How to improve commercial performance David Shields, Director Apsiz Services Ltd

How to improve commercial performance
Deliver more for less
David Shields, Director Apsiz Services Ltd
May 2014
Transforming Government Procurement Service
The Initial Major Steps
Clear set of organisational targets established with senior stakeholders /
shareholders – 3 year outlook
Operational targets established with Executive and Non Executive Teams
Assessment of capacity, resources and gap analysis completed
Governance, management controls and performance management regime
established including internal and external audit
Internal and external communications plan established
Assessment of current technology platforms and utilisation completed
Programme team and plan established
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Targets and Performance Management
Visualisation of all major organisational targets
All targets had a named Executive owner, defined outcomes and dates
All targets and delivery received a RAG status based upon agreed criteria
Golden thread from corporate targets to team and individual targets
All performance targets independently validated through the Performance
Management Team
Rigorous monthly reporting established in line with broader financial reporting and
Data standards defined and embedded through the organisation and into suppliers
Apsiz Services Ltd
Apsiz Services Ltd
The steps needed for a high impact function
Apsiz Services Ltd
Building the Team
Clear set of objectives for each individual, team and Directorate all linked to the
corporate objectives and targets
Objectives embedded into HR system and appraisal processes with some changes
to the HR system and processes to align these to the objectives of the organisation
Skills and capability gap analysis completed across the organisation and also
encouraged individuals to contribute via line management
Set of internal and external developmental projects undertaken
Organisation design lead to some significant changes with non operational staff
reduced as a total percentage from 28% to 15%
Targeted recruitment, specialist skills, and creating more balanced teams
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Alignment and Communication
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Capability Assessment
Apsiz Services Ltd
Lean Procurement
A broader initiative established across Central Government procurement functions
Fundamental challenge to the quality of procurement outcomes, the nature of
suppliers and specifically the lack of diversity and innovation, the efficiency of the
procurement process and the capability of procurement staff
Applying lean processing and visual management to the procurement and supplier
management process
Tailored these processes and techniques and adopted those that worked within the
context Government Procurement Service
Delivered in real time in operation, learning by doing with specialist external
support but with internal ownership for delivery and outcomes
Apsiz Services Ltd
Lean Procurement Process
Apsiz Services Ltd
Significant Operational Efficiency
227 days
91 days
27 days
Sub-OJEU procurements now run within 14 days
Pre-OJEU processes implemented within eSourcing tool
Target pricing established for all procurements
Each part of the process is actively reviewed using
standard deviation methodology
Apsiz Services Ltd
Use of Boot Camps
A range of boot camps introduced for
a range of stakeholders:
• Industry;
• Internal colleagues;
• Customers;
Introduced a broader range of
stakeholders to the lean procurement
and management processes we
were building
More efficient use of time although
required a fundamental shift in
approach, e.g. more openness
across all stakeholders
Enabled faster and more meaningful
market engagement
Apsiz Services Ltd
Technology – Efficiency, Transparency and Change
A critical enabler of the transformational change was the use of best of breed
technology / service providers
Technology needs to be implemented within a clear Operating Model
Technology can be used to help drive:
1. Operational efficiency;
2. Improved outcomes;
3. Cultural change;
4. Improved performance management and reporting;
5. Compliance with processes and policies;
6. Highlight new areas for further improvements;
Technology also enabled greater evidenced based delivery which was completely
Apsiz Services Ltd
Government Procurement Service
Key Facts
Spend (£m)
11,441 (50.5%)
Savings (£m)
2,726 (59.0%)
Operating surplus (£m)
11.17 (67.0%)
Total cost per FTE (£000)
68.3 (11.9%)
Managed spend per FTE (£m)
30.27 (56.0%)
Savings per FTE (£m)
7.7 (40.0%)
Supplier commission (average %)
0.33 (32.7%)
Apsiz Services Ltd
Lessons learnt
More and earlier engagement and active involvement with customers.
• Use of technology can accelerate the pace of change and improve outcomes
but needs a high – level of commitment across the organisation.
Greater emphasis on training and development.
Greater clarity on what to stop doing.
Reduce wasteful / unnecessary activities earlier.
Apsiz Services Ltd
Technology a driver for change
A critical enabler to transforming the performance of an organisation is the effective
use of technology.
Frequently systems fail to deliver all the anticipated benefits.
Expertise and experience is needed to implement solution(s) AND ensure
processes and behaviours change to act on insights.
We can help clients to choose and procure the right technology solution(s) or
optimise their initial investment, bridging the gap between technology solutions and
real world business outcomes.
Apsiz Services Ltd
Our blended approach
Using our expertise to help
organisations transform their
procurement capability and
become more efficient and
We are able to bring
together a number of
‘best of breed’ solutions
and implement them
together to derive further
Apsiz Services Ltd
Deliver services
on our clients
behalf where
capability or
resources are
Spend Analytics programmes delivered in weeks
Clients with no previous strategic procurement or spend analysis solutions
Spend of £6bn on goods and services
Implementation of BravoSolution Spend Analysis solution
6 weeks to gather, cleanse and analyse data
Identified 24 initiatives for implementation
Saving the client £1m to date
Spend of £36bn categorised with data from 14 different source systems
Implementation of BravoSolution Spend Analysis solution
8 weeks to gather, cleanse and analyse data
Identified £100m savings for client
Deploy quickly, act on results, continuously improve over time.
Apsiz Services Ltd
Effective supplier management
Without accurate supplier data organisations are at risk from a commercial,
reputational and legal perspective.
We undertook supplier management analysis with Dun & Bradstreet with over
9,000 supplier records.
Nearly half the records could not be matched against DUNS number
A further 1500 records were identified as duplicates
High possibility of payment errors with duplicate suppliers
Undertaking spend analysis is inaccurate and onerous
No effective supplier management can be undertaken with this level of unclean
Apsiz Services Ltd
Managing suppliers to identify and mitigate risks
In addition to duplicate and unmatched suppliers our client could not foresee
financial risks with its tier 1 suppliers:
Top 100 suppliers analysed.
A high financial risk was indicated in 7.5% suppliers, this instability could result
in loss of supply and the associated costs and reputation damage.
Suppliers paying beyond 60 days of invoice totalled 16%.
This visibility allows an effective SRM programme to be developed and the risks
highlighted and managed.
Apsiz Services Ltd
Our eSourcing portal
The Apsiz eSourcing
portal using
technology up and
running in 3 weeks
Apsiz Services Ltd
Recent procurements
EPM Systems Integrator
• Our process included engaging early with bidders as part of the tendering
exercise and following a ‘best and final offer’ round of negotiations
• Our client has made at least a 15% saving on day rates
Cleaning Services
• We saved our client 10% through identifying opportunities to aggregate spend
and simplify management
• At the same time increasing the quality of the service using best practise
contracts and also increasing the service level by improving the specification
Private sector JV partner for public sector client:
• Complex procurement using process of competitive dialogue
• Completed within 6 months
Apsiz Services Ltd
Environmental analysis
AMEE uses data and technology at scale to address critical business sustainability
challenges and enable more intelligent use of resources. This analysis is available
throughout the whole supply chain and can be linked with wider spend and
performance data to provide a comprehensive view of supply chain intelligence.
Operational Benefits include;
Reduced cost of carbon
Reduced risk and cost of environmental issues throughout the supply chain
Reduced resource requirements for legislative reporting
Improved data quality and transparency of reporting
Improved brand reputation
Improved continuity of supply and access to resources
Apsiz Services Ltd
Procurement & Supply Chain Intelligence
The Smart Cube provides custom, high value procurement, strategy & investment
research and analysis services to help procurement professionals and their
organisations make optimal fact-based business decisions and unlock hidden value.
Providing services across 4 practices to bring relevant specialist skills and expertise
into your organisation across Strategy & Marketing, ‘Big Data’ Analytics, Finance,
Procurement and Supply chain.
Operational Benefits include;
Increased analytical capability without the need for lots of resource
Increased focus on strategic delivery rather than analysis
Improved leverage throughout procurement activities, becoming a well informed
Increased savings through more innovative strategies
Apsiz Services Ltd
Purchase 2 Pay and eMarketplace
ScienceWarehouse provide cloud based eCommerce, P2P and catalogue solutions
that can be configured to integrate with any specific environment, ensuring that
buyers across complex organisations can directly access approved contracts and
suppliers, on-line through quick and easy processes.
Operational Benefits include;
Increased savings
Reduced cycle times and repeat procurement activity
Increased contract compliance
Improved data quality and insight into procurement activity
Reduced order and invoice processing errors, improving financial control
Improved supplier payment terms
Apsiz Services Ltd
eSourcing and Spend Analysis
BravoSolution are market leaders who provide proven, end-to-end solutions for
spend analysis, spend recovery, sourcing, eAuctions and supplier performance
management. Their extensive experience means any solution can be deployed
quickly and with confidence. The end to end integration of their whole solution can
increase efficiency as the technology covers the whole of the procurement process.
Operational Benefits include;
Increased savings
Reduced cycle times
Improved contract and supplier performance
Reduced contractual risk
Increased contract compliance
Apsiz Services Ltd
Further information
If you would like more information about how to improve commercial performance
please get in touch:
[email protected] | (+44) 7920 768370 |
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