‘TOWARDS TESCO’ – A NEW APPROACH TO PROCUREMENT AND SHARED SERVICES

Colin CramMarc1 LtdTel: 01457 868107Mobile: 075251 49611colin.cram@talktalk.netwww.marc1ltd.com

DOMESTICS

Mobile PhonesRefreshmentsFacilitiesFire AlarmPresentations AvailablePlease Read Speaker Biogs

Programme

1100: Bill Longley, MD Civica Revs and Bens1105: Colin Cram: ‘Towards Tesco’1130-1200: Suzie West, Road Map to Shared Services1200-1230: Organisational Impact of Collaboration1230: Lunch1315: Carol Gray, From Partnership to Implementation1345: John Gibbs, The Civica Shared Services Model1415: Break1425: Panel Debate1450: Closing Remarks1500 Conference Close and Refreshments

My Background

Director, North West Centre of Excellence- 47 local authorities

Director, Research Councils’ Procurement OrganisationDirector, North West Universities’ Purchasing ConsortiumDirector, Benefits Agency Contracts OrganisationCentral Unit on PurchasingCabinet Office, Treasury, Central Government generally

Senior Adviser to Office of Government CommerceMember of Society of Local Authority Chief Executives -SOLACEFellow of Chartered Institute of Purchasing and SupplyInstitute of Directors: ‘Towards Tesco’

TOWARDS TESCOBackdrop: Public Sector Finances

1. Public Sector Procurement is Vast A New Integrated Model could Deliver Huge Benefits

2. Outsourcing and Shared Services Is Uncoordinated and Costly Huge Potential Remains

• £220 Billion pa• £3,500 per Adult and Child pa• One Third of Total UK Public Spending• One Sixth of UK Gross Domestic Product (GDP)• 0.75% of Global GDP• Size makes it Critical to Delivery of Public Services• Effective Management is Essential to Reduce Public Spending Deficit and Deliver Government Procurement Policies

LOCAL GOVERNMENT PROCUREMENT - £50bn

Alone would put UK in top 20% of national GDPs

• 65% Non-Central Government• 50% Common Categories, Goods, Services

• Professional Services £35bn• Construction £21bn• ICT £10bn• Facilities Management £10bn• Energy £4bn• Reprographics £3bn• Travel £3bn• Fleet £3bn• Food £2bn

• Some Major Central Government Department Organisations• Some Large Specialist Organisations• NHS Outsourcing• Buying Agencies: 40+• OGC and Category Teams• Several Thousand Small to Medium Procurement Units• 40,000+ Procurement Points• Absence of Mandation

BUT• Increasing Collaboration/Joint Procurement

•Indiscipline

•Different Procedures/Contract Ts and Cs

•Complexity – e.g. Tender Procedures/Ts and Cs

•Multiplicity of Tenders

•Multiplicity of ‘Duplicate’ Contracts and Contract Managers

•Specifications

•Inconsistency of Capability, Expertise, Processes

ALSO: Inability to use best procurement techniques

Furniture 30%

FM/Outsourcing/Major Contracts Up to 35%

Laboratory Consumables Up to 90%

IT 5 – 80%

Construction 5 – 25%

Excellent Construction Management 5 – 15%

Social Care 10%

Legal Services 10%

Good Contracts Management 5 – 35%

© C M Cram

•Right Procurement Structures/Joint Procurement

•Common and Complete Databases

•Common Information/IT Systems

•Common Procedures

•Common Specifications

•Commodity, Markets, Procurement Expertise

•Specialist Management

•Best Practice Procurement Techniques

PUBLIC SECTOR PROCUREMENT IN 5 YEARS TIME?Central/ Major Departments/Buying Solutions

Industry Specific

Regional P Hubs/Medium Depts

Local/Med/Small Departments

Major National Contracts/Suppliers

* *

Common Categories * *Relationship Management * *Market Management * *Industry Specific * *PPIs/Major Project Support * * *

Regional/Large Local Contracts/Suppliers

*

Small Local Contracts * *Discipline/Implementation/Compliance

* * © C M Cram

INDEPENDENCE

COLLABORATION

INTEGRATION

© C M Cram

PUBLIC SECTOR PROCUREMENT: THE FUTURE?

FACILITATING SHARED SERVICES

ELIMINATE OBSTACLES: CREATE MODEL APPROACH

Create Range of Model SpecificationsCreate Matrix of Service Providers and Services

that the Public Sector can use without further EU Tendering

Provide those Services through building on Existing Service Centres/Creating New Ones

SERVICES

© C M Cram

SERVICES SERVICE PROVIDERS

1. 2. 3. 4. 5. 6.

Revs and Bens

√ √

Call Centres √ √ √

HR √ √

Finance √ √ √

ConstructionServices

√ √

ICT √ √ √ √

Legal √

HOW?Create Range of Model SpecificationsFollow EU Procurement Directives to Create

MatrixEvaluation Criteria: CapabilityObtain Indicative Prices?Grow Matrix OrganicallyConsider Dynamic Purchasing System

MAKING IT HAPPEN

• Create Steering Group with TORs - membership private and public sectors

• Commission and Fund Initial Work – to investigate feasibility/sources of funding etc

• Draft Programme of Work and Implementation Plan

Colin M Cram

Marc1 Ltd

Tel: 01457 868107

Mobile: 075251 49611

colin.cram@marc1ltd.com

www.marc1ltd.com