Busting bureaucracy and procuring with purpose
By Dominic Campbell • Jun 9th, 2008 • Category: FeaturesIn the blur that was last week, one tweet stood out and woke me from my ambient daze. Possibly after a night of broken sleep brought about by nightmarish images of Dale Winton loading up trolley loads of computers for government supermarket sweep style (or not), Tom Watson (our man in Parliament as Minister for Transformational Government and keen blogger and member of the Twitterati) appeared to start Thursday with a cheery determination to tackle the area of IT procurement in government.
Having endured the torture that is the government procurement process on numerous occasions, both from the client and supplier sides, Tom’s tweet grabbed my attention providing an opportunity to bring some like minded people together to try and influence government policy even if just in some small way. And with Tom seeming up for the fight and keen to get the input, why not?
The main problems as I see them:
- Without wanting to state the obvious, suffice to say anyone who comes into government procurement rules will be all to aware of the long drawn out procurement processes weighed down by red tape and requirements. Enough said.
- There is a clear need for a more outcome focused approach to procurement, one that is faster, more flexible and continually refers back to the business case, ensuring the need identified at the outset satisfies customer demand and is continually adjusted during procurement to ensure it remains relevant throughout what can often be a long and drawn out affair. This will require a way of drawing in more dynamic and entrepreneurial procurement professionals into the sector able to work closely with service delivery experts to ensure their views and the views of the customers/citizen are well represented throughout.
- Many view the procurement process as an end in itself rather than a means to an end, with the outcomes for customers and the organisation often lost in a haze of forms and closed language accessible only to the procurement experts, who they themselves often appear lost under piles of ever changing legislation, ITTs, OJEUs and Ts & Cs (to name just those that I have cared to learn!).
- Too often the market is prevented from helping to steer the process, held back from feeding in their knowledge and expertise as experts in their field by rigid processes, often viewed (sometimes rightly) with suspicion but whose creativity is restricted only by the limits of government officials’ imagination. While there have been some moves to open up the procurement process to allow for suppliers to propose more appropriate solutions, this has often merely led to far longer and more costly procurement processes as officials are forced out of their comfort zones supported by fewer clear guidelines and forms.
- In this way, risk is rarely (if ever) taken (or rewarded even!), opting rather to squeeze the life out of the precious few enterprising public servants who try to innovate and push the boundaries of service delivery using procurement in creative ways to seek best market solutions.
- The current system is not built to cope with new, non-standard, non-out of the box, innovative solutions. Therefore, ironically, this seeming lack of risk taking results in the government continually being prevented from breaking out of the box, tied in to proprietary and closed systems that themselves steer processes and ways of working within government, rather than providing the flexiblility to meet the needs of government and the society it exists to serve.
Some thoughts on what we could do to make a change:
- At a strategic level, there is a need to put in place a more flexible, transparent, entrepreneurial approach to procurement, perhaps learning from the recent shift in HR thinking from Human Resource Management to Talent Management. This will inevitably require having greater faith in individuals responsible for the procurement process and the creation of a new kind of risk management framework, one that is no less able to provide assurance that nothing untoward is happening but that also allows for more human, conversational and realistic relationships between suppliers and government and relies on the skill and judgement of the more enterprising procurement professional.
- Continue work to bring suppliers and government into closer contact with one another to developed a shared understanding, approach and culture to enable both to better understand each other’s needs (public value vs reasonable profit) to improve and foreshorten processes wherever possible.
- To kick this off, it is vital that the government seek the views of the business community regarding what the issues are that they face, with suppliers sure to be only too happen to provide examples of challenging situations they have faced in contracting with government. This could perhaps be supported through building a business case for change based on an estimation of the cost burden placed on UK industry by government procurement processes as they currently stand.
- There appears to be a current shortage in highly skilled and creative procurement professionals in government. It is vital that the government invests in developing the hard skills of experts and non-experts alike, but also encourage softer development opportunities such as on the job frontline experience for procurement experts to allow them to experience the realities of the outcomes procurement processes are intended to improve. The value of the rigid government procurement qualification may also be worth investigation, a qualification that appears to encourage a culture and bureaucratic structure that creates as much waste and inefficiency as it purports to save. Much like PRINCE 2 it seems to be one of those qualifications you need to get for your CV then get back to working in the real world (and yes I am PRINCE 2 qualified!). Why not actually make it reflect the organisational reality we live in - or better yet the reality we want to live in.
- Make the procurement process more accessible, above all by making the language of procurement less impenetrable. Government officers and suppliers alike might be able to make a better fist of achieving better outcomes through effective procurement if only they could understand what is expected of them in the first place.
- Accept the procurement hacks/work arounds and mainstream them. Many exist for a reason! Find the pockets of resistance to the procurement orthodoxy and capture what they are doing to make procurement work for them (faster, easier, whatever). Chances are we can learn from them. For instance, why not find a way of formally permitting government and its departments to take advantage of ‘one time only special offers’, allowing for guilt free opportunism rather than the under the counter way this takes place currently.
- In terms of encouraging smarter government procurement, it might be useful to consider a ‘national procurement pipleline/contract register’ to enable government to spot opportunities for economies of scale when going out to market. Why should each government silo foot a sizeable procurement bill each time it wants to buy a new enterprise system? Government must get smart and stop these inefficiencies within the procurement process itself.
Q. What are your views? Do you agree? What is missing? Do you have experiences you are willing to share?
With Tom listening and clearly up for ‘pushing the system’, I am keen to gather the views of as many people as possible from government and supply side to build a strong case for change.
Dominic Campbell is
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Phew, great thinking Dom. I’m not an expert on procurement (I play emu when the word is mentioned) but your point about mainstreaming the hacks is a very pertinent one - particularly in relation to the kind of stuff we are talking about. There are some hacks that seem to make it easy to contract individuals, so i guess there must be a way of extending that to small companies.
I think there is often an impression that Government procurement favours safe and proven IT contractors and solutions, in its evaluation processes. Often there is a feeling that new and innovative solutions to problems are not going to be sufficiently evaluated, because they diverge from the prevailing orthodoxy and risk averse nature of some Government departments. There is often a view that the biggest contractors and solutions always know best (e.g. the idea that no-one ever got fired for selecting Microsoft/IBM, or Windows etc.), and their ideas and status are given more weight over new companies and products. The prevailing orthodoxy seems to be that of conservatism, whether warrented or not.
An idea on how to to overcome this might be for CIOs in Goverment to blog more, or be more vocal in seeking innovative solutions to current and future issues. If Departments had more of a public display of their thinking - and this is known to suppliers - it might change what solutions are proposed and how they communicate these. The use of RFPs as a response to Government procumement should be enhanced with real-time discussion and collaboration. RFPs should be smarter and involve more collaboration with Government and suppliers. Marshall McLuhan said ‘We shape our tools and thereafter our tools shape us’. If blogs etc. are used more to solicit views from suppliers - in respect of RFPs etc., it will change the dynamic of how suppliers interact with Government, and how they propose and collaborate together.
There is a risk in not taking risks, and accepting solutions that are tried and tested, but are not necessarily agile or flexible to meet the future needs of society or the changing business zeitgeist. The business world is changing into a much more interconnected network of suppliers and partners, in which the line between internal and external is blurred. This dynamic of a highly distributed network of entities making up an organisation will become more and more prevalent, and is already evidenced in many governmnet departments. Adapting to such an environment requires significant riss taking to entend trust for major decisions and procurement to different entities.
Given this, I’m not sure there should be “greater faith in individuals responsible for the procurement process”, but rather there should be more entities involved in analysing procurement decisions and solutions. While I’m not calling for some kind of collective decision making that would diffuse responsibility, I’m suggesting there should be more opportunity for internal consultation on large IT projects. This includes consultation from other CIOs within Government as to their experiences and views.
I think also seeking the views of the business community is an excellent idea. There should be a forum where they could express their analysis of the the current procurement framework and suggest improvements. Such a forum should also be available within government so interested stakeholders could share and discuss their experiences of IT procurement and how it should be changed e.g. give reviews of contractors and solutions (something like http://www.communities.idea.gov.uk).
Dom,
a very comprehensive response to Tom so not sure I can add very much. I would endorse the point on making the process more accessible, and specifically make it more comprehensible to Small Business Onwers (SBO’s) and freelancers. They don’t have an army of business analysts, HR and admin staff to pick through the minutae of the process. I also think there are opportunities for a more ‘agile’ procurement process where the project/solution does not require integration (or there is minimal integration) with core gov systems and IT infrastructure. For example, a service or solution that is provided outside the firewall and maybe hosted in the enterprise cloud. Maybe Gov should start thinking outside of the box and begin questioning whether they need to build and integrate every solution into their IT infrastructure, i.e. more use of the SaaS model (though clearly security issues will dicate how far this can go). They could start by questioning why they feel it is necessary to build their own social networking/social media architecture, fully intergrated with gsi, when off the shelf services are available and could be delivered in a fraction of the time and cost.
If anything else occurs to me I’ll re-comment.
From Mitch Sava via Twitter:
http://twitter.com/addingvalue/statuses/830445331
Dom - interesting response. Can’t say I disagree with any of it. However I think you miss a point and that it the really important concepts of economies of scale and economies of scope. I’m currently working on the 2nd biggest government procurement exercise in Britain. There are only a small number of suppliers that have both the scope and the scale to respond to these tenders…let alone the up front capital to invest in the infrastructure. The proposed contract also has a massive impact on the nature of the procurement itself. One thing the government does not do very well is quantify and handle risk - thus it tries to get the private sector to do this for it in any new project. This comes at a cost. If the contract is design to conduct this risk to the private sector then the public purse is going to take the pinch.
Anyway, back to the main point. If you want entrepreneurship, dynamism and responsiveness then the age old wisdom dictates that this usually resides in smaller, newer start up companies. So, to get these companies to respond to these huge government procuremtns (and the reason they’re usually huge is because volumes represent the whole population) then one of two things is going to have to happen:
1) the work is broken down into smaller chunks that a number of orgs can take on
2) Large contracts, big companies, transfer of risk and hig costs to the private sector
Both approaches have flaws. For number 1 it means extra work, higher project management and monitoring costs and higher levels of trust - the NHS I.T modernisation programme being a good example of how the controling of cost results in a over run of 4 years. Decision: delivery time of cost - can you have both?
For 2 you’re ultimately pulled over the coals by the supplier because they have the expertise, immediate capital and nouse to be able to respond to your requirements…
Answer to all this…a process called competitive dialogue. This new approach to procurement seems to be working well and is finding fans all over whitehall.
Put simply the purchasing body spends time defining what their business requirements are in outcome based requirements language - they absolutely do not solutionise. That’s for the suppliers to do.
Then there is a formal invitation to submit a tender on this high level documentation. A short-list is made. Then in a 6-12 month process a solution is chosen through intense but productive dialogue where each can ask questions of the other.
This has so far reduced costs for my client, but given a number of innovative solutions not thought about before
Hi all
Just to say a quick thanks for all the great comments you’ve been posting. I will comment more fully later, but for now rest assured Tom is listening in to your insights:
http://www.tom-watson.co.uk/?p=2053
A really pertinent issue being discussed here - that needs not only to be applied to the world of IT but more generally to the unpredictable commissioning that takes place in the public sector. The understanding that procurement plays an essential part in achieving efficiency savings and better quality of services seems to be well established especially in local government (thank you Gershon), but often eludes everyday business, strategic outlook and organisational structures.
Rather than to bring anything especially new to this discussion I would emphasise the following areas:
•Have the right people, placed sensibly in the organisation, and with the flexibility to explore new avenues in commissioning services. Nurture those procurement geeks who are prepared to work the system to meet strategic goals and achieve the desired outcomes. Whilst professionalism can clearly be a good thing, it often comes packaged with a reluctance to diverge from the text book solutions.
•Public sector procurement professionals are not the only guilty ones, the sector harbours a range of “you can’t do that-ers” in various services whose knee-jerk reaction will stifle change. If innovation and change in procurement practice is encouraged adjustments and allowances need to be made to more widely in organisational cultures, especially in terms of attitudes to risk and accountability. The confidence to work differently, and deal with the inevitable hiccups likely to occur in trying something new will follow.
•Procurement is too often confined primarily to the procurement team in an organisation, almost as if procurement is an industry in itself. Break down the barriers through better use of language and comprehension that procurement is a mechanism for delivering and improving services.
•Devolve elements of commissioning to those closer to the delivery of services to ensure that what is purchased is fit-for-purpose and captures bottom-up innovations. Procurement needs to also be mainstreamed so it is part of an organisation’s business cycle and considered at key junctures (for example when measuring performance and Value for Money etc).
•Play a role of market-maker/influencer where appropriate, creating the right market environment for supply to meet demand, with collective feedback of the views of the customers in order to aid the development and design of provision. Furthermore, support competition and encourage high performing areas of the market, whilst helping to remove unwarranted barriers preventing the arrival of hopeful new market players that you may be procuring from in the future.
There should be no such thing as procurement. If there is a word to describe the activity, then let’s call it commissioning. Sourcing and thinking sensibly are much the most important aspects of this process that can take ten years.
Troubles - it is designed by an EU bureaucracy that cannot adjust, and never will adjust, at the speed of the market. The buyer i.e. the public sector is therefore always at a disadvantage. All the OJEUs in the world won’t correct the deficit in the design.
If I was the British government I would advertise in OJEU - ” All businesses and individuals wishing to do business with the UK government are presumed to be capable of so doing, and by being registered at Companies House, or paying income or corporation tax, we will do business with you ”
Then having got the charade out of the way that procurement is about choosing the best solution, prepare the business world and the buying community for obtaining the best outcomes. This might mean testing smaller, iterative and quick to evaluate pilots ; using SMEs rather than patronising them ; sharing risk and reward ; speaking with the people who built the High Speed Rail Link because it worked and sharing best practice or good practice
All the sticking plasters such as OGC, ” Better Procurement “, more professional procurement etc..Chartered Institute of Purchasing and Supply are simply that - sticking plasters on a process that does not work. I would bet my bottom dollar that government procurement is worse now that thre are so many CIPS people than when there were none. Not because CIPS is a complete waste of time, but because the people on the private sector side are in business to make money, and most of the time the CIPS people on the buying side find that money grows on trees because the Treasury gives it to them.
How may more Chinook helicopters, Holyrood Parliaments, Metronets, and all the rest does it take for politicians to realise that they are 5-0 down after 80 minutes in any procurement process ?
Can they level the playing field ? Maybe - there is a new chief executive at OGC who has some experience of the private sector. They will need some brave Ministers hence I applaud the sentiment from Mr Watson. However the National Health IT record and the Identity and Pasport Services record make me very sceptical that deep down anything will change.
If Mr Watson would like to convene SME and other participants to talk about transformational government and avoiding the evils of procurement, then please let him do so. Look forward to it.
Alex
Quotes from another discussion on-line
” Now then, This might make you cross, but I’ve been at the ‘welfare to work’ conference for the last two days (that bit won’t bother or interest you at all). I’ve been in the industry many years, and it was very interesting calmly sitting this year ‘joining the dots’ with regards to those who had secured large (very large) public contracts for their organisations, and their links to Ministers/ the partners thereof, mates with senior Civil servants etc. (I’m old enough to be able to quietly say to myself, now isn’t she married to…., or didn’t he use to work with….)
Now, I’m not necessarily saying that is a bad thing - (because I fully admit I have benefitted from that too!), and one does not wish to let a client down if you know and like them, which is a powerful quality assurance tool. But then should we be honest with everyone about who can get work?
So moving to the question posed, why on earth would one advertise Government jobs online, when in fact it would be entirely reasonable to expect someone found through personal recommendation to get the job….
I feel a telling-off is in the ether…”
A reply
” I contract with government, and have done for a while now. I am not a part of a large consultancy, yes they pitch for the work I do, but if I am better than them - I get the job.
I have no idea about mates getting jobs, the rules are scarily rigorous in this regard. It is nigh on impossible to slip a mate in as it were.
However, the measures that government goes to to prevent such matey behaviour, does mean that all contractors/consultants must go through a framework agreement. these government framework agreements are few and far between and to get on them you have to have quite a substantial business, so to apply for a job, you need to register with said framework agency and then apply. Of course, if once you get called to interview your face is familiar, the interview goes more smoothly, but trust me - it is never a given. (I have learned this time and time again).
My beef with the framework thing is that intermediaries, agencies/consultancies etc, once on the framework - get all of the work! Or contract out the work at presumably a nice profit. This cuts out the small fry, like me, contracting directly (and without ‘fees’).
So, although these frameworks safeguard itself against nepotism and the like, they also create an unfair system of contracting with government that cuts out the smaller, perhaps more VFM companies. (It takes a lot of investment for a company to go through the rigorous application process to get on a framework agreement, and they offset the cost against potential profit in the promised contracts - which do not always materialise to be frank).
So I agree with a point that you were inadvertantly making, but I disagree with the nepotism bit. It is very, very hard to ‘get a mate in’ in government. (Just ask my mates :)) “
[...] Watson, British MP and Minister for E-Government, is BLOWING MY MIND with his twitter use. (And Hazel Blears, the Minister for Communities, started blogging and twittering [...]
If competition is the Answer, What is the Question?
Well this has hit the nail on the head. The problems are multidimensional, that is they are highly complex and interlinked.
Lets look at some facts - there is no definition from the EU on Most Economically Advantageous Tender. So where is the consistency in evalation that gives confidence? That leaves anarchy where the IDeA has identified that only 20% of Third Sector organisations feel that the process is transparent and fair. The CBI has similar concerns.
At another level, there is no real opportunity to provide robust innovative proposals. Few know how to evaluate them as they cant do apples and pears. Anyway, some proposals may be too revolutionary.
Tick boxes rule - and no evaluators seem to be able to think.
Its all process based and outcomes are not understood. We have been running Outcome Based Specification Writing Course for two years and are astounded at the levels of ignorance from most managers before they start. How do we know? - we test them before and after.
So what’s causing it? In short- the whole profession is in need of governance. Would you expect the same from qualified accountants - and what do they have that procurement people dont? Standards, Regulations, Discipline, Qualifications, Choice of Awarding Bodies and Professionalism. Shouldnt we learn from this?