- 30 May 2019
7 More London Riverside LONDON SE1 2RT
Contracts and Procurement SIG
Procurement for benefits and value
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Projects are justified by the benefits and value they promise but, in traditional procurement, contracts are not made around outcomes but specification and price. If suppliers are rewarded by results, then how can outcomes be defined, benefits measured, responsibilities identified, and risk and value shared in a way that is unambiguous and fair to both parties?
Driven by austerity, competitive pressures and shareholder value, organisations are focusing more on the delivery of value and realisation of benefits. This is changing the way project and procurement professionals are measured and in turn is influencing their approach to procurement.
Rather than defining how a result should be delivered or what the end result will look like, buyers are moving towards defining the outcomes they want and rewarding suppliers based on the results achieved. This demands different approaches to engaging with the market before formal procurement, and a greater focus on monitoring delivery after award.
This 2½ hour interactive event aims to raise questions and give answers on how you engage and contract with vendors based on benefits and value. It looks at some of the advantages and possible pitfalls, and the approaches available to private and public sector buyers.
The workshop will mix short talks to introduce a topic, round-table contributions, and facilitated visual discussions to explore the sub-topics. Participants will be expected to contribute by sharing their experiences, concerns and solutions. It is expected that the session will help form the basis for a ‘white paper’ that will capture the key findings.
Quick introduction and participant introductions.
Why is this important? Hugo Minney
- The advantages of adopting a benefit driven commissioning strategy
- And some possible pitfalls
- Benefits real and potential – the group
Contracting strategies: Jon Broome
- Typical contract strategies for procuring for benefits
- How else have people done it?
- How else could we do it? – the group
Pros and cons of the above. Visual facilitated session
Unlocking Provider Value: Ian Heptinstall
- Engaging in the ‘pre-procurement’ stage
- What do you pre-qualify providers against?
- Fostering collaboration and partnership
- Possible win-win-win commercial arrangements
Other considerations (work in parallel groups):
Participants will choose preferred topics from the following list and work in parallel facilitated discussions. Topics may be added or combined to create three discussion streams.
Key: Procuring for Benefits and Value (PBV)
|What’s the appetite for PBV?
||What are the barriers to PBV and who bumps into them?
|What are the drivers for PBV?
||When would you use PBV and when a more conventional approach?
|How to decide what level of the pyramid to PBV (strategic to tactical)?
||What level to pitch the risk (sufficient that people care, without scaring them off)?
|How to reward achievement (note time lag, and control or lack of it)?
||How to convert desired outcomes into contractual language?
There will be a brief plenary feedback session to identify key conclusions.
As well as being an APM board member, Dr Jon Broome is the APM Contracts and Procurement SIG Chair, and was the lead contributing author to the APM Guide to Contracts and Procurement. He is an expert on contract strategy and the NEC family of contracts, and specialises in helping organisations develop collaborative working relationships that create and sustain value for buyer and provider.
Ian Heptinstall is a lecturer in project management at the University of Birmingham, where he leads the Masters in Industrial Project Management programme.
Prior to recently joining the university, his career has mainly involved managing projects in the chemicals industry, and procurement. He is a Fellow of the Chartered Institute of Procurement & Supply, and a APM Contracts and Procurement SIG committee member.
Hugo Minney is the APM Benefits and Value SIG Co Chair, which was formed of the merger of two SIGs in April 2019 and is one of the largest SIGs by community membership. He has contributed to much of the thought leadership output on benefits management produced by APM.
Hugo has always had an interest in local economies, and is a founding member of Durham County Council’s Social Value Taskforce (the first in the North East of England). This taskforce develops the strategy, policies and procedures to use the buying power of local government for good.
This event is suitable for professionals with an intermediate to advanced level of experience.
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APM Body of Knowledge 6th edition reference