Making Collaboration Work Key Considerations, Challenges & - PowerPoint PPT Presentation

Making Collaboration Work – Key Considerations, Challenges & Pitfalls Ian Conner CPO – Strategic Procurement Service Southwest One February 16th 2011

Agenda Southwest One – who are we?  Collaboration – It‘s the next big thing  Procurement Transformation within Southwest One  Embedding Category Management within the Client  Organisations Some examples of Collaborative Procurement in practice  Where next?  Q&A 

Southwest One Structure The vision of Southwest One is to enable the social transformation of 75% Taunton, Somerset and the South West to deliver better value for 25% money for council taxpayers and improve access to services for local residents, namely:  Create efficiency savings  Develop new ways for people to access public services FRAMEWORK AGREEMENT ALLOWS DELIVERY OF  Help the councils and the police SERVICES TO >38 OTHER DELIVER SERVICES TO AUTHORITIES WITHOUT improve services to the community SCC AND TDBC FROM COMPETITIVE TENDER 11/07, ASC FROM 06/08  Support the development of the local economy

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Collaboration – The New Shangri La ― Shangri -La has become synonymous with any earthly paradise but particularly a mythical Himalayan utopia — a permanently happy land, isolated from the outside world.‖ (wikipedia) ―Public Sector People Managers' Association president calls for collaboration‖ ―More councils look to shared services to keep them afloat‖ ―Senior civil servants on course for pain, cuts and collaboration‖ (Guardian) The Reality is Collaboration is hard, difficult to establish and requires significant skill (and patience) to make work

Collaboration – what it means in Southwest One Procurement There are three principal outcomes arising from collaboration which apply to the procurement shared service in Southwest One:- Bringing IBM in as a partner leverages expert knowledge and wide  experience of identifying improvement strategies in Procurement, providing the catalyst needed to embed new methodologies and deliver value Aggregated demand across two levels of Government and the Police to  generate cost reduction opportunities Builds a central procurement team which is stronger and more capable than  the sum of it‘s parts The shared service structure enables the recruitment of skilled category procurement specialists and a focus on developing close working relationships and driving strategic initiatives that just wouldn‘t have been possible for any of the three organisations without the partnership

Collaboration – Making it work Governance - Board of Directors drawn from all 4 partners.  Issues arising from perceived lack of focus on any one party are easily  addressed and resolved at senior level before dissent grows Close alignment to stakeholders is key - hearts and minds engagement is  crucial - Stakeholders are mapped and strategies aligned with them well in advance of key decision boards. Generate a Sourcing Council of the ―Great and the Good‖ to sign off  strategies and avoid subsequent arguments Detailed and extensive Customer satisfaction surveys are deployed to  understand and obtain users views of how procurement is performing, looking at Tactical; Category Management and Business Advisory aspects

Collaboration – Making it work The Southwest One model is based on seconded employees from  the original teams with additional resource coming from direct hires and IBM specialists. Category Teams have been established from a mix of secondees  (staff previously part of the old buying teams), new hires and some IBM resource. Apart from high level technical skills, key attributes are soft skills….  the ability to engage closely with stakeholders at all levels, winning ‗hearts & minds‘ Equally comfortable debating key economic issues with the CEO or having a chat and a cup of tea in a church hall in Hatch Beauchamp

Procurement – Evolution or revolution? From To Beat the supplier Partnership up and take his Collaboration wallet! Aligned goals

How should procurement support the drive for spending reductions? Within the 3 Client organisations that comprise Southwest One the key drivers are:-  Maintain front line Police presence  Safeguard as many key council provided services as possible  ―More for less‖  Drive efficiency  Reduce waste  Support the local economy  Green Agenda Procurement is perfectly positioned in the current economic climate to demonstrate it‘s worth in delivering ―more for less‖ for the Authorities and not simply acting as a processor of tenders

“Southwest One Strategic Procurement Service to deliver £200 million in cost savings over 10 years” Combined addressable spend of £500M per annum across the 3  Authorities Move procurement from a back end process driven service to a  front end advisory service, influencing and informing key commissioning decisions Deploy ―Category Management‖ as a core methodology that  analyses supply markets and demand trends to focus on best value delivery (not just cheapest price) Collaboration in procurement enables two prime goals:   Aggregated and committed spend and the ability to leverage it  Scale, specialised, professional procurement team, utilising a leading edge methodology with focus on outcomes Development of existing procurement staff alongside bringing in  ―fresh blood‖ was key to enhance skills and move procurement to a new ‗strategic‘ level Challenge demand within the Client organisations 

Transforming the team  Initial deployment of IBM procurement Consultants  First steps – focus on structure of the team  Establish master categories and ―Tactical team‖  Establish desired characteristics for each role  Assessing team capability & identifying Gaps against the role characteristics  Agreeing Gap closure initiatives to upskill team to required levels  Procurement Capability Accelerator  Importing key skills & expert practitioners to lead by example

The “Wave Plan” 20 High 1 Tpt Fleet & Grey Fleet Professional Adult Social Care Publications Services Tactical procurement 2 3PST EBI Highways Travel 15 Savings potential EBI Construction EBI Professional Services EBI Soft FM 3 EBI Hard FM Social Care CYP 3PST Fleet Inc ASP Public Tpt Social Care Learning Difficulties 10 Banking and finance IT Office MRO 4 Utilities Publications Uniforms Communications/marketing Leisure EBI Soft FM and public services EBI Highways 5 3PST EBI Waste Social Care Construction s Professional Police specific EBI Hard FM Adult Social Care Services Travel Fleet Scientific services 0 Low 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Easy Hard Ease of Implementation

The Category Planning Process Specifications, Requirements business plans, market & best Supply market corporate practice data, trends, objectives, analysis, Agreed Agreed Form a cross Team analysis on budgets, peculiarities of Category Category INPUT functional knowledge what other Plan & KPI’s historical spend SW1 Plan Team companies do data environment Market & Balancing Form Category Stakeholder Stakeholder Requirements Timelines & Category Benefits & Best Practice Management Management Management Analysis Resource Strategy Risks Analysis Analysis Team OUTPUT Agreed list of Forecast of Succinct report Agreed plan on When elements Future key future identifying how to take will be delivered estimated stakeholders & requirements future trends in Category & resources benefits comms plan identifying supply market, forward,  required  product our view on best  considering function, practice sourcing, SRM, volumes, &  compliance, value demand etc   Gather Facts Draw Conclusions Develop Options