The change of government is expected to bring significant public sector savings through collaborative procurement. However, procurement needs to undergo a seismic shift if it is going to deliver the required savings.
Departments can no longer afford to be seen as delivering tactical tendering services focused only on their own organisation. Collaboration with other organisations will be key to making the anticipated savings. This should not only capture the benefits available through aggregating spend and using this volume in the supply market, but should also focus on pooling knowledge, capability and methodologies to create centres of excellence that can help to save money and protect front-line service delivery.
Collaboration initiatives such as my organisation, Southwest One (a public/private joint venture partnership formed in 2007 between Somerset County Council, Taunton Deane Borough Council, Avon and Somerset Police and IBM), are transforming how public services are delivered. Further collaborations between the public and private sectors will be necessary to provide the focus to save on the scale envisaged.
Finding the right private sector partner is key. It needs to be one that recognises the importance of investing in people development. The result of IBM’s partnership with Southwest One has been the creation of a shared centre of excellence which can operate at a more strategic level than would previously have been possible for the individual organisations alone.
The challenge is to make sure procurement is at the table to ensure collaboration options are considered when significant spend decisions are being taken. Strategic procurement is not just about reducing costs. We need to challenge demand as well. It’s not enough just to procure to a specification any more. We need to determine whether there is a better approach to a particular activity. By considering the catering and cleaning operations throughout the three client organisations in Southwest One we anticipate moving to output-based specifications, which will enable significant efficiencies to be made for all partners.
Senior-level support from across the organisations is critical and this is formalised in Southwest One by working with a private sector partner and having clearly defined deliverables. This is supported by a robust governance process to enable successful collaborative working.
Southwest One, IBM, the local authorities and the police are at the start of an exciting journey. This is one model of collaborative working already delivering results, but I predict that many more will emerge over the coming months if we are to realise the anticipated savings across the public sector.
* Ian Conner is CPO at Southwest One and will be speaking at this year’s Public Procurement Show