Building an Intelligent Client Function (ICF) and Commercial Mindset
What we deliver
A Commercial Mindset building process that helps you drive maximum value from your strategic suppliers. We build the commercial mindset of your team to be able to deliver the 10 characteristics that are found in the most successful and innovative strategic supplier relationships. We then assess your team against these characteristics for the specific skills, experience and motivation that we can evidence will drive the required behaviours.
How you will benefit
Your in-house team will accelerate outcomes. When the commercial mindset building process is completed, your team will be able to evidence that a mature approach to genuinely collaborating with your suppliers, means you will often achieve very specific business outcomes in less than half the time you had originally expected.
Lower BAU costs. Having the right team skills, experience and motivations will help you to reduce supplier resistance to finding innovative ways to reduce BAU costs of existing services, because they can see more opportunities where they can widen their involvement in new service/solution areas for you.
Provides on-going maximum value. Recent case law supports strategic suppliers being ‘experts’ in their field and puts them under a ‘Duty’ to provide best value, even if such a duty is not documented in the written contract. We help your team leverage this knowledge in a collaborative manner with your strategic supplier, to assure win-win relationship lifetime maximum value for both parties.
The ICF commercial mindset building process
Step 1 : We review how strategic suppliers will support you
We look at the business outcomes and commercial objectives your internal senior level stakeholders are looking to achieve within your organisation. From that, we assess your expectations in how strategic suppliers might help support and accelerate those objectives.
Step 2 : We look at the outcomes you are currently achieving
Our having gained visibility of your business outcomes and commercial expectations from strategic suppliers in Step 1, we’ll look at a few examples of your current complex/strategic supplier relationships and the services/projects they are delivering.
Between us, we can discuss how you feel about whether your organisation is achieving outcomes you consider are good value for money from your existing strategic supplier relationships or whether you believe there are areas that can be improved upon. To provide independent assurance to senior stakeholders, we often also review specific evidence that supports everyone’s perceptions and where the evidence does not.
We then benchmark both the evidence and perceptions against the ten key ‘behavioural principles’ that we see in the most successful complex / strategic supplier relationships. These principles are:
- Objectives being met. Your supplier is helping you to achieve your project objectives consistently, which in turn, means this is enabling you to achieve your business outcomes.
- Critical friend supplier. Your strategic supplier is both supporting and challenging you to work with them strategically to achieve on-going maximum value.
- Inherent commercial trust and good ethics. Both you and your supplier operate to high professional ethical and personal moral standards. In turn, the supplier delivering services to a high consistent standard, builds commercial trust between everyone.
- Sustained collaboration and innovation. You govern the relationship in a highly collaborative manner, that results in great innovation between you to optimise critical service delivery and streamline complex project solutions.
- Reduced service cost. Sustained collaboration and innovation in service delivery is driving significantly reduced costs for BAU services.
- High reputation with your peers. The ability to drive on-going service innovation and reduced BAU costs greatly increases your reputation with your executive peers.
- Internal team aligned. Truly collaborative operating governance means your internal senior stakeholders are all aligned as to the outcomes they are achieving from the relationship.
- Services always aligned to outcomes. Having a regular re-shaping process to check that business objectives and outcomes are still current and where they are not, to re-state/re-generate them, and then adjusting services/solutions to meet these updated objectives and outcomes, means your expectations are being sense checked and service re-aligned to meet these changing expectations.
- Flexible/agile contract structure. As part of reshaping/realigning services, the contract terms and schedules allow for reshaping of the supplier’s delivery of services and solutions, based on a value for money assessment at each reshaping cycle.
- Evidenced based results. Firstly, that the KPIs you have in place reflect the real value your organisation is achieving from the strategic supplier relationship you have in place. Secondly, that your process of validating performance, service/solution cost and ROI data means that it will stand up to independent scrutiny so that senior executives on both client and supplier side can rely on that data for improving performance on an on-going basis.
Step 3 : We assess your existing supplier management process
We’ll assess your existing strategic supplier relationship and contract management process against the BPG ‘Optimise’ model (an evidenced ‘what good looks like’ model from over 500 complex supplier relationships) having first aligned the model to your business outcomes.
Between us, we can determine which aspects of your existing relationship and contract management process are already doing well and are aligned to your business outcomes. We’ll also assess where it would help to improve alignment to generate even better value.
The eight principle foundations of the Optimise model that help to drive the ten relationship characteristics (behavioural principles) in Step 2 above, include the following :
- An Articulated Business Vision. The organisation has clearly articulated specific business objectives it will achieve once the service/solution has been implemented.
- An Intelligent Client Function (ICF). An ICF team that demonstrates strategic, commercial and partnership behaviours an Intelligent Supplier expects.
- An Intelligent Supplier. A supplier that understands the ‘holistic’ objectives of an Intelligent Client and strategically supports them.
- Clear Service Delivery Requirements. Clear articulation of the ‘use cases’ and business objectives the client is seeking from the supplier and its solution to enable for it.
- Supplier Expert Responsibilities. Clarity of an Expert Supplier’s “Duty to Warn” and how that impacts the pre-contractual due diligence responsibilities between the client and the supplier.
- Fit-For-Purpose Contract. Contract terms that are reverse engineered from the business objectives, to support ‘enabling’ behaviours.
- Buying Governance. Procurement governance that drives the right foundations to assure a fit- for-purpose solution/supplier is procured.
- Relationship and Contract Management. Strategic Relationship and Contract Management that assures on-going benefits are realised for the life cycle of the relationship.
Step 4 : We identify the appropriate value-driven client team skills
The ‘Commercial Mindset’. Aligned to your specific business outcomes, we’ll benchmark what the most appropriate strategic supplier management skills, capability, expertise and experience that are required from your internal team, to ensure you encourage your suppliers to support your business objectives in the most optimum fashion, quickly. The key internal team skills that we assess and align to your business outcomes, are :
- Thought Leadership & Strategy. (a) How effective the internal team is in establishing and forecasting the strategic supplier services/solutions available to support your own organisation’s effectiveness in serving its clients and (b) its ability to plan, implement and mobilise that strategy.
- Innovation/Service Re-Shaping. The governance processes in place that captures changing organisational objectives and outcomes, good existing operating practice, where existing operating practice needs to be realigned to drive better value and the process of updating written contracts and schedules so they continue to align to (a) the changing business objectives and outcomes and (b) the supplier services/solutions being delivered.
- Commercial Trust and Ethics. The client’s perception of the degree of Trust and Ethics that are being achieved by the supplier, from the supplier’s services/solutions that are being delivered to the agreed outcomes, on time and to budget. Separately, the supplier’s perception of the degree to which the client’s dealings with the supplier are being conducted in a commercially trusted and ethical manner.
- Fit-for-Purpose Contracting Skills. The degree to which the client team (and its external advisors) have contractual structures in place that drive ‘enabling’ and ‘innovative’ behaviours between client and supplier to allow on-going maximum value to be derived over the lifetime of the relationship.
- Expert Supplier Responsibilities. The extent to which the client team understands the supplier’s “Expert Responsibilities”, implied by recent case law, have been incorporated into the requirements definition, procurement, contracting, project management, operating and performance optimisation process.
- Commercial Negotiation Skills. The depth of domain expertise within the client team in leveraging and optimising ‘Interest Based’ negotiation skills to drive maximum value between client and supplier on a win-win basis.
- Buying Governance. The degree to which the internal team has developed a procurement process that starts with the ‘end in mind’, ie. how the procurement process will operate a due diligence process that can safely assure a suitable fit for purpose service/solution is likely to be implemented on time and within budget.
- Objectives/Process Alignment. The knowledge the internal client team has of (a) the key objectives the organisation is aiming to achieve and by when, (b) the governance process of identifying changing market forces and which client objectives need to be realigned, as a result, (c) what operational processes and supplier services/solutions need to adapt to meet the changing objectives and (d) the governance and contractual documentation that will need to be amended in the event of objectives and supplier service / solution changes.
Step 5 : We appraise the efficacy of the performance, cost and ROI data
We’ll review the performance data, cost information and return on investment you hold for your strategic suppliers and determine, against our internal reference framework based on over 500 complex / strategic supplier relationships, which data stands up to robust independent scrutiny and which data is more subjective. Within the context of the available data we assess its relevance, accuracy, timeliness and punctuality, accessibility and clarity, comparability, coherence and completeness.
Step 6 : We produce a roadmap to build your ‘Future Team State’
The roadmap takes into account:
- Business plan. Your business plan of outcomes you want to achieve and by when
- Project portfolio. The degree to which any complex project services/solutions are necessary to achieve your business outcomes
- Existing relationship/contract management process. Where your existing supplier relationship and contract management process is already aligned to supporting your business outcomes and where some realignment of it will generate further value for you
- Alignment of process to business outcomes. How your existing processes of procuring new strategic relationships, remediating and improving existing relationships and the exit and transition of relationships into new service/solution provision aligns with your business outcomes. We’ll also outline evidence of where any realignment of those processes will assure better fitness for purpose of those strategic relationships. As part of the knowledge transfer process, we’ll provide an operating framework so that the court-case-precedents that involve strategic relationships and the supplier’s “Expert Responsibilities”, can be used to update your creation and updating of policies involving:
- Roles and responsibilities between you and strategic supplier, including individual internal job descriptions and OKRs
- Operating governance
- Relationship and contract management governance (to assure the supplier’s “Expert Responsibilities” are not inadvertently diluted and undermine your contractual protections)
- Your competency framework for the Intelligent Client Function Team, including the interdependent elements of cross-functional roles and responsibilities
- Team capability building including training, coaching and mentoring aligned to agreed business outcomes
- Overall process modelling aligned to the ‘Future State’ (target operating model)
- Return on investment (ROI) evidence reporting. Specific foundations are put into place to capture return on investment evidence at the beginning of the mobilisation process. This assures that independent ROI evidence stands up to external scrutiny so all senior stakeholders know they can rely on the ROI data being produced. These stakeholders can then assess with much better certainty, whether these strategic relationships are producing an appropriate level of ROI or where they might need some realignment.
Step 7 : Mobilisation and monitoring of the capability building process
The implementation/mobilisation process for training, coaching and mentoring can be tailored to fit in with your own resource availability. To provide some guidelines, the capability building process can take up to around 12 months. The outline structure often follows (but can be structured differently according to your individual requirements):
- The first 20-40 working days. The review, information consolidation, structuring the capability building and return on investment framework normally takes between 20-40 working days, subject to the complexity and diversity of your complex/strategic supplier relationships. Deployment into your team takes the form of using existing and ‘live’ strategic relationships. We work alongside you in these existing (or new) relationships over an initial 12 month period.
- The next 12 weeks; weekly progress measurements. Progress from your team is usually measured weekly for the first 12 weeks. The measurements assess the degree to which learnings are being implemented, the degree of success and where any re-alignment would generate better value.
- The next 3 months; two-weekly progress measurements.
- The following 12 weeks; progress measurements once per month.
- Thereafter; progress measurements once every three months.
Other considerations for building ICF teams
Typical hurdles in the creation and management of ICF Teams
There can be challenges in encouraging senior stakeholders in organisations to invest appropriately in the Intelligent Client Function. These challenges include:
- An unwillingness from the client key decision makers to support a strategic supplier management strategy because of the investment involved
- Key decision makers having fears about their strategic management strategy not being successful – a perception of wasted investment
- A lack of internal client stakeholder agreement over pragmatic expectations to be achieved by having a successful strategic supplier management strategy
- Poor internal visibility of the end-to-end strategy process including a lack of understanding how to measure its success over what time scales and key milestones
- Client worries regarding internal reputations within their own organisation in the perception of the strategy not being successful
- A lack of coal-face experience in implementing a strategy that can independently evidence a good return on investment
- Not knowing how to practically govern strategic supplier relationships and instead, ‘reverting to type’ in an aggressive, position-based approach from the client to the supplier rather than a mutual interest-based approach that provides the foundations for win-win outcomes.
- Lack of timely client decision making through poor process governance for a strategic relationship
- Poor facilitation management between client and supplier.
Some successful ICF team development examples
Successful examples of sectors we've created ICF teams in
Why the BPG Optimise process drives significantly better value
The process of building Commercial Mindset capability in Intelligent Client Function teams for complex/strategic supplier relationships comes from our involvement in over 500 complex/strategic supplier relationships across a wide range of sectors and project/relationship types. The evidence of its foundations lie in two areas :
- The really great stuff. Across more than 500 complex relationships, we’ve been fortunate enough to be involved with client organisations that really ‘get it’. They drive exceptional value in their strategic supplier relationships. We’ve helped to develop excellent exemplars of business cases, service/solution requirements, procurement, negotiation and contracting strategies, fit for purpose agile contracts, operating governance that continually aligns the contracts and service/solution requirements to business outcomes every 6 months, really insightful ways of innovating new ways of working and significantly cutting the costs of BAU project delivery. We build your capability by incorporating these aspects into your knowledge transfer.
- The ‘not-so-good stuff’. Our “Expert Witness” experience, giving evidence in court of which party (supplier or client) has caused the problems being experienced, poor behaviours, misaligned contracts produced in a silo and not aligned to the business objectives, contract terms that the courts interpret the responsibilities of differently to the ways the solicitors drafted them, originally expected and so forth. These areas are highlighted and structures provided to avoid you getting caught in these misunderstandings.
The greater value this experience provides to you.
Having seen the very ‘nasty’ end of complex / strategic supplier relationships that have gone wrong through our expert witness work for the courts, we’ve also seen how the courts interpret good and great behaviours as well as poor ones.
A strategic supplier’s “Expert Responsibilities” implied by the Courts and often not documented in the contract terms, requirements or project schedules, means that traditional methods of defining requirements, the procurement and contracting process, operating and project governance and delineating roles and responsibilities between client and supplier, are often not contractually enforceable from a practical perspective.
Our capability building and Commercial Mindset process takes into account these “Expert Responsibilities” implied by Courts, and assures a much more strategic relationship, that drives collaboration, innovation and great value between client and supplier.
Building an Intelligent Client Function is only one element of the BPG ‘Optimise’ method
Evidenced by over 500 complex relationships, the ‘Optimise’ method can be implemented quickly to improve service innovation and drive down BAU costs.
Share Great Practice
Experience of over 500 complex supplier relationships, means we can share great practice with you that really works.
Drive maximum value
Building an Intelligent Client Function helps support the 10 characteristics that drive maximum value in complex supplier relationships.
A brilliant project outcome
This is part of the ‘Optimise’ process; a proven method assuring a brilliant project outcome and an excellent supplier relationship.
5 steps to a great new relationship
See the 5 steps to making sure new complex supplier relationships work really well.
Clients that we support
Most of our clients are already highly experienced in complex supplier relationships. Click here to see how we help them take these relationships to the next level.