How to improve commercial performance. Deliver more for less David Shields, Director Apsiz Services Ltd
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1 How to improve commercial performance Deliver more for less David Shields, Director May 2014
2 Transforming Government Procurement Service The Initial Major Steps Clear set of organisational targets established with senior stakeholders / shareholders 3 year outlook Operational targets established with Executive and Non Executive Teams Assessment of capacity, resources and gap analysis completed Governance, management controls and performance management regime established including internal and external audit Internal and external communications plan established Assessment of current technology platforms and utilisation completed Programme team and plan established
3 Targets and Performance Management Visualisation of all major organisational targets All targets had a named Executive owner, defined outcomes and dates All targets and delivery received a RAG status based upon agreed criteria Golden thread from corporate targets to team and individual targets All performance targets independently validated through the Performance Management Team Rigorous monthly reporting established in line with broader financial reporting and timetable Data standards defined and embedded through the organisation and into suppliers
4
5 The steps needed for a high impact function
6 Building the Team Clear set of objectives for each individual, team and Directorate all linked to the corporate objectives and targets Objectives embedded into HR system and appraisal processes with some changes to the HR system and processes to align these to the objectives of the organisation Skills and capability gap analysis completed across the organisation and also encouraged individuals to contribute via line management Set of internal and external developmental projects undertaken Organisation design lead to some significant changes with non operational staff reduced as a total percentage from 28% to 15% Targeted recruitment, specialist skills, and creating more balanced teams
7 Alignment and Communication
8 Capability Assessment
9 Lean Procurement A broader initiative established across Central Government procurement functions Fundamental challenge to the quality of procurement outcomes, the nature of suppliers and specifically the lack of diversity and innovation, the efficiency of the procurement process and the capability of procurement staff Applying lean processing and visual management to the procurement and supplier management process Tailored these processes and techniques and adopted those that worked within the context Government Procurement Service Delivered in real time in operation, learning by doing with specialist external support but with internal ownership for delivery and outcomes
10 Lean Procurement Process
11 Significant Operational Efficiency 227 days 91 days Sub-OJEU procurements now run within 14 days Pre-OJEU processes implemented within esourcing tool Target pricing established for all procurements Each part of the process is actively reviewed using standard deviation methodology 27 days
12 Use of Boot Camps A range of boot camps introduced for a range of stakeholders: Industry; Internal colleagues; Customers; Introduced a broader range of stakeholders to the lean procurement and management processes we were building More efficient use of time although required a fundamental shift in approach, e.g. more openness across all stakeholders Enabled faster and more meaningful market engagement
13 Technology Efficiency, Transparency and Change A critical enabler of the transformational change was the use of best of breed technology / service providers Technology needs to be implemented within a clear Operating Model Technology can be used to help drive: 1. Operational efficiency; 2. Improved outcomes; 3. Cultural change; 4. Improved performance management and reporting; 5. Compliance with processes and policies; 6. Highlight new areas for further improvements; Technology also enabled greater evidenced based delivery which was completely auditable
14 Government Procurement Service Key Facts 2010/ / /13 Spend ( m) 7,602 8,430 11,441 (50.5%) Savings ( m) 1,714 2,504 2,726 (59.0%) Operating surplus ( m) (67.0%) Total cost per FTE ( 000) (11.9%) Managed spend per FTE ( m) (56.0%) Savings per FTE ( m) (40.0%) Supplier commission (average %) (32.7%)
15 Lessons learnt More and earlier engagement and active involvement with customers. Use of technology can accelerate the pace of change and improve outcomes but needs a high level of commitment across the organisation. Greater emphasis on training and development. Greater clarity on what to stop doing. Reduce wasteful / unnecessary activities earlier.
16 Technology a driver for change A critical enabler to transforming the performance of an organisation is the effective use of technology. Frequently systems fail to deliver all the anticipated benefits. Expertise and experience is needed to implement solution(s) AND ensure processes and behaviours change to act on insights. We can help clients to choose and procure the right technology solution(s) or optimise their initial investment, bridging the gap between technology solutions and real world business outcomes.
17 Our blended approach Using our expertise to help organisations transform their procurement capability and become more efficient and effective. We are able to bring together a number of best of breed solutions and implement them together to derive further benefits. Deliver services on our clients behalf where capability or resources are needed.
18 Spend Analytics programmes delivered in weeks Clients with no previous strategic procurement or spend analysis solutions Spend of 6bn on goods and services Implementation of BravoSolution Spend Analysis solution 6 weeks to gather, cleanse and analyse data Identified 24 initiatives for implementation Saving the client 1m to date Spend of 36bn categorised with data from 14 different source systems Implementation of BravoSolution Spend Analysis solution 8 weeks to gather, cleanse and analyse data Identified 100m savings for client Deploy quickly, act on results, continuously improve over time.
19 Effective supplier management Without accurate supplier data organisations are at risk from a commercial, reputational and legal perspective. We undertook supplier management analysis with Dun & Bradstreet with over 9,000 supplier records. Nearly half the records could not be matched against DUNS number A further 1500 records were identified as duplicates High possibility of payment errors with duplicate suppliers Undertaking spend analysis is inaccurate and onerous No effective supplier management can be undertaken with this level of unclean data.
20 Managing suppliers to identify and mitigate risks In addition to duplicate and unmatched suppliers our client could not foresee financial risks with its tier 1 suppliers: Top 100 suppliers analysed. A high financial risk was indicated in 7.5% suppliers, this instability could result in loss of supply and the associated costs and reputation damage. Suppliers paying beyond 60 days of invoice totalled 16%. This visibility allows an effective SRM programme to be developed and the risks highlighted and managed.
21 Our esourcing portal The Apsiz esourcing portal using BravoSolution technology up and running in 3 weeks
22 Recent procurements EPM Systems Integrator Our process included engaging early with bidders as part of the tendering exercise and following a best and final offer round of negotiations Our client has made at least a 15% saving on day rates Cleaning Services We saved our client 10% through identifying opportunities to aggregate spend and simplify management At the same time increasing the quality of the service using best practise contracts and also increasing the service level by improving the specification Private sector JV partner for public sector client: Complex procurement using process of competitive dialogue Completed within 6 months
23 Environmental analysis AMEE uses data and technology at scale to address critical business sustainability challenges and enable more intelligent use of resources. This analysis is available throughout the whole supply chain and can be linked with wider spend and performance data to provide a comprehensive view of supply chain intelligence. Operational Benefits include; Reduced cost of carbon Reduced risk and cost of environmental issues throughout the supply chain Reduced resource requirements for legislative reporting Improved data quality and transparency of reporting Improved brand reputation Improved continuity of supply and access to resources
24 Procurement & Supply Chain Intelligence The Smart Cube provides custom, high value procurement, strategy & investment research and analysis services to help procurement professionals and their organisations make optimal fact-based business decisions and unlock hidden value. Providing services across 4 practices to bring relevant specialist skills and expertise into your organisation across Strategy & Marketing, Big Data Analytics, Finance, Procurement and Supply chain. Operational Benefits include; Increased analytical capability without the need for lots of resource Increased focus on strategic delivery rather than analysis Improved leverage throughout procurement activities, becoming a well informed buyer Increased savings through more innovative strategies
25 Purchase 2 Pay and emarketplace ScienceWarehouse provide cloud based ecommerce, P2P and catalogue solutions that can be configured to integrate with any specific environment, ensuring that buyers across complex organisations can directly access approved contracts and suppliers, on-line through quick and easy processes. Operational Benefits include; Increased savings Reduced cycle times and repeat procurement activity Increased contract compliance Improved data quality and insight into procurement activity Reduced order and invoice processing errors, improving financial control Improved supplier payment terms
26 esourcing and Spend Analysis solutions BravoSolution are market leaders who provide proven, end-to-end solutions for spend analysis, spend recovery, sourcing, eauctions and supplier performance management. Their extensive experience means any solution can be deployed quickly and with confidence. The end to end integration of their whole solution can increase efficiency as the technology covers the whole of the procurement process. Operational Benefits include; Increased savings Reduced cycle times Improved contract and supplier performance Reduced contractual risk Increased contract compliance
27 Further information If you would like more information about how to improve commercial performance please get in touch: (+44) You can also follow us at: We provide regular support and guidance via . To join our mailing list go to
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