Scottish Councils Deliver Streamlined Contract and Supplier Management
“The automation has streamlined the Council’s contract management and supplier performance processes and as such we feel that this has increased our business efficiency and improved internal and third-party collaboration by reducing operating expenses.” – Tommy Burns, Procurement Project Officer – East Ayrshire Council
South Ayrshire Council (SAC) and East Ayrshire Council (EAC) are two local authorities in the southwestern corner of Scotland. Each operates a centralised procurement function, responsible for supervising the strategic spend of up to £150 million annually on a wide range of goods and services, to deliver best value to the local community.
SAC delivers services to a population of about 113,000 residents and employs about 6,000 people to make sure that is done well. East Ayrshire is a diverse area covering some 490 square miles with a population of 122,440 spread over both urban and rural communities. Both procurement functions aim to promote robust, compliant and transparent procurement processes in line with the objectives of Scottish Government, Scotland Excel, and Crown Commercial Service.
They are committed to maximizing value through procurement by increasingly seeking collaborative opportunities on contracts with other local authorities, to share knowledge and benchmark performance – an overarching strategic aim of Scottish Government. Both councils adopted JAGGAER’s contract lifecycle management software, which complemented their use of (public contracts Scotland) PCS-Tender. In doing so, they not only gained visibility, tracking, negotiation and compliance benefits, but discovered a collaborative way of sharing knowledge and market intelligence to take their supplier value management to a superior level.
A Collaborative Approach
The challenge for the councils was to take a collaborative approach to contract and supplier management to get the same value for both councils while ensuring better delivery of public services. Management, control and value tracking of contracts and the suppliers that deliver on them is an essential task which, without a systemized and automated approach, can be time-consuming and resource-heavy.
South Ayrshire Council
At South Ayrshire Council, Lynsey Bennet, Procurement Officer (Contract and Supplier Management) explained how they, like many other local authorities, had a functional but manual supplier and contract management system in place. “There was no automation at all in this process, everything was manual, based on spreadsheets and emails. It took an awful lot of admin time to locate and collect information from different stakeholders and transfer that into a master spreadsheet, so we couldn’t rely on absolute accuracy,” said Lynsey.
JAGGAER provided them with a demo of the software’s functionality. “JAGGAER were very hands–on in helping us to align the tool to our view of what we wanted contract management to be for South Ayrshire Council.” Expanding on the existing tender system was crucial, but so was working with the systems in place. “The whole idea behind PCS-T is to standardize measurements across authorities, so that all information would be comparable. But no two contracts are the same, and we were restricted by the KPIs available. JAGGAER helped us develop a wider range of KPIs, which could still be used by any authority, thereby facilitating cross-organizational benchmarking. We didn’t want to have to write a process to fit their system, so it was hugely beneficial to have JAGGAER work with us to adapt the system to suit our process.”
East Ayrshire Council
At East Ayrshire Council, Tommy Burns, Procurement Project Officer explained that: “East Ayrshire Council previously had well–established contract management processes and procedures in place, however these were also mainly manual processes which required allocated time and resources to administer. Now, JAGGAER does that instantly.”
The Council made a strategic decision to implement JAGGAER’s contract lifecycle management software across its whole contract portfolio. However, in discussions with JAGGAER, it decided to incorporate a formal and standardized document management structure behind the system to ensure proven best-practice contract management controls to automate and streamline contracting processes. These are now embedded into the system for all contracts.
“The contract tracking software,” he explained, “also provides easy and flexible options to audit, track and report on any required contract data (including enabling easy data extraction for more in-depth analysis and improves business controls, like integration and accessibility for departments for optimized contract value and performance, faster workflow cycles and corporate governance adherence.”
“For East Ayrshire Council, the system has completely transformed how we work, giving us a transparent and formalized online contract management database. The automation has streamlined the Council’s contract management and supplier performance processes and as such we feel that this has increased our business efficiency and improved internal and third-party collaboration by reducing operating expenses.”
Supplier Value Management
It was during the time when JAGGAER was working closely with both councils to understand their individual needs that they saw an opportunity to bring both councils value. It was a simple, yet highly effective change to how they derive best value from service provision, which benefited both the council and the supplier.
The persistent need to find savings has driven many councils to explore new ways of commissioning and delivering services. And as they enter more third-party arrangements to fulfill these needs, good contract management and supplier value management have become increasingly important. JAGGAER suggested that, as they were now adept at using the same system, the separate scorecards could be rolled up together into one scoreboard. Being able to compare notes and work collaboratively on certain contracts would do more than just ensure suppliers meet their contractual obligations; it would help the councils identify risk and achieve savings and continuous improvement throughout the life of the contract.
“East Ayrshire Council are the lead authority on a collaborative C1 Waste Management Contract with South Ayrshire Council” said Tommy. “So it made perfect sense to share scorecard and supplier contract performance information. Also, we were using the same suppliers, contractors and service providers for very similar contracts. We considered it beneficial for both councils to meet to discuss current KPIs and scoring methodology to see if we could re-align these to some of the national performance indicators.”
East Ayrshire Council often leads on collaborative contracts and is actively considering ways of implementing a standardised KPI approach across its collaborative contract portfolio. “There is clear evidence that solid, consistent and constructive feedback enhances performance at all levels across the Council.” He continued, “Executing the Council’s contract portfolio is absolutely crucial, but so is implementing the strategic initiatives that ‘future proof’ the Council. Designing our scorecards to be contract–specific ensures the right balance of operational and strategic measures that are being monitored, measured and recorded.”
“Collaborating on this has been so beneficial,” said Lynsey, “because we can compare different elements like cost, quality, service, lead times, response times, etc, and where we have issues, we can determine what each other is experiencing and what each other is doing to remedy or change them. This is very valuable to us – an effective, ongoing way to secure value for the longer term.”
Not only do both councils benefit from a collaborative dialogue, openly exchanging information and ideas on what they can do to change or improve metrics, the supplier is also involved in the discussions and can respond to both. Lynsey says the benefit to suppliers is clear. “This has a two-fold advantage for them: it helps them focus on what is important to us, and in doing so, can demonstrate how good their performance can be. After all, it is in their interest to make sure everyone gets an equal service.”
JAGGAER simplifies that process. “We used to have to collate the documents and issue them in a shared folder somewhere, but now they are easy to access and download – making sure everyone has the same versions.” The supplier has the opportunity to respond to the combined scorecards in advance of each quarterly review, qualifying remarks or identifying a route to improvement. “On the other hand, where a supplier does not agree with our scoring, we can demonstrate our reasons behind it, because we have all supporting information to hand and up to date in the system. It ultimately enables us to receive and deliver a better service.”
Supplier Relationships Built on Trust
The shared process has now produced three quarters’ worth of data, and the councils are starting to build up a very useful picture of supplier performance. They can use the data to demonstrate where they are getting real value for money, which bodes well for more reciprocal work on contracts going forward.
“By using the system we can configure and distribute supplier performance surveys, manage certifications, define and monitor supplier KPIs, and create and manage supplier scorecards with closed-loop support for performance sustenance/improvement. The team at JAGGAER are very pro-active and are keen to discuss and develop system enhancements with us,” said Tommy.
“At East Ayrshire, we have also taken the time to conduct one-to-one training with our suppliers on the system in order to provide them visibility of their own contract information, thus reducing the need to duplicate work and information,” he said.
Lynsey agrees, and adds: “When contracts are up for renewal, whether due to contract expiry, changing business requirement, service user needs, newer technology, or market or legislative developments, we are better placed to negotiate terms and conditions because our relationships are more founded on trust.”
With the ability to invite other evaluators to contribute, they can aggregate all information and build on what they’ve learned going forward for the next generation of contracts. “The functionality of the software makes it open to a wider audience participation,” she continued, “so we can involve other stakeholders, and, who knows, even garner the experience of the recipients one day – the citizens themselves.”
Crossing the Sector Divide
The single process has introduced a mechanism for collaboration that could be appropriate for any set of authorities, or even for businesses in other sectors. Both Lynsey and Tommy have worked in the public and private sectors and feel the system has benefits for both, through its ease of use, flexibility and range of management reports.
“It is definitely beneficial to work as one organization,” said Lynsey. “Sharing supplier and services information, and employing our aggregated knowledge to make informed decisions, has got to be the sensible way forward, for anyone, especially at a time when we are all focusing on making savings, but still want quality.”