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Sourcing skills firmly on government agenda

Source: Public Sector Executive Nov/Dec 2012

Martyn Hart, chairman of the National Outsourcing Association, explains more about the newly-launched skills academy aimed at bridging the public/private gap.

In the summertime, we had G4S. In the autumn, West Coast rail. Hopefully there will be no more outsourcing fiascos over the next few months, and we can have a winter of relative content where public sector procurement is concerned. But while journalists and editors remain on tenterhooks, eagerly waiting the next disaster, the next big outsourcing story, an army of people up and down the land are working feverishly to ensure that the next big story does not namecheck them.

Which is healthy for the taxpayer, but presents major challenges for the people involved in managing commercial relationships on their behalf. The public servant’s skillset is changing. It is widely believed that, when it comes to sourcing best practice, the private sector is significantly more sophisticated than the public. To maximise value – and of course, mitigate risk – there is a need to bridge this maturity gap.

Currently, public sector procurement is seen as a combative sport. Done properly, outsourcing is a combined effort to secure maximum value over the life of the deal – not a race to the cheapest offer recorded on a piece of paper.

Government needs to get smart and begin taking a holistic approach to costs. Being realistic and considering the financial impact over the full term of these tantalisingly low-priced contracts would be a good start. If it looks too good to be true, it probably is. It is a naïve consumer who gets carried away thinking that the cheapest is always the ultimate bargain…

Good procurement involves knowing the market, including having a rough idea of the costs involved. Introducing some benchmarking into the procurement procedures is worthwhile; it will save more money than it costs. As will investing time and effort into your outsourcing relationship management.

The methodology by which you will manage your outsourcing partners is laid out in your governance schedule. But all too often, governance is overlooked – an afterthought in the tender process. Governance and contract are interlinked – effectively two sides of the same coin. The latter mitigates risk, the former drives value creation. For good governance, you need to build the right communications channels so that all stakeholders collaborate effectively, to handle (inevitable) change and ensure ‘issues’ are resolved before they become ‘problems.’ Without an effective means of ‘relationship governance’, communications break down, the relationship fails and both you and your partner are in big trouble: a few thousand security guards undermanned, for example.

This may sound like common sense, but as the All Party Parliamentary Group on Outsourcing and Shared Services has revealed, when it comes to public sector procurement, common sense needs committing to record. I’m not for a second suggesting that there is no outsourcing expertise within government – there are pockets of excellence all over the place – it’s more that the public sector’s record regarding the proliferation of its collective experience is weak.

Failing to systematically capture data to use information and use it to improve project performance is sinful in any business. But it’s even worse in the high-value – and therefore high-risk – projects that the Government has cause to commission.

Currently, by not adequately sharing data on the success / progress / issues with its projects, the public sector is perpetuating a culture of persistent ‘wheel reinvention’. Collecting and sharing information on what makes major projects go wrong – and what makes them go right – is one step towards saving taxpayers’ cash.

Another is up-skilling. Increasing the sourcing skills base is a vital part of the Government’s efficiency drive – to get procurers operating smart and negotiating confidently.

The NOA Public Sector Skills Academy gives delegates access to the latest private sector tools and techniques. The programme is designed exclusively for delegates from the public sector, both local and central government, who have a role in the design, implementation or management of outsourcing and shared service relationships. Attending workshops will empower public sector workers towards substantial, sustainable savings throughout the whole of the outsourcing lifecycle: strategy, engagement, managing transition and change, and on-going governance.

The Academy features a series of standalone workshops that can build into a unique university-accredited qualification in sourcing skills. Workshops are led by experienced professionals with a wealth of expertise and experience in both private and public sector procurement practices, providing an innovative and invaluable learning opportunity that will benefit individuals and organisations alike, helping aid intelligent sourcing and allowing them to make the most of existing and future relationships.

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