Sales & Marketing Forum - Colin Cram on public sector procurement of IT and outsourcing

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Presentation by Colin Cram (Director of Marc1 and former Director, North West Centre of Excellence) at the Sales & Marketing Forum in May 2010 ("What will it take to become a partner for the public sector?")

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Sales & Marketing Forum - Colin Cram on public sector procurement of IT and outsourcing

  1. 1. PUT A LITTLE S&M IN YOUR DAY<br />
  2. 2. ‘TOWARDS TESCO’A NEW APPROACH TO PUBLIC SECTOR PROCUREMENT AND OUTSOURCING<br />Colin Cram<br />Marc1 Ltd<br />Tel: 01457 868107<br />Mobile: 075251 49611<br />colin.cram@talktalk.net<br />www.marc1ltd.com<br />
  3. 3. My Background<br />Director, North West Centre of Excellence<br /> - 47 local authorities<br />Director, Research Councils’ Procurement Organisation<br />Director, North West Universities’ Purchasing Consortium<br />Director, Benefits Agency Contracts Organisation<br />Central Unit on Purchasing<br />Cabinet Office, Treasury, Central Government generally<br />Senior Adviser to Office of Government Commerce<br />Member of Society of Local Authority Chief Executives -SOLACE<br />Fellow of Chartered Institute of Purchasing and Supply<br />Institute of Directors: ‘Towards Tesco’<br />
  4. 4.
  5. 5.
  6. 6. TOWARDS TESCO<br />Public Sector Procurement is Vast<br />A New Integrated Model could Deliver Huge Benefits<br />2. Outsourcing and Shared Services<br /> Is Chaotic and Costly<br /> Huge Potential Remains<br /> Propositions: <br />A New Outsourcing Model? <br />A Proposition for Delivery of Public Services<br />3. Potential Savings of £25bn+<br />
  7. 7. MIRROR TO PUBLIC SECTOR PROCUREMENTWhat Does It Look Like? How Well is it being Managed?How Can We do Better? <br />
  8. 8. DOES PUBLIC SECTOR PROCUREMENT MATTER?<br /><ul><li>£220 Billion pa
  9. 9. £3,500 per Adult and Child pa
  10. 10. One Third of Total UK Public Spending
  11. 11. One Sixth of UK Gross Domestic Product (GDP)
  12. 12. 0.75% of Global GDP
  13. 13. Size makes it Critical to Delivery of Public Services
  14. 14. Effective Management is Essential to Reduce Public Spending Deficit and Deliver Government Procurement Policies</li></ul>EDUCATION PROCUREMENT - £30+bn<br />Alone would put UK in top 30% of national GDPs<br />
  15. 15. FEATURES OF PUBLIC SECTOR PROCUREMENT<br /><ul><li> 65% Non-Central Government
  16. 16. 50% Common Categories, Goods, Services
  17. 17. Professional Services £35bn
  18. 18. Construction £21bn
  19. 19. ICT £10bn
  20. 20. Facilities Management £10bn
  21. 21. Energy £4bn
  22. 22. Reprographics £3bn
  23. 23. Travel £3bn
  24. 24. Fleet £3bn
  25. 25. Food £2bn</li></li></ul><li>IF IT WAS YOUR MONEY, WOULD YOU MANAGE IT LIKE THIS?<br /><ul><li> Some Major Central Government Department Organisations
  26. 26. Some Large Specialist Organisations
  27. 27. NHS Outsourcing
  28. 28. Buying Agencies: 40+
  29. 29. OGC and Category Teams
  30. 30. Several Thousand Small to Medium Procurement Units
  31. 31. 40,000+ Procurement Points
  32. 32. Absence of Mandation</li></ul>BUT<br /><ul><li> Increasing Collaboration/Joint Procurement</li></li></ul><li>HOW TO MAKE SAVINGSPUBLIC SECTOR ORGANISATIONS CREATE UNNECESSARY COSTS FOR SUPPLIERS AND THEMSELVES<br /><ul><li>Indiscipline
  33. 33. Different Procedures/Contract Ts and Cs
  34. 34. Complexity – e.g. Tender Procedures/Ts and Cs
  35. 35. Multiplicity of Tenders
  36. 36. Multiplicity of ‘Duplicate’ Contracts and Contract Managers
  37. 37. Specifications
  38. 38. Inconsistency of Capability, Expertise, Processes</li></ul>Also, inability to use Best Procurement Techniques.<br />
  39. 39.
  40. 40. SO WHAT IS THE COST OF POOR PRACTICE/MISSED OPPORTUNITY?<br />Furniture 30%<br />FM/Outsourcing/Major Contracts Up to 35%<br />Laboratory Consumables Up to 90%<br />IT 5 – 80%<br />Construction 5 – 25%<br />Excellent Construction Management 5 – 15%<br />Social Care 10%<br />Legal Services 10%<br />Good Contracts Management 5 – 35%<br /> © C M Cram<br />
  41. 41. BIG IMPROVEMENTS NEED BIG CHANGES<br /><ul><li>Right Procurement Structures/Joint Procurement
  42. 42. Common and Complete Databases
  43. 43. Common Information/IT Systems
  44. 44. Common Procedures
  45. 45. Common Specifications
  46. 46. Commodity, Markets, Procurement Expertise
  47. 47. Specialist Management
  48. 48. Best Practice Procurement Techniques</li></li></ul><li>PUBLIC SECTOR PROCUREMENT IN 5 YEARS TIME?<br />
  49. 49. PUBLIC SECTOR PROCUREMENT: THE FUTURE?<br />INTEGRATION<br />COLLABORATION<br />INDEPENDENCE<br /> © C M Cram<br />
  50. 50. HOW CAN OUTSOURCING AND SHARED SERVICES BUSINESS BE BOOSTED?<br />Eliminate obstacles<br />High Costs<br />Long Timescales<br />Complex Procedures<br />Varied Procedures<br />Duplicate Specifications<br /><ul><li>Create Model Approach
  51. 51. Create Vision for Public Service Delivery</li></li></ul><li>PUBLIC SPENDING £bn<br />CentralLocal Total<br />Pensions 110 110<br />Health/Social Care 117 117<br />Education 28 52 80<br />Defence 38 38<br />Welfare 60 50 110<br />Protection 16 17 33<br />Transport 13 10 23<br />General Government 13 13 26<br />Other Spending 71 32 103<br />Interest 30 1 31<br />TOTAL 496 175 671<br />
  52. 52. ELIMINATE OBSTACLES: CREATE MODEL APPROACH<br />Create Range of Model Specifications<br />Create Matrix of Service Providers and Services<br /> that the Public Sector can use without further EU Tendering<br />Provide those Services through building on Existing Service Centres/Creating New Ones<br />
  53. 53. SERVICES © C M Cram SERVICES SERVICE PROVIDERS <br />
  54. 54. HOW?<br />Create Range of Model Specifications<br />Follow EU Procurement Directives to Create Matrix<br />Evaluation Criteria: Capability<br />Obtain Indicative Prices?<br />Grow Matrix Organically<br />Consider Dynamic Purchasing System<br />
  55. 55. WHAT SERVICES COULD BE COVERED?ALMOST ANYTHING!<br /><ul><li>Policy
  56. 56. HR
  57. 57. Payroll
  58. 58. Print and Design
  59. 59. Finance
  60. 60. Internal ICT
  61. 61. Legal Services
  62. 62. Agile Working Solutions
  63. 63. Procurement
  64. 64. Construction
  65. 65. Asset Management
  66. 66. Roads
  67. 67. Revs and Bens
  68. 68. Debt Collection
  69. 69. Managed CCTV
  70. 70. CRM
  71. 71. Out of Hours Services
  72. 72. ICT Hosting
  73. 73. Data Centre Operations
  74. 74. Environmental health
  75. 75. Elements of Children’s Services and Adult Social Care</li></li></ul><li>PROPOSITION FOR PUBLIC SERVICE DELIVERY<br /><ul><li> What should be Delivered by the Public Sector?
  76. 76. What should be Delivered by the Private Sector?
  77. 77. Benefits of Proposition
  78. 78. Overall Model for Public Service Delivery
  79. 79. Developed by the Outsourcing Industry</li></ul>VISIONARY – Nothing Ruled Out<br />
  80. 80. MAKING IT HAPPEN<br /><ul><li>Outsourcing Industry to Take Lead
  81. 81. Create Steering Group with TORs - membership private and public sectors
  82. 82. Commission and Fund Initial Work – to investigate feasibility/sources of funding etc
  83. 83. Draft Programme of Work and Implementation Plan</li></li></ul><li>THANKYOU<br />Colin M Cram<br />Marc1 Ltd<br />Tel: 01457 868107<br />Mobile: 075251 49611<br />colin.cram@marc1ltd.com<br />www.marc1ltd.com<br />
  84. 84. PUT A LITTLE S&M IN YOUR DAY<br />

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