacific.

Related stories

In a recent statement, Blumenthal and Connecticut Sen. Chris Murphy said that "dialing back submarine procurement in fiscal year 2025 threatens to slow progress in strengthening our nation's submarine supplier base and workforce" and risks "making it more difficult to upgrade our submarine fleet and meet mounting global threats on the timeframe our national security requires."

They argued that the US cannot risk weakening the submarine industrial base.

"Unfortunately, this administration and this president are putting forward budgets that shrink the Navy year after year," Alaska's Sen. Dan Sullivan said in the hearing Thursday.

China, the primary US rival in the Indo-Pacific region and a key challenger that the US would need its submarine force to confront in a conflict, is planning on expanding its Navy, and the Pentagon estimates the country will have 65 submarines by 2025 and as many as 80 submarines by 2035. The US military operates 67 submarines, only a portion of which are in the Pacific.

The head of US Indo-Pacific Command, Adm. John Aquilino, said he believes that China is spending more on defense than it admits and that the country appears increasingly "belligerent" as it expands its military capacity and presence in the region.

"I have advocated for increased capacity of our joint force and all domains," Aquilino said regarding insufficient submarine production. "Undersea capabilities are a significant advantage for the United States and we ought to consider expanding."

"I need the assets operationally," he added, underscoring that he would like to be able to see the delivery of undersea capabilities and resources in a timely and affordable manner.

The Navy has said that the budget plan pumps billions into the industrial base for submarine production, which will help boost the overall capability.

Watch: The shipwreck at the center of a battle between China and the Philippines

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Innovation, science and economic development canada's 2024–2025 departmental plan, on this page, from the minister, companies, investment and growth.

• Science, Technology, Research and Commercialization

People, Skills and Communities

Internal services, future-oriented condensed statement of operations, human resources, corporate information, supplementary information tables, federal tax expenditures, definitions.

It is our pleasure to present the 2024–25 Departmental Plan for Innovation, Science and Economic Development Canada (ISED), which lays out the key priorities the Department is working to advance for the benefit of all Canadians.

In 2024–25, ISED will continue working with the Innovation, Science and Economic Development Portfolio and other federal partners to bolster Canadian innovation by fostering competitive, sustainable and inclusive economic growth.

As Canada transitions to a net-zero economy, ISED has entered into special agreements with industry partners such as NextStar Energy, Volkswagen PowerCo, and Northvolt Batteries North America to increase Canada's production of lithium battery cells and electric vehicles (EVs). To help ensure Canada's economy remains a competitive destination for investment following the introduction of the Inflation Reduction Act in the United States, these unprecedented agreements will advance the country's position as an EV manufacturer. To complement these efforts and support Canada's Critical Minerals Strategy, the Strategic Innovation Fund (SIF) will also invest in projects that will prioritize the manufacturing, processing, and recycling of critical minerals.

Recognizing the growing importance of artificial intelligence (AI), ISED will seek to accelerate the adoption and commercialization of AI by investing in the Pan-Canadian Artificial Intelligence Strategy (PCAIS). In 2024-25, the PCAIS will provide funding of up to $20 million to institutions in across the country to advance AI innovations and research. Further advancing the PCAIS, ISED's Advanced Manufacturing Global Innovation Cluster, led by Next Generation Manufacturing Canada, will provide $19 million in funding for 12 AI projects in Canada's manufacturing sector. These projects are expected to enhance the competitiveness of Canadian manufacturing through the commercialization of Canadian AI innovations, while increasing manufacturing capacity in the country.

The new National Quantum Strategy (NQS), in turn, will continue to ensure Canada's leadership in quantum technology. Under the NQS, the Department, in collaboration with key partners including the regional development agencies, will continue to support the development of Canada's quantum research and the commercialization of quantum-ready technologies through the Quantum Industry Canada program.

The Department's Universal Broadband Fund (UBF) will continue to support the expansion of broadband, connecting underserved rural, remote, and Indigenous communities with access to high-speed Internet. The Government of Canada, in partnership with other orders of government and private sector stakeholders, has leveraged UBF to secure high-speed internet access for 93.5 percent of Canadian households and is on track to exceed its goal of connecting 98 percent of Canadian households by 2026 and 100 percent by 2030.

Supporting fundamental research continues to be a priority for ISED. The Department is working to promote a strong, vibrant science and research community across Canada, anchored by a diverse pool of world-class researchers. Through the Biomanufacturing and Life Sciences Strategy, ISED is looking to grow a strong, competitive domestic life sciences sector, with cutting-edge biomanufacturing capabilities, which will create good jobs for Canadians and ensure Canada is prepared for future pandemics and health emergencies. Specifically, the Department is investing $225 million in AbCellera—the Canadian biotech company that helped develop the first antibody therapy treatment for COVID-19—to fund research and clinical trials projects, and to build a new manufacturing plant that will produce anti-body therapies for clinical trials.

In addition, scientific excellence will be supported through the Strategic Science Fund. Contribution agreements are being finalized with a diverse portfolio of organizations selected for funding by an independent expert panel. The funding will support of the organizations in advancing program objectives to support research, talent, knowledge mobilization and science culture. To help post-secondary institutions maintain and enhance security posture and support them in identifying, assessing, and mitigating risks to research security, ISED will continue to fund the Cybersecurity Initiatives Program.

In 2024–25, ISED will continue to support small and medium-sized enterprises (SMEs) —the backbone of the Canadian economy. In addition to the Department's ongoing support for women-owned and Black-owned businesses—through their respective entrepreneurship strategies, ISED will continue to eliminate barriers to access for under-represented entrepreneurs by providing support through the 2SLGBTQI+ Entrepreneurship Program. The program will deliver critical business advice, create resources, provide mentorship, and will collect the data needed to better understand the needs of 2SLGBTQI+ entrepreneurs and the challenges they face. Additionally, the Canada Digital Adoption Program will continue to support SMEs to modernize their operations and adopt e-commerce technologies, bolstering their growth and competitiveness.

Finally, ISED will support tourism in Canada by delivering on the Federal Tourism Growth Strategy, which includes targeted actions to help the Tourism sector recover from the pandemic and grow the Indigenous tourism industry. Specifically, the Department will strengthen economic reconciliation through the $20 million Indigenous Tourism Fund, which will support the scale-up of signature Indigenous tourism experiences and help build the capacity of micro and/or small Indigenous tourism businesses.

Funding from Budget 2023 will support additional tourism programming including $50 million to Destination Canada to attract major international conventions, conferences, and events to Canada; and $108 million to the Regional Development Agencies to support communities, small businesses, and non-profit organizations in developing local projects and events. With the goal of positioning Canada as a premier outdoor, nature-based destination, ISED will also leverage the country's natural landscape and network of trails in developing a new Trails Tourism Strategy.

We invite you to read this report to learn more about how ISED, along with its portfolio partners, is working with Canadians of all backgrounds and in all regions—urban and rural—to position Canada as a leader in the global economy.

The Honourable François-Philippe Champagne Minister of Innovation, Science and Industry

The Honourable Mary Ng Minister of Export Promotion, International Trade and Economic Development

The Honourable Soraya Martinez Ferrada Minister of Tourism and Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec

The Honourable Gudie Hutchings Minister of Rural Economic Development and Minister responsible for the Atlantic Canada Opportunities Agency

The Honourable Rechie Valdez Minister of Small Business

Plans to deliver on core responsibilities and internal services

Core responsibilities and internal services, description, quality of life impacts, results and targets, plans to achieve results, snapshot of planned resources in 2024-25, related government priorities, program inventory.

Provide support to help grow small, medium and large Canadian businesses into globally competitive, high-impact firms; ensure a fair and competitive marketplace; promote the conditions that support competitive prices and product choices, including in the telecommunications sector; simplify government programming, promote efforts to reduce red tape for businesses, putting in place the right conditions for market-driven innovation and promoting growth and an economy that works for everyone; reduce barriers to the movement of goods, services, capital and labour; grow Canada's tourism sector.

The Companies, Investment and Growth core responsibility is most closely related to the "Prosperity" domain of Canada's Quality of Life Framework, but it also touches on the "Good Governance" and "Environment" domains.

The "firm growth", "gross-domestic product per capita", and "investment in in-house research and development" indicators under the "Prosperity" domain are directly related to this core responsibility, for which the key outcome is to provide support to small, medium and large Canadian businesses to innovate and grow. To assess this outcome, ISED tracks the revenue growth rate and value of business expenditures on research and development (BERD) of the firms it supports.

Additionally, the "Good Governance" domain measures Canadians' confidence in institutions. Several entities under ISED's Companies, Investment and Growth core responsibility, including Measurement Canada, the Office of the Superintendent of Bankruptcy, Corporations Canada, the Competition Bureau and the Canadian Intellectual Property Office, focus on fostering conditions for market-driven innovation and creating a fair and competitive marketplace for businesses, investors and consumers.

Under the "Environment" domain, the "greenhouse gas emissions" indicator relates to the following departmental results indicator: "annual incremental reductions in GHG emissions attributable to ISED-supported technologies".

The following tables show, for each departmental result related to Companies, Investment and Growth, the indicators, the results from the three most recently reported fiscal years, the targets and target dates approved for 2024–25.

Table 1: Indicators, results, and targets for departmental result: Canada has a clean and sustainable economy.

Table 2: indicators, results and targets for departmental result: canadian businesses and industries are innovative and growing., table 3: indicators, results and targets for departmental result: businesses, investors and consumers are confident in the canadian marketplace, including the digital economy..

The financial, human resources and performance information for ISED's program inventory is available on GC InfoBase Footnote i .

Departmental Result: Canadian businesses and industries are innovative and growing

Innovation and adaptation on the part of Canadian enterprises—from start-up to scale-up—are vital to success in job creation, economic productivity, and trade. To spur creativity in support of Canada's economic recovery, growth, and competitiveness, ISED will continue to work closely with entrepreneurs, businesses and industry sectors to build on areas of traditional Canadian advantage while also capitalizing on emerging opportunities. Innovation and adaptation on the part of Canadian enterprises—from start-up to scale-up—are vital to success in job creation, economic productivity, and trade. To spur creativity in support of Canada's economic recovery, growth, and competitiveness, ISED will continue to work closely with entrepreneurs, businesses and industry sectors to build on areas of traditional Canadian advantage while also capitalizing on emerging opportunities.

Growing Canada's innovation ecosystems

Innovation Canada Footnote ii offers programs and services to help Canadian businesses innovate and grow by accessing client-centered, simplified support to advance research and the development and commercialization of innovative technologies and products. Flagship programs like the Strategic Innovation Fund (SIF), the Global Innovation Clusters (GICs) and Innovative Solutions Canada are instrumental in fostering industrial innovation and growth while advancing other governmental priorities like reducing greenhouse gas emissions (GHG). With renewed funding of $750 million from Budget 2022, the five GIC's will continue their efforts to advance Canada's innovation ecosystems, promote investments in innovation and commercialization, expand their national and global presence, deepen their collaborations, and support the growth and scale-up of Canadian small and medium-sized enterprises (SMEs). In 2024–25, the GIC program will increase industry co-investments by raising the industry match ratio to $1.50 for every dollar committed by non-GIC partners by 2028. In addition, the program is expected to establish new collaborations involving funding partnerships for the Pan-Canadian Artificial Intelligence Strategy (PCAIS) and Canada's National Quantum Strategy. For instance, as part of the PCAIS, the Advanced Manufacturing Cluster Footnote iii launched the AI for Manufacturing funding challenge, calling on companies to submit project proposals focused on commercializing AI or machine learning solutions in manufacturing. As a result, NGen, the organization leading the Advanced Manufacturing Cluster, will provide $19 million in funding for 12 AI projects in Canada's manufacturing sector. These projects are expected to enhance the competitiveness of Canadian manufacturing through the commercialization of Canadian AI innovations while building manufacturing capacity in the country.

In 2024–25, SIF will continue to support industrial transformation and growth, building on its $17 billion in research and development (R&D) investments to ensure the long-term sustainability of Canadian businesses in key industrial sectors including automotive, critical minerals and batteries, life sciences, semiconductors, aerospace, natural resources, and agri-food.

Through the Net Zero Accelerator Initiative, SIF will support Canada's goal of becoming a leader in clean technologies and help advance Canada's commitment to achieving net-zero emissions by 2050. For instance, SIF will advance the development of the battery innovation ecosystem by providing funding for the construction of E-One Moli's new $1 billion battery manufacturing and R&D facility in British Columbia, to support the production of lithium-ion batteries for industrial and consumer applications. SIF will also invest in electric vehicle (EV) battery manufacturing projects such as those by Volkswagen PowerCo, NextStar Energy and Northvolt Batteries North America, which will help reduce GHG emissions, decarbonize the transportation sector and strengthen Canada's domestic manufacturing capacity. ISED's partnership with Northvolt, in particular, will support the construction of its new EV battery manufacturing facility in Quebec—a $7 billion dollar investment—that will produce some of the greenest batteries in the world given its low carbon footprint. These investments in clean technology solutions demonstrate ISED's ongoing work toward meeting Canada's ambitious emissions reductions targets and securing Canada's battery supply chain. Supported by these investments, Canada ranked first in Bloomberg NEF's 2023 Global Lithium-Ion Battery Supply Chain Ranking.

Under Canada's Critical Minerals Strategy, in 2024–25, SIF will use targeted funds to accelerate investments in critical mineral projects, specifically prioritizing advanced manufacturing, processing, and recycling applications. To meet the rising demand for critical minerals and related manufactured products, ISED's investments will increase the supply of responsibly sourced critical minerals, while promoting innovation and sustainable practices across domestic and global critical minerals value chains. Since Canada is a leading global producer of many minerals, including nickel, potash, aluminum and uranium, investments in critical minerals have the potential to spur economic growth and manufacturing capabilities both domestically and internationally. Through ISED's expected  $551.3 million contribution to Umicore, a circular materials technology company, the federal government, in partnership with the Government of Ontario, will support Umicore's decision to build a new manufacturing facility in Loyalist Township, Ontario, to produce essential EV battery components using critical minerals such as nickel, lithium, and cobalt. This facility, the first of its kind in North America, will strengthen Canada's domestic EV and battery supply chain.

Supporting the industrial transformation of key sectors

Since March 2020, more than $2.1 billion has been invested in rebuilding Canada's vaccines, therapeutics and biomanufacturing capacity. In alignment with the Biomanufacturing and Life Sciences Strategy, ISED will support a $61 million project by Edesa Biotech—a biopharmaceutical R&D company focused on developing and commercializing novel clinical-stage drugs for autoimmune and inflammatory diseases, such as acute respiratory distress syndrome (ARDS). ISED is also investing through SIF to support a $119.3 million project by Pharmascience Inc. to expand its facility in Candiac, Quebec, by 2,500 square metres, increasing its capacity to produce sterile injectables. Both projects will be instrumental in increasing innovation in the life sciences sector, contributing to Canada's talent pipeline by creating new jobs, and developing world-class expertise and infrastructure to build a competitive biomanufacturing and life sciences industry.

Budget 2022 announced $30 million over four years to expand the CAN Health Network across Canada. By connecting health organizations with Canadian companies from coast-to-coast-to-coast, the Government of Canada's investment in expanding the CAN Health Network will support innovation in the health technology sector, grow businesses, create good well-paying jobs and generate prosperity for Canadians.

SIF will continue to provide targeted support to the aerospace industry—one of the most innovative and export-driven sectors in Canada, contributing close to $27 billion and more than 210,000 jobs to the economy. The SIF investment of $350 million to support the new Initiative for Sustainable Aviation Technology— a pan-Canadian, industry-led aerospace network focused on funding collaborative R&D projects with companies of all sizes across the Canadian supply chain—will help accelerate the green industrial transformation of the aerospace industry, generate high-value jobs, strengthen the sector's supply chains, and position Canada as a global leader in sustainable aviation.

Through the National Shipbuilding Strategy Value Proposition (NSS VP), the department will help ensure the long-term sustainability of the Canadian marine industry by requiring that shipyards with large vessel contracts support investments in three key areas—human resources development, technology investment and industrial development—that are equal to 0.5% of the value of the contracts they receive. For 2024–25, Irving Shipbuilding Inc. and Seaspan's Vancouver Shipyards have forecasted more than $41 million in combined NSS VP investments in Canada's marine industry.

Helping businesses navigate government support

Connecting businesses with government programs and supports at the federal and the provincial, and territorial level to facilitate growth and innovation remains a key priority for ISED. In 2024–25, ISED will liaise with government partners to optimize service provided through the Business Benefits Finder, a platform that uses a client-centred approach to streamline the process of connecting businesses with the services and programs they need to bolster their performance. ISED's Accelerated Growth Service, which helps entrepreneurs and businesses innovate and scale up through its advisory and growth services, will complement the Business Benefits Finder by assisting existing, innovative businesses in accessing government programs and services.

Similarly, the Global Hypergrowth Project (GHP) will support businesses in scaling-up and growing by convening various federal, provincial, and broader ecosystem partners to identify programming gaps and opportunities for Canadian companies. Announced in July 2023, the GHP will help businesses develop into anchor firms, which are responsible for creating business clusters and incubating other businesses, by assisting them in navigating complex regulatory regimes, expanding to new markets, and acquiring the right talent. To achieve these goals, eight Canadian businesses have been selected to receive tailored support through the project, including Clarius Mobile Health Corp. With help from the GHP, Clarius will be able to propel its growth and make its innovative portable hand-held ultrasound imaging device available to more clinicians around the world.

In 2024–25, ISED's national BizPaL office will continue supporting cross-jurisdictional partnerships focused on helping Canadian businesses find and access business licences and reducing the burden of duplication for businesses to meet regulatory, permitting and licensing requirements. The program will help users navigate Canada's regulatory landscape via an interactive artificial intelligence interface, improving access to timely, complete information and analytics through an Open Service Platform and the Service for Regulators project.

Increasing access to capital for Canadian businesses

ISED, through the Canada Small Business Financing Program (CSBFP), will continue increasing the availability of financing for Canadian small businesses looking to start up, expand, modernize, and innovate. In 2024–25, the CSBFP will gather information to support and inform a statutory comprehensive review report assessing the extent to which the program has met its goals over the last five years, including examining the provisions and operations of the Canada Small Business Financing Act . The report will propose recommendations to ensure that the CSBFP continues to adapt to meet the current economic conditions and future needs of small businesses.

As announced in Budget 2021, ISED's Venture Capital Catalyst Initiative (VCCI), managed by the Business Development Bank of Canada, will support innovation and job creation in Canada by increasing the availability of private sector capital for Canadian entrepreneurs with high-growth potential, particularly for those in the life sciences sector and those belonging to under-represented groups. VCCI will accomplish this through three streams: $350 million for funds-of-funds, a $50 million for supporting VC investments in life science technologies, and a $50 million for an inclusive growth stream dedicated to increase access to VC programs for underrepresented groups. In 2024–25, funding recipients for the second intake of the inclusive growth stream and will invest up to $25 million in five Canadian VC funds through this stream. Through VCCI's inclusive growth stream, ISED aims to advance diversity, equity, and inclusion in the Canadian VC ecosystem by providing additional capital to invest in innovative under-represented entrepreneurs.

Supporting a modern telecommunications network

As the demand for spectrum and telecommunications services continues to grow, ISED will continue to advance Canada's position as a global centre for innovation and world-class wireless infrastructure. In 2024–25, the department will launch a new Non-Competitive Local Licensing framework, offering 80 MHz of mid-band spectrum, which will provide users— including wireless Internet service providers, vertical industries, and Indigenous communities—with localized access to shared 5G spectrum.

With a commitment to fostering greater universal connectivity, ISED will implement a new Access Licensing Framework in 2024–25 to facilitate greater access to unused licence spectrum in rural and remote areas, including supporting the expansion of broadband services. Under this framework, ISED will also consult on and implement an Indigenous Priority Window, which will allow Indigenous-led businesses and Indigenous service providers access to spectrum that strengthens their Internet connectivity, improves access to emergency response services, and establishes reliable cell service.

Reinvigorating tourism in Canada

Building on the progress made last year, ISED will continue to implement new strategies to advance the long-term growth of the tourism sector. In 2024–25, under the Federal Tourism Growth Strategy (FTGS), the department will coordinate and promote measures to support the growth of Canada's tourism industry, particularly positioning Indigenous communities as attractive tourist destinations, by continuing to implement the $108 million Tourism Growth Program, through the regional development agencies, to deliver key tourism projects.

As part of the FTGS, ISED will collaborate with its federal, provincial, and territorial partners, industry stakeholders and Indigenous people to ensure that the needs of tourism businesses are being served. The FTGS is based on five strategic priorities: investing in tourism assets, embracing recreation and the great outdoors, partnering to grow Indigenous tourism, attracting more international events, and improving coordination through a Ministerial Tourism Growth Council. ISED will also provide $50 million to Destination Canada, with the expectation of hosting more business events in Canada and invest in maintaining Canada's network of trails and outdoor spaces through the Trails Tourism Strategy.

Indigenous tourism is a key segment of the industry that differentiates Canada as a premier tourist destination. ISED's continued support of this segment through the $20 million Indigenous Tourism Fund (ITF), announced in Budget 2022, will help rejuvenate the Indigenous tourism industry and ensure long-term, sustainable growth for Indigenous businesses and communities. As a component of the ITF, the department is collaborating with the Indigenous Tourism Association of Canada to roll out the first $10 million of the Micro and Small Business Stream, which will provide financial assistance, specifically non-repayable contributions of up to $25,000, to support export-ready micro and small Indigenous tourism businesses.

Developing talent for the digital economy

As Canada's key industrial sectors continue to evolve and digitize, ISED remains committed to equipping youth, students, graduates, and mid-career workers with industry-relevant experience to enhance their professional experience and preparedness.

In 2024–25, ISED will continue to administer programs aimed at increasing digital skills and employment experience among Canadian youth, including the Digital Skills for Youth (DS4Y) program, the Computers for Schools Internship program (CFSI), and the Business + Higher Education Roundtable (BHER). Through DS4Y, which connects post-secondary graduates with internships in small businesses and not-for-profit organizations, nine not-for-profit organizations have been selected to provide 179 internships that will equip youth with the skills and experience needed to transition to career-oriented employment. In 2024–25, the CFSI will provide 148 internships to help young people develop digital skills through paid, on-the-job experience refurbishing digital devices, which will increase their employability and marketability to prospective employers. Likewise, the BHER will seek to help emerging talent develop skills that will prepare them for the labour market and support business innovation and growth. It will aim to create over 7,500 work integrated learning opportunities for post-secondary students in 2024–25.

Launched in 2022–23, the Upskilling for Industry Initiative (UII) has committed $125 million in 2024–25 to support employers and SMEs, in better identifying their skills needs and develop new upskilling programming to meet them. Through Palette Skills Inc., the selected lead delivery participant , Footnote iv UII will continue to support demand-driven short-cycle programs to meet the needs of employers in six high-growth sectors: digital technology, cybersecurity, agriculture technology, advanced manufacturing, clean technology and biomanufacturing. ISED expects to connect 15,000 Canadians, including those from under-represented groups, with new work opportunities by March 31, 2025, creating a responsive pipeline of upskilled workers for Canadian industry.

Departmental Result: Businesses, investors, and consumers are confident in the Canadian marketplace, including in the digital economy.

Creating equitable market conditions is critical to Canada's economic growth on the global stage. Through a focus on modernizing key regulatory frameworks and intellectual property products and services, ISED will continue its progress towards leveling the playing field for businesses, investors, and consumers, creating a robust and fair marketplace that balances economic growth with national security considerations.

Modernizing Canada's marketplace regulatory frameworks

In 2024–25, the Competition Bureau will support the government's efforts to modernize and update the Competition Act Footnote v to promote and strengthen competitive markets. The Affordable Housing and Groceries Act received Royal Assent on December 15, 2023. Among other measures to make life more affordable for Canadians, the Act empowers the Bureau to take action against collaborations that stifle competition and consumer choice, in particular situations where large grocers prevent smaller competitors from establishing operations nearby. It also removed the efficiencies defence, which allowed anti-competitive mergers to survive challenges if corporate efficiencies offset the harm to competition, even when Canadian consumers would pay higher prices and have fewer choices. With a modernized Competition Act, the Bureau will be better able to protect and promote competition in Canada leading to lower prices, while stimulating innovation and economic growth. The Bureau will also continue its work with regulators and policymakers to assess the impact of new or existing policies on competition, championing the essential role of competition in the economy. Through the Canadian Digital Regulators Forum, the Bureau will strengthen information sharing and collaboration on digital markets and artificial intelligence (AI) with the Office of the Privacy Commissioner of Canada and the Canadian Radio-television and Telecommunications Commission. To ensure that anti-competitive behaviour is detected and deterred, the Bureau will continue to implement proactive monitoring and enforcement measures in areas such as deceptive marketing practices, cartels, problematic mergers, and digital services.

To protect the integrity of the Canadian insolvency system, ISED's Office of the Superintendent of Bankruptcy (OSB) will continue to modernize its directives, regulations, and IT systems in 2024–25 to reduce unnecessary burden on those it regulates and support confidence in the Canadian marketplace. Through its newly launched Debtor Compliance Management System, the OSB will leverage AI capabilities to detect and address debtor non-compliance.

In 2024–25, Measurement Canada, which has the legislative mandate to approve and oversee all measuring devices used in Canadian financial transactions, will prioritize modernizing and renewing legislation governing trade measurement, especially the approval and inspection of electric vehicle charging devices.

Through legislative amendments to the Investment Canada Act , ISED will continue to strengthen Canada's reputation as the world's top destination to invest . The amendments propose new regulatory measures for foreign investments that aim to improve compliance and information sharing with international counterparts concerning foreign investment reviews and national security assessments. Additionally, the amendments will grant the Minister of Innovation, Science and Industry the authority to impose interim conditions during a national security review of investments and accept binding undertakings from investors to mitigate any national security risks. These measures will not only foster a stronger investment climate but also grant ISED greater authority in reviewing any national security threats from foreign investments. Through timely processing of foreign investment reviews under the Act, ISED will assess foreign investments in Canada for likely net economic benefits and potential national security injury as well.

Promoting compliance among federally incorporated businesses

In 2024–25, ISED will notify corporations of the new reporting requirements under the Canada Business Corporations Act (CBCA), whereby federally incorporated businesses must proactively submit information on their beneficial owners or individuals with significant control of their business. The publicly accessible beneficial ownership registry, governed under the CBCA, will provide information about the ownership and control of Canadian corporations governed under the CBCA to help reduce the misuse of these corporations and strengthen the detection of tax evasion and fraudulent activities through improved transparency of beneficial ownership.

Promoting and protecting consumer interests

As consumer spending patterns and trends change because of inflation and rising food prices, ISED will continue to ensure that the voice of the consumer is represented through the Contributions Program for Non-Profit Consumer and Voluntary Organizations. In 2024–25, the department will provide $1.7 million to consumer advocacy organizations in Canada to conduct research projects, addressing issues such as digital consumer protection, systemic barriers to vulnerable consumers, affordability, and sustainable consumption. The program will also receive a $3.3 million budget increase to strengthen support for consumer advocacy, with a particular focus on areas where consumers have expressed great concern, including retail practices and rising grocery prices.

Advancing inclusive economic growth through intellectual property

In 2024–25, ISED will work toward making Canada's intellectual property (IP) system more inclusive, with a particular focus on the intersection of IP and the protection of Indigenous knowledge and cultural expressions.

IP protections, services and resources remain widely underutilized by Indigenous businesses and entrepreneurs in Canada as they face barriers to accessing Canada's IP system. As a result, the Canadian marketplace has been flooded with fraudulent imported Indigenous arts and goods, posing a threat to the economic viability of Indigenous communities. To address these barriers and support the protection of Indigenous IP, ISED will provide $150,000 in grants to Indigenous organizations through Indigenous Intellectual Property Program (IIPP) grants. The program will fund both small scale Indigenous-led projects, up to $15,000, and larger, more complex projects up to $50,000. The IIPP grants will also fund representatives from Indigenous organizations, up to $5,000, for their participation in World Intellectual Property Organization events and negotiations related to intellectual property, Indigenous knowledge, and Indigenous cultural expressions policy.

Through the IP Clinics Program—a grant program designed to foster the development of future IP experts by increasing university students' exposure to IP issues—ISED will provide $400,000 to eligible projects with a commitment to improving the understanding of IP and increasing access to IP services, including for women and Indigenous-led businesses. In support of the Government of Canada's Intellectual Property Strategy, the program will continue to deliver low cost or free IP services and resources to promote inclusive access.

In an effort to provide quality, timely IP services and resources to innovators, as well as safeguard IP rights, the Canadian Intellectual Property Office (CIPO), an agency under ISED, will continue optimizing turnaround times and enhancing client services through new technologies. Specifically, CIPO will continue implementing its Trademark Recovery Plan to reduce application backlogs by increasing examination capacity to restore turnaround times to internationally comparable standards by 2026.

As part of the National IP Strategy, CIPO will continue to advance IP awareness among Canadian entrepreneurs and innovators through the IP Awareness and Education Program. In 2024–25, CIPO will offer a number of training opportunities and information resources on IP, developed in partnership with Indigenous organizations, government departments, businesses, academia, and regional offices. For instance, through the IP Village—a collaboration between Canada's leading IP organizations—ISED will deliver a range of targeted educational resources and tools to support SMEs and women, Indigenous and Black entrepreneurs in managing and levering IP assets as part of their business and growth strategies.

Departmental Result: Canada has a clean and sustainable economy.

As Canada transitions to a cleaner, more sustainable economy, ISED remains committed to supporting the development of a globally competitive clean technology sector that addresses environmental challenges and provides high quality jobs for Canadians. Through the provision of key supports to researchers and businesses to develop and adopt clean technologies and products, ISED will contribute to Canada's annual incremental reductions in GHG emissions and the number of clean technology projects underway, helping Canada progress towards its net-zero emissions goal by 2050.

Helping to grow the clean technology sector

In 2024–25, ISED will support project proponents that have the potential to transition the Canadian economy toward a net-zero future and seek to deploy clean technology in economic sectors and technology areas such as carbon capture and storage, agriculture, electricity, and clean fuels, including hydrogen. The department will continue offering services and resources to Canadian companies to facilitate the development and financing of transformative projects in Canada's industrial sectors, while helping Canada achieve its 2030 and 2050 emissions reduction targets and its transition toward a competitive, low-carbon economy. These activities include acting as a central point of contact in the government for project proponents; coordinating and identifying funding opportunities, in partnership with key federal departments and their funding programs; and working with companies to position high-potential project concepts for success. 

Leveraging improved data on clean technologies

As the federal focal point for clean technology, ISED's Clean Growth Hub—an inter-departmental initiative co-led by ISED and Natural Resources Canada and in partnership with 16 other departments and agencies—will continue to ensure that clean technology stakeholders are better equipped to make decisions related to clean technology innovation and deployment.

In 2024–25, the Hub will address emerging needs of clean technology stakeholders, including: leveraging government procurement to support clean technology development, facilitating stronger collaborations between clean technology innovators and adopters; strengthening awareness of unique regional clean technology needs, and leveraging new digital resources to improve client experience. It will also play an important role as a focal point in facilitating connections, coordinating leading clean tech companies across Canada, and providing assistance to new or existing clients, ranging from young clean tech innovators with high potential for disruption to large firms in high-emitting industries. Through the implementation of its strategy and action plan to advance reconciliation, equity, diversity and inclusion, which seek to better understand and address the needs of under-represented groups in the clean tech sector, the Hub will proactively leverage existing government efforts to increase inclusion and provide targeted support to these groups.  

In parallel, ISED, in collaboration with Statistics Canada and Natural Resources Canada, will publish macroeconomic, industry and administrative data related to Canada's cleantech sector to help support private and public sector decision making. The Clean Growth Hub, which is the only source of authoritative data on Canada's clean tech sector, will conduct an analysis of economic trends and policy impacts on the sector. The Hub will further publish data measuring the contribution of Canada's cleantech sector to the Canadian economy— including data on employment and disaggregated data on the basis of labour force characteristics— and measure various economic, social, environmental and governance indicators. With the aid of the administrative data pillar of the Clean Tech Data Strategy, the Hub will work with federal programs in improving the consistency of data collection on federal cleantech investments and will lead an annual data collection exercise on these investments, which will allow for deeper analysis and understanding of federal programs that support clean technology.

Canada, like many other countries, is dependent on global markets for its supply of critical minerals and lithium batteries. This reliance on external supply chains, combined with a lack of global market share in this industry, creates a risk that Canada will not be able to successfully transition to a low-carbon economy. Additionally, as the battery market is already very competitive, there is a risk that firms receiving funding will not be able to compete in the global market. To mitigate these risks, Canada will continue to strengthen its domestic supply chain through the Government of Canada's recently announced special agreements with industry partners—NextStar Energy, Volkswagen PowerCo, and Northvolt Batteries North America— to anchor the production of lithium batteries in Canada, helping to develop more resilient supply chains. These three major investments will help solidify Canada's position in the global supply chain and attract the business of automotive manufacturers and critical minerals suppliers, thereby creating a sustainable domestic ecosystem.

Additionally, in light of increasing interest rates and inflation combined with budgetary constraints , there is a risk that some programs, such as the Strategic Innovation Fund, the Global Innovation Clusters and the Accelerated Growth Service may be unable to deliver the planned level of activities and projects in 2024–25. In response, ISED has implemented several measures to minimize disruptions to funding and planned activities. For example, ISED is developing strategies to manage potential project cancellations or delays, including project pipelines that can be leveraged to reinvest this funding. The department is also conducting forecasting exercises with funding recipients to ensure that their spending is on track and that potential lapses are identified and addressed as early as possible. Furthermore, ISED will implement quarterly results monitoring and reporting, through committee reviews, and improve strategies for recipient selection to ensure that the expected results of projects are met.

Snapshot of planned resources in 2024–25

• Planned spending: $4,279,156,052
• Planned full-time resources: 4,352

In 2024–25, ISED will continue to ensure that its programs, policies, and initiatives are responsive, inclusive, and reflective of the diverse experiences and realities of Canadians in order to address inequities and barriers. For example, several Innovation Canada programs now require recipient organizations to develop inclusion, diversity, equity and accessibility strategies outlining how they will ensure fair and equitable access for applicants and highlighting targeted initiatives to address barriers and gaps for under-represented groups. In addition, the ElevateIP program will establish partnerships with organizations representing equity-deserving groups to develop more inclusive programming.

Following ISED's commitment to producing more inclusive outcomes for women and under-represented groups, gender and diversity plans are now mandated for all recipients of Strategic Innovation Fund support. The program requires recipient organizations to develop a comprehensive gender and diversity plan at the start of their projects in an effort to ensure that they are actively cultivating environments that are more equitable, inclusive and accessible. Similarly, under the Industrial and Technological Benefits Policy, firms bidding on applicable defence procurements are required to describe their approach to increasing gender equity and diversity in their corporate structure and broader supply chains in Canada. A key component of developing an effective GBA Plus framework is identifying how initiatives can be tailored to meet the diverse needs of the people most impacted. Programs such as the Global Innovation Clusters will be implementing a series of measures creating opportunities specifically for Indigenous peoples, for example—to provide meaningful work experience for people from equity-deserving groups. The clusters are also offering workshops and formal training in response to the industry's need for members to develop their talent, gain knowledge or learn new skills. Under each Cluster, the program also promotes the 50 – 30 Challenge that strives for gender parity (50% women and/or non-binary people) and significant representation (30%) of members of under-represented groups, on its board of directors.

ISED will continue applying a GBA Plus lens to its intellectual property programming as well. The IP Clinics and Patent Collective programs specifically support recipients from traditionally under-represented groups, such as women and Indigenous entrepreneurs, in need of network development and funding support for IP advice. CIPO, in general, will continue its collaboration with the international IP community to develop a stronger understanding of GBA Plus and address the existing gender gaps in the innovation ecosystem.

In 2024–25, the department will conduct various educational and awareness raising activities aimed at encouraging greater participation of equity deserving groups. For example, ExploreIP will be targeting underrepresented groups, including Indigenous, Black, women, 2SLGBTQI+, disabled and other diverse entrepreneurs, to increase program awareness and will highlight the importance of inclusion, diversity, equity, and accessibility among staff as they pertain to their duties. Corporations Canada at ISED will continue its broad and inclusive digital awareness campaign on how to effectively access information and resources, ensuring program requirements are accessible, reliable and not impeded by technological barriers.

ISED is committed to advancing Canada's efforts toward developing the United Nations 2030 Agenda for Sustainable Development and the UN's Sustainable Development Goals (SDGs). While ISED is a strong proponent for all 17 SDGs, its policies, programs, and initiatives mostly advance actions on SDG 9—Industry, Innovation and Infrastructure to "build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation." The department's key programs, such as the Strategic Innovation Fund, Canada's five Global Innovation Clusters and Innovative Solutions Canada will support work in: research and development, technology adoption, investments in science and research, efforts to attract anchor firms through foreign investment and measures to create innovative ecosystems. ISED will also contribute to this SDG through Canada's Intellectual Property Strategy, as Canadian innovators and businesses will continue to protect and leverage their IP. In terms of promoting green infrastructure as part of the SDG, SIF's Net-Zero Accelerator initiative, Sustainable Development Technology Canada (SDTC) and ISC will be supporting clean technology innovation and Canada's clean growth policies.

ISED is also a key contributor to the following SDGs: SDG 7—Affordable and Clean Energy, SDG 8 —Decent Work and Economic Growth, SDG 12—Responsible Consumption and Production; and SDG 13 —Climate Action. Since the department is a strong advocate for Canada's climate commitments, the SIF's NZA and SDTC provide targeted investments in projects advancing SDG 7 and SDG 13— such as ones focused on developing clean technologies, batteries, critical minerals and electric vehicles— and support for initiatives promoting globally competitive clean technology solutions that will help Canada achieve its net-zero target by 2050. In addition to these flagship ISED programs, the Business Benefits Finder, the Accelerated Growth Service, and the Upskilling for Industry Initiative will be advancing SDG 8 as well. These programs will encourage inclusive and sustainable economic growth by connecting Canadians with relevant government programs, and funding employer driven-approaches to redeploying workers in high-growth sectors.

More information on ISED's contributions to Canada's Federal Implementation Plan on the 2030 Agenda and the Federal Sustainable Development Strategy can be found in ISED's Departmental Sustainable Development Strategy . Footnote vi

Companies, Investment and Growth is supported by the following programs in the program inventory:

• Business Innovation
• Spectrum and Telecommunications
• Digital Service
• Economic Outcomes from Procurement
• Support for Small Business
• Talent Development
• Intellectual Property
• Competition Law Enforcement and Promotion
• Marketplace Protection and Promotion
• Clean Technology and Clean Growth

Supporting information on planned expenditures, human resources, and results related to ISED's program inventory is available on GC InfoBase . Footnote vii

Science, Research, Technology and Commercialization

Support and enable business-led investment and strategic collaborations for leading- edge technology development and commercialization; maintain and strengthen Canada's research excellence, including support for fundamental science, experimentation, and exploration to address global challenges.

The Science, Technology, Research and Commercialization core responsibility aligns with the "Prosperity" domain of the Quality of Life Framework. The program within this core responsibility focuses on maintaining and strengthening Canada's research excellence, including support for fundamental science, experimentation, and exploration to address global challenges.

Under the "Prosperity" domain, the "investment in in-house research and development" indicator aligns with ISED's departmental results indicator, "percentage of Canada's higher education research and development funded by business." Both indicators recognize the importance of investments in research and development to support innovation and the commercialization of new products, services, and technologies. ISED also tracks Canada's rank among OECD nations on the average relative citation (ARC) score of science and research publications. Key initiatives under this core responsibility focus on the transfer of knowledge within the Canadian research ecosystem.

The following tables show, for each departmental result related to Science, Technology, Research and Commercialization, the indicators, the results from the three most recently reported fiscal years, the targets and target dates approved for 2024–25.

Table 4: Indicators, results, and targets for departmental result: Canadian science, technology and innovation (ST&I) research contributes to knowledge transfer.

The financial, human resources and performance information for Innovation, Science and Economic Development Canada's program inventory is available on GC InfoBase . Footnote viii

Departmental Result: Canadian science, technology and innovation (ST&I) research contributes to knowledge transfer.

ISED aims to foster an innovative economy, improve the health and well-being of Canadians, and optimize federal investment in ST&I. To achieve these goals, in 2024–25 ISED will continue working with various third-party organizations (TPOs) to advance federal research priorities and fill ecosystem gaps—primarily through the newly established Strategic Science Fund (SSF). The Department will continue to promote collaboration between domestic and international research organizations, support the development of pan-Canadian science and research-related strategies, and provide the Prime Minister and Cabinet with advice related to key scientific issues through the Office of the Chief Science Advisor. ISED will also provide policy advice on cyber security and research security considerations for international research and development (R&D) investments in academia through the implementation of the Government of Canada's Digital Research Infrastructure Strategy.

Supporting coordinated federal investments

The government allocates funding to TPOs that play an important role in the Canadian science and research ecosystem by seizing unique opportunities, filling gaps in federal programming in areas of priority to the government, providing services nationally, or deriving advantages from ST&I activities being delivered at arms-length from the federal government. TPOs are independent, not-for-profit organizations that have highly diverse mandates and areas of expertise and cover a wide spectrum of ST&I activities.

In response to the need for greater transparency and accountability related to funding decisions, Budget 2019 established the SSF, administered jointly by ISED and Health Canada. This new competitive approach to investing in TPOs affirms the importance of a credible, principles-based merit-review process informed by the advice of independent external experts chosen based on high ethical standards, expertise, and diversity of perspectives. This approach was recommended by an independent advisory panel and external monitoring of this approach will ensure that it is fair and appropriately targeted.This marks a foundational change in how funding is provided to organizations in the science and research ecosystem. Through this coordinated approach, ISED and Health Canada are better equipped to make funding decisions and assess where there may be gaps in the ecosystem.

The SSF will act as a key funding vehicle for the science and research community and will ensure clear alignment with program objectives and expected outcomes. Activities funded under the SSF are expected to enhance internationally competitive, leading-edge research in areas critical to the health, and the economic and social well-being of Canadians; to develop, attract and retain world-class research and innovation talent in scientific areas that are aligned with Canada's priorities; to accelerate the exchange of research results and the translation of this knowledge into action in Canada and abroad; and to strengthen evidence-based decision making, innovation skills development and science culture.

Following a competitive process, 24 successful applicants have been selected Footnote ix to receive funding through the SSF in 2024-25, pending the finalization of contribution agreements. This first year of a five-year cycle of funding under the SSF will allow the government to provide direct financial support for organizations to advance both fundamental and applied research. ISED, in partnership with Health Canada, will work closely with SSF recipient organizations in 2024–25 to ensure their activities are aligned and positioned to meet expected program outcomes.

Accelerating the adoption and commercialization of artificial intelligence

In 2024-25, the Department will continue to support research and development in key emerging sectors such as artificial intelligence (AI) through the ongoing implementation of the Pan-Canadian Artificial Intelligence Strategy (PCAIS).

The PCAIS aims to drive the adoption of AI across Canada's economy and society. Through the three pillars—commercialization, standards, and talent and research, the PCAIS seeks to connect Canada's world-class talent and research capacity with federal programs that facilitate commercialization and technology adoption in order to ensure that Canadian ideas and knowledge are mobilized and commercialized domestically.

In support of the commercialization and talent and research pillars of the PCAIS, the $60 million fund for the national AI institutes —Amii in Edmonton, Mila in Montréal, and the Vector Institute in Toronto— aims to help translate research in AI into commercial applications and increase the capacity of Canadian businesses to adopt these new technologies. These three not-for-profit corporations are each receiving funding of up to $20 million over five years to support the advancement of AI research, training, and innovation. For example, Amii will advance leading-edge research in AI by funding academic research and encouraging industry leaders to invest in Alberta's world-leading talent and expertise. In 2024‒25, contributions to these institute will support capacity-building among business, health, and not-for-profit partners.

In 2024‒25, ISED will continue to monitor and support the ongoing implementation of the Digital Research Infrastructure (DRI) Strategy, to ensure Canadian researchers have the tools they need to conduct leading-edge research. Under the strategy, ISED is providing funding to the Digital Research Alliance of Canada (DRAC) for the planning, procurement, installation, operation and allocation of computing infrastructure to increase computing capacity for AI researchers. In 2024‒25, DRAC will continue to coordinate and deliver national services in advanced research computing, research data management and research software, while also promoting innovation and expanding the network of support and resources that are available to academic and research communities.

CANARIE, the Canadian Network for the Advancement of Research, Industry and Education (CANARIE) will advance the DRI Strategy by funding initiatives such as the expansion and maintenance of the National Research and Education Network (NREN)—which connects more than 750 Canadian universities, colleges, cégeps, research hospitals, government research labs, school boards, business incubators and accelerators. Specifically, through the Digital Accelerator for Innovation and Research (DAIR) program, CANARIE will continue to accelerate innovation and the commercialization of products and services by providing Canadian start-ups with free cloud resources and access to expertise in next generation technologies.

Enhancing Canada's research ecosystem and leading-edge technology development in quantum science

In 2024–25 the National Quantum Strategy (NQS) Secretariat will continue to oversee the coordination and integration of quantum R&D in Canada, guiding investments through the strategy's three pillars: quantum research, talent and commercialization. To do so, the secretariat will continue to work with key partners such as the Quantum Advisory Council, the Natural Sciences and Engineering Research Council of Canada, the National Research Council of Canada, Mitacs, Canada's Global Innovation Clusters, Innovative Solutions Canada (ISC), and ISED's Regional Development Agencies to look for solutions in several quantum technology areas such as computing, software, communications and sensors.

Additionally, under the NQS, ISED will provide another year of funding to Quantum Industry Canada, a consortium of Canadian quantum technology industries, which will increase internal capacity and improve the effectiveness of knowledge transfer between key groups to support the development, scaling and commercialization of innovations.

In 2024–25, work will continue developing of the Pan-Canadian Genomics Strategy in partnership with the NRC, taking into consideration the 'What We Heard' report published in the spring of 2022, which underscored Canada's potential in genomics with existing strengths in genomics research.

Canada has a small number of lab-to-market programs that aim to increase commercialization awareness and skills among early researchers and students. Budget 2022 provided funding for a national lab-to-market platform for students and researchers at post-secondary institutions to explore the commercial potential of their work, with the aim of filling gaps in funding to support post-secondary institutions in creating or expanding lab-to-market programming. In 2024-25, ISED will work with program delivery partners to launch the new national lab-to-market platform whereby successful post-secondary institution applicants will receive funding to develop shared training curriculum, leverage respective areas of sectoral or technology specialization, and engage in cross-promotion and networking as they build and expand their lab-to-market program offerings. A new annual survey, to be launched in fall 2024, will assess how knowledge created at Canada's universities, colleges and research institutes generates commercial outcomes, as well as broader social and economic benefits for Canadians.

Strengthening international scientific collaboration

In 2024–25, in collaboration with Global Affairs Canada, ISED will be joining Horizon Europe, the world's largest collaborative science, research and innovation program. As a result, Canadian researchers and innovators will be able to access a broader range of research opportunities in areas such as health; culture, creativity and inclusive society; civil security for society; digital, industry and space; climate, energy and mobility; and, food, bioeconomy, natural resources, agriculture & environment. The benefits of association to Horizon Europe include the ability to lead projects, receive direct funding and collaborate with European partners and other associated countries in various research and innovation areas.

Investing in Cybersecurity

In 2024–25, the Cyber Security Innovation Network (CSIN) program will seek to enhance R&D, increase commercialization, and further support the development of skilled cyber security talent across Canada. ISED's role is to implement, oversee and monitor the CSIN program, as well as provide funding for the selected successful projects. The CSIN program will help foster a strong national cyber security ecosystem and position Canada as a global leader in cyber security.

As the program's lead, the National Cybersecurity Consortium (NCC) launched an initial call for proposals in April 2023, which led to a partnership between telecommunications company Ericsson, and researchers from Concordia University, the University of Waterloo, and the University of Manitoba for a project to investigate the security of 5G networks. The project will receive $1 million in funding from the NCC over three years and aims to design and implement technologies that can prevent, predict, detect, and mitigate cyber threats in 5G networks using machine learning and AI. In 2024–25, a second national call for proposals will be launched to continue to support the growth of a comprehensive and collaborative Canadian cyber security innovation ecosystem through academia-industry collaboration.

Due to the sensitive nature of cyber security R&D and the innovation activities undertaken by the NCC in leading the CSIN, the network may be targeted for its data and intellectual property. While Canada maintains an open and collaborative research environment, it has increasingly been the target of foreign interference activities that, pose a threat to Canada's research ecosystem, and to as national security.

To mitigate the risk of targeted espionage, in collaboration with national security and intelligence organizations and Canada's granting agencies, ISED will continue with the phased implementation of the National Security Guidelines for Research Partnerships in 2024–25. These guidelines are used to assess whether aspects of a research project pose unacceptable risks to national security and if these risks cannot be mitigated, the project will not be funded. The guidelines already apply to the Alliance Grant program and the Canada Biomedical Research Fund.

• Planned spending: $969,539,190
• Planned full-time resources: 114

Barriers to access and to participation in science, technology, engineering, and math (STEM) for women and other equity-deserving groups have led to an under-representation in these fields. ISED and its partner organizations work toward reducing and eliminating barriers to participation in several ways, with the goal of creating a diverse talent pool and inclusive industries.

One way to address this issue is by applying a GBA Plus lens when selecting funding recipients and embedding GBA plus requirements into funding agreements. For example, in 2024–25, the NCC will implement an Equity, Diversity, and Inclusion (EDI) Framework with GBA Plus considerations. The framework will outline actions the NCC will adopt to identify and remove barriers regarding the participation of individuals from underrepresented groups in network governance, operations, and activities. This includes developing EDI objectives, actions, data collection methods, and performance metrics to measure progress.

Similarly, contribution agreements with science research organizations require that recipients provide details of their planned activities to advance EDI on an annual basis, including updates on progress in their annual report. These activities can include setting representation or diversity-related targets for the governance and administration of scientific review committees; collecting self-identification data for EDI performance tracking; working towards a better understanding of program impacts on underrepresented groups; and embedding EDI values in hiring and training processes. At the initial phase of selecting funding recipients and negotiating agreements, GBA Plus is also applied.

GBA Plus also means ensuring inclusive outcomes for all Canadians through inclusive program design and implementation. For example, the NQS's broad community-based approach encourages youth from under-represented groups, such as girls, Indigenous youth, disabled youth, at-risk youth, and youth living in rural or remote locations, to develop life-long learning habits and curiosity toward STEM fields such as quantum science and technologies. Additionally, by expanding NREN into Nunavut through an agreement with Nunavut Arctic College, CANARIE will continue to reduce the digital divide for rural and northern communities.

Lastly, Genome Canada maintains a strong commitment to action on inclusion, diversity, equity and accessibility (IDEA) by embedding policies and practices enterprise-wide across its programs. It will continue collaborating with all equity-deserving groups for input on investment prioritization and delivery of challenge-driven initiatives. Specifically, Genome Canada has engaged with a wide range of Indigenous leaders across sectors and supports Indigenous-led programs, such as Silent Genomes and the Summer internship for Indigenous Peoples in Canada (SING Canada). They are working with Indigenous partners to co-develop an Indigenous truth, reconciliation and engagement strategy to elevate Indigenous genomics leadership in Canada. Through continued partnerships in activities such as the Black Excellence in Science, Technology, Engineering, Mathematics and Medicine/Health (BE-STEMM) event, Genome Canada provides research and career opportunities to Black Canadian scholars, with a focus on removing barriers and boosting retention.

For details on ISED's contributions to various UN Sustainable Development Goals please see the United Nations 2030 Agenda for Sustainable Development and the UN Sustainable Development Goals section under the People, Skills and Communities, and Companies, Investments and Growth core responsibilities.

Additionally, more information on ISED's contributions to Canada's Federal Implementation Plan on the 2030 Agenda and the Federal Sustainable Development Strategy can be found in ISED's Departmental Sustainable Development Strategy . Footnote v

Science, Technology, Research and Commercialization is supported by the following program in the program inventory:

• Science and Research

Supporting information on planned expenditures, human resources, and results related to ISED's program inventory is available on GC InfoBase . Footnote x

Support the creation, transfer and diffusion of knowledge to ensure that Canadians, including under-represented individuals, are equipped with the skills and tools to participate in an innovative, high-growth economy; advance a culture of innovation where Canadians are driven to address local, regional, national and/or global challenges; benefit from growth of the middle class across communities; have increased access to affordable broadband and mobile Internet, including in rural and remote regions; and are protected and informed consumers.

The People, Skills and Communities core responsibility aligns with the "Prosperity" domain of Canada's Quality of Life Framework, with its focus on improving participation in the Canadian economy for various segments of the population, particularly the emphasis on broadband access. For example, one of the indicators in the "Prosperity" domain is "access to high-speed Internet," measured by the proportion of households that have access to high-speed Internet services, which is also one of ISED's Departmental results indicators.

This core responsibility also aligns with the inclusion lens of the Quality of Life Framework, as several of ISED's programs focus on reducing barriers and enhancing access to financial and non-financial supports for entrepreneurs from various equity-deserving groups, including women, racialized people, and members of the 2SLGBTQI+ communities.

The following table shows, for each departmental result related to People, Skills and Communities, the indicators, the results from the three most recently reported fiscal years, and the targets and target dates approved for 2024–25.

Table 5: Indicators, results, and targets for departmental result: People and communities from all segments of Canadian society participate in the economy.

The financial, human resources and performance information for ISED's program inventory is available on GC InfoBase . Footnote xi

Departmental Result: : People and communities from all segments of Canadian society participate in the economy.

In 2024–25, ISED will continue to provide people from all regions of the country with the necessary access, tools, and skills to participate in the digital economy. In support of Canada's Connectivity Strategy, ISED will continue to advance connectivity and bring reliable high-speed Internet access to households and businesses across Canada through the $3.225 billion Universal Broadband Fund (UBF). For instance, ISED will continue to roll out UBF projects across Canada to further advance connectivity in rural and remote areas of the country, such as in the example of Saskatchewan, where the UBF brought fibre-optic Internet to the communities of Thode and Shields, allowing nearly 350 households and other local businesses (e.g., those in the tourism industry) to benefit from access to remote schooling, work, healthcare and connecting with loved ones. These efforts will support our goal of 98% of Canadian households having access to high-speed internet by 2026, and 100% by 2030.

To provide high-speed Internet service to the hardest to reach households, the Government of Canada has entered into a $600 million agreement with Telesat to secure capacity on its low Earth orbit (LEO) satellite constellation, Telesat Lightspeed. Through Telesat Lightspeed, Internet service providers (ISPs) will be able to offer services to Canadian households at a reduced rate, bringing Canada closer to meeting its 2030 100% connectivity target. ISED will continue to monitor Telesat's progress towards a 2026 launch and 2027 service date, working with Telesat to connect a total of 40,000 rural , remote and Indigenous households in satellite-dependent communities, including in the Far North.

Through the Connecting Families Initiative (CFI), ISED will continue to promote affordable Internet access for low-income families and seniors who face affordability barriers. In partnership with ISPs, ISED will continue to facilitate access to affordable Internet plans for the hundreds of thousands of households that need it most. Specifically, in 2024–25, ISPs will provide the newest service package of 50/10 Mbps Internet speeds for $20 per month, along with the previous package (10/1 Mbps) at $10 per month.

To enhance awareness and access among those who are eligible , the CFI will be promoted through mailouts to eligible individuals and households, inviting them to register through the program's web portal. Working with the Canada Revenue Agency and Employment and Social Development Canada, ISED will explore additional means beyond mailouts to reach the target population, potentially through emails. A social media campaign, coupled with other social media engagement strategies and webinars with community-based partner organizations, will also help broaden awareness of the CFI. These efforts will serve to provide more information about the program and support organizations in helping those who have language barriers or digital literacy challenges to register and to participate in the CFI.

In addition to improving Internet access, ISED, through the Digital Literacy Exchange Program (DLEP), will continue to support not-for-profit organizations in developing and delivering digital literacy skills training for those who face barriers to participating in the digital economy. The program's second phase, DLEP 2.0, aims to provide digital literacy training to 100,000 individuals, including persons with disabilities, Indigenous people, individuals who do not speak English or French at home, seniors, individuals who have not completed high school, individuals with low-income, residents in rural and remote areas, newcomers to Canada, and individuals from official language minority communities.

Through these collective efforts and their focus on tackling systemic barriers to economic participation, the Department will help foster an increasingly accessible, and inclusive digital economy by providing everyone in Canada with the access, tools, skills, and affordable services they need.

Diversifying Canada's entrepreneurial ecosystem

As Canada's entrepreneurial landscape continues to evolve, various groups, including women, Indigenous people, and other racialized minorities, remain under-represented in the entrepreneurial ecosystem. In 2024–25, ISED's programs will continue to dismantle the barriers faced by these groups by providing access to financing, business tools and support services so that all equity-deserving groups have equal access to the resources needed to start and grow their businesses. By investing in diverse entrepreneurs, ISED will unlock new and existing potential in the business community, making Canada's entrepreneurial ecosystem more accessible by providing opportunities and support for individuals from equity-deserving groups to start, scale, grow, and maintain their businesses.

Through the Women Entrepreneurship Strategy (WES), the Black Entrepreneurship Program, and the newly established 2SLGBTQI+ Entrepreneurship Program, ISED will continue to facilitate access to financing, networks, mentorship, and business supports, such as financial planning services and training, for under-represented entrepreneurs across Canada.

In 2024-25, the WES Ecosystem Fund will continue to strengthen capacity within the entrepreneurship ecosystem and offer business supports to diverse women entrepreneurs, as well as those in rural and remote areas. An investment of $65 million will fund 24 projects led by not-for-profit organizations to offer supports such as training, mentorship and financial literacy. Furthermore, the WES Ecosystem Fund will continue to strive to serve at least 12,000 women entrepreneurs across Canada annually. The WES Ecosystem Fund will support the École des entrepreneurs du Québec FAIR.E project, which will deliver three transformational learning programs—free-of-charge—to help women entrepreneurs launch, boost and grow their businesses. The project will serve up to 1,800 women in six provinces: Quebec, Ontario, Prince Edward Island, New Brunswick, Nova Scotia, and Newfoundland and Labrador. Finally, financing and access to capital will be offered to women entrepreneurs through the $55 million Women Entrepreneurship Loan Fund, which provides individual loans of up to $50,000.

To bolster the representation of under-represented groups in Canada's entrepreneurial ecosystem, the $160 million Black Entrepreneurship Loan Fund (BELF)—made up of $30 million from the Government of Canada and $130 million from the Business Development Bank of Canada (BDC)—will continue to provide individual loans of up to $250,000 for Black business owners and entrepreneurs. The BELF administrator, the Federation of African Canadian Economics (FACE), in partnership with BDC, has approved over 500 applications, representing more than $46 million in loans. In 2024-25, the Black Entrepreneurship Ecosystem Fund will continue to support 43 not-for-profit organizations across the country, in providing training, mentorship, networking and financial literacy services to Black entrepreneurs and business owners. Entrepreneurs who identify as 2SLGBTQI+ (Two-Spirit, lesbian, gay, bisexual, transgender, queer, intersex, or other sexually or gender diverse people) make sizable contributions to the Canadian economy, yet they continue to face systemic barriers to starting and growing their businesses. Through the 2SLGBTQI+ Business Scale-Up program, totalling $13.5 million in funding, and in partnership with Canada's 2SLGBTQI+ Chamber of Commerce (CGLCC), ISED will help 2SLGBTQI+ entrepreneurs across Canada grow their businesses by implementing a national mentorship program, improving access to corporate procurement opportunities, and helping 2SLGBTQI+ entrepreneurs and businesses become export ready. The Business Scale-Up program plans to support 250 small and medium-sized enterprises (SMEs) by March 31, 2025, including 55 SMEs owned and managed by 2SLGBTQI+ individuals who also identify as members of another equity-deserving group.

Within the venture capital (VC) ecosystem, women entrepreneurs continue to face systemic barriers to accessing venture capital funding. To address these barriers and build a more inclusive risk and venture capital environment for women in Canada, the Venture Capital Catalyst Initiative (VCCI) will continue to increase women entrepreneurs' access to VC funding, contribute to increasing the representation of women in the VC industry, and help ensure that the VC industry is sensitive to gender and potential unconscious bias. VCCI's projects seek to facilitate capacity building and skills development opportunities as they relate to training and education, mentorship and coaching, and advisory services.

Additionally, the Small Business and Entrepreneurship Development Program (SBEDP) General Fund received $101.4 million, as announced in Budget 2021, to support national/pan-Canadian not-for-profit organizations into assisting SMEs across Canada, including those led or owned by members of equity-deserving groups, to develop and grow. The SBEDP General Fund has been used to support several entrepreneurship initiatives, including the $25 million 2SLGBTQI+ Entrepreneurship Program and the renewal of the Trade Accelerator Program

The Department will also continue to build knowledge and collect data on under-represented entrepreneurs to create a more inclusive and supportive business environment through the Women Entrepreneurship Knowledge Hub (WEKH), the Black Entrepreneurship Knowledge Hub (BEKH), and the 2SLGBTQI+ Knowledge Hub, which conduct research on the state of the entrepreneurial ecosystem for each group. To provide evidence-based research to inform the design and delivery of targeted supports for women entrepreneurs, the WEKH, led by Toronto Metropolitan University, will continue to publish the State of Women's Entrepreneurship annual report, as well as reports and articles on women entrepreneurs across a variety of sectors, such as cleantech, agriculture, arts and culture, and procurement. To further dismantle the barriers experienced by women entrepreneurs, the WEKH will continue to add more women entrepreneurs to its See It. Be It. database of over 1,800 diverse Canadian women entrepreneurs.

The BEHK, administered by Carleton University's Sprott School of Business and the Dream Legacy Foundation, will continue to work with community partners to advance research on the state of Black entrepreneurship in Canada and help identify barriers to success, as well as opportunities for growth, for Black entrepreneurs. To support this work, the BEKH will conduct a range of research activities. BEKH will also continue to convene Black Entrepreneurship Program stakeholders, building on the successes and lessons learned from its annual symposiums in 2022 and 2023. Similarly, the 2SLGBTQI+ Knowledge Hub will conduct research and collect data to create a clearer picture of the entrepreneurship landscape for the 2SLGBTQI+ community and the challenges 2SLGBTQI+ entrepreneurs face.

In 2024–25, ISED will continue to challenge Canadian organizations to increase the representation and inclusion of diverse groups in senior leadership positions through the 50 – 30 Challenge, which aims to achieve gender parity (50% women and/or non-binary people) and significant representation (30%) of members of other equity-deserving groups on Canadian boards and/or in senior management. The five Ecosystem Partners — Colleges and Institutes Canada, UN Global Compact Network Canada, the Ted Rogers School of Management's Diversity Institute, the Women's Economic Council and Egale Canada— will continue to support challenge participants by delivering tools, services and resources to help them meet the 50 – 30 Challenge objectives.

Bolstering the digital presence of Canadian businesses

ISED is committed to helping Canadian businesses, especially SMEs and businesses owned by under-represented entrepreneurs, take advantage of digital technologies. Through the Canada Digital Adoption Program (CDAP), ISED will provide funding opportunities and expert advice to help SMEs digitalize their operations. In 2024–25, the Department will continue to help SMEs establish a digital presence and to provide job opportunities to youth—by hiring and training them as e-commerce advisors—through CDAP.

Through its Grow Your Business Online component, CDAP will continue to provide eligible businesses with micro-grants of up to $2,400 for costs associated with the adoption of digital technologies and with assistance and e-commerce advisory services. By focusing on awareness-building activities and user-centric enhancements, CDAP will continue to increase its uptake to maximize the value and impact of the program for participating businesses.

Through CDAP's Boost Your Business Technology component, additional incentives will be offered in the form of interest-free loans through BDC and individual wage subsidies of up to $7,300 for youth employment placements, to support SMEs in implementing their digital adoption plans to improve their productivity and competitiveness.

ISED, through the Trade Accelerator Program (TAP), will continue to help SMEs take advantage of international market opportunities by increasing their exporting capabilities. TAP is delivered by six regional chambers of commerce across Canada and will support these organizations in guiding participating SMEs to achieve an increase in the value of their exports over the course of their participation in the program through access to networks, training and advice from Canada's top export advisors.

Due to ongoing procurement and supply chain challenges, labour shortages, and inflation, combined with unexpected events such as extreme weather and wildfires, there is a risk of delays and cost overruns for some projects under the UBF and Telesat's LEO satellite constellation. ISED will continue to monitor the progress of these projects and to work closely with funding recipients to mitigate risks on a case-by-case basis to ensure that the programs remain on track to meet the government's connectivity targets.

Given the systemic barriers that people from under-represented groups continue to face in accessing financial and non-financial support services, there is a risk of insufficient program uptake or use by eligible recipients. In addition, there is a risk that ISED's programs may not sufficiently address the needs of their target populations because of the changing economic climate, the evolving needs of SMEs and entrepreneurs, and the limited availability of data on the specific entrepreneurship barriers that some equity-deserving groups face. To mitigate these risks, ISED will undertake targeted outreach and engagement activities to ensure that programs reach their audience and that eligible individuals benefit from key services. ISED will also continue to leverage research and data from the various knowledge hubs and work closely with community-based organizations to co-develop services and supports, such as training, to ensure that programming is relevant, useful and culturally appropriate for the target audience.

• Planned spending: $703,840,962
• Planned full-time resources: 178

ISED will continue to foster an inclusive and representative modern digital economy by focusing on closing gaps in connectivity and Internet access for Canadian households, improving digital literacy skills, and providing financial and business supports to under-represented entrepreneurs.

Certain groups may face barriers to accessing DLEP and CFI services—for instance, those with limited access to technology due to financial constraints, lack of access to the Internet to register for the program, language barriers, lack of transportation or lack of awareness of the program. To address these limitations, the programs will continue to target low-income families, seniors, and official language minority communities. DLEP will continue to offer services free of charge, support multilingual training and translation, offer training in various facilities, and provide transportation to individuals in need. In partnership with the YWCA, the CFI will continue to offer services in multiple languages and to train staff in non-profit organizations that support low-income families and seniors on how to assist eligible participants with program registration.

Programs committed to closing the connectivity gap such as the UBF, will continue to work towards providing households in rural and remote and Indigenous communities with access to high-speed Internet. The UBF will continue to target under-served communities, including Indigenous communities.in order to bridge the digital divide by bringing reliable Internet access to these regions and groups.

Barriers to accessing financial and non-financial support services are further amplified for entrepreneurs with multiple intersecting identities (i.e., those who identify as belonging to more than one under-represented group). With a reduced awareness of these programs or a lack of knowledge in navigating government resources, these entrepreneurs may not benefit from federal supports. Entrepreneurs from equity-deserving groups and/or those in rural, remote, and northern communities may also face additional barriers to growth due to small local markets, remoteness, and infrastructure challenges. Furthermore, individuals who do not wish to identify as a member of an equity-deserving group may not benefit from ISED's programs and services.

To dismantle these barriers, ISED will ensure that the self-identification process in applications is secure and confidential and will enhance its outreach and communication activities —through platforms like the Business Benefits Finder, for example—to build awareness of all entrepreneurship programs. Furthermore, disaggregated data collected on diverse groups will be used to fuel research on Canada's entrepreneurial ecosystem and to improve programming for under-represented groups. The Department will also encourage recipient organizations to refer clients and to share information with eligible applicants to bolster the reach of their programs. In addition, ISED will continue to assess recipient organizations' projects to ensure that those benefitting individuals with intersecting identities and living in rural and remote communities are prioritized.

ISED is a strong supporter of Canada's efforts to develop and implement the United Nations 2030 Agenda for Sustainable Development and Sustainable Development Goals (SDGs). While ISED supports multiple SDGs, its programs and initiatives under the People, Skills, and Communities core responsibility primarily advance action on SDG 9—Industry, Innovation and Infrastructure to "build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation." ISED's programs and initiatives in support of this SDG include Canada's Connectivity Strategy, the Universal Broadband Fund, Connect to Innovate), and the Canada Digital Adoption Program.

ISED's People, Skills, and Communities programs also advance other SDGs, such as:

• ensuring inclusive and equitable quality education and promoting lifelong learning opportunities for all; and
• promoting inclusive and sustainable economic growth, full and productive employment, and decent work for all.

More information on ISED's contributions to Canada's Federal Implementation Plan for the 2030 Agenda and the Federal Sustainable Development Strategy can be found in ISED's Departmental Sustainable Development Strategy . Footnote v

People, Skills, and Communities is supported by the following programs in the program inventory:

• Support for Under-represented Entrepreneurs
• Bridging Digital Divides

Supporting information on planned expenditures, human resources, and results related to ISED's program inventory is available on GC InfoBase . Footnote xii

Internal services are the services that are provided within a department so that it can meet its corporate obligations and deliver its programs. There are 10 categories of internal services:

• management and oversight services
• communications services
• legal services
• human resources management services
• financial management services
• information management services
• information technology services
• real property management services
• materiel management services
• acquisition management services

Our Workplace

In 2024–25, ISED will continue to ensure that its workspace, tools, and technology are accessible, and that they continue to evolve to meet changing needs of employees in the hybrid work environment. The Department will continue to modernize the built environment to meet GC Workplace standards, and to remove barriers identified in ISED's 2023-2025 Accessibility Plan. In 2024‒25, employees will see the creation of a variety of accessible spaces within the workplace including community boardrooms, multi-faith prayer rooms and reflection rooms. ISED will also continue to increase the number of all-access and gender-neutral washrooms that are available to employees. Finally, ISED will continue to equip its boardrooms with hybrid meeting technology and will continue to ensure Wi-Fi access in regional offices.

In many cases, the delivery of projects in the built environment are dependent on external partners such as building management companies, Public Services and Procurement Canada, Shared Services Canada, among others. As such, there is a risk that projects could be delayed if project stakeholders are unable to align with ISED's timelines. To mitigate this risk, ISED will continue to monitor its progress and reprioritize investments as required to responsibly manage its funds and continue to deliver on its requirements.

ISED's Future of Work Office (FOWO) has been critical to the Department's successful transition to the hybrid work environment. FOWO will continue to ensure that all employees have signed telework agreements and will monitor ISED's compliance with the Direction on Prescribed Presence in the Workplace to meet the reporting requirements set out by Treasury Board of Canada Secretariat (TBS).

Our Workforce

ISED is committed to being a leader in anti-racism, diversity, equity, inclusion and accessibility, and fostering organizational well-being. ISED's 2023-2025 Employment Diversity and Inclusion (EDI) strategy emphasizes equity by providing fair opportunities and access, while also highlighting accountability and reporting mechanisms to ensure effective behaviors and tangible results across the organization. As an integral part of the strategy, ISED is piloting a new corporate onboarding program designed to develop a greater sense of belonging within the organization. This program will offer new employees personalized resources, tailored onboarding as well as the opportunity to engage in specialized networking events with ISED's various employee networks.

Through the 2023-2025 Accessibility Plan, ISED is working to identify, remove and prevent barriers not only in the built environment, but also in the areas of culture, employment, accessibility, and communication, with the aim to combat ableist attitudes, enhance inclusive hiring practices, and improve accessibility. To improve the accommodations process, ISED will empower managers to autonomously handle accommodation issues, when possible, provide support when needed and continue to foster awareness, and encourage the pursuit of innovative, inclusive solutions. ISED will continue to implement its 2023-2026 Official Languages (OL) Strategy, incorporating OL policy into departmental strategies, promoting collective leadership, and integrating planned OL improvements to foster linguistic duality within ISED.

In 2024‒25, ISED will implement its updated 2023-2026 Mental Health Strategy which aims to improve psychological health and safety in the workplace; prioritize employee well-being, leading to a healthier and more productive workforce. The strategy also seeks to integrate diversity, equity, and inclusion principles, emphasizing their critical role in creating a supportive work environment where every individual is acknowledged, respected, and valued.

To further support employee mental health and well-being, the Canadian Innovation Centre for Mental Health in the Workplace will continue to offer mental health workshops to ensure managers and employees are aware of the tools and services available to support mental health in the workplace, including but not limited to the Employee Assistance Program (EAP).

In addition to EAP, ISED also offers Ombuds Services and Information Conflict Management Services (ICMS). This year, ISED will work to ensure that its services are accessible and inclusive, and that members of underrepresented groups feel safe and secure in accessing them. Specifically, the Office of the Ombud will reach out to all internal EDI networks to answer questions, address concerns, identify any potential barriers to access, and establish ways to overcome them. The goal of this work is to ensure that employees can discuss any issue—including racism, inclusion, equity, discrimination, or accessibility—in complete confidence and without fear of reprisal.

This year, ISED will undertake a three-year review of the Harassment and Violence prevention program, with a focus on preventative measures and program improvements and to assess program effectiveness. At the same time, the Department will continue to offer employee support regarding harassment, violence, and discrimination issues, including sessions on addressing microaggression while preserving positive working relationships. Additionally, ISED will facilitate safe space discussions with executives, so that they are equipped to facilitate conversations on EDI, harassment, and discrimination with their own teams.

Over the past two years, ISED has implemented phases I and II of its Financial Management Modernization Initiative, to improve financial stewardship and optimize financial management practices as well as to improve access to timely and effective financial management information to support decision making and risk management. To date, ISED has also reinforced accountabilities within the Department and centralized key functions to ensure better alignment under the Chief Financial Officer model. In 2024‒25, ISED will focus on optimizing the model to ensure maximum benefit for the organization. This will be especially important as the Department moves to a risk-based approach to better manage the variety and scope of its Grants and Contributions programs.

ISED will also transition to multi-year budget planning to ensure the Department is well positioned to achieve the Government of Canada saving targets announced in Budget 2023. ISED's finance and human resources teams will work together closely to maximize savings from attrition and realign resources to ensure ongoing program delivery.

To support the advancement of departmental and government priorities across Canada, ISED's regional offices will continue to serve as ISED's ambassadors across the country, providing substantial support to the Department's five ministers by organizing and executing ministerial visits. Regional offices will also continue to gather critical regional intelligence, facilitate relations with ISED's key regional partners, and conduct policy analysis to support the delivery of ISED's programs and services across the country.

In 2024‒25, ISED will continue to modernize and improve its Information Management and Information Technology (IM/IT) infrastructure, tools and services to improve users' digital experience, while maintaining a secure technical environment. In alignment with ISED's recently developed Service & Digital Strategy and Service Improvement Road Map, the Department will continue to monitor service criteria such as online end-to-end access, real-time performance measures, accessibility, service improvement based on client feedback and performance against service standards.

ISED will continue monitoring its cloud-based landscape to ensure that all internal and external services, databases and platforms remain available to users and function without interruption. To enhance its security posture, ISED will continue to advance its detection and response capability, ensuring that the organization is able to respond to cyber threats, and minimize any related impacts.

There is a strong demand within the organization to build a data pipeline and create tools for ISED's programs to enable evidence-based program delivery. Building on the successful development of Power BI dashboards for CDAP, ISED will continue to develop data visualization tools that put real-time program information in the hands of ISED's decision makers. To further support the management and utilization of organizational data, ISED will continue to implement data standards and data integrity measures to ensure the reliability of its data, improve digital information management practices, and manage information sprawl across the organization.

• Planned spending: $182,467,251
• Planned full-time resources: 1,651

Planning for contracts awarded to Indigenous businesses

To achieve and exceed the 5% Indigenous procurement targets and meet our economic reconciliation obligations, ISED continues to take the following actions:

• Communicate ISED's Indigenous Procurement Policy and related processes to advocate and encourage procurement with Indigenous businesses;
• Impose mandatory training for Procurement Functional Specialists, Acquisition Cardholders, and staff with low-dollar procurement delegations;
• Conduct ISED's Annual Procurement Planning exercise to enable early client engagement with key department officials to maximize opportunity with Indigenous businesses;
• Publish Requests for Information to determine if Indigenous capacity exists, as needed;
• Apply Procurement Strategy for Indigenous Business (PSIB) and include evaluation criteria in solicitation documents to maximize opportunity for Indigenous businesses to the greatest extent possible;
• Award sole source contracts under $40K to Indigenous businesses where capacity and market presence exists and above $40K direction to Indigenous businesses is encouraged.
• Unbundle larger contracts when Indigenous capacity exists;
• Attend Indigenous job expos to better understand the market and help Indigenous businesses navigate procurement within the federal government; and
• Utilize corporate controls and reporting to monitor compliance and achieve the targets.

ISED's targets were determined by analyzing past contracting data. Using this information, procurement opportunities were identified, and ambitious targets were established. 

ISED reviews purchasing activity and compares it with the Indigenous Business Directory (IBD). Where no capacity exists, ISED established exempted commodities, for Deputy Minister (DM) approval. ISED annually reviews the Indigenous Business Directory IBD to determine if updates to the exemptions apply.

The potential challenges in meeting the minimum 5% target for ISED's commonly purchased commodities include lack of competitive pricing, limited capacity and gaps in expertise.

In 2024–25, ISED plans to establish a means to report acquisition card purchases with Indigenous businesses with the goal of increasing ISED's procurement results.

Planned spending and human resources

This section provides an overview of ISED's planned spending and human resources for the next three fiscal years and compares planned spending for 2024–25 with actual spending from previous years.

Table 6: Actual spending summary for core responsibilities and internal services ($ dollars)

The following table shows information on spending for each of ISED's core responsibilities and for its internal services for the previous three fiscal years. Amounts for the current fiscal year are forecasted based on spending to date.

Table 6 Notes

The variance primarily reflects actual spending under the Universal Broadband Fund, which was lower in 2022–23 as a result of the proposal assessment process and contribution agreement negotiations.

Also reflected is the funding profile for the Canada Digital Adoption Program: Stream 1.

Return to table 6 note 1 referrer

The increase reflects the actual spending related to the implementation of the Strategic Science Fund and the National Quantum Strategy.

Return to table 6 note 2 referrer

The increase in actual spending primarily reflects the funding profiles of the Strategic Innovation Fund, the Canada Digital Adoption Program: Stream 2 and the Canada Foundation for Sustainable Development Technology.

Return to table 6 note 3 referrer

The variance in actual spending primarily reflects spending to support various departmental initiatives such as Diversity & Inclusion, Workload Migration and Future of Work.

Return to table 6 note 4 referrer

Table 7: Budgetary planning summary for core responsibilities and internal services (dollars)

The following table shows information on spending for each of ISED's core responsibilities and for its internal services for the upcoming three fiscal years.

Table 7 Notes

The variance in planned spending reflects a fluctuation in the approved funding profile of the Universal Broadband Fund, offset by the end of funding for several programs such as the Canada Digital Adoption Program: Stream 1, the Small Business and Entrepreneurship Development Program and the Women's Entrepreneurship Program.

Return to table 7 note 1 referrer

The variance in planned spending primarily reflects a decrease in the approved funding profile of the Digital Research Infrastructure Strategy. Also reflected is the winding down of several programs such as Genome Canada, adMare Bioinnovations, Stem Cell Network.

Return to table 7 note 2 referrer

Planned spending primarily reflects new funding announced in Budget 2023 for the Strategic Innovation Fund to support battery manufacturing in Canada. Also reflected is the end of temporary funding for several programs such as the Canada Digital Adoption Program: Stream 2, Upskilling for Industry Initiative, New Generation Wireless Technology Initiative, Zero Emissions Vehicles and Fuels Regulatory.

Return to table 7 note 3 referrer

The budget reduction related to the Refocusing Government Spending is reflected among all core responsibilities, to reach $191.6 million by 2026–27.

Return to table 7 note 4 referrer

Table 8: 2024–25 budgetary gross and net planned spending summary (dollars)

The following table reconciles gross planned spending with net planned spending for 2024–25.

ISED's 2024-25 Budgetary Planned Gross Spending is $6.5 billion, which includes $374.4 million in vote netted revenues, accounting for total planned net spending of $6.1 billion.

The ISED vote netted revenue authorities are those referred to in paragraph 29.1(2)(a) of the Financial Administration Act (i.e. revenue received by the department in a fiscal year through the conduct of its operations, which the department is authorized to expend in order to offset expenditures incurred in that fiscal year) from the following sources:

• the provision of internal support services under section 29.2 of that Act, and the provision of internal support services to the Canadian Intellectual Property Office;
• activities and operations related to communications research at the Communication Research Centre;
• services and insolvency processes under the Bankruptcy and Insolvency Act at the Office of the Superintendent of Bankruptcy;
• activities and operations carried out by Corporations Canada under the Canada Business Corporations Act, the Boards of Trade Act, the Canada Cooperatives Act and the Canada Not-for-profit Corporations Act; and
• services and regulatory processes for mergers and merger-related matters, including pre-merger notifications, advance ruling certificates and written opinions, under the Competition Act at the Competition Bureau.

The following graph presents planned spending (voted and statutory expenditures) over time.

The variance in future years is primarily related to the fluctuations in the cashflow profiles of transfer payment programs.

Estimates by vote

Information on ISED's organizational appropriations is available in the 2024–25 Main Estimates . Footnote xiii

The future-oriented condensed statement of operations provides an overview of ISED's operations for 2023–24 to 2024–25.

The forecast and planned amounts in this statement of operations were prepared on an accrual basis. The forecast and planned amounts presented in other sections of the Departmental Plan were prepared on an expenditure basis. Amounts may therefore differ.

A more detailed future-oriented statement of operations and associated notes, including a reconciliation of the net cost of operations with the requested authorities, are available at ISED's website . Footnote xiv

Table 9: Future-oriented condensed statement of operations for the year ending March 31, 2025 (dollars)

The expected variance in total expenses year-over-year is mainly attributable to increases in transfer payments, particularly in the Strategic Innovation Fund, the Canada Foundation for Innovation, the Digital Research Infrastructure Strategy and the Universal Broadband Fund. Given the complexity of some of ISED's programming, and the requirement to align the funding profile with the recipients forecasted spending, further changes to the 2024–25 planned results could occur during the fiscal year.

Total revenues (net of those earned on behalf of government) are projected to increase year-over-year, mainly as the Canadian Intellectual Property Office (CIPO)'s revolving fund expects to collect higher revenues due to fee increases and increased examination capacity.

Table 10: Actual human resources for core responsibilities and internal services

The following table shows a summary of human resources, in full-time equivalents (FTEs), for ISED's core responsibilities and for its internal services for the previous three fiscal years. Human resources for the current fiscal year are forecasted based on year to date.

Table 10 Notes

The increase in actual and forecast FTEs is due to new temporary employees in support of the implementation of the Canada Digital Adoption Program: Stream 1 and the Universal Broadband Fund.

Return to table 10 note 1 referrer

The increase in actual and forecast FTEs is due to the implementation of the Strategic Science Fund Program and the launch of the National Quantum Strategy.

Return to table 10 note 2 referrer

Table 11: Human resources planning summary for core responsibilities and internal services

The following table shows information on human resources, in full-time equivalents (FTEs), for each of ISED's core responsibilities and for its internal services planned for 2024–25 and future years.

Table 11 Notes

The decrease is due to the winding down of funding for the Canada Digital Adoption Program: Stream 1 and the Universal Broadband Fund.

Return to table 11 note 1 referrer

The decrease is due to the winding down of funding for the Canada Digital Adoption Program: Stream 2 and the funding for the Budget 2021 measures entitled Charging and Fueling Zero Emission Vehicles; and Supporting the Production and Use of Clean Fuels.

Return to table 11 note 2 referrer

FTE totals may not add due to rounding.

Return to table 11 note 3 referrer

The reduction in Full Time Equivalent related to the Refocusing Government Spending, which will be achieved by not backfilling certain positions as they vacate through attrition, is reflected among all core responsibilities, to reach 94 FTE by 2026–27.

Return to table 11 note 4 referrer

Return to table 11 note 5 referrer

Appropriate minister(s):

Minister of innovation, science and industry.

The Honourable François-Philippe Champagne, P.C., M.P.

Minister of Export Promotion, International Trade and Economic Development

The Honourable Mary Ng, P.C., M.P.

Minister of Tourism and Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec

The Honourable Soraya Martinez Ferrada, P.C., M.P.

Opportunities Agency

Minister of small business.

The Honourable Rechie Valdez, P.C., M.P.

Deputy ministers:

Simon Kennedy

Francis Bilodeau

Ministerial portfolio:

Innovation, Science and Economic Development Footnote xv

Enabling instrument(s):

Innovation, Science and Economic Development Canada's founding legislation is the Department of Industry Act , S.C. 1995, c.1. Footnote xvi

Year of incorporation / commencement:

Mailing address:.

Corporate Management Sector Innovation, Science and Economic Development Canada 235 Queen Street 2nd Floor, East Tower Ottawa, ON K1A 0H5

613-954-5031

1-866-694-8389

613-954-2340

ic.info–info.ic@ised–isde.gc.ca

Website(s):

https://ised-isde.canada.ca/site/ised/en

The following supplementary information tables are available on ISED's website:

• Details on transfer payment programs
• Gender-based analysis plus
• Horizontal initiatives
• Up front multiyear funding

Information on ISED's departmental sustainable development strategy can be found on ISED's website . Footnote x

ISED's Departmental Plan does not include information on tax expenditures.

Tax expenditures are the responsibility of the Minister of Finance. The Department of Finance Canada publishes cost estimates and projections for government‑wide tax expenditures each year in the Report on Federal Tax Expenditures . Footnote xvii

This report provides detailed information on tax expenditures, including objectives, historical background and references to related federal spending programs, as well as evaluations, research papers and gender-based analysis plus.

For the purpose of the 2024–25 Departmental Plan, government-wide priorities are the high-level themes outlining the government's agenda in the 2021 Speech from the Throne: building a healthier today and tomorrow; growing a more resilient economy; bolder climate action; fighter harder for safer communities; standing up for diversity and inclusion; moving faster on the path to reconciliation and fighting for a secure, just, and equitable world.

An initiative in which two or more federal organizations are given funding to pursue a shared outcome, often linked to a government priority.

Net outlays and receipts related to loans, investments and advances, which change the composition of the financial assets of the Government of Canada.

What an organization did with its resources to achieve its results, how well those results compare to what the organization intended to achieve, and how well lessons learned have been identified.

The articulation of strategic choices, which provides information on how an organization intends to achieve its priorities and associated results. Generally, a plan will explain the logic behind the strategies chosen and tend to focus on actions that lead up to the expected result.

For Departmental Plans and Departmental Results Reports, planned spending refers to those amounts presented in the Main Estimates.

A department is expected to be aware of the authorities that it has sought and received. The determination of planned spending is a departmental responsibility, and departments must be able to defend the expenditure and accrual numbers presented in their Departmental Plans and Departmental Results Reports.

Individual or groups of services, activities or combinations thereof that are managed together within a department and that focus on a specific set of outputs, outcomes or service levels.

An inventory of a department's programs that describes how resources are organized to carry out the department's core responsibilities and achieve its planned results.

An external consequence attributed, in part, to an organization, policy, program or initiative. Results are not within the control of a single organization, policy, program or initiative; instead, they are within the area of the organization's influence.

Expenditures that Parliament has approved through legislation other than appropriation acts. The legislation sets out the purpose of the expenditures and the terms and conditions under which they may be made.

A measurable performance or success level that an organization, program or initiative plans to achieve within a specified time period. Targets can be either quantitative or qualitative.

Expenditures that Parliament approves annually through an Appropriation Act. The vote wording becomes the governing conditions under which these expenditures may be made.

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