Commercial Competence

Commercial acumen is a term that refers to an individual’s ability to view situations from a commercial or business perspective, facilitating better business decisions and innovative thinking. It’s about knowing the market, customers and stakeholders, what they want and need and how they work; understanding organisational culture; identifying threats and opportunities; and about developing more robust strategic goals and better implementation plans, helping to justify the cost-effectiveness of any budget and the available resources.

Commercial acumen is just as relevant in the public sector as in private and is about developing the following:

  • A consideration of economic issues and concerns such as decreased income generation increased expenditure, decreased productivity
  • The ability to analyse financial trends and forecast accordingly
  • An awareness of commercial activity, competitive services and market trends
  • Appropriate strategies for working within budget limitations

It is important to consider how to promote commercial awareness throughout the organisation and with suppliers. For example, awareness of the need for efficiency, cost-effectiveness, customer / stakeholder support, a knowledge of the sector and the services the organisation provides and will provide in the future, and a consideration of the strategic objectives, current economic climate etc.

The Organisation must have clear, documented Procurement Delegated Authority and separate budgetary controls, controlled by commercially aware individuals.


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