Chaston said she expects her service providers to buy into the ideals of their client. 'What I was looking for was someone that could come in and make a difference and help to deliver the vision,' she said. 'Service providers should think in terms of how knowing the values of their client can be turned to their advantage.'
Sion Latter – who, as head of FM Solutions at BT, has overseen the procurement of the largest facilities management outsourcing deal ever in the UK – had a similar message.
At the top of BT's list of requirements from suppliers bidding for the contract were innovation and an understanding of the core business. Many fell at the first hurdle, said Latter, because they did not have these qualities.
Also crucial for the deal – awarded last year on an interim basis to the Monteray consortium lead by Carillion – were team-working skills, which proved elusive for many of the bidders.
Criticising BT's approach to contract management in the past, Latter said that, before Project Jaguar, there had been no incentive for suppliers to invest in the future because of the short length of contracts – typically three years. He also said there were many overlapping areas between BT in-house operations and contractors.
Post Office culture change
The Post Office is in the early stages of putting together a facilities solution that will rely heavily on outsourcing, Roy Galley, director of planning at Post Office Properties, told delegates.
The first stage will be to consolidate the fragmented departments that make up the 4.6 million m2 Post Office portfolio. 'We are trying to change the culture at the Post Office, to help us control our budgets,' he said.
Acknowledging that he was not as far down the outsourcing road as others at the conference, he said the new approach to property and facilities management would focus on removing duplication in contracts, introducing simpler, faster contracting processes and making better use of Post Office buying power.
Much further down the outsourcing route is British & American Tobacco, but it hasn't been an easy path. Keith Lamb, BAT's building and construction manager responsible for facilities management, highlighted the cultural problems that outsourcing can bring when organisations fail to bring staff with them. BAT's first contractor met with considerable resistance to total outsourcing. 'None of the staff wanted to know,' said Lamb. 'People were scared of change and there was resentment.'
Since then, a new approach and management team have helped move the organisation forward. In 1998, a fresh contract was put in place, but not without all client staff formerly associated with facilities management being redirected to other duties. Lamb likened the new partnership to a marriage, and urged contractors bidding for work to aim for the same.
Mark Pedlingham, director commercial (commands & centre) for the MoD, stressed the importance of getting contracts right first time. Of the 2,110 land contracts for 1999/2000 – worth £132 million – he said amendments had to be made to 1,688, at a cost of £41 million.
'Twenty per cent of the contractual action is amendment. Too often, we got it wrong first time,' he said. 'We want long-term value for money. One lesson we have learned is not to do things on the cheap and then end up having to replace it. The total cost can end up more than we ever intended.'
Pedlingham said the MoD needed to start procuring services in a competitive way.
He indicated a move towards partnering with contractors, although the procurement methods for the MoD – whereby contracts must be reviewed after a fixed period – may stand in the way of long-term partnerships, he said.
Delegates also heard from Peter Jones, technical services director at Barclays bank, and from Citigroup head of corporate realty services John Killey, who described the crucial role of key performance indicators in measuring contractors' progress. Citigroup currently outsources a variety of services monitored by these indicators. 'KPIs are there to help both parties,' said Killey. 'They should be used as a management tool for both the customer and the vendor.'
Question time
Why have suppliers failed to win contracts with your organisations?Mark Pedlingham, MoD: ‘Contractors often make the same mistake many of us made during school exams by answering the question they think they have been asked, not the actual question. We have a golden rule: always provide us with the bid we ask for.’
Sion Latter, BT: ‘We took the view that [the process] had to be an inclusive dialogue and over time we evolved in terms of what it was we required until we had what we thought was a compliant bid. Quite often contractors will aim to conform and wouldn’t dream of non-conforming. Sometimes we may miss out on good ideas because of this.’
How do you give feedback to suppliers?
Roy Galley, Post Office Properties: ‘We meet our suppliers on a regular basis, learning about the contracts from them, and building that into future reviews. We need to work towards comparing those reports to give us better performance. This would mean we could provide the businesses we serve with better performance.’
What keeps the partnering process honest?
Sion Latter, BT: ‘I think trust and openness is critical. In the BT environment a partner has to go into the relationship eyes open. Five years is not a lot of time for you to be investing in IT, people and all the things that will develop the business. Honesty between both parties is the best way. That is how a partner will become imbedded in the culture of that organisation.’
Source
The Facilities Business
