Smart Procurement – DCLG Digital Building Collaborative Commercial Capability in IT


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Presentation about collaborative commercial capability in IT.

Presenters: Terry Brewer, Divisional Director Commercial and Procurement, London Borough of Harrow

Raihan Mustafa,Customer Relationship Manager for Local Government, DCLG, London & SE Regions

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Smart Procurement – DCLG Digital Building Collaborative Commercial Capability in IT

  1. 1. Smart Procurement – DCLG Digital Building Collaborative Commercial Capability in IT 28th February 2014 Terry Brewer, Divisional Director Commercial and Procurement, London Borough of Harrow Raihan Mustafa,Customer Relationship Manager for Local Government, DCLG, London & SE Regions
  2. 2. Agenda • The roots of Category Management for ICT • Our progress, goals and key initiatives • The Software Challenge 2 Commercial Reform
  3. 3. Roots of the project • The London Procurement Strategy Board: lots of common suppliers, little co-ordination • Capital Ambition funding • The Camden partnership with GPS • Integration with CIO groups in London • Full first-year programme delivering benefits in a wireless concession contract and a supplier management programme 3 Commercial Reform
  4. 4. 3 Commercial Reform Spend Data 2010 / 2011 The ICT Challenge Key statistics Number of unique suppliers 1,547 Total reported spend £323,247,405 % of spend on contract 37% Number of invoices 226,019 Suppliers by spend range Suppliers Total spend On contract % on contract Cumulative spend % of spend % on contract £20m+ 3 £62,837,887 £10,540,701 17% £62,837,887 19% 17% £10m - £20m 3 £43,462,872 £24,644,853 57% £106,300,759 33% 33% £5m - £10m 8 £61,104,552 £14,276,503 23% £167,405,311 52% 30% £1m - £5m 34 £71,494,626 £32,160,091 45% £238,899,937 74% 34% £500k - £1m 22 £16,573,652 £8,457,786 51% £255,473,589 79% 35% £250k - £500k 56 £19,247,976 £8,215,108 43% £274,721,565 85% 36% <£250k 1,421 £48,525,840 £20,092,400 41% £323,247,405 100% 37%
  5. 5. ICT Category Management Governance Structure London Procurement Strategy Board London Connects ICT Cat Mgt Project Board Wireless Datacentres Apps SRM eAuctions Camden (Terry Brewer) Newham (Geoff Connell) Haringey (David Airey) Camden (PMO) Enfield (Tim Kidd) Society of London Treasurers GPS Delivery Team 5 Commercial Reform
  6. 6. Challenges Complex internal stakeholder networks Entrenched behaviours and historic Standing Orders which tend to encourage independent tendering Co-ordination problems: timelines and availability of key personnel “Deal-making” supplier behaviour Building commitment and leading change 6 Commercial Reform
  7. 7. Cost Variation 7 Commercial Reform
  8. 8. What we’ve achieved • Effective co-working with key CIOs across London • Good quality granular data – and a culture of sharing information • A collaborative wireless concession contract – the first for participating Boroughs • An extended SRD programme • An agreed programme of work on future procurement and technology priorities • Extended partnership with CCS – now a dedicated team of 3 senior staff reporting to Terry Brewer as category lead • Delivered benefits of £2.5m in Year 1 with a solid platform for future growth 8 Commercial Reform
  9. 9. The National Strategy LGA National Procurement Strategy for Local Government • ICT one of three priority categories (construction and energy are the others) • National category lead is Terry Brewer, Divisional Director, LB Harrow • ICT leadership provided through SOCITM and the Local CIO Council • A first iteration of the category strategy for ICT is with the LGA’s National Advisory Group for Procurement (NAG4LGP) Key Themes • Local ownership and local leadership – each region can address its own priorities • Technology opportunities – desktop alliance, data centre rationalisation, digital innovation in service delivery and citizen access • Savings – our own target is 20% of the £2.1bn spend over three-years Operational Delivery • Major national agreements developed in partnership between CCS, GDS and the Pro5 • CCS has a significantly expanded regional Customer Service function • Drive as much input and influence as possible from customers • Have defined roles for LG staff that want to get involved 9 Commercial Reform
  10. 10. The National Opportunity To develop and implement a national commercial strategy for ICT in £2.5bn Local Government market which is focused, inclusive and has effective governance To work with procurement partners on a new contracting strategy and new procurement vehicles in complex markets To establish and leverage collaborative and effective commercial relationships with key national suppliers To stimulate genuinely competitive markets and enable access for SMEs and micro-business innovators To embed innovation in technology delivery and citizen-facing services A 20% Cost Improvement Programme can deliver up to £500m in cash-releasing savings for Local Government 10 Commercial Reform
  11. 11. LG Software Applications - Now £500m + spend per year in Local Government Councils report common issues around value, technology capability and service support Multiple, independent budget-driven solutions – often extending failing agreements A complex pattern of bespoke deployments and licensing model creates lock-in A complete lack of transparency and control Huge waste and lost opportunity 11 Commercial Reform
  12. 12. LG Software Applications – A Major Opportunity for 2013/14 A common procurement platform which enables access to ALL major systems All commodity unit costs explicit Flexible access through direct award and further competition A range of technology models: hosted, licensed, SAAS A master standard SLA to enable agile deployment Developed, owned and used by Local Government New framework available – Q1 2014/15 TCO reduction? …could be up to 50% 12 Commercial Reform
  13. 13. IT Products, Associated Services and Solutions Transactional IT Procurement System (TIPS) 1 Contract 4 Lots 6 Lots Information Assurance (Product and Services) Commodity Software Solution Services IT Products & Value Add Services End User Computing Devices Transactional portal for COTS IT Hardware and Software Products Packaged Software & Value Add Services HR Document Management Data Management ERP Finance / Accounting CRM Proposed Procurement Vehicles & Lot Structure 13 Commercial Reform
  14. 14. IT End UserIT End User Computing DevicesComputing Devices IT Product and ValueIT Product and Value Added ServicesAdded Services InformationInformation AssuranceAssurance YE S YE S IT Products, Associated Services and Solutions (IT PASS)IT Products, Associated Services and Solutions (IT PASS) TargetedTargeted AudienceAudience  Value Added Resellers  End User Devices providers AnticipatedAnticipated SuppliersSuppliers 10 – 15 Suppliers 7 – 12 Suppliers3 – 7 Suppliers ServiceService RequirementRequirement  Wider range vendor neutral products  Close to the box IT hardware related services  IT consumables and accessories.  Value-add associated services  Desktop computer bundle  Laptops,  Tablets,  Thin client,  Hybrid device  Accredited vendor neutral IT Product providers  Secure destruction & disposal  HMG compliant facility (List X ) FrameworkFramework AccessAccess  Further competitions  Regular eAuction  Further competition  Further competitions IT PASS – Framework Agreement structure Packaged SoftwarePackaged Software Value Added ServicesValue Added Services  Large Account Resellers  P2P  Further competition 10 – 15 Suppliers  Wide range vendor neutral products  Enterprise Software licenses  Implementation and configuration services  Value added associated services  Large Account Resellers 14 Commercial Reform
  15. 15. The new DNA for commercial activities Business need identification Supplierrelationship m anagem entand negotiation Execution of sourcing strategy M arketanalysis Sourcing strategy Supplier identification Finalisation of contract Contract m anagem ent £ Goal High Low Time spent on value added activity Before going to market Procurement Process Contract and supplier management Managed Commercial Services delivered centrally - once on behalf of Government Developing requirements that shape markets and the supply base to Government Improving contract and supplier management capability through application of new standards Simplifying process and reducing turnaround times & supplier bid costs Av’ge turnaround times for EU procurements now less than 100 days (200 days in 2011) Circa 20% of spend is now with SMEs (baseline 6% - direct spend only) Before Published pipelines Cross Government contract review 15 Commercial Reform UNCLASSIFIED
  16. 16. What CCS will expect from suppliers 16 Commercial Reform To embrace competition To be innovative through proposals for how we can improve services To be transparent through open book accounting To demonstrate high levels of corporate responsibility To deliver what we are asking for as an intelligent client To deal effectively with CCS as one customer - the Crown To make a reasonable but not excessive profit To provide opportunities to SMEs in the supply chain To deliver savings for taxpayers
  17. 17. Contact Details Terry Brewer Will Laing 07775 561287 Raihan Mustafa