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New Opportunities in Public Procurement. Magnus Josephson Kelvin Prescott 26 April 2013. New Opportunities in the Public Sector. The dynamics of IT sourcing have transformed in the 21st century public sector buyers have become more sophisticated

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new opportunities in public procurement

New Opportunities in Public Procurement

Magnus Josephson

Kelvin Prescott

26 April 2013

new opportunities in the public sector
New Opportunities in the Public Sector
  • The dynamics of IT sourcing have transformed in the 21st century
    • public sector buyers have become more sophisticated
    • the number of service providers has increased.  
    • There is huge pressure on public budgets, and major changes in the routes to market.

How can IT providers win in this market?  

rumours of the death of public sector it have been greatly exaggerated
Rumours of the death of public sector IT have been greatly exaggerated

The UK outsourcing and IT market remains the largest in the world (outside the US)

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  • No-one really knows total public sector spend (estimates range from 14 – 17BN per annum)
  • The data that does exist suggests that spend is flat (2010-11 17.99BN to 2015-16 18.27BN)
procurement planning
Procurement Planning
  • The majorityof pre-procurementsales and marketing to the publícsector is a waste of time and money – for bothparties
  • Reason: it doesn´taffect the decisionsthat the clientwill make in the upcomingprocurement in anycriticalway
  • Solution: The focus of planning work must use marketing and sales for morethan just the brand. Market solutions to common client problems, e.g.: a wholesale partner solves the problem ofhaving lots of contractswith lots ofsuppliers.
case study how boeing established intellectual leadership in logistics applications
Case Study: How Boeing Established Intellectual Leadership in Logistics Applications

The MOD selected BAE Systems as its prime contractor for an £800M contract for the support and development of its logistics applications.  

BAE won out over a number of established systems integrators such as EDS, IBM, CSC and others, even through it no established SI capability in the UK.  

How?  Because it set out a simple, clear strategic vision for the delivery of logistics information and gave the message "everything else is in the detail, which we will manage, but we are the ones who know how the end to end military logistics process works”

public sector buyers want to understand the market not the company
Public SectorBuyersWant To Understand The Market, Not The Company
  • The supplierwhoknowsmostabout the market behaviour is the mostinteresting to talk to
  • Market knowledge like
    • Common evaluationcriteria and whytheyareused
    • Common contract periods and why
    • Common results from the procurement, long term
      • E.g.: Sourcingcontractaimed to reducecostsbuttheydidn´tevaluatesuppliers process and ability to do that – so costsactuallyincreased
  • The supplierthatcanonly talk abouttheirownproducts and services willstand in a long waitinglinetogetherwithother ”peddlers” to get a meeting…
basic pre conditions for a company that wants to succeed on the public sector market
Basic pre-conditions for a companythatwants to succeed on the public sector market

Before the Procurement

  • Go from reactive to proactive in the pre-tender phase
    • Map the market, choose the clientsyouwant long beforethey start the procurement, 1-2 years at least
    • Analyse the contractdocuments from their last procurement
      • Whatdidtheybuy?
      • Howdidtheybuy it?
      • Budget? Final prices?
    • Make contactwith decision makers and budget holdersbutrun it through the procurementdepartment
    • Discuss the resulttheywant to achieve. What problem/pain is it thattheywant to solvetogetherwith the supplier
    • Answers the question WHY theybuy as theybuy
    • Then show whatotherbuyers in similar situation havefocused on to solvethat problem through public procurement
procurement process
Procurement Process
  • Ask questions, butclosethem to get a yes- or a no- answer
  • Have a Go/NoGo-policy, don´t spray and pray
  • Have a clear time line for the project
  • Havewell-definedroles in the bid team
    • Whowrites
    • Who makes qualitycontrol?
    • Who´s in charge of the process?
    • Whoowns the clientifyouwin – must participate in the work
case study the importance of perfect proposals
Case Study: The Importance of Perfect Proposals

The Ministry of Justice was evaluating software vendors for the provision of an integrated document management and workflow system to support the civil courts in the UK.  There were 3 leading contenders in the market who had implemented similar systems in other countries, and the competition was initially assumed to be a 3-horse race.  

However, one of the 3 submitted a response that was poorly written and, in a number of cases failed to answer the questions in the tender pack.  As a result, it was deselected, even though the project team believed that the company had a credible and capable solution.  By contrast, a fourth bidder submitted a response that was both fully compliant and met all of the evaluation criteria. It was selected even though it had never implemented a similar solution in the past

contract period
Contract Period
  • If youwin: howcanyou get as quicka start as possible?
  • Whatcanyou do before Day 1 of the contract to make it wellknownthatyouare the winner and to make it workwhenit´stime?
  • Howcanyouuse the contract period toprepare for the nextcompetition? Buildbarrierstoyourcompetitorsnow!
  • If youlose: Whowon and why? Read the reasons in the decision and dontforgetto read the winning tender
  • In what situations shouldyouappeal? There must be a policy
case study building barriers to the competition
Case Study: Building Barriers to the Competition

The MOD undertook a major procurement to consolidate its desktop infrastructure and support arrangements.  Two incumbent service providers held the majority of the existing estate, in addition to in-house support teams.  

However, the MOD was concerned that two bidders was insufficient to generate real competitive tension, and consequently went to great lengths to encourage alternative bidders to form consortia to bid.

The incumbents didn’t fight the competition, but they did spend 18 months proactively building pilot solutions to the MOD’s requirements, and highlighting the cost and risk of change to a new provider

In practice, two other consortia were formed and submitted proposals.  They were eventually deselected after investing, conservatively, £4m each in bid costs, and the two incumbent providers then went

head to head for the contract

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Magnus Josephson

Growingyour public sector business

Legal expert on EU Directives

Business developer

Tel: +45 734-35 65 65

Stockholm, Sweden

mj@magnusjosephson.se

www.magnusjosephson.se

Contacts

Kelvin Prescott

  • Winning in IT
  • Commercial Strategy
  • Business Development
    • Tel: +44 793 155 2842
    • London, UK
    • kelvin.prescott@newburyconsulting.co.uk
    • www.newburyconsulting.co.uk