Tag Archive for: Technology

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Prioritisation Matters – A Story about my Phone

I’ve been intending to tell this story for a couple of months now, but prevarication is a terrible thing, as we will see.

I owned – well, I still do – a Huawei mobile phone that I got on a monthly contract with Vodafone in (I think) 2017, although it may have been a little earlier. In October 2021 I fell off my bicycle (embarrassing, 200 yards from home, going up a slightly higher than I expected kerb). I fell onto my phone which was in my pocket, the rear casing got badly cracked, so I “repaired” it with Sellotape. I had the intention to replace the phone from then onwards, but it did work, and I replaced the tape every few months.

Finally I went into the Vodafone shop in Camberley in May. My first visit, it turned out I had to change something on my account before they could do anything for me – that was a bit of a process. So I went back a couple of weeks later and I’m sorry to say the two women working in the shop laughed at me! Twice!

They had met me once before so maybe they felt more comfortable having a good laugh when they saw the state of my phone. Apparently the Sellotape was funny, can’t see why myself…  But then the woman who was helping me laughed again when she opened my account on her system and saw the charges.  It was perhaps more of a gasp than a laugh. “You’re paying how much a month?” she exclaimed.

Well of course I had been suffering from the “inflation plus 79.3%” or whatever it is standard contract for 7 or 8 years, and I didn’t really even look at the monthly direct debit to be honest.  I hate to admit it,  but it was about £40 a month for an ancient, knackered phone and really not very much data at all!

There was some more chuckling when she did the transfer of data to the new phone, which took ages  – “your old phone was pretty much on its last legs”, she said.

The Vodafone staff were great actually, I went for the buy my own phone option then a monthly contract and they saved me £50 on the phone by suggesting something surprising, which I won’t repeat here in case it gets them into trouble. So I have ended up with a total cost of ownership that has probably reduced by 50% and gives me much a better contract, hardware and capability.

So, apart from giving you the chance to have a laugh at me, supposedly a serious and experienced procurement professional, why am I telling you this? It just struck me that putting things like this off is always very easy. There always seemed something more urgent or important to do rather than take an hour or two to go and sort out my phone. I was procrastinating for over two years. Or there was an excuse. “I won’t replace it just before Reading Festival in case I lose it / gets damaged” etc.

And we do tend to do the same in our working lives. We know we should review that contract, or look for a new supplier because our current one isn’t really performing, or check out the latest market forecasts and see if we should go “long” on that commodity. But something more urgent comes up. Our internal customer wants to see us NOW.  The CFO wants a report on how to save 10% on everything by Christmas. If I don’t go online at 10am I won’t get my Taylor Swift tickets…

But the cost of delaying all mounts up. In my case, it’s not just the fact that I probably overpaid by the best part of a thousand pounds over the last few years, it is also that I missed the functionality I could have had with a new phone. So prioritisation, which must be accompanied by good general planning, is an undervalued skill in my opinion. I’ve worked with people who were brilliant in almost every way, but could not prioritise.  If this is you, it is important, do work on it.

Clearly, I’m not perfect (!), but also have a think about whether you’re missing some possibly quick and easy wins, in work or in life generally, just because you “never get round to it”.

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2022 – How Was It For You, CIPS?

The Chartered Institute of Procurement and Supply (CIPS) has had a troubled couple of years. We saw major arguments about changes to governance, then implementation of a new Oracle technology platform to manage membership, exam bookings, events – pretty much everything really – has been a disaster. The CEO, Malcolm Harrison, left at the end of March in circumstances that weren’t altogether happy, I understand. The Institute did manage to publish its accounts on time, and you can now examine the document on the Charities Commission website here. They run up to October 31st, 2022, so we’re already two-thirds of the way though the subsequent financial year.

The headlines – CIPS Group turnover in FY22 was £30.2 million with net income of £2.4 million before investments and pension scheme movements. The turnover was below budget expectations, but still represents an increase 11% above FY21, and operating profit was above budget despite the revenue shortfall. Reserves were down on plan but not dangerously low.  

There are a number of wider points of interest in the report. I liked the focus on volunteers; I don’t think I have ever seen information provided before on number of volunteers, where they are and so on. The report is pretty honest about the problems caused by the system failure; there is talk of staff having to go above and beyond to keep the show on the road, workarounds and more.  But the report makes this claim.

“A programme is now in place to resolve the issues with the platform and to remove all workarounds. However the impacts have been significant with membership, exam bookings, revenue and profits all being negatively impacted.”  But clearly the issues were not resolved by the end of March when Harrison went – I’m not convinced all is sorted even now in July.   

But there is no simple number provided in terms of what the programme has cost or what more it might still cost to get the platform up and running.  However, there is a table that gives figures for “Intangible Fixed Assets. “Assets under development” stood at £4.9 million in November 21 and a further £2.6 million was spent in 2022. The assets under development were “brought into use” during 2022 – if all of this was the new platform, that means some £7.5 million had been spent by November 22.

Maybe some of this was other development though, but it is not clear. I was told a while ago that the budget was in the £5-6 million area so this would represent a major overspend by last November, with more since then. We’ll have to see what the number is in this year’s accounts, and maybe next year’s too! But it seems quite possible that CIPS will end up spending the best part of £10 million.

There have been other impacts too driven by these problems. MCIPS membership is down some 700 on the year, and the blame for that is put at the door of the system. Examinations revenue was up, although there was also mention of system issues there, so maybe it should have been even better. Some of the impact is not really financial but still matters. Talking to a Fellow the other day, it is clear that the issues have made even organising basic events much more difficult. The Fellows group has been one of the success stories of recent years; it would be a shame if it lost momentum simply because of a technical issue.

Looking at those membership numbers, and where revenue comes from, I think it is fair to say that CIPS is no longer primarily a membership organisation. Its two “core businesses” are student education and examinations; and corporate training and development. In terms of the latter, CIPS does not say how much of that revenue comes now from NGOs, governments and charities who provide grants to CIPS to help develop procurement in the developing world. The Bill Gates Foundation is mentioned, and the work in the health system in Africa sounds very worthwhile. Such revenue is not reliable year after year of course, but my feeling is once you get a decent reputation, there are a lot of funds out there for delivering these “good works”.

But 17,000 MCIPS members means membership fee revenue of around £4 million, only some 13% of total revenues. And it is hard to see that growing much, to be honest. As I’ve said before, so much of what used to be the CIPS membership proposition is now replicated by other organisations, from Procurious to the Sustainable Procurement Pledge, by tech and consulting firms or even by individual “influencers” in the profession, who together provide a huge among of insight, IP, networking opportunities and more – free of charge. Why pay CIPS if that is what you value?

So – wild idea – maybe CIPS should make membership free?

You would still need to do the exams or go through a rigorous non-examination route to get your MCIPS, but the “affiliate” status could be developed further for those who don’t want that. And just think how much more the CIPS membership list would be “worth” if it was five times the size it is now!  CIPS also needs to get better at working with software firms, consultancies etc – there is a lot more potential revenue there if CIPS gets its act together. But an expanded membership list would be a huge benefit.  And the credibility CIPS has in terms of winning corporate work or NGO and charity funded projects would also be far greater with more members.

The alternative is for MCIPS numbers to stagnate at best, and the organisation becomes that training and education body as I suggested earlier, with more and more focus on Africa and the Middle East  in the main.  But there are issues with the overseas approach too; the US was a disaster last year, losing over £230K after revenues fell and costs rose quite dramatically.  I’m also not totally sure about the ethics of doing so much work in Saudi Arabia. I guess our government and our football clubs don’t worry too much about that so there is no reason why CIPS should. 

In summary; CIPS had a difficult year, but to be clear, it is not about to go bust. However, the new system has cost millions more than planned and has caused other problems. Some of the overseas operations also look problematical. There is a new Chair and a new CEO (who has solid IT and procurement experience but has never run a business or a P&L before) just getting their feet under the table.  Core membership is static or declining, but education and training activities are going pretty well, with grant funded work in particular showing a lot of potential.

I gave up my membership last year after the governance shambles – but I wish the Institute well and hope 2023 proves a better year than 2022. I suspect some innovative thinking is necessary though.

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TSB Systems and Contracting Failure- CIO Fined

In my Bad Buying book, I wrote about the IT disaster that affected millions of TSB bank customers back in 2018. Here is the story from the book.

“In 2015 Sabatell acquired TSB, a UK-based retail bank, formally part of the Lloyds TSB Group. TSB at some point needed to move onto its own IT platform, rather than continuing to use the Lloyds  group systems, as they were now competitors to their former parent company. But the move, in April 2018, turned into a disaster.

Account holders couldn’t use mobile or Internet banking, and some reported seeing accounts details from other account holders. Customers struggled for weeks to make mortgage and business payments, as the new TSB systems failed to function properly. The issue was serious enough to be raised in the British Parliament, and in September 2018 TSB’s CEO, Paul Pester, resigned.

In March 2019 The Sunday Times reported that an investigation into the affair put much of the blame onto the IT firm that handled the transition.13 However, the twist was that this firm was SABIS – which is part of the Sabatell Group itself. So although it has a separate identity, this was in effect the internal IT function of the group that owned TSB.

Reports suggested a range of technical and programme management issues around the deployment of new software, rather than problems with the underlying infrastructure. But whatever the cause, the whole episode cost TSB £330 million,14 and there is a  ‘provisional agreement’ (according to the firm’s annual report) for SABIS to pay TSB £153 million. In November 2019 an independent report from law firm Slaughter and May concluded that the issues arose because ‘the new platform was not ready to support TSB’s full customer base’ and, second, ‘SABIS was not ready to operate the new platform’.

Questions have to be asked about the choice of ‘supplier’ here. Was SABIS the right choice to carry out this challenging task? It certainly doesn’t appear so, in retrospect. Did TSB have a choice, or was the firm told by top Sabatell management that it had to use SABIS? Would a firm with a wider and broader experience of banking systems than SABIS have done better? And why didn’t TSB accept the offer of help from Lloyds, which was made as soon as news of the problems broke?”

Now, five years later, there is an interesting postscript. Carlos Abarca, who was the TSB chief information officer, has been fined £81,620 by the Prudential Regulation Authority (PRA), the body that provides oversight of the UK banking system. In their 35 page report, they explain how Abarca’s failure caused a debacle that might have threatened financial stability more widely.

He apparently ignored early signs that the migration was not going well before the big switchover. He “did not ensure that TSB formally reassessed Sabis’s ability and capacity to deliver the migration on an ongoing basis”. Sabis told Abarca that they were migration ready and that subcontractors had given written confirmation that their infrastructure was fit for purpose. but the Authority felt this was not enough because the statements were caveated with comments about outstanding tasks. Abarca also did not obtain a written updated confirmation of readiness from Sabis when he told his own Board everything was ready for the transition.

The PRA said, “Mr Abarca’s failings undermined TSB’s operational resilience and contributed to the significant disruption TSB experienced to the provision of critical functions and potentially impacting on financial stability”.

This might be the first time a senior executive has been fined and disgraced for a failure in contract and project management. Now clearly in most industries, there is no equivalent of the PRA to  carry out this sort of investigation and take such action if someone screws up in a similar manner. But if you are in the financial services industry in the UK, it is a warning. If you are responsible in some way for operations, and that includes some procurement and contract management activities, then you must be very careful and must conduct your work with considerable diligence. And make sure you cover your back carefully at every point if a supplier tells you, “yes, everything is fine, don’t worry”!

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What’s Gone Wrong with CIPS Systems? Part 2 – Advice to Help Avoid Similar Issues!

In part 1 of this discussion, we talked about the issues CIPS (the Chartered Institute of Procurement and Supply) has faced in implementing its new systems. Moving away from the CIPS specifics now, here are some lessons related to this field, based on both personal experience and wider research.

  1. Nothing wrong with Oracle software, but small clients (and CIPS are small in the greater scheme of things for a firm like Oracle) sometimes struggle to get the attention that a Unilever, Barclays or Toyota might receive as customers of any software giant. In many sectors, including procurement software (which is not what CIPS has bought, I should say), I’ve always felt there is a lot to be said for smaller organisations choosing smaller suppliers.  
  2. Optimism bias is often an issue too. Suppliers are almost always likely to tell you that “yes, our product can do this” and “yes, it can be up and running in six months, no problem”. They might not be lying – but they omit to mention the conditionality. “Yes our product can do this as long as the data is in this format…” Or “yes, six months is feasible – as long as a, b, c, and d all apply…”  
  3. My understanding is that CIPS went for the “big bang” approach with the Oracle software. An alternative might have been to look at different aspects of the requirement – the student and exam booking element, core membership management, conferences and events, etc – and perhaps gone for a staged approach, with a more “best of breed with good inter-operability” approach to the software products chosen too. Whilst this might have looked somewhat more expensive and less rapid in theory, incremental approaches do tend to de-risk programmes like this.  
  4. The US example in Bad Buying mentioned in part 1 was undoubtedly made more complex by the involvement of several parties. I do understand why Oracle “don’t do implementation”, but immediately you have potential for dilution of responsibility when another party or parties are involved. Most senior buy-side people tell me they would always prefer “one backside to kick”, if you pardon the language. It’s not always possible, but having real clarity about who is responsible and accountable for what on the vendor side is vital. That’s true not just in technology, I should say, but in many other areas including construction, outsourcing projects, etc.  
  5. The Enigen statement (see part 1) is interesting in its mention of “evolving and additional requirements”. The very first chapter of Bad Buying is all about getting the specifications right. It’s the first chapter because it is the most fundamental cause of failure – if you get the spec wrong, nothing else matters. For complex technology projects, and that includes something like the Army’s disastrous Ajax armoured car programme as well as digital tech, changing specifications once work is underway will almost always cause problems. In terms of a software project, a client that starts saying, “oh, could we have that functionality as well please, sorry, forgot to mention it earlier…” is asking for trouble. Suppliers like to say “yes” of course, but not only can it lead to delays, it muddies the water in terms of accountability.  
  6. Software implementation that involves a systems transition – rather than a totally new system / functionality – is often difficult because problems with (for instance) transferring data don’t always come to light until you’re well into the project. It is easy to say that thorough due diligence before choosing a supplier or starting the programme is the answer, and of course that is important. But sometimes issues do emerge from the woodwork (or from the silicon, we should say) only once you are actually pressing that “go live” button!  is It is often a sensible move to look at cleansing data, perhaps using a real specialist in this area, as part of the pre-contract award market engagement process and planning.  
  7. On the client side, effective programme management is absolutely key. One would hope CIPS recognised that, but there might be questions now about factors such as the programme manager, governance, reporting, stakeholder and risk management. Now you can have a brilliant programme manager and still end up with a failed programme, but I’d hope the CIPS Board would be insisting on a detailed review of what has happened (if they haven’t done that already).  
  8. Expanding on that point, clients MUST understand they are reputationally, contractually and commercially on the hook for leading the implementation. You can’t just hand this off to software providers, SIs (systems integrators) or consultants. Programmes must have the right level of senior people involved and fully engaged from programme inception, and involved in governance of the project throughout. A lack of appropriate senior input is the root cause of many implementation disasters – leaders must ensure early decisions are made and do not get missed. Small issues can fester into multi-million pound disputes  requiring un-picking, and causing cost, delays and disruption.  

In November 2021, CIPS net assets (excluding the defined benefit pension fund notional surplus) were about £6 million. The accounts up to November 2022 should be out in the next couple of months – it will be interesting to see if the systems issues have visibly affected the financial position. For the sake of next year’s membership fee inflation, I hope not!

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What’s Gone Wrong With CIPS Systems?

Anyone who has been around in business for a few years knows that there is nothing more nerve-wracking, tense and challenging then implementing a new technology solution in a mission-critical area for the business.  When I was researching my Bad Buying book, I found enough case studies on that topic to have pretty much filled the book with that alone.  

I did include a few examples, from different sectors and countries, from an Australian government payroll system disaster to the US drugs firm FoxMeyer, who went bankrupt after major problems with a project that included two software providers plus a systems integrator.

But despite the challenges, digitisation is essential. A recent article quoted Malcom Harrison, CEO of the esteemed Chartered Institute of Procurement and Supply, as saying this. “Whatever your corporate goal might be, a digital platform is critical to making more informed decisions”.

Unfortunately, CIPS itself has run into difficulties related to its own set of new digital platforms which it has been implementing over the last year or so, including its website, customer and membership systems. In an email to CIPS members recently, CEO Malcolm Harrison apologised for the inconvenience members and students have experienced over recent months in using the platforms.  I had seen some comments which were critical of the new platform around social media, and even a comment sent to the Spend Matters website. Several mentioned exam booking as a particularly problematical area. But clearly the problems are wider than that.

In the email, Harrison explained that CIPS chose tech giant Oracle as the software provider, after a thorough procurement process.  But Oracle don’t do implementation themselves – which is true of many major software providers. (Company valuations are generally higher for pure-play software firms than for combined software / services businesses). Instead, an Oracle approved systems integration partner, Enigen, has worked on that task. 

In the email, a joint statement from CIPS and Oracle said this:  CIPS, Oracle and Enigen are committed to modernizing the CIPS member and customer experience. Oracle has stepped in to ensure the project delivers on its full potential.”

The cynical might wonder how Oracle will “ensure” that delivery, given they don’t do implementation, and some might feel there is an implication there that Enigen are at fault, that Oracle having to “step in” to sort things out.  

A spokesperson for Enigen gave us this short statement: “This has been a complex project with many evolving and additional requirements. We are working collaboratively with CIPS and Oracle to create an exceptional digital experience for their members.”

We will come back to that statement in part 2 of this commentary – it is interesting to see that mention of “evolving and additional requirements”. That will no doubt set off alarm bells with readers who have experience of large software programmes! And of course, if Oracle has now “stepped in” to sort out the problems, it does beg the question as to why this level of integrated involvement from the firm was not already planned and present in the implementation programme.

I don’t want to be too critical here. To be honest, I managed to get through my lengthy procurement leadership career avoiding responsibility for many significant systems programmes. That was partly deliberate and partly luck (thanks to RBS for buying NatWest just as we were starting the mega-SAP programme … which RBS canned, incidentally). This is intrinsically difficult work – when I talked to a good friend of mine, one of the best complex programme managers I have ever met, he simply said, “it can happen to the best of us”.

But these events are not a great advert for the procurement profession, or for the firms involved, so hopefully the issues can be resolved quickly. I would also hope that CIPS will be open with members as to what has gone wrong. That could represent a learning opportunity that might help thousands of other CIPS members and their organisations, and CIPS has plenty of opportunities to feature this programme and all the experience gathered from it through its own channels. In that spirit, in Part 2 we will suggest some general good practice points (not necessarily linked to the CIPS case) when it comes to major systems implementation programmes.  

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Supercomputer – Not Very Super Procurement

We started the New Year with an expensive error made in UK government procurement. Atos, the large French technology firm, were paid £25 million after the firm complained about the decision to award Microsoft the £850 million contract for a new Meteorological Office super-computer. Most of the cash was paid by the government’s Department for Business Energy and Industrial Strategy with the Met Office itself stumping up the rest.The language is often the same when this sort of case drops into the public domain. No-one is to blame. “There was no admission of liability”, said the government here.

That begs the question of course – why pay £25 million if you didn’t do anything wrong? Clearly, the government’s legal advisers must have thought there was a very high probability that Atos would have won if the case had come in front of a judge, and might have been awarded substantially more in damages.

The best description of the dispute I found is on The Register website. A fairly technical and technological issue around the specification of the computer and the solution proposed by Atos led to the French firm receiving a score of 0/5 for several evaluation questions and their bid being declared in effect “non-compliant”.  Then, as the Register reported, “It was also alleged the government was “disproportionate” in ruling its bid non-compliant without seeking further clarification on the architectural equivalence of the Atos system”.

Eliminating a serious bidder on a complex specification issue is rarely a good idea in my experience. You need to be absolutely sure the bid really does not meet your spec, and I would certainly have wanted “further clarification” from Atos before I took the drastic step of kicking them out of the competition. Poor judgement at the very least on the buy-side. Or maybe somebody just didn’t want Atos to win and was looking for an excuse to disqualify them (yes, that does happen…) 

There was then an interesting debate on Twitter about the case too. Duncan Jones, the highly respected expert who led who led the procurement practice at research firm Forrester until he “retired” last year, was rather angry about this money ending up with Atos. If a company is on the wrong end of a bad piece of procurement by a private sector firm, the disappointed bidder doesn’t get recompensed, he said. So why should it be different in the public sector, with our money going straight into the profits of Atos (and others).

It is a fair point. But my argument is that you must have some way for bidders to highlight when there has been incompetent or even corrupt public sector procurement. And if they have lost millions because of that, why shouldn’t they be able to get something back? Otherwise I do think we would see more nepotism and even criminality in public procurement, with politicians, advisers and public officials acting in their own interests rather than those of the taxpayer. If the procurement rules did not have the “teeth “ provided by bidders’ right to challenge decisions, I think we would see lots of cases that would make the UK pandemic PPE procurement experience look like a model of probity and effectiveness!  

However, I think Duncan made a fair point about how much compensation should be payable in cases like this. Working out “loss of profit” is an inexact art, and many suppliers make very low margin on big government contracts. So £25 million does sound on the generous side; but as I say, the lawyers must have felt the amount could have been a lot more if the dispute has continued.

At the early stages of development of the new UK Procurement Bill, I seem to remember that there were some major changes proposed around supplier challenges, compensation and so on. Introducing the scope for a less legalistic dispute resolution process was one idea I liked (some countries have a “procurement ombudsman” which is an interesting idea), alongside less scope for big supplier pay-outs. The proposals seemed interesting, but I believe most of those have gone now from the draft legislation, and the Bill is not going to drastically change the current situation. 

Finally though, the point to remember is this. If an unhappy potential supplier ends up being paid lots of money, it is ALWAYS because there has been a failure in the procurement process. Don’t blame the supplier – look at what went wrong on the buyer side. In the case of this Met Office supercomputer, it may have been something rather complex around the specification. But it was still a failure, another case of Bad Buying, and one that has cost us £25 million.

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Waitrose Denies that New Systems are Causing Stock Issues

We write pretty regularly about public sector procurement disasters, probably more than we cover private sector failures. When I was researching and writing the Bad Buying book, I found it easier to find stories about government entities than those featuring major private sector firms.

There are a number of reasons for that. Some areas of government spending – such as defence – are just very difficult and complex.  So it is a challenge in any and every country to execute that type of  procurement well. There is also the political factor, politicians who want to leave a “legacy” for instance, or who want to pursue a certain policy despite the fact that there is no procurement solution that is likely to work.

But the biggest reason is probably just the nature of government, meaning there is a higher probability that a disastrous IT system implementation will get into the public domain. So we find out about numerous tech failures in the UK public sector, going back to the DSS ICL “Benefit Card” fiasco, to the ongoing Home Office/Police Airwave failure.

So it was interesting and unusual to see a high profile private sector firm mentioned in the press recently for a significant IT problem. According to the Times, Waitrose, the upmarket supermarket chain and part of the John Lewis Group, has seen problems with stock management in recent months, which is being blamed on the implementation of a new Oracle / JDA ERP system.

But it is an odd example, because although the Times report was quite detailed, Waitrose has strenuously denied that there is a problem. So the newspaper says, “The idea is to replace the partnership’s antiquated systems with the Oracle system. But during the switchover, when the two systems have to temporarily “talk” to each other, the Oracle system has been producing incorrect numbers. Every time a new part of the system is introduced, more problems emerge… “

The report says that product availability has slipped from 3/94% to around 91%  compared to an industry average of 92%. Well, to be honest, that does not sound like a major problem, although many readers did comment on the article to back up the claim, complaining about lack of product in their local stores. Particularly cheese …

Waitrose then denied that there is a particular problem or that there are system issues, claiming that their product availability is still better than several major competitors. But one point which did make me wonder was the statement that the implementation has been ongoing for 6 years now. That does seem like a long time – even given Covid – to get a new system in place.  

Coincidentally, I heard from a friend the other day about another organisation in a very different industry (but one that will be well-known to most readers here) that has had major Oracle implementation problems this year. Now clearly many ERP implementations do succeed, or Oracle and SAP would not have grown to be two of the largest tech firms in the world. But it is also clear that things can go wrong.

I included a salutary tale in the Bad Buying book, all about FoxMeyer, a US pharma distributor. That ERP implementation appeared to set off a train of events that ended up with bankruptcy, and illustrated a number of common failings in IT disasters. The case study seemed to show defining the requirement wrongly; relying too much on external consulting-type expertise for the implementation; several suppliers sharing unclear accountability and blaming each other when things went wrong; trying to integrate different systems that did not really want to integrate; and poor programme management. We all probably recognise some of those warning signs.

So whatever the truth about Waitrose, if your organisation is planning or going through a major systems implementation, be very careful. Get the right expertise lined up, including at a minimum, some internal “intelligent client” resource even if you are using consultants for much of the work.   Be cautious, do your risk management properly, define accountabilities, never assume different systems will integrate easily (e.g. consider the data architecture), plan carefully, put the governance and reporting in place….

It is a long list, so good luck!

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NHS Procurement Platform – Was it Bought Properly?

The UK National Health Service is one of the largest organisations in the world in terms of number of employees and its running cost. Whilst it is a single organisation in some senses, really it is made up of thousands of smaller organisations, many with considerable levels of autonomy. Even when we think about hospital trusts, each still has its own Board and is set up as an independent entity from a legal perspective, although that is slowly changing with the introduction of the regional Integrated Care System model.

So it is not surprising that over the years, there has always been tension in procurement between the urge to centralise and control more from “the top” (whatever structures might be defined in that way) against the desire for local autonomy and power.  Now no-one would argue for total centralisation (everything needed by every hospital bought from a huge central office somewhere) or total decentralisation (every doctor or hospital negotiating its own deals for pharmaceuticals!)

But getting the balance right has proved difficult. For instance, Ministers persist in claiming “the centre” did a good job in terms of pandemic PPE procurement. But the truth is that pre-pandemic central procurement strategy proved inadequate, and local action was needed to maintain supply in many hospitals. And whilst once the pandemic was underway some central activity was necessary, mandated central buying cost the UK billions in waste and super-profits for suppliers.

The new Chief Commercial Officer for the NHS, Jacqui Rock, who sits in NHS England HQ, recently launched a Central Commercial function for the NHS. A key strand of that is a technology initiative that is designed to help the manage procurement better across the system. The aim is to have a more common approach to procurement, and to start enabling better access to spend data across the whole network. That is a very sensible aim – gathering data does not mean in itself a more central approach to category strategies, and however you want to approach procurement, having good data is essential.

The mechanism for achieving this has raised some eyebrows though. Via Crown Commercial Services, all trusts, integrated care boards and other NHS entities can now use a software platform provided by Atamis, with CCS funding that to the tune of £13 million over three years (it is not clear if CCS has actually “pre-bought” licences here, which could be a risk in itself).

Atamis is a procurement and tendering platform with spend analysis functions as well as tools for managing programmes, tenders, contracts, and supplier relationships. It was chosen for use by NHS England and the central Department two years ago, although NHS Supply Chain chose software firm Jaggaer for their similar requirements.However ,this new contract with Atamis was put in place using the government’s Digital Marketplace, a set of frameworks that gives the public sector access to thousands of suppliers. And it appears that no competitive process was used to choose Atamis. They were simply awarded the contract. Now there are rules (laws) about when you can award a contract in that manner without seeking proposals from other firms also listed in the Marketplace. And I cannot see in this case how a “single tender” can be justified, when there are other firms on the framework who provide similar products and indeed supply many Trusts already.

I should say that I have no axe to grind with Atamis or their product. When I worked at Spend Matters, I had contact with the founder of Atamis and liked him and the business. But the firm was sold to a Canadian software company last year, and the NHS could represent a considerable proportion of their business.  There are also questions about what happens once the 3-year CCS funding ends, dependence (the Atamis product is built on the Salesforce platform) and “lock-in” to Atamis.

When the initiative was announced, there were a whole host of interesting comments from readers of the HSJ (Health Service Journal). This extract from one probably encapsulates much of the content.

“Why has the centre decided to create a monopoly situation, by endorsing, promoting and funding this only provider for, say contracts management? What happens to other providers with better value solutions? Should UK Tech Plc pack up and shut shop? Are these other solution providers now out of the whole NHS market? Why”? 

For me, the most fundamental question is whether it was legal and commercially appropriate to award the contract to Atamis without competition. (There are “business issues” too of course). The new central function should set a good example, and surely competition is the most fundamental principle of good procurement. But given the way the contract was let, I would not be surprised if we see challenges to that process from other suppliers who are clearly at a competitive disadvantage now, with Atamis being available “free”.  

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