Tower Procurements are, the problems?

The tower model was intended to enable organisations to move away from large IT service management contracts provided by a single prime outsourcer. The new structure has separate IT components – such as hosting, applications development, security and desktop support which are contracted to different providers. One provider then takes on the role of Service Integration and Management (SIAM) to manage the various towers, without providing any of the tower contracts itself.

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The buzz around local government is commercialism.

The buzz around local government is commercialism. As usual, many officers think they do not know what to do and are awaiting guidance, but they know more than they give themselves credit for. They talk to residents on a daily basis so they do know what the “Customer” wants.  What local officers lack is the confidence to adopt a marketing mind-set and they may also suffer from a fear of the unknown.

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Will BBC DMI be the last IT failure?

An investigation of the BBC’s failed Digital Media Initiative project is likely to rehearse many of the previous failures of large scale IT projects. We can all recite them: too ambitious; project scope creep and not enough governance to name but a few.

It is time for Commercial Management to stand up and say we can provide the tools to avoid this for future projects. There are four key areas we should report on monthly which, if carried out correctly, will flag some of the problems early so the Board can make decisions with full knowledge.

These are:-

  1. Obligations Register which shows the Suppliers, the Clients and the Joint obligations and how they are being observed on a month by month basis. For each one not being met there can be a clear action plan.
  2. Change Control Register. A sizeable amount of change controls reflect scope creep and cost increase and such a register is a quick way to indicate possible problems. Anything over the estimated level at project inception should trigger a full review.
  3. Goodwill Register to cover work at risk and those services given as value added (for example an extra couple of days of project management time etc.). By reporting on this it avoids goodwill or work at risk being used to massage the change control number. I have seen contracts where the supplier was providing 30% of total contract value as goodwill and, needless to say, the Finance Director was not aware of this. After calculating the value and its impact on the bottom line, it was clear that it was time to introduce it as a methodology throughout the business.
  4. Dispute and Claims Register. By maintaining a good record of these you get a proper overview of the project. Nothing can be hidden in this category in order to massage the overall figures.

Such reports should fit on to a simple one page dashboard that enables the Board to raise questions as soon as the numbers start to move in the wrong direction.

Unlike Project Managers who might be revising the dates of delivery, costs etc. to keep the project “on track”, Commercial Managers should be clear and indicate the percentage difference between the authorised project and the revised project plan.  Anything over an agreed set of defaults should trigger a full review. Questions like what was wrong with the initial plan? Why are the costs/delivery/ solution changing so much? What is the confidence level in the new plan being delivered?

Commercial Managers normally sit outside of a project, in chain of command terms, so their report should be directed to the Board to enable the Board to quickly question movements in the project from the original authorised project. The intent is not to be a tell-tale but to ensure the organisation does not end up with a BBC DMI or NHS IT project. Feel free to contact us to assist you.

What value Commercial Management?

As a commercial I am often seen as either sales prevention or the person to take the troubles to when it has all gone wrong with the client. I do not mind the latter but I would love to change the former.

On reflection I have come to the opinion that as Commercial we fail to sell the value of our services to the rest of the business. Yes, we are seen by senior management as capable pairs of hands to do the “governance” or as competent negotiators yet we are rarely seen as the drivers of profit.

Why is that? I shall try to set out a few ideas of how I think we have come to this place and how we can change.

I have the same aversion to process that others have but my years in business have taught me that process reduces problems and saves cost.  So yes we need process, but it needs to be efficient and easy to use. If Commercial teams are to show their worth, they need to provide clear analytical data to evidence the benefits they offer. For example, keeping an added value register will enable you to demonstrate the benefits Commercial has introduced into the deal during its lifecycle.  This could include:

  1. the risks they have identified and mitigated
  2. reductions in liabilities
  3. improved payment, delivery, insurance terms etc.

Of course, organisations could go out and buy commercial systems that would provide reporting from standard templates but I believe that it is better to add such templates to an existing database system.

Why do I think this? Existing systems e.g. CRM applications, are used by others throughout the business so this provides a great opportunity for collaboration as well as a forum for them to see what value you add during your day to day work.  Adding various aspects of commercial reporting to the CRM system enables the sales force to see the solutions that the Commercial team bring to help win the business.  Likewise, deployment of  post contract manager’s tools into the project manager’s system improves visibility and aids discussion of change control opportunities.

Cost is also important and small adaptations to current systems are generally much lower in cost than the purchase of a whole new system and support structure.

A little change in process can show how you can help the organisation to work more collaboratively and track the hard cash benefits you bring to the organisation. This makes it easier to justify your bid. If you need any assistance please feel free to contact us.

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