How to Know if You Should Engage in Strategic Commissioning

By Allan Watton on

How to Know if You Should Engage in Strategic CommissioningThere is an unfortunate mistake that many organisations make when first considering strategic commissioning.

That mistake may seem so small as to be irrelevant, but it can make all the difference between a successful long term partnership and a contract that was doomed to failure from the very beginning.

It all comes down to the very first question. Is it, “Should this service be commissioned?” Or is it, “How should this service be commissioned?” If an organisation feels that the primary question is how, it indicates a lack of understanding of what is truly required to launch and maintain a successful partnership. And that can be fatal to a future partnership.

When considering strategic commissioning, the first question should always be, “Should this service be commissioned?” Fortunately, getting the answer to that question does not have to be an expensive or lengthy process, and may save you some very big headaches down the line.

Why Does Strategic Commissioning Seem Like an Attractive Option?

There are a multitude of legitimate reasons as to why an organisation would choose to commission a service:

  • To acquire new skills and better management
  • To better focus on strategy and core functions
  • To avoid major investment
  • To assist in a fast transformation situation
  • To handle overflow situations
  • To enhance credibility and flexibility
  • To improve financial ratios and reduce costs
  • To launch a new strategic initiative
  • To improve overall performance.

Unfortunately, organisations have also been known to engage in strategic commissioning for less than sensible reasons – most typically:

The first stage in deciding whether or not you should commission a service is to ask yourself if you are considering doing so because of either of the above two reasons. The overriding objective of an organisation often defines the future success (or failure) of a strategic partnership.

Do You Really Want to Engage in Strategic Commissioning?

Commissioning a service requires an enormous internal shift in approach.

You immediately cease to become responsible for the delivery of the service. You lose control over its day to day operations, and you lose any authority over the staff delivering the service.

Your focus moves from micro-management to macro-monitoring, and the importance of such monitoring must not be underestimated. You will have to create extremely proactive monitoring systems with regular pulse checks (think daily or weekly, rather than monthly or quarterly). If this sounds excessive, there is plenty of evidence available from organisations who have experienced the excessive and unexpected costs associated with a lack of suitable monitoring.

Although the gradual reduction of your in-house headcount is a justifiable reason for engaging in strategic commissioning, work will still need to be carried out by an internal team. It will be a different kind of work, and there will be less of it, but it will require a different and specialised skill set.

When considering strategic commissioning, you must therefore ask yourself if your organisation is truly willing and/or capable of taking on the inevitable new set of responsibilities.

Do You Have an Effective Governance Team?

The importance of a Governance Team in making the ultimate decision regarding strategic commissioning should not be underplayed.

It is their responsibility to ensure that decisions regarding commissioning align with an organisation’s strategic goals. The team will need to administer an effective process for informed decision-making regarding the question as to whether or not strategic commissioning is the right move.

Empowering a Governance Team to make tough decisions regarding your strategic commissioning options is one issue – ensuring that they are appropriately qualified to ask the right questions is something else altogether. Those key questions are:

  1. What would strategic commissioning achieve that in-house re-organisation cannot?
  2. What outcomes do we expect from the process of strategic commissioning?
  3. Do we understand the commissioning process? If not, is there a budget for specialist advice?
  4. What impact will strategic commissioning have on our organisation?
  5. Do we thoroughly understand our own operational processes, the costs those operational processes drive, and our strengths and weaknesses as an organisation?
  6. Do we fully understand the economics of strategic commissioning, and the strengths and weaknesses of the various potential cost models?
  7. Can we (or do we want to) deal with the challenges of having staff go through TUPE transfer arrangements, arguing over pension liabilities, and negotiating with unions and potential partners?

There are many more questions that a Governance Team must ask when moving through the process of strategic commissioning, but the above questions are those that relate directly to the decision of “should we commission?” Answering them can prevent a lot of future headaches, just waiting to happen.

Look Before You Leap

Whilst it is possible to jump straight to the tendering stage without asking or answering any of the above questions, doing so would be akin to trying to run a marathon without any prior training. At best, you’ll stumble through the 26.1 miles in a mammoth time. At worst, you’ll simply never make it.

Fortunately, answering the questions as to whether you should engage in strategic commissioning does not have to be as gruelling as training for a marathon. With due consideration and application, not only will you be able to satisfy yourself regarding the potential merits of strategic commissioning for your organisation, but you will also have a head start on the process of securing a partner.

Creative Commons image courtesy of milos milosevic