Supplier transparency not just a public sector issue

Bruce Melizan, executive director, InterserveLast year's National Audit Office report on the role of major contractors in the delivery of public services discusses the value of outsourcing as a way to reform public services and improve value for money – but indicates better public scrutiny is required to ensure contractors are more transparent in their service delivery and their performance is held to account.

Transparency of service provision and the performance of those contractors procured to deliver services needs to be balanced with the necessary skills to manage contracts effectively.

Yet such issues are not only experienced in the public services domain.  Professionals in the private sector are voicing the same concerns over the methodology that should be implemented by both buyer and supplier for transparent, outcome-based delivery models to be implemented.

Our latest facilities management research Time for Change undertaken with Sheffield Hallam University polled senior buyers in the public and private arenas, revealing a shift from a pure cost and service level focus to a stronger emphasis on successful buyer-supplier relationships, with 90 per cent of respondents requesting new ideas to be offered during the preparation and management of outsourced contracts.

Concurrently, our recent survey in public service delivery with YouGov showed that 58 per cent of public sector decision makers believe outsourcing must continue to play its part in meeting budgets and maintaining service levels. Yet 31 per cent expressed concerns over lack of supplier trust being a serious obstacle to change.

These words - accountability, trust and partnership - seem to signal a shift in the outsourcing agenda where the drive is on transparency between all parties involved. So what methodology should be applied to deliver this outcome-focused approach?

It starts by identifying what the model needs to deliver. With a FM contract, this would mean taking the focus away from the service deliverables, such as the type and frequency of cleaning required, to consideration of the reason for the activity, which may be to change the perception of a building for staff and visitors or to improve employee productivity.

Importantly, this needs to be included in the initial contract scope. This is an obvious statement but one that is frequently overlooked as there is often discrepancy between what buyers want from a contract and how it is measured. This is indicated in our FM research where, using the example of innovation, 68 per cent link it to their strategic objectives but only 24 per cent actually list it as a requirement in their contracts.

Businesses should recognise that to create accountable and transparent provision of outsourced services each contract must first meet the overall strategic direction of the organisation, be scoped accordingly and communicated to all parties.

This requires a continuous process of revision, change and improvement so that all parties are agreed on the scope of services to be provided and can work towards an agreed set of outcomes.

Bruce Melizan is executive director of Interserve

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