https://sfadigital.blog.gov.uk/2015/02/16/supply-chain-transformation-procurement-lessons-learnt/

Supply chain transformation - procurement lessons learnt

In a previous blog we explained that we have moved away from large IT contracts, handled by a single outsourcer, to a “tower model”. In this model separate IT components – such as hosting, applications, network, security and desktop support – are supplied by different companies.

Our procurement approach to support the change is to

  • Firstly, adopt other government shared service contracts where possible, to save us having to do our own procurement (share first)
  • Then, use the G-cloud, an online marketplace where suppliers offer their cloud-based services to the public sector (commoditise where possible)
  • Use a traditional OJEU procurement approach, as a last resort.

Testing the new approach

We tested the G-cloud and shared service routes on a number of IT procurement projects. Both we and the potential suppliers were early adopters of these new approaches.

The projects showed us that the transformation to the tower model would be more complicated than we had first thought, but helped us understand the risks and how we could improve our processes.

Key findings

  • There was no opportunity for potential suppliers to talk to us about the work, and this meant existing suppliers were seen to have an advantage. We think this may have discouraged new suppliers from making bids. This is less of a problem now, as it’s becoming clear to all suppliers, new and existing, that the government supply chain is changing and that we’re committed to this change.
  • The two year terms of the G-Cloud agreements were too short to make them financially viable for suppliers (particularly for the SIAM function and there were seemingly no opportunities to increase revenue in the account). We’ve shared our feedback on this with the G-Cloud team.
  • Our teams were used to traditional OJEU procurement processes and it was a steep learning curve to make G-Cloud work for us. We’ve since developed our own G-cloud “made easy” manual and trained our staff on the new ways of working and new procurement best practice.
  • It works best when suppliers are given clear and concise tender material. At first the information we provided was very detailed. Some suppliers, particularly the small and medium-sized ones, told us they didn’t bid because there was too much information to review in the time they were given.
  • When we were looking for shared service opportunities, we found it wasn’t easy to find out what contracts government had in place that we could take advantage of. We’ve shared our feedback on this with the government and suggested a central register of shared service agreements.
  • Planning in trials periods for suppliers to prove their credentials was extremely valuable, and reduced risk for both parties. This is now embedded in our procurement process.
  • Suppliers really liked our prospectus, which set out our ‘as is’ and ‘to be’ transformation programme. We also ran a supplier day to engage with a range of new suppliers, explain our strategy, our challenges, our expected benefits and our procurement plan. Going forward we will carry on having supplier days but will use social media routes to warm up the market as well.

What are your experiences?

If your organisation has gone through a similar change in IT procurement, we’d be very interested to hear your experiences.

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