Assuring Maximum Value – The ‘Optimise’ method and process

The BPG ‘Optimise’ Method is evidenced from over 500 complex supplier relationships. It shows these 8 characteristics are present in every successful complex relationship. We can help you implement these quickly to improve service innovation and drive down BAU costs.

8

Relationship Management

Strategic Relationship Management that assures on-going benefits are realised for the life cycle of the relationship.

ICF RESOURCING

A well-resourced ICF team that manages internal stakeholders, supplier expectations, learns what behaviours to change from KPI monitoring and drives innovation led services.

FUTURE STATE AGILITY

As the marketplace changes, ensuring that the ‘Future State’ the organisation expects to enable from the solutions and services implemented, is continually validated.

SERVICE RE-SHAPING

As the ‘Future State’ is continually validated, ensuring the services, requirements, SMART KPIs and contract terms are innovated to remain agile and aligned to the organisation’s objectives.

ROLES / RESPONSIBILITIES

The ICF is continually validating that the supplier and client teams are project managing the mobilisation of behaviours to achieve the Future State in line with ‘Expert Responsibilities’.

COLLABORATION

Operating governance that is driving the right collaborative behaviours to build on-going Commercial Trust in the relationship.

COMPLIANCE

Keeping in line with any statutory compliance and contractual obligations will remain a key foundation of your operating governance.

PERFORMANCE

The ICF team providing evidence that, (a) The supplier relationship, and (b) The ICF team itself are both performing to expectations and progress is being made towards the Future State.

VALUE FOR MONEY / ROI

Independent evidence that the solutions and services being provided are being tested to validate they are providing on-going value for money.

WHY THESE ARE IMPORTANT

The role of the ICF team is paramount in ensuring the internal stakeholders and supplier(s) both remain aligned to the organisation’s ‘Future State’ of operating effectiveness and, in turn, achieve the full benefits realisation over the relationship lifecycle.

BENEFITS

On-going achievement of the Future State means the organisation will have, (a) A supplier relationship with high levels of Commercial Trust, (b) Continual innovation in its service delivery, and (c) On-going reductions in Business as Usual operating costs.

7

Buying Governance

Procurement governance that drives the right foundations to assure a fit- for-purpose solution/supplier is
procured.

BUYING STRATEGY

The process of buying a solution starts with having a sev Aticulation of what will change in the business once this service delivery process is complete.

INTERNAL AGREEMENT

Prior to going out to market, the Procurement Department having confidence the business is internally aligned on its expectations from the project. Then to define the procurement route.

EARLY MARKET TEST

Early market engagement with potential suppliers helps the client understand where its expectations are realistic, where it needs to realign its thinking and the ‘art of the possible’.

COMPLIANCE

For the public sector and certain regulated industries, it’s key for the procurement specialists to assure their organisation is compliant with statutory regulations.

FITNESS-FOR-PURPOSE

In validating/assessing supplier solutions, always ask supplier to keep assuring its alignment with the business objective. Reshaping to keep on top of fitness-for-purpose for lifetime.

SUPPLIER SELECTION

Having a clear, open, fair and equitable holistic selection process that aligns to the business objectives and collaborative behaviours required from the supplier.

NEGOTIATIONS

Keep fitness for purpose/supplier advice accountability at the top of the agenda. Don’t compromise on any items that will distract you from aligning to the key business objectives.

CONTRACT FINALISATION

Reverse engineer the structure of the contract to drive behaviours aligned to the business objectives to be achieved. Diagram the mapping of key clauses and produce a contract process.

WHY THESE ARE IMPORTANT

The buying governance process is the real ‘sanity check’ for the organisation to determine whether it is ready to ‘go to market’, and to assure it both contracts for, and achieves, a fit- for-purpose solution.

BENEFITS

Assures the client is likely to achieve the cost reductions, operational improvements, and strong commercial trust in the relationship, along with a high reputation for collaborative working.

6

Fit-For-Purpose Contract

Contract terms that are reverse engineered from the business objectives, to support ‘enabling’ behaviours.

REVERSE ENGINEERING

It is important to reverse engineer the structure of the contract terms. This is to ensure they align to the key business objectives and operational strategy for service delivery.

ROLES / RESPONSIBILITIES

Ensuring the client does not inadvertently take on the supplier’s ‘Expert Responsibilities’ in its use of vanilla project management methods, i.e. PRINCE2.

6 MONTH RE-SHAPING

Ensuring that business objectives, current operations, SMART KPIs, governance and ‘enabling terms’ are updated every 6 months to align to current business objectives.

PRE-CHANGE SCOPING

A governance process to validate whether changes to service delivery are legitimately chargeable and, if so, for the supplier to scope any changes prior to undertaking them for impact to objectives.

VALUE FOR MONEY

All on-going services to be subject to value for money testing at client’s will against pre-agreed, fair market testing criteria and appropriate benchmarking data.

POOR DELIVERY

Method to re-build trust; agree key outcomes and performance criteria to realign service delivery. Drive ‘enabling’ not ‘defensive’ behaviours. Track escalation and performance.

ON-GOING ISSUES

Structure ‘step-in’ process to, (a) Use evidence from performance, (b) Allows use of contingency providers, (c) Don’t take expert responsibility away, and (d) Claim damages.

EXIT AND TRANSITION

Pre-agreed exit costs schedule and migration process. Updated every 6 months in line with re-shaping process.

WHY THESE ARE IMPORTANT

Most contract structures do not take into account the ‘enabling behaviours’ everyone needs to adopt to assure fit-for-purpose service delivery that achieves the business outcomes.

BENEFITS

Having contractual foundations that drive the right collaborative behaviours between client and supplier helps to realise benefits a minimum of 45% faster.

5

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.

RECENT CASE LAW

Recent case law implies certain ‘expert obligations’ onto suppliers that represent themselves as ‘specialists’ in certain fields.

EXPERT RESPONSIBILITIES

(1) Validate what it is going to deliver, (2) Validate what it is not going to deliver, (3) Impact –  validate the consequential impact on service delivery of what it is not going to deliver.

REASONABLE ADVICE

Supplier has to operate with ‘Reasonable Care and Skill’. This means it should provide appropriate advice to you during both the buying and implementation process.

SUPPLIER DUTY TO WARN

Supplier has to ‘warn’ you of any items it would reasonably identify in its expert experience that will adversely impact the project.

SUPPLIER DUE DILIGENCE

Giving the supplier the opportunity to have a ‘deep dive’ review of how to align its services to your business objectives removes material risks. Supplier accountable for fitness for purpose.

ON-GOING OBLIGATION

The supplier holds these responsibilities both in the pre-contractual and post-contractual stages (unless the client removes them through its behaviours – usually inadvertently).

REMOVING OBLIGATIONS

The client can inadvertently remove these responsibilities by being prescriptive to the inputs of its requirements and service delivery process.

ACCOUNTABILITY

All of these principles should be encapsulated into a pre-contractual supplier due diligence process to assure the supplier is accountable for its advice.

WHY THESE ARE IMPORTANT

The roles and responsibilities of the client and supplier delivery team can often overlap inadvertently. It is important to delineate what roles the specialist supplier *should* have.

BENEFITS

Detailed knowledge of these responsibilities ensures both the supplier and the client are clear on, (a) Delivery accountability, (b) Reducing the chances of chargeable scope creep, and (c) Achieving a fit-for-purpose implementation.

4

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.

WHY A NEW SERVICE?

A clear and articulated explanation to the supplier of why the organisation has decided to implement a new service delivery process and how it came to that decision.

PROCUREMENT PROCESS

A full outline of the process including milestones, the client team involved, the Supplier selection process, the contracting strategy and benefits realisation process.

BUSINESS OBJECTIVES

There is a clear vision documented that outlines what hurdles the organisation will overcome and the objectives it will achieve once the service delivery is in place.

USE CASES

There are specific use cases that explain what the key current operational processes are and where the client sees opportunity for improving on those processes.

CLARITY OF OBJECTIVES

The objectives to be achieved clearly state what the objective is, its alignment to the business outcome, when it needs to be achieved by and the degree of improvement that is expected.

NEGATIVE IMPACT

A clear understanding of the operational and financial impact on the organisation/objective if the requirement is not fully achieved to the level and time scale expected.

SUPPLIER SELECTION

A clear, fair and equitable method to compare each supplier’s bid against the quantified objectives expected on a like for like basis.

PERFORMANCE

How the client will use SMART KPIs to monitor the speed and effectiveness of the supplier’s solution achieving the expected business outcomes.

WHY THESE ARE IMPORTANT

Two reasons, (1) Supplier gets much greater visibility to provide you with better advice, and (2) It provides the foundations to contractually hold them accountable for that advice.

BENEFITS

The clarity prevents misunderstandings over expectations and reduces implementation time by up to 45%. 

3

An Intelligent Supplier

A supplier that understands the ‘holistic’ objectives of an Intelligent Client and strategically supports them.

STRATEGY

Supplier can evidence that it can holistically support the client in achieving its strategic outcomes.

OBJECTIVES ACHIEVED

Supplier evidences that it has achieved not only the contracted objectives, but is helping the client to enable the more subjective objectives that it may not be contracted for.

COMMERCIAL TRUST

Supplier evidences from its other clients that they do appropriate due diligence and ‘ask the right questions’ of their clients in new project work or change variations.

CRITICAL FRIEND

Supplier can evidence that it has challenged its client’s contracted KPIs if they are driving either its own or its client’s behaviours to prevent it from achieving its client’s objectives.

INNOVATION

Supplier evidences it regularly provides the client with new innovations to pilot. It can evidence an engagement model to encourage the client to actively participate in the innovation process.

CONTRACT APPROACH

Supplier evidences that the contract terms for the majority of its clients drive good behaviours between both parties, are fair and equitable and reviewed every 6 months to reduce ambiguity.

OWN ICF TEAM

Supplier can evidence that with its existing clients, it actively engages with the client’s ICF team and works with them to re-shape service delivery in 6 monthly cycles.

EXPERTISE

Supplier evidences from the results it has achieved with other clients (so, less emphasis on length of service) that it has deep domain expertise for the technical services it operates.

WHY THESE ARE IMPORTANT

The good behaviour of an ‘Intelligent Supplier’ provides the quick foundations of building commercial trust with the client. This encourages the client to open up additional opportunities to the supplier for mutual gain.

BENEFITS

The supplier and client work on new innovative projects together, driving greater cost savings across BAU services whilst improving the supplier’s operating margins and cash flow.

2

An Intelligent Client

An ICF team that demonstrates strategic, commercial and partnership behaviours an Intelligent Supplier expects.

WHAT GOOD LOOKS LIKE

The client has articulated what benefits its organisation will achieve once the relationship is delivering to its expectations.

SERVICE OBJECTIVES

New service delivery objectives are clearly quantified between, (a) Transactional/BAU services, and (b) Transformational expectations.

DELIVERY STRATEGY

The strategic principles are clear in respect of how the delivery process will be undertaken and performance managed.

PROJECT PRIORITIES

New project priorities anticipated within the strategic relationships are aligned to the direction of travel.

PERFORMANCE

Performance management is monitored through SMART KPIs. These align to the organisational outcomes to be achieved and are used as a ‘learning tool’.

INNOVATION

Client understands that innovation in service delivery is vital and there is evidence that can be demonstrated to the supplier that this is led at the senior executive level.

ENABLING CONTRACT

The key principles of contract terms and schedules are aligned to drive ‘enabling’ behaviours for both parties to achieve outcomes in a fair and equitable manner.

CLIENT FUNCTION

Client has invested in an appropriately funded, resourced and skilled Intelligent Client Function. Led at the executive level to ensure maximum value out of the relationship.

WHY THESE ARE IMPORTANT

‘Intelligent Client Behaviour’ attracts ‘Intelligent Supplier Behaviour’. By a supplier seeing constructive and innovative behaviour (rather than just intentions and words), encourages Intelligent Suppliers to ‘go the extra mile’ and drive innovation in service delivery.

BENEFITS

Behaving ‘intelligently’, (1) Accelerates achievement of benefits from the service, (2) Reduces misunderstandings, (3) Reduces the stress of your internal team, and (4) Ultimately reduces the costs of managing the supplier and service delivery.

1

Articulated Business Vision

The organisation has clearly articulated specific business objectives it will achieve once the solution has been implemented.

CLARITY OF VISION

The ‘vision’ for the organisation is clear, understood and agreed by the team members.

OBJECTIVES ARE CLEAR

The business objectives for the organisation fully align to the ‘vision’ and are understood by the team members.

EXPLICIT STRATEGY

There is a clearly articulated business strategy that outlines how the objectives will be delivered by the business as a whole.

BUSINESS CASE/ROI

The business case and ROI for the relationship/project has been quantified and clearly articulates the benefits realisation process aligned to the objectives.

OBJECTIVE STATUS

Each objective has a clear status of (1) Aspiration [blue-sky thinking], (2) Shaped [direction of travel], (3) Quantified [articulated the ‘what’, ‘how’ and ‘by when’].

SMART KPIs

SMART KPIs have been articulated against each objective so that achievement towards the objective can be impartially measured, learned from and the KPIs can be re-aligned.

RESPONSIBILITIES

The business has put clear roles and responsibilities against each individual that is the senior stakeholder for achieving each of the objectives.

INNOVATION

The organisation has a structured governance process in place to drive and measure the performance of innovation across the management teams.

WHY THESE ARE IMPORTANT

A competent, aligned and informed management team means the right operating disciplines will be in place to assure the success of the relationship/project.

BENEFITS

This type of clarity provides, (1) An accelerated time scale to full benefits realisation, (2) Significantly reduces project delivery costs, and (3) A highly positive reputational impact.

What stage is your strategic supplier relationship currently at?

New Relationship

You’re procuring or contracting and you need it to work really well.

Existing Relationship

You’re in a partnership that could be working better.

Broken Relationship

It’s gone wrong. You need help to exit a relationship early and safely transition to another.