Why read this article? Key takeaways:
There are 13 key subject areas of great practical importance which the government’s ‘Sourcing Playbook’ recommends in order to help drive maximum value in these complex projects and relationships. The first half of this article focuses on the first seven of them, all fall under the heading of ‘Stage 1: Preparation and Planning’:
- Pipelines and market management
- Approval process
- Delivery model assessment (DMA)
- Piloting first-generation outsourcing (If you have not done this before)
- Preparing to go to market (CRITICAL you get this right; causes 85% of disputes later)
- Routes to market
- Model Services Contract (MSC).
This second half of this article is dedicated to the remaining six subject areas of the Sourcing Playbook, which include:
- Formal engagement with the market
- Due diligence during selection
- Evaluating bids and contract award
- Resolution planning and ongoing financial monitoring
- Building and maintaining successful relationships
- Expiry, extension, transition and termination.
The purpose of this article is to point you towards further, more detailed, guidance that you may find useful.
We hope that the following sections provide the context needed to help you sense-check the degree to which your own current thinking and operational practices are already delivering best value.
Introduction and background
As a specialist consultancy dedicated to optimising complex projects and strategic supplier relationships/public sector partnerships, it is our business to help our clients to align with government guidance on sourcing best practice and to support them in applying it to their specific situation to drive maximum value in their projects.
Best Practice Group (BPG) not only provides regular commentary on public sector procurement policies, reports, activities and project outcomes (good and not so good), we also offer thought leadership which aims to help organisations optimise their sourcing activity results and build strong, successful, mutually beneficial supplier relationships which continue to improve, innovate and deliver ongoing best value in a true partnership model.
With the latest issue of the government’s Outsourcing Playbook 2 or ‘Sourcing Playbook’ as it’s now known (in recognition of the fact that it also deals with Insourcing and Mixed-Economy Models), we take this opportunity to explore where this guidance succeeds as a best practice approach. The guidance can also be adopted by the wider public sector (and indeed large-scale complex private sector strategic supplier procurements/projects). Based on our own hard-won experience of driving maximum value from these projects and relationships, we offer some further thoughts on where the NAO guidance could drive better value.
The Sourcing Playbook is split into 5 core stages (covering 13 key subject areas):
1. Preparation and Planning, 2. Publication, 3. Selection, 4. Evaluation and Award, 5. Contract Implementation.
Throughout the Sourcing Playbook there are links to further resources, useful contacts and the government’s key policies and their associated guidance notes.
This article focuses on stage one, Preparation and Planning. It provides a whistle-stop tour of the existing BPG advice, guidance, processes and document templates that can help you implement some of the key points of guidance set out in this stage of the Sourcing Playbook.
We’ll share our top tips from over two decades of managing these complex projects and relationships, on how to put this guidance into practice, signposting to other BPG articles and FAQs that have addressed these points already as part of our ongoing knowledge share activities.
Finally, we offer a few thoughts on where we think the Sourcing Playbook could have gone further in its measures to improve the likelihood of strategic sourcing project success, and share with you our unique approaches to plugging these gaps.
Sourcing Playbook: Preparation and Planning
It is no surprise to find that the first 7 subject areas, out of 13 in the guidance, are dedicated to preparation and planning. BPG wholeheartedly supports this focus on the pre-procurement stage as the foundation for assuring a fit-for-purpose, successful sourcing project. To walk the hard miles early may be challenging, but the evidence from both good and poorly performing complex projects, demonstrates that it pays dividends later on to have greater clarity on all aspects of your project, including current state, future state and potential speedbumps along the road to success.
1. Pipelines and market management
The Sourcing Playbook rightly emphasises the need to plan early for commercial activity and to thoroughly assess the capability of those in the market to deliver your requirements. It also encourages all parties to view the role of the supplier as the expert to lead on the development of innovative solutions to achieve your outcomes.
A deeper understanding of the capabilities and limitations of those in the marketplace, and of the marketplace itself, will better prepare you for the inevitable stresses and strains associated with any procurement activity. The earlier you can engage with the market the better, ensuring you consult widely and encourage broad participation.
An informed Early Market Engagement (EME) process will help you assess whether your project expectations, timescales, resources, requirements and budget are practically achievable before formal procurement begins. It should also be used to inform the delivery model assessment, pilots, the procurement procedure and bid evaluation criteria. To this BPG would also add that it can be used to test early contract terms. Feedback from market engagement will help you demonstrate your Strategic Outline Case (SOC).
BPG has developed a comprehensive EME process which ensures you achieve the clarity you need from your market engagement activities. We have made a more generalised version of this freely available. Our EME Guide with an accompanying RFI template provides you with outline direction on the process steps and the types of questions to ask of your prospective suppliers, which you can download for free at:
- https://www.bestpracticegroup.com/guides/early-market-engagement-guidance/ and
As the need for public sector procurements to drive innovation and deliver social value becomes increasingly important, so does the need for you to ensure, during early market engagement, that suppliers have a plan for meeting these challenges. These are topics you can include as specific questions in your RFI.
2. Approval process
While wider public sector procurements may not follow the same process as the government Project Validation Review (PVR), having rigorous gateway checks prior to formal procurement to assure internal stakeholder buy-in and articulated/agreed outcomes is a sensible early sense check for any organisation. Start as you mean to go on with formal reporting and approvals processes which will continue with your Outline Business Case (OBC) and Final Business Case (FBC) stages.
One of the most popular services we deliver for clients is our Procurement Readiness Assessment, and clients are right to want assurance that their planning and preparation has set them up for success. [https://www.bestpracticegroup.com/services/procurement-review/]
Our procurement and implementation methodology, titled ‘Optimise’, ensures that sufficient time and effort is invested in preparing the procurement to ensure clarity of purpose, outcomes and requirements at the start.
This will lead to accelerated achievement of the full benefits of the project as the Optimise approach begins by looking to identify and implement the ‘good’ behaviours you need to drive success and helps to minimise all common risks which could otherwise derail your project/strategic supplier relationship further down the line. You can learn the steps of the Optimise Process here and apply them to your sourcing projects.
While sound preparation does involve a lot of work, we recommend it because we know that the time invested in the pre-contract stage will result in a much smoother and more effective contract management process and a far better chance of the contract achieving all your required outcomes in accelerated timeframes. Evidence determines that following this process in complex projects helps you to achieve a fit for purpose implementation, first time, on time and to budget. By not following the material aspects of these steps, evidence shows that the project is likely to not be fit for purpose some 56% – 87% of the time, be up to 200% over budget and up to 200% longer in implementation time.
For more tips on removing risks from your sourcing projects read: https://www.bestpracticegroup.com/how-can-i-mitigate-procurement-risk/
3. Delivery model assessment (DMA)
The Sourcing Playbook summarises the delivery model assessment (formerly known as a ‘make versus buy assessment’) as “an analytical, evidenced‐based approach to determine whether a service should be delivered in‐house, outsourced or as a mixed-economy solution”. The guidance includes a structured framework detailing the stages of a best practice DMA approach, the importance of using Should Cost Models, and some specific points to consider when assessing in-sourcing and outsourcing options.
While you will find our equivalent service listed as a ‘Service Delivery Options Appraisal’ on our website, the principles are the same and it has long been a fundamental activity in our sourcing complex support services.
For us, the emphasis isn’t just on ensuring this process happens, but that it involves the right representation of stakeholders from across your organisation. It is essential that internal agreement is reached on what the optimum delivery model looks like to achieve the required outcomes of all key stakeholders. This in turn will assure their buy-in for the subsequent sourcing project – which can mean the difference between your project progressing smoothly or being beset by internal challenges and delays before it has had a chance to get off the blocks with your suppliers.
We have published a range of articles, FAQs and BPG service descriptions that provide tips which will help you put into practice the DMA guidance set out in the Sourcing Playbook (and the Orange and Green Books), a small sample include:
- How and why to conduct a comprehensive Service Delivery Options Appraisal, a step-by-step process
- 5 Steps to Structuring a Should Cost Model (SCM) (this builds on the government’s existing SCM Development Guidance)
Insourcing Services: what are the typical challenges and foundations for success: https://www.bestpracticegroup.com/insourcing-services/
4. Piloting first-generation outsourcing
Recommending testing and piloting for first-generation outsourcing is sound advice, as indeed it is for any significant change to the delivery of complex services. Investing time and resources upfront to test what will and won’t work for you when considering outsourcing a service is crucial – it will save you a lot of time, costs and pain in the long run, especially when designing your KPIs. You will learn if you are measuring the right things in the right way to motivate and incentivise your provider to continually improve, innovate and drive best value. This process will also quickly reveal if you have clearly articulated measurable outcomes!
One point mentioned in this section, which could be developed further by the government, is a major area of focus for BPG – “Scoping phases,[ …] Processes that help to develop and build the final requirements”. Although the point being made in the Sourcing Playbook is about using structured, iterative ‘agile’ stages to ‘test and learn’, to this we would add the importance of pre-contractual supplier scoping/blueprinting/due-diligence – contracting for the supplier’s advice separately to the service they are going to deliver.
A structured pre-contractual due diligence process allows the supplier and client to get deeper clarity of each other’s expectations at an early stage, including the appropriate roles and responsibilities to assure fitness for purpose of the solution. It allows the preferred supplier to fully investigate and understand your requirements, how/where their solution can meet your requirements/deliver your outcomes, their ‘duty to warn’ you of any requirements that are ambiguous or any aspects that they cannot deliver, the consequential impacts of the latter and their proposed compromise/alternative solution.
The more the supplier understands your expectations, the better the advice it will provide. In turn, the more likely you will achieve the implementation of a fit-for-purpose solution. By contracting the supplier for its advice separately to contracting for the solution it intends to provide, also means it is contractually accountable for fitness for purpose of the solution which will avoid future arguments over your expectations. To find out more about Pre-Contractual Supplier’s Due Diligence, Supplier Expert Responsibilities and Duty to Warn, follow these links:
5. Preparing to go to market
Understandably, a lot is covered in this section: preparing publication, collating quality data and asset registers, clear specifications, KPIs and baselines, designing evaluation criteria to avoid bias towards low-cost bids, resolution planning, protecting against supply chain risk, protecting against costs arising from supplier insolvency and prompt payment. Rather than plough through every point, we’ve reviewed some of the key steps on which BPG regularly advises clients – the importance of clear requirements, KPIs and evaluation criteria – all of which can be tested with suppliers during the early market engagement process, referenced earlier, to assure they are fit for purpose.
The Sourcing Playbook advises on the importance of having a clear articulation of the requirements of the service being procured, with sufficient information for suppliers to make an informed decision about whether they want to bid and, we would add, if they can deliver a fit-for-purpose solution.
For complex services outsourcing, the key words here are ‘clear articulation’. From our experience in getting failing or failed projects back on track, and as expert witnesses to the High Court in client/supplier disputes, we have found that ambiguity in service/solution requirements is the single biggest cause of disagreements in complex supplier relationships (some 85%).
To address this problem, BPG designed a best-in-class service/solution Requirements Definition Process that assures clarity in aligning your specific requirements to your business outcomes. By following this process your requirements will be free of ambiguity and can be contractually relied upon.
Below are a couple of links to articles providing BPG guidance on the ‘how’, ‘what’ and ‘why’ of developing your requirements specification:
What is also important to consider is the nature of your requirements specification: input, output or outcome based. One of our most enduring and popular blogs over the past few years is on this very topic, which will take you through the pros and cons of each type and when it is appropriate to use them, is listed below:
“Appropriate specifications and performance measures are the foundation of a good contract. With the right KPIs in place, it should follow that contracts are designed to incentivise delivery of the things that matter, to minimise perverse or unintended incentives and to promote good relationships.” Laudable ambitions from the Sourcing Playbook – however, how to determine and design the right performance measures, aligned to business outcomes/benefits, to achieve this happy state is often easier said than done. Advice from the Sourcing Playbook is to develop your KPIs jointly with your bidders/suppliers and your EME process can be used to test these early in the procurement process.
BPG have published a number of articles and ‘top tips’ to help you define, articulate and internally agree the right KPIs, including: 6 Steps to smarter KPIs to achieve your business outcomes and a popular FAQ, I have a clear set of KPIs so why is my project still failing?
In most strategic service delivery relationships that are not achieving their expected outcomes, we find that several common issues relate directly to KPIs:
- KPIs are not aligned to the business outcomes to be achieved
- They often measure the wrong indicators
- They are often used as a stick to beat a provider with, thus driving behaviours that are misaligned from those that were intended.
The aforementioned FAQ provides some pointers on the approach to take to test your KPIs with ‘Use Cases’ to determine the behaviours they may drive.
The Sourcing Playbook consistently warns of the dangers of placing too much emphasis on the evaluation of bids on price and provides guidance for designing evaluation criteria that avoids a bias towards low-cost bids by ensuring that Should Cost Models are used to provide a benchmark and that due consideration should be given to: “The approach to evaluating quality, including objective criteria that are relevant to the service requirement, weightings applied according to the importance of the criteria and a scoring approach that promotes effective differentiation.”
A good evaluation framework should, therefore, evaluate price, quality (technical ability) and social value. Not only is a good evaluation framework the only way to accurately measure the relative merits (or otherwise) of submitted tenders, it is a necessity for public sector organisations with regard to transparency and the avoidance of legitimate supplier (bidder) challenge in their procurement process.
The key to success is to design and agree evaluation criteria directly aligned to your requirements and business outcomes that will achieve buy-in from your key senior stakeholders. Evaluation criteria should be clearly identified in your tender documentation and bid response structures to facilitate fair and consistent scoring across all submissions.
Reaching a set of agreed evaluation criteria may require focused attention on addressing and resolving the competing priorities of multiple stakeholders, so it is important to allow enough time to reach agreement. Stakeholder input in defining your evaluation criteria is key so that you can be assured you evaluate bids on the basis of what matters most to your organisation and what will achieve the outcomes your stakeholders expect from the project.
This BPG article How to create an evaluation framework and conduct an evaluation process free from challenge provides lots of practical advice and steps to follow when designing and delivering your evaluation process.
6. Routes to market
The Sourcing Playbook provides a helpful overview of suitable public sector procurement routes for complex services procurement/outsourcing including dialogue options and the use of frameworks, providing a link to a decision tree if you’re unsure what is the best route for your project.
Your EME process can help you determine what is the most suitable route to market and the overriding advice from the Sourcing Playbook is to plan early and allow sufficient time to undertake the procurement properly: “Allowing insufficient time for commercial activities is frequently flagged by the National Audit Office (NAO) as an indicator of project failure.” We have certainly found this to be the case in many of the more complex sourcing projects we have been called in to remediate. So, understanding exactly what is involved in each procurement route is the first step to ensuring that your future planning allocates sufficient time.
What isn’t explored in the Playbook in detail is what is involved and how long each process takes, although it signposts available guidance notes on the use of competitive dialogue and competitive procedure with negotiation. If you’re new to the dialogue routes you might find our guide on Competitive Dialogue helpful as it explains, in clear language, what the main issues are and highlights the key mistakes everyone makes in using Competitive Dialogue for outsourcing, technology and shared services projects. We have also published several useful articles on procurement routes, including: CPN; How Long Each Procurement Route Takes; and How to Speed Up the Procurement Process.
The Playbook rightly emphasises the importance of preparing a sound negotiation strategy when using the dialogue-based routes. However, from our experience we have found that ‘interest-based’ negotiating skills can be in short supply in client teams. BPG carries considerable expertise in ‘interest-based’ negotiating techniques, skills and processes and have developed our own negotiation methodology (we train our clients in this too). The following BPG article provides some top tips on successful negotiations for effective strategic relationships that you can put into practice now: https://www.bestpracticegroup.com/6-tips-for-successful-negotation/
If your organisation could benefit from a boost in its negotiating capability, take a look at our Negotiation Training, programmes designed and tailored to meet your specific needs.
7. Model Services Contract (MSC)
As the Sourcing Playbook states: “The latest MSC is a great starting point for a wide range of government services, and provides contractual clauses to support the policies set out in the Playbook.” The benefits of having such a starting point in what can be an extremely complicated process cannot be overstated. BPG would advise that when structuring such contracts for complex services, provision is made for the inclusion of a built-in six-monthly reshaping process to ensure that contract terms and business outcomes (which could potentially change or new outcomes emerge) continue to align.
A crucial element of contracting which we feel is missing from the MSC is appropriate visibility/understanding of supplier ‘Expert Responsibilities’/’Duty to Warn’ to optimise risk allocation. This is an area in which we specialise and, as far as we know, are the only professional services agency to advise on this matter. We offer many thought-leadership articles as well as white papers on how understanding these legal concepts can help you build the right collaborative relationship with your strategic partners.
To help guide you through the often complex contracting process, we have published quite a number of articles on topics such as negotiating and drafting fit-for-purpose contracts, outcome-based contracts, flexible contract structures, supplier ‘Expert Responsibilities’ and ‘Duty to Warn’, and ‘reshaping’ governance.
A few of the articles you might find helpful include:
As well as proving a starting point for what should be included in your contract, guidance on the use of the MSC could be enhanced with some pointers on what not to include.
We provide some guidance on this in our article 13 Outsourcing contract clauses to avoid at all costs.
Part 2 Of Sourcing Playbook Review (Part 1 Above)
This second half of our article is dedicated to the remaining six subject areas of the Sourcing Playbook, which include:
- Formal engagement with the market
- Due diligence during selection
- Evaluating bids and contract award
- Resolution planning and ongoing financial monitoring
- Building and maintaining successful relationships
- Expiry, extension, transition and termination.
While all of this content within the playbook offers sound, best practice procurement, implementation and relationship management guidance, we are focusing on the four highlighted areas (8, 9, 10 and 12) which we felt could do with some additional ‘fleshing out’. We are concentrating on them specifically because these are the stages where we most commonly see direct links between their management and the subsequent success or failure of the project.
Formal Engagement with the Market
The Sourcing Playbook directs readers towards further guidance throughout this segment, including the Supplier Code of Conduct, the Green Book and the Orange Book. The key points from this stage of the playbook regarding the formal procurement process stage cover the importance of:
- Ensuring fair, healthy competition by removing barriers to entry
- Setting a collaborative tone for suppliers
- Allowing sufficient time for suppliers to thoroughly develop and price solutions, raise clarifications and respond to your tender with high‐quality responses
- The fair allocation of risk based on the nature of the relationship, requirements and design of/accountability for the solution.
While all four points are important, the last two could be explored further.
Allowing Sufficient Time
Trying to rush through a procurement process, without already having a clear articulation of outcomes and requirements, is one of the most common causes of issues that we encounter. Once your accelerated procurement is complete, it is unlikely you will find out until well into the implementation of the project that the lack of clarity in your expectations and requirements is often a major contributor to delays, significant overspend, or outright failure on strategic projects.
By neglecting to take the time (yes – we know there are legitimate business pressures and reasons why require you to move quickly) to fully agree, articulate, communicate and test requirements and outcomes with suppliers during the pre and formal procurement process, these misunderstandings or ambiguities are likely to threaten the cost-effectiveness and timescales of your project. Time saved by cutting ‘clarity corners’ in this way only stores up much bigger problems for you later on.
This point ties in with a later section of the playbook which addresses the need for ‘Due diligence during selection’.
Allocation of Risk
Ensuring that risks sit with the party best able to manage them is central to the government’s approach to delivering value for money and partnering with the private sector. Therefore, the Sourcing Playbook is right to draw a connection between expectations of where risks should sit and the type of requirements you issue to the market. To make sure that you are going out to market in the right way for what you want and the levels of risk you expect to take on, it is vital that consider ‘how’ you communicate your requirements (input, output or outcomes based). It is easy to talk about input and output specifications, but how do you know which is right for you? One of our most popular blogs provides some further guidance: The smart way to use input, output and outcome specifications to get the most from your suppliers.
Striking a balance between avoiding low-cost, low-quality solutions and suppliers making excessive profits from public money, the Sourcing Playbook advises that contracts need to be profitable and expectations reasonable in order for suppliers to remain interested. Buyers should expect margins to be higher for contracts where suppliers take on accountability for, and, therefore, the risk of delivery. Remember that risks and KPIs can be explored during early market engagement to ensure that allocation of risk in the contract is fair and manageable, drives optimal pricing from bidders, and ensures suppliers are paid a fair profit margin in return for any risks they accept.
Due Diligence During Selection… (plus a critical point the playbook doesn’t mention…)
As you would expect, the playbook highlights the importance of conducting transparent, proportionate and non-discriminatory due diligence on potential suppliers and the use of the Standard Selection Questionnaire (SSQ) to ensure bidders meet mandatory requirements, economic and financial standing criteria, that they comply with exclusion grounds, and have the capability to carry out the contract.
However, the due-diligence guidance should have gone further. In our experience of over 500 of these complex projects, it should have been recommended that ‘due-diligence’ should be a two-way exercise between client and potential supplier. The playbook does make a passing reference to supplier due diligence when it advises that the buyer should “Share all data (that is appropriate to do so) relating to the procurement” and should “Not hold incoming suppliers responsible for errors in data (excluding forecasts) where they are unable to complete due diligence.” However, there is no guidance on the supplier undertaking an appropriate due diligence exercise on the outcomes and requirements prior to contracting or contracting separately for this stage of scoping and advice from the supplier.
For complex procurements, such as the outsourcing of public sector service delivery, from early market engagement and throughout the procurement, there are considerable benefits to be gained from honest and transparent dialogue with suppliers. Suitable provision should be made for suppliers to ask the right questions to ensure they fully understand requirements, business outcomes and how/if their solution can deliver against these aspirations. The more a supplier understands about your expectations, the better the advice they will provide and the more likely their solution will be fit for purpose.
If your chosen procurement procedure allows for it, a structured pre-contractual due diligence process would ensure both supplier and client get deeper clarity of each other’s expectations, including the appropriate roles and responsibilities each must take on. During this process, expert suppliers are usually under a ‘Duty to Warn’ of any requirements you have that are ambiguous or which they cannot be assured of meeting (and the consequential impacts of the latter). This assured process of due diligence by the supplier contractually and operationally ensures the solution they provide is fit for purpose and can be delivered on time and budget. By contracting the supplier for this advice separately to the solution it intends to provide, means the supplier is accountable for the fitness for purpose of that solution, to avoid future arguments over your expectations (and the associated delays, cost increases or relationship breakdowns that can accompany such disputes).
Alternatively, if your procurement procedures don’t permit pre-contractual supplier due diligence, you should prepare for a structured post-contract verification process. In this approach, you would encourage the supplier to do as much due-diligence during the procurement phase as possible to iron out any assumptions they might be making. However, there may still be circumstances when assumptions need to be made, the accuracy of which can only be determined once in the live environment, post award. The structured verification process allows a supplier a certain amount of time to check assumptions after being awarded the contract. Only predetermined elements are in scope of this verification process, meaning a supplier cannot find ‘new’ material issues they reasonably should have identified during the procurement phase that they haven’t already warned you about. Only if the results can be proved to have an impact on price can the supplier’s contracted price increase.
Whichever approach you take, the key is having the process planned and agreed before your formal procurement begins. This is one of the steps in our article 4-Step Procurement Strategy to Mitigate Procurement Risk.
Evaluating Bids and Contract Award
While the Sourcing Playbook rightly emphasises the importance of evaluating quality and social value, and not just price, we believe it could have gone further. In this case to provide some best practice guidance on how to ensure you determine the right evaluation criteria (and weighting), which should be aligned to requirements and business outcomes, to be sure you are assessing what is most important to your organisation. Guidance on how to then apply a consistent approach to scoring and evidencing a fully-auditable, fair and transparent evaluation process would also be helpful. For further guidance on this subject area you may find the following article useful:
How to Create an Evaluation Framework for Procurement Tenders.
A valuable stage in the evaluation process for the buyer, as well as the bidders, is post-award feedback to unsuccessful bidders.
It can be easy to focus on the winning supplier once the award has been made, but this is to miss a trick. Think wider than the procurement you are engaged in and consider how your evaluation process and follow-up with the unsuccessful bidders can help strengthen your position as an ‘intelligent client’. There are at least three good reasons to invest time in providing comprehensive feedback to unsuccessful bidders:
- Good Professional Practice – a recognition of the hard work, time and effort that has been put into the bid by the supplier to help them to learn from the process and where they can improve their chances of success on future bids.
- Fair and Transparent Process – being able to provide clear, detailed feedback indicates a fair and transparent scoring approach and evaluation process – less likely to be subject to challenge.
- Intelligent Client – positions you as a good client to do business with as unsuccessful suppliers are more likely to bid again for future opportunities with you, thereby maintaining a healthy, open market.
Building and Maintaining Successful Relationships
We saw earlier how the Sourcing Playbook stresses the importance of establishing a collaborative tone with suppliers at the start of the formal procurement process through the implementation of the Supplier Code of Conduct and how early market engagement in the preparation and planning stage sets up this expectation. Many businesses and organisations will have their own versions of supplier codes of conduct. At BPG we have designed what we call the Relationship Charter, which we encourage clients and suppliers to sign up to when they work on projects together.
The key outcomes a strategic supplier relationship would achieve in an ideal world are true partnership working, trust, transparency, collaboration, innovation and flexibility. The playbook makes clear a very important point about ensuring there is: “flexibility within the contract to enable the type of relationship to change if required” and “enable periodic review and update to relevant contract provisions and KPI targets”.
For more guidance on developing flexible contract structures and the reshaping process, you may find the following BPG blogs helpful:
- Fit-for-purpose contract for strategic supplier relationships
Supplier Contracts: Making strategic contracts fit for purpose
Whatever format or approach you use to foster collaborative relationships, it helps to understand what kind of behaviours you are seeking to ensure that your approach will enable them.
From our experience of 20+ years and 530+ complex strategic projects, we have identified ten Key Behaviours present in all successful strategic supplier relationships. Use these to benchmark where you stand with your strategic supplier.
We hope that you have found this review of the government’s Sourcing Playbook to be useful and you have gained some value from the BPG articles we’ve linked to throughout – providing a deeper view of both our expertise in this field and some tips for navigating these rocky waters.
You can find plenty more articles, guides and white papers on a wide variety of sourcing topics on our website.