NAO report: How ICF can spark greater innovation and commercial trust

By Allan Watton on

ICF InnovationThe relationship you create, nurture and commit to with your strategic supplier partner(s) has the potential to drive the right behaviours to generate sustained dedication to innovation. In turn, this often helps you achieve your ultimate business outcomes more quickly and cost-effectively. Though that very much depends on your approach.

A recent NAO report on The challenges in implementing digital change looks to understand, among other thoughts, how government entities can use ‘intelligent client’ strategies to develop the right kind of relationships. The belief being that this maximises the chances of any major strategic supplier relationship developing into a collaborative partnership, one which improves the chances of success in an area where failure is all too common.

This article looks at how public and private sector organisations can ‘adapt’ the way they build and manage their supplier relationships, with reference to that NAO report and our own experience on the subject from two decades of remediating complex projects at that particular coalface.

What is an ‘intelligent’ (or ‘informed’) client?

An intelligent client is one which seeks to maximise the benefits of commercial trust, collaborative working and the power of the innovation contained within your supplier’s expertise.

As you may have already recognised, these three flow from one another – a dedication to building commercial trust with your supplier will increase the likelihood of them working side by side with you in a collaborative working style. And this, in turn, will result in a greater commitment from your supplier to go the extra mile by investing resources into innovations which may optimise everyone’s productivity and maximise the potential of the relationship to achieve the business outcomes of the project.

Where organisations fail to follow the example of an intelligent client team, the opposite can quickly take over, with trust dented, reluctance to share information and the increased potential for friction within the supplier relationship.

On major digital transformation projects, it’s all the more important for closer working relationships to be fostered and for speed bumps along the road to success to be identified and smoothed out before they threaten to push the project and/or relationship off course. And that’s the role of the ICF team on a project.

The Intelligent Client Function (ICF) team

You may know this by another name, but essentially this is a team of individuals – chosen for their blend of commercial and digital skills – tasked with the role of creating and managing the closest relationships with their supplier counterparts. They are all at once the ‘canary in the coalmine’ and the ‘rudder of your project ship’ as their relationships may generate earlier warnings of issues through the kind of informal conversations that take place between team members, and when challenges arise those relationships may provide added steering power to realign the efforts, trust and activities from all concerned.

The NAO report cites that: ‘… the IPA’s Major Projects Leadership Academy teaches senior project leaders across government to work together with suppliers, as experience shows that complex projects benefit from a partnership model based on collaboration.’

At the beginning of 2021 we wrote a piece titled How should I manage strategic supplier relationships? that discussed the importance of skilled ICF involvement on any major project and cited the top eight supplier management skills of those in the team, which may help you recognise the strengths required of those in your own ICF team when you need them:

    1. Their ability to identify levels of thought leadership and strategy implementation from the supplier
    2. Levels of innovation being shown and how adaptive they are to the need for service reshaping
    3. How much commercial trust exists between them and the suppliers and how ethically they are conducting themselves
    4. Their ability to accurately monitor that the contract is driving the right kind of behaviours from the suppliers
    5. Skills in identifying and monitoring whether the supplier is living up to its ‘expert’ responsibilities throughout the relationship
    6. That they take action when opportunities arise to renegotiate to achieve maximum value from the relationship
    7. Whether the procurement process has set everyone off on the right path, with clear and understood goals and aspirations
    8. Monitor alignment of activities and productivity needed to achieve project objectives and to take action when these need to be adapted to better suit the real-world solution recipients as this may change over time.

The NAO report highlighted an example that our own experience in remediating these complex projects represents, in terms of what can happen when such a collaborative relationship fails to materialise, where the wisdom of partnership is absent and where insights into potential issues are missed.

Case example: The Emergency Services Network, 2019

The programme sought to be at the cutting edge of technology despite the high inherent risks and was unable to manage the delivery effectively.

Objective: The Cabinet Office instructed the Home Office to decommission the dedicated radio network used by the police, fire and ambulance services and replace it with a novel solution based on an existing public 4G mobile network.

What happened: The public 4G mobile network approach involved significant technical challenges, including:

    • working with the network provider to increase the coverage and resilience of its 4G network;
    • developing new handheld and vehicle-mounted devices as no current devices were compatible with the Emergency Services Network;
    • successfully integrating all the components; and
    • meeting the needs of the emergency services in situations such as in the air or underground.

As the programme progressed, the Home Office faced significant technical difficulties in scenarios including aircraft transmission and the availability of devices able to communicate directly with each other without a network signal.

Outcome: The Home Office reset the programme in spring 2018 and extended the existing dedicated radio service to December 2022. In January 2019 the Infrastructure and Projects Authority reviewed the programme and found that successful delivery of the programme was in doubt, with major risks or issues apparent in a number of key areas.

What lessons departments can learn: Many unknown risks emerged from imposing a technical solution from the start which was also untried and untested. Departments should avoid setting a tight timeline with no contingency, and when programmes fall behind schedule responding by squeezing the time available further is unlikely to recover the situation.

Source: Comptroller and Auditor General, Upgrading emergency service communications: the Emergency Services Network, Session 2016-17, HC 627, National Audit Office, September 2016; and Comptroller and Auditor General, Progress delivering the Emergency Services Network, Session 2017–2019, HC 2140, National Audit Office, May 2019

NAO report recommendations

The importance of developing the characteristics of an intelligent client and the formation of an ICF team are reflected in the NAO’s recommendations, which include a suggestion for the government to:

‘… strengthen their intelligent client function for digital change including identifying and developing key requirements before tenders and bid processes commence and taking the lead on supplier engagement.’

Behavioural benefits an effective ICF team may generate

The purpose of effective supplier management is to achieve the little wins that propel a project forward towards its stated objectives. In terms of our evidence in developing the commercial and relationship management capability, client behaviours that generate these wins include suppliers:

    1. Meeting all important milestone objectives
    2. Acting as a critical friend who both supports and challenges where necessary to move things forward in a positive direction
    3. Generating and evidencing commercial trust through the delivery of quality work
    4. Committing to collaboration and innovation which looks to drive down BAU costs
    5. Aligning with your expectations of the outcomes everyone agrees to progress towards
    6. Committing to a six-monthly reshape and realignment meeting to ensure that business objectives and outcomes remain relevant and agreed and that contract terms are driving best results and the right behaviours
    7. Agreeing to any contractual changes required for the betterment of the relationship and the expedience of the objectives
    8. Openly sharing of data to maximise project prospects and collaborative behaviours.


The NAO report concludes that the government ‘has begun to use more pragmatic and good-practice approaches to digital innovation’ but also that many years of plans and strategies to change its approach to digital change projects have changed very little in the past. The hope, therefore, is that this inciteful report will have a greater impact and that’s why we are dedicating four articles to this one NAO report, as we would like to support this hope.

The first article we wrote on this was on the subject of flexible contracting on digital change projects. The second was on the importance of developing a sound business case for your digital change project. And the final article in this series is on the subject of early market engagement with suppliers to set you on the right path.