Matt Denham at Public Procurement Summit – “Crown Commercial Services Got Things Wrong”

So Sally Collier didn't make it to the Public Procurement Summit last week. She sent Matt Denham instead, one of her deputies in Crown Commercial Services; it is always a tough gig, doing someone else's presentation! But he opened well by saying he had been given some slides by Collier's office but had added some of his own as he thought they would be more interesting. Good man! Maybe that made the session a little more revealing than it would have been otherwise.

The Summit coincided with the announcement of Bill Crothers' departure and his replacement on an interim basis by Chris Hall. Was Collier upset that she didn't get that acting government Chief Commercial Officer role? We doubt that, whilst she is a very capable policy and political operator, I suspect she is happy not to be stuck in the corridors of Whitehall. She also doesn't have any private sector experience and the CCO probably needs that - or stakeholders might think they need that, which is the same thing.

Back to Denham's presentation, which really re-inforced some of what we've said here about Crown Commercial Services. In terms of taking on the fully managed spend from departments, "we got things wrong - we onboarded too much work too quickly". (Talking to someone about this later, not Denham himself, they laid the blame for that firmly at Crothers' door). So now CCS is realising we "don't need to do everything" and needs to redefine what is done in departments versus the centre.

Strategic category management will focus on fewer but higher level people. That area within CCS will reduce from 270 people to around half that. (You will notice we avoided the temptation to go with a sensationalist headline for this article -"CCS to fire hundreds of staff!").  Transactional work will move into the customer operations team. "We want to be more market-facing" and in terms of internal stakeholder management, "we are jointly developing long-term savings plans with departments". (Definitely the right approach!) There is an initial focus on in-year savings, then a rapid review of long-term savings opportunities across top spending departments. "All the savings levers not just competitive bidding" will be considered.

This seems to be where McKinsey are helping, and apparently that work is very much on a contingent fee basis - we just hope CCS has robust measurement in place otherwise there are obvious risks; we would imagine McKinsey are pretty smart when it comes to working out their own fees!

CCS now has "a more collaborative mindset". There is a single point of contact in CCS for each department - who then works in teams with category experts. Cross-functional teams from CCS, departments and external consultants are working on categories with deep dives to identify opportunities, followed by implementation. This requires "recruitment of more experienced commercial experts, upskilling of existing teams, better tools for the talent we have, and improving performance though development programmes".

It all sounds pretty positive, although it has taken CCS quite a while to get to this point, which arguably is still only a case of recognising past issues rather than showing genuine success. But we can all hope that the organisation is on a better track now. Denham finished with a list of key learning from experience points to date - we rather liked this and it may be relevant for any procurement function trying to drive a major programme:

  • Be ready to escalate quickly if you don't have senior level buy-in
  • Prepare team for the pace of work with a rapid two-week diagnostic
  • Create transparency and one version of the truth
  • Separate category management development from transactional contract and supplier management
  • Ensure your teams are up for the challenge
  • Engage external consultants on outcome based arrangement

He then took one good question from the audience - "do you benchmark your services against other collaborative procurement organisations and if so what measures do you use"?

He said that CCS is now using the "net promoter" score as a key measure. "The first set of results weren't very good", it is getting better but is still marginally negative. So it will be interesting to track that over the next year or so - that will be a very good measure of how the senior team at CCS and indeed the whole organisation is progressing.

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