Innovation eligibility checklist
Buying innovation involves a more agile and complex procurement approach compared to buying known solutions. Find out if Test and Buy Innovation is the right approach for your buying project.
Innovation defined
The term ‘innovation’ can be interpreted differently. In the NSW Government environment, the World Economic Forum’s definition is helpful because it focuses on achieving value (or service outcomes) despite complexity, and recognises the role of practical steps. It states:
"Innovation is the process of turning new ideas into value, in the form of products, services, business models, and other new ways of doing things. It is complex and goes beyond mere creativity and invention to include the practical steps necessary for facilitating adoption.”
Procurement approach when buying innovation
Innovation procurement is when a buyer understands the problem they want to solve but they have not yet decided what they're buying.
Procurement processes for buying known solutions are well established, even where those solutions might be considered innovative. Buying innovation is different from established models of procurement because it helps the NSW Government access the latest technology and solve problems in new or unexpected ways. It relies on agile and innovation-friendly procurement methods, like:
- early market engagement
- focusing on the problem or outcomes
- trying out unfamiliar or less mature solutions
- co-designing with suppliers
- multi-stage procurements that support scaling from successful trials.
Current procurement policies allow and encourage buyers to use these methods. However, their complexity can be a barrier to adoption. That is why we recognise innovation as needing a distinct procurement approach and support.
Different business objectives
When buying innovation, business objectives are different compared to standard procurement. Expand the headings below to see if your business objectives are more aligned with buying innovation or buying known solutions.
The NSW public sector has developed procurement processes focused on established products and services. Existing processes support buyers achieve their business objectives when what they want to buy is clear, and they are confident it will meet their needs.
In these scenarios, the business objectives include:
- speed to use
- pre-agreed terms
- accessing lower pricing through spend aggregation
- risks understood and mitigated
- minimum administration and handling
- catalogues / easy to find suppliers and products.
When a buyer doesn’t know exactly what they’re buying, business objectives that focus on efficiency and risk minimisation can lock out innovation. Instead, when buying innovation, the business objectives are:
- understand the problem space and define the challenge or opportunity
- leverage expertise of the market and the latest technology
- try things out before committing
- learn and adapt to make more confident investment decisions
- a pathway to scale when a solution works well.
A wide range of procurement approaches can support the business objectives for innovation. The combination that best suits an individual project is called an innovation buying pathway. Creating this pathway is the first step when buying innovation.
Learn more about the Pathway step.
Eligibility checklist
This non-exhaustive list can help identify whether adopting innovation-friendly procurement practices is the right approach for your buying project. For help understanding or working through any of these criteria, contact the advisory team at innovationprocurement@customerservice.nsw.gov.au.
| Qualifiers | Detailed criteria |
|---|---|
| Problem |
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| Buying objective |
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| Buyer readiness |
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| Scale of opportunity |
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| Leverage best of market |
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| Source of opportunity |
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| Funding |
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