FMJ Facilities Management magazine providing industry-specific intelligence to FM and property professionals
DIRECTOR OF PUBLIC SECTOR AFFAIRS’ VIEW
DEBORAH ROWLAND,
DIRECTOR PUBLIC SECTOR AFFAIRS, SODEXO
The outsourcing industry is in a time of unprecedented challenge. Everything that we do and stand for in service delivery, particularly in public services, has been over scrutinised by the media in the wake of the Carillion collapse and other potential failures facing us going forward. We have lost the trust of the public in delivering services that actually do deliver value not only in terms of price but the value we bring as industry experts and the value to the communities that we serve in the form of our social impact.
Only a few weeks ago we saw political will at play with the statement from the Justice Minister to bring back in house the Community Rehabilitation Centres. This has always been a tricky contract, commissioned poorly with the wrong model that could not deliver which then had to be re-baselined to make it work.
However, the civil servants that work in the probation service, who were TUPE’d to outside companies, have been given the freedom to become more innovative in the delivery of the service – areas of real inspiration that are just not reported in the media. These same people now have to go back into the civil service where their world will once again become very fixed .
Public trust is at an all-time low and it is time for all of us in the private sector to really push the messages of the good that we deliver, the local economies that we support, the jobs that we provide and ultimately the value that we can bring to the public sector. We need to be vocal in what we can do better and support ideologies that are different, particularly in our very uncertain political climate, with nationalisation looming ever closer in a lot of sectors that we are part of.
Many of the key suppliers to government have been working closely with the Cabinet Office to produce the Outsourcing Playbook and embed social value within the body of its contracts. However this will only work if it truly lands and is fully understood within the civil servant commissioners. Strategic suppliers are committed to delivering transparency. However, this transparency in public sector KPIs where they deliver the same services has not been so forthcoming.
There has been a lot of work done on developing commercial skills, however the work to upskill those that actually specify and manage contracts is yet to start and is a big undertaking. Commercial and contract management teams have been very disconnected in the past, leading to poor commissioning and contract management. Local government has been strong on social value and has developed the National Themes Measures and Outcomes (TOMs) Framework within the National Social Value Taskgroup, however this has yet to be adopted by central government.
Central government are currently consulting on Social Value, but the questions have focused primarily on Small Medium Enterprises which they appear to be fixated with. The answers lie in a mixed market economy, which is the healthiest solution with some new innovative models that meet with social value intent.
FM PROVIDERS VIEW
SIMON VENN,
MITIE CHIEF GOVERNMENT AND STRATEGY OFFICER
Let’s be clear, the principle of outsourcing itself isn’t flawed, but I think we all agree that tangible improvements can be made to the way in which both the private and the public sector procure services. Working together, we can refocus our efforts to ensure the right outcomes for clients, contractors, and above all, end users.
The government took an important step by collaborating with private sector suppliers to launch its ‘Outsourcing Playbook’ earlier this year. Two vital pillars are ensuring quality of service and value for money. This is a key shift from past procurement processes which, more often than not, prioritised lowest price over value or quality.
This approach needs to be a core consideration for any client before going out to market. Building a tender which rates value above cost is the first step towards delivering high quality, sustainable services. Clients need to ask how they can best achieve this whilst allowing enough wiggle room to encourage innovation. These go hand in hand as clients should absolutely be asking for innovation to optimise the cost of delivering services over the long term, whilst ensuring the right quality standards. Adopting this method at the outset will not only assist in top notch delivery, it should also set a healthy tone for the contracting relationship moving forwards.
It also plays in to the development of KPI’s that align with value rather than price. All too often, KPI’s are used as a mechanism to recoup costs rather than maintain service levels. This is a slippery slope for both parties which should be avoided at all costs. Well considered and meaningful KPIs will deliver consistent standards and true value which should be the central objective of any contract.
There are two obvious, but fundamental, hygiene factors for clients. The first is understanding the business model – and financial position – of any supply chain partners. The second is how services differ. Recognising that not all companies employ the same model, or rely on the same financial levers and having a solid understanding of how a potential partner operates can impact the decision-making process. How do they treat their own suppliers? Are they transparent about accounting figures? Are their employees highly engaged? It may seem obvious, but all these elements are great litmus tests.
Overlay this with enquiries around culture to ensure a good match. Upholding the same social values and sharing aspirations will ensure both client and supplier are moving in the same direction.
Having narrowed down to a final selection of potential partners, requesting references, or to visit the site of an existing client, is likely be an eye-opening experience, and an opportunity to learn from what works, or has been improved on other contracts.
This is also the time to interrogate the mobilisation plan – it should be concrete. Sales teams can offer a dream, and all too often leave the scene before the crime so get those operational teams in the room. Meet the managers who’ll be responsible for the contract on a daily basis and ensure there is a clear escalation path, should it be needed. There should be a commitment from the C-suite all the way down to the front line…. That’s how you deliver the exceptional every day.
Of course, during any procurement process, there are numerous questions which should be asked and too many to list here. But, I suggest, if all roads lead back to ensuring quality of service and value for money, you’ll be firmly on the road to securing the best fit supplier for the long term.
