Creating unexpected value through outcome based procurement webinar Thursday 4 May 2017 presented by Dr Jon Broome, Darren Knowd, Tony Birch and Hugo Minney organised by APM Benefits Management SIG and APM Contracts and Procurement SIG

1. Creating unexpected value through
outcome-based procurement
04th May 2017, Webinar
Organised by the
Practical lessons for project managers,
bidders and procurement people

2. Agenda
 Introductions and the evolution of
procurement
 The challenges and opportunities
– The view from Procurement
– The view from Project Management
– The view from Bidders
 Panel discussion and questions
 Summary and close

3. Intros
Dr Jon Broome : chair of C&P SIG. Experienced in dreaming
up & drafting innovative contract strategies
Hugo Minney : FAPM, RPP, accredited practitioner of the
Social Return on Investment (SROI) Model, committee
member of Benefits SIG and Chief Executive of TyneHealth, a
GP Practice federation serving 217 thousand patients.
Darren Knowd, Chief Procurement Officer at Durham
County Council. He leads all procurement activity at the
Council, which spends over £500M annually on supplies,
services and works.
Tony Birch is MD of Shipley Limited, a consultancy that
provides organisations & individuals with consulting &
training services on winning business in competitive
environments. He is a Fellow of the APMP and was one of
the creators of the APMP Certification scheme.

4. What does “Creating unexpected value through
outcome-based procurement” mean ?
Two BoK6 definitions :
Value : “A standard principle or quality considered
worthwhile or desirable. In Value
Management terms, Value is defined as
the ratio of ‘satisfaction of requirements’
over ‘use of resources’.”
Outcome : “The changed circumstances or
behaviours that result from the use of
outputs.”

5. Hierarchy of detail for how requirements
can be expressed in a Works Contract

6. Darren Knowd
Darren is the Chief Procurement Officer at Durham
County Council who were awarded the Cabinet Office
first ever award for Social Value Leadership for an
Organisation in 2016.
Darren leads all procurement activity at the County
Council who spend over £500M annually in supplies,
services and works. He also represents the North East
region on the LGA National Advisory Group for Local
Government Procurement.
He was previously Head of Procurement at several
District Councils prior to the establishment of the
unitary council in 2009 and during this period he
completed his MBA at Durham University Business
School.

7. Examples of Outcome Based Approaches
 Specialist Professional Services – Payment on outcomes delivered – No cost creep or £ based rates
 Agency Workers – Neutral Vendor approach with committed savings plus gain share for further savings
 Learning Disabilities Services – Outcomes Framework and Indicators  Independent living and savings
 Domestic Abuse Support – Funding Clawback or Payment Deductions if KPIs not achieved
 Innovation Project “Smart County” – Seeking new solutions to social isolation problems rather than
procuring solution based on pre-existing knowledge - £100K investment available
 Banking Services – Additional Social Value outcomes committed for financial education in schools and
commercial training for credit unions in County Durham
 Bill Payment Audit – Supplier paid a Percentage of cost recovery opportunities delivered

8. Strategic Procurement Resources
High
Low
ResourceAllocation
Pre-Procurement
Phase
Procurement
Phase
Traditional Approach
Future Approach
Contract and Supplier
Management Phase
Outcome Focus Innovative Processes Robust Contract and Relationship Mgt
Outcome Based Approach

9. Outcome Based Procurement - Enablers
 Top level commitment to strategic procurement resources
 Collaborative and whole system (person-centred) approach
 Potentially shared budgets with partners
 Strategic needs analysis and robust baseline data
 Appropriate time allowed for pre-procurement market analysis
 Outcome based service design or commissioning  Social Value
 Early supplier engagement or development  Supplier bid readiness
 Innovative and flexible procurement approaches
 Incentivised pricing or consequences for non-achievement
 Outcome based performance management (KPIs)
 Robust contract and supplier management  Joint accountability
 Benefits realisation of outcomes and impact  Social Value

10. Hugo Minney PhD
Hugo is a Registered Project
Professional and committee member of
the APM Benefits SIG.
He is Chief Executive of TyneHealth, a
GP Practice federation serving 217
thousand patients.
Hugo is a Fellow of the Association for
Project Management (APM) and an
accredited practitioner of the Social
Return on Investment (SROI) Model.

11. Delivering Value – Project Manager
 Begin with the end in mind
Time Cost
Quality
OLD
Additional
Value
(vs Time/
Cost/ Quality)
Business
Need
NEW

12. Complementary Projects
Whole
solution
Project 1 - Capabilty
Project 2 -
Capability
Project 3 - Capability
Intended
Outcome
(with value-
add)

13. Engaging the Business
Baseline
Desire to
change
Actions to
change
Measure Impact
(attribution etc)
and adjust

14. Obstacles
Attribution =
“Budget Cuts”
Change –
safety and
competence
fears
Measurement
– not sexy or
fun.
Reporting and
Proof
Some time in
the future –
every Project
Manager’s
nightmare
(control)

15. Tony Birch
 Managing Director of Shipley Limited, a
consultancy that provides organisations and
individuals with consulting and training
services focused on winning business in highly
competitive environments.
 Fellow of the APMP and was one of the
architects and creators of the APMP
Certification scheme.

16. Strong value propositions deliver tangible results
16
Reduce costs
Improve customer retention
Reduce
time to market
Decrease employee
turnoverImprove operational
efficiency
Increase market share
Increase revenues

17. Five elements to a value proposition
17
Current Situation
improve what?
Benefits
by how much? / in what way?
Target Situation
as a result of doing what differently?
Timing
over what timescale?
Costs
for an investment of how much?

18. Panel
Discussion
Jon Hugo Darren Tony

19. Q&A
Have a question for our panel?
• Please type your question in the Question
tool on the GoToWebinar tool bar
Jon Hugo Darren Tony

20. Summaries
From each of us :
 The most useful insight from the discussion
that others have not already said.

21.  The APM Benefits Summit 2017
London, 22 June 2017
www.apm.org.uk/event/benefits-summit-2017/
 Delivering successful projects under a contract:
what every project manager and procurement professional
needs to know
London, 12 July 2017
www.apm.org.uk/event/delivering-successful-projects-under-
a-contract/
Upcoming conferences
For full nationwide programme of good
practice events visit apm.org.uk/events

22. This presentation was delivered
at an APM webinar
To find out more about
upcoming webinars please visit
our website
www.apm.org.uk/events