Smart Procurement – DCLG DigitalBuilding Collaborative Commercial

Capability in IT28th February 2014

Terry Brewer, Divisional Director Commercial and Procurement, London Borough of Harrow

Raihan Mustafa,Customer Relationship Manager for Local Government, DCLG, London & SE Regions

Agenda

• The roots of Category Management for ICT

• Our progress, goals and key initiatives

• The Software Challenge

2 Commercial Reform

Roots of the project

• The London Procurement Strategy Board: lots of common suppliers, little co-ordination

• Capital Ambition funding

• The Camden partnership with GPS

• Integration with CIO groups in London

• Full first-year programme delivering benefits in a wireless concession contract and a supplier management programme

3 Commercial Reform

3 Commercial Reform

Spend Data 2010 / 2011

The ICT Challenge

Key statistics              

Number of unique suppliers 1,547            

Total reported spend £323,247,405            

% of spend on contract 37%            

Number of invoices 226,019            

               

Suppliers by spend range Suppliers Total spend On contract % on contract

Cumulative spend

% of spend

% on contract

£20m+ 3 £62,837,887 £10,540,701 17% £62,837,887 19% 17%

£10m - £20m 3 £43,462,872 £24,644,853 57% £106,300,759 33% 33%

£5m - £10m 8 £61,104,552 £14,276,503 23% £167,405,311 52% 30%

£1m - £5m 34 £71,494,626 £32,160,091 45% £238,899,937 74% 34%

£500k - £1m 22 £16,573,652 £8,457,786 51% £255,473,589 79% 35%

£250k - £500k 56 £19,247,976 £8,215,108 43% £274,721,565 85% 36%

<£250k 1,421 £48,525,840 £20,092,400 41% £323,247,405 100% 37%

ICT Category Management Governance Structure

London Procurement

Strategy Board

London Connects

ICT Cat Mgt Project Board

Wireless Datacentres

Apps SRM eAuctions

Camden (Terry Brewer)

Newham (Geoff Connell)

Haringey (David Airey)

Camden (PMO)

Enfield (Tim Kidd)

Society of London Treasurers

GPS DeliveryTeam

5 Commercial Reform

Challenges

Complex internal stakeholder networks

Entrenched behaviours and historic Standing Orders which tend to encourage independent tendering

Co-ordination problems: timelines and availability of key personnel

“Deal-making” supplier behaviour

Building commitment and leading change

6 Commercial Reform

Cost Variation

7 Commercial Reform

What we’ve achieved

• Effective co-working with key CIOs across London

• Good quality granular data – and a culture of sharing information

• A collaborative wireless concession contract – the first for participating Boroughs

• An extended SRD programme

• An agreed programme of work on future procurement and technology priorities

• Extended partnership with CCS – now a dedicated team of 3 senior staff reporting to Terry Brewer as category lead

• Delivered benefits of £2.5m in Year 1 with a solid platform for future growth

8 Commercial Reform

The National Strategy

LGA National Procurement Strategy for Local Government• ICT one of three priority categories (construction and energy are the others)

• National category lead is Terry Brewer, Divisional Director, LB Harrow

• ICT leadership provided through SOCITM and the Local CIO Council

• A first iteration of the category strategy for ICT is with the LGA’s National Advisory Group for Procurement (NAG4LGP)

Key Themes• Local ownership and local leadership – each region can address its own priorities

• Technology opportunities – desktop alliance, data centre rationalisation, digital innovation in service delivery and citizen access

• Savings – our own target is 20% of the £2.1bn spend over three-years

Operational Delivery• Major national agreements developed in partnership between CCS, GDS and the Pro5

• CCS has a significantly expanded regional Customer Service function

• Drive as much input and influence as possible from customers

• Have defined roles for LG staff that want to get involved

9 Commercial Reform

The National Opportunity

To develop and implement a national commercial strategy for ICT in £2.5bn Local Government market which is focused, inclusive and has effective governance

To work with procurement partners on a new contracting strategy and new procurement vehicles in complex markets

To establish and leverage collaborative and effective commercial relationships with key national suppliers

To stimulate genuinely competitive markets and enable access for SMEs and micro-business innovators

To embed innovation in technology delivery and citizen-facing services

A 20% Cost Improvement Programme can deliver up to £500m in cash-releasing

savings for Local Government

10 Commercial Reform

LG Software Applications - Now

£500m + spend per year in Local Government

Councils report common issues around value, technology capability and service support

Multiple, independent budget-driven solutions – often extending failing agreements

A complex pattern of bespoke deployments and licensing model creates lock-in

A complete lack of transparency and control

Huge waste and lost opportunity

11 Commercial Reform

LG Software Applications – A Major Opportunity for 2013/14

A common procurement platform which enables access to ALL major systems

All commodity unit costs explicit

Flexible access through direct award and further competition

A range of technology models: hosted, licensed, SAAS

A master standard SLA to enable agile deployment

Developed, owned and used by Local Government

New framework available – Q1 2014/15

TCO reduction? …could be up to 50%

12 Commercial Reform

IT Products, Associated Services and Solutions

Transactional IT Procurement System (TIPS)

1 Contract

4 Lots

6 Lots

Information Assurance (Product and Services)

Commodity Software Solution Services

IT Products & Value Add Services

End User Computing Devices

Transactional portal for COTS IT Hardware and Software Products

Packaged Software & Value Add Services HR

Document Management

Data Management

ERP

Finance / Accounting

CRM

Proposed Procurement Vehicles & Lot Structure

13 Commercial Reform

IT End User IT End User Computing DevicesComputing Devices

IT Product and Value IT Product and Value Added Services Added Services

Information Information Assurance Assurance

YES

YES

IT Products, Associated Services and Solutions (IT PASS) IT Products, Associated Services and Solutions (IT PASS)

Targeted Targeted AudienceAudience

Value Added Resellers

End User Devices providers

AnticipatedAnticipated SuppliersSuppliers

10 – 15 Suppliers 7 – 12 Suppliers

3 – 7 Suppliers

Service Service RequirementRequirement

Wider range vendor neutral products

Close to the box IT hardware related services

IT consumables and accessories.

Value-add associated services

Desktop computer bundle

Laptops, Tablets, Thin client, Hybrid device

Accredited vendor neutral IT Product providers

Secure destruction & disposal

HMG compliant facility (List X )

Framework Framework Access Access

Further competitions

Regular eAuction Further competition

Further competitions

IT PASS – Framework Agreement structure

Packaged SoftwarePackaged Software

Value Added ServicesValue Added Services Large Account

Resellers

P2P Further competition

10 – 15 Suppliers

Wide range vendor neutral products

Enterprise Software licenses

Implementation and configuration services

Value added associated services

Large Account Resellers

14 Commercial Reform

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Goal

High

Low

Time spent on value added activity

Before going to market

ProcurementProcess Contract and

supplier management

Managed Commercial Services delivered centrally - once on behalf of Government

Developing requirements that

shape markets and the supply base to

Government

Improving contract and supplier management

capability through application of new

standards

Simplifying process and reducing

turnaround times & supplier bid costs

Av’ge turnaround times for EU procurements now less than 100 days (200 days in 2011)

Circa 20% of spend is now with SMEs (baseline 6% - direct spend only)

Before

Published pipelinesCross Government contract review

15 Commercial Reform UNCLASSIFIED

What CCS will expect from suppliers

16 Commercial Reform

To embrace competition

To be innovative through proposals

for how we can improve services

To be transparent through open book

accounting

To demonstrate high levels of

corporate responsibility

To deliver what we are asking for as

an intelligent client

To deal effectively with CCS as one customer - the

Crown

To make a reasonable but not

excessive profit

To provide opportunities to

SMEs in the supply chain

To deliver savings for taxpayers

Contact DetailsTerry Brewer

terry.brewer@harrow.gov.ukWill Laing

will.laing@ccs.gsi.gov.uk07775 561287

Raihan Mustafaraihan.mustafa@ccs.gsi.gov.uk