Presentation about collaborative commercial capability in IT. Presenters: Terry Brewer, Divisional Director Commercial and Procurement, London Borough of Harrow Raihan Mustafa,Customer Relationship Manager for Local Government, DCLG, London & SE Regions

1. Smart Procurement – DCLG Digital
Building Collaborative Commercial
Capability in IT
28th
February 2014
Terry Brewer, Divisional Director Commercial and Procurement, London Borough of Harrow
Raihan Mustafa,Customer Relationship Manager for Local Government, DCLG, London & SE Regions

2. Agenda
• The roots of Category Management for ICT
• Our progress, goals and key initiatives
• The Software Challenge
2 Commercial Reform

3. Roots of the project
• The London Procurement Strategy Board: lots of
common suppliers, little co-ordination
• Capital Ambition funding
• The Camden partnership with GPS
• Integration with CIO groups in London
• Full first-year programme delivering benefits in a wireless
concession contract and a supplier management
programme
3 Commercial Reform

4. 3 Commercial Reform
Spend Data 2010 / 2011
The ICT Challenge
Key statistics
Number of unique suppliers 1,547
Total reported spend £323,247,405
% of spend on contract 37%
Number of invoices 226,019
Suppliers by spend range Suppliers Total spend On contract % on
contract
Cumulative
spend
% of
spend
% on
contract
£20m+ 3 £62,837,887 £10,540,701 17% £62,837,887 19% 17%
£10m - £20m 3 £43,462,872 £24,644,853 57% £106,300,759 33% 33%
£5m - £10m 8 £61,104,552 £14,276,503 23% £167,405,311 52% 30%
£1m - £5m 34 £71,494,626 £32,160,091 45% £238,899,937 74% 34%
£500k - £1m 22 £16,573,652 £8,457,786 51% £255,473,589 79% 35%
£250k - £500k 56 £19,247,976 £8,215,108 43% £274,721,565 85% 36%
<£250k 1,421 £48,525,840 £20,092,400 41% £323,247,405 100% 37%

5. ICT Category Management
Governance Structure
London
Procurement
Strategy Board
London
Connects
ICT Cat Mgt Project
Board
Wireless Datacentres Apps SRM eAuctions
Camden
(Terry
Brewer)
Newham
(Geoff
Connell)
Haringey
(David
Airey)
Camden
(PMO)
Enfield
(Tim
Kidd)
Society of London Treasurers
GPS Delivery
Team
5 Commercial Reform

6. Challenges
Complex internal stakeholder networks
Entrenched behaviours and historic Standing Orders which tend to
encourage independent tendering
Co-ordination problems: timelines and availability of key personnel
“Deal-making” supplier behaviour
Building commitment and leading change
6 Commercial Reform

7. Cost Variation
7 Commercial Reform

8. What we’ve achieved
• Effective co-working with key CIOs across London
• Good quality granular data – and a culture of sharing information
• A collaborative wireless concession contract – the first for
participating Boroughs
• An extended SRD programme
• An agreed programme of work on future procurement and technology
priorities
• Extended partnership with CCS – now a dedicated team of 3 senior
staff reporting to Terry Brewer as category lead
• Delivered benefits of £2.5m in Year 1 with a solid platform for future
growth
8 Commercial Reform

9. The National Strategy
LGA National Procurement Strategy for Local Government
• ICT one of three priority categories (construction and energy are the others)
• National category lead is Terry Brewer, Divisional Director, LB Harrow
• ICT leadership provided through SOCITM and the Local CIO Council
• A first iteration of the category strategy for ICT is with the LGA’s National Advisory Group for Procurement
(NAG4LGP)
Key Themes
• Local ownership and local leadership – each region can address its own priorities
• Technology opportunities – desktop alliance, data centre rationalisation, digital innovation in service delivery
and citizen access
• Savings – our own target is 20% of the £2.1bn spend over three-years
Operational Delivery
• Major national agreements developed in partnership between CCS, GDS and the Pro5
• CCS has a significantly expanded regional Customer Service function
• Drive as much input and influence as possible from customers
• Have defined roles for LG staff that want to get involved
9 Commercial Reform

10. The National Opportunity
To develop and implement a national commercial strategy for ICT in £2.5bn Local
Government market which is focused, inclusive and has effective governance
To work with procurement partners on a new contracting strategy and new
procurement vehicles in complex markets
To establish and leverage collaborative and effective commercial relationships
with key national suppliers
To stimulate genuinely competitive markets and enable access for SMEs and
micro-business innovators
To embed innovation in technology delivery and citizen-facing services
A 20% Cost Improvement Programme can
deliver up to £500m in cash-releasing
savings for Local Government
10 Commercial Reform

11. LG Software Applications - Now
£500m + spend per year in Local Government
Councils report common issues around value, technology capability
and service support
Multiple, independent budget-driven solutions – often extending failing
agreements
A complex pattern of bespoke deployments and licensing model
creates lock-in
A complete lack of transparency and control
Huge waste and lost opportunity
11 Commercial Reform

12. LG Software Applications – A
Major Opportunity for 2013/14
A common procurement platform which enables access to ALL major
systems
All commodity unit costs explicit
Flexible access through direct award and further competition
A range of technology models: hosted, licensed, SAAS
A master standard SLA to enable agile deployment
Developed, owned and used by Local Government
New framework available – Q1 2014/15
TCO reduction? …could be up to 50%
12 Commercial Reform

13. IT Products, Associated
Services and Solutions
Transactional IT
Procurement System (TIPS)
1
Contract
4 Lots
6
Lots
Information Assurance
(Product and Services)
Commodity Software
Solution Services
IT Products & Value Add
Services
End User Computing
Devices
Transactional portal for
COTS IT Hardware and
Software Products
Packaged Software & Value
Add Services HR
Document Management
Data Management
ERP
Finance / Accounting
CRM
Proposed Procurement Vehicles & Lot Structure
13 Commercial Reform

14. IT End UserIT End User
Computing DevicesComputing Devices
IT Product and ValueIT Product and Value
Added ServicesAdded Services
InformationInformation
AssuranceAssurance
YE
S
YE
S
IT Products, Associated Services and Solutions (IT PASS)IT Products, Associated Services and Solutions (IT PASS)
TargetedTargeted
AudienceAudience
 Value Added
Resellers
 End User Devices
providers
AnticipatedAnticipated
SuppliersSuppliers
10 – 15 Suppliers 7 – 12 Suppliers3 – 7 Suppliers
ServiceService
RequirementRequirement
 Wider range vendor
neutral products
 Close to the box IT
hardware related
services
 IT consumables and
accessories.
 Value-add associated
services
 Desktop computer
bundle
 Laptops,
 Tablets,
 Thin client,
 Hybrid device
 Accredited vendor
neutral IT Product
providers
 Secure destruction &
disposal
 HMG compliant facility
(List X )
FrameworkFramework
AccessAccess
 Further
competitions
 Regular eAuction
 Further competition
 Further
competitions
IT PASS – Framework Agreement structure
Packaged SoftwarePackaged Software
Value Added ServicesValue Added Services
 Large Account
Resellers
 P2P
 Further competition
10 – 15 Suppliers
 Wide range vendor
neutral products
 Enterprise Software
licenses
 Implementation and
configuration services
 Value added
associated services
 Large Account
Resellers
14 Commercial Reform

15. The new DNA for commercial activities
Business
need
identification
Supplierrelationship
m
anagem
entand
negotiation
Execution
of
sourcing
strategy
M
arketanalysis
Sourcing
strategy
Supplier
identification
Finalisation
of
contract
Contract
m
anagem
ent
£
Goal
High
Low
Time
spent on
value
added
activity
Before going
to market
Procurement
Process Contract and
supplier
management
Managed Commercial Services delivered centrally - once on behalf of Government
Developing
requirements that
shape markets and
the supply base to
Government
Improving contract and
supplier management
capability through
application of new
standards
Simplifying process
and reducing
turnaround times &
supplier bid costs
Av’ge turnaround times for EU
procurements now less than 100 days
(200 days in 2011)
Circa 20% of spend is now with SMEs
(baseline 6% - direct spend only)
Before
Published pipelines
Cross Government contract review
15 Commercial Reform
UNCLASSIFIED

16. What CCS will expect from
suppliers
16 Commercial Reform
To embrace
competition
To be innovative
through proposals
for how we can
improve services
To be transparent
through open book
accounting
To demonstrate
high levels of
corporate
responsibility
To deliver what we
are asking for as
an intelligent client
To deal effectively
with CCS as one
customer - the
Crown
To make a
reasonable but not
excessive profit
To provide
opportunities to
SMEs in the supply
chain
To deliver savings
for taxpayers

17. Contact Details
Terry Brewer
terry.brewer@harrow.gov.uk
Will Laing
will.laing@ccs.gsi.gov.uk
07775 561287
Raihan Mustafa
raihan.mustafa@ccs.gsi.gov.uk