Procurement Battle Plan: how is transformation embodied in contracts?

Posted in: Analysis  
Procurement Battle Plan: how is transformation embodied in contracts?

Looking to improve processes or services in your business? Using procurement as a tool to scope projects and select suppliers that initiate transformation in your business can create a cost effective way to improve performance. We are delighted to welcome a guest post from Matthew Hattersley, Commercial Partner at law firm Clarion. In this article Matthew highlights how transformation is embodied in contracts.

The ‘Procurement Battle Plan’ hosted by Science Warehouse at the Royal Armouries was a great opportunity to share ideas with a range of procurement leaders from across the UK, and the discussion generated some excellent points to consider when managing transformational procurement processes.  

Ensuring contracts are clear and concise was also a key theme at a recent Clarion seminar at which Paul Dickinson from the Olympic Delivery Authority shared his experiences and thoughts on procurement.

Transformation programmes are a great way to improve services but more than half don't deliver fully.  The Olympic Park is an example of a successful programme but as Paul Dickinson explained this was largely due to the tight contracts that were produced and how the supplier relationships were managed.

When planning the following key stages need to be adhered to:

  • Ensure you consult on the ‘actual’ need for change - not just what the board requires but also what the end user needs
  • Review the market - to ensure appropriate supplier availability at key project stages 
  • Tender process  - ensure that prior to the meetings with potential suppliers they fully understand your requirements so their pitch presents you with the ‘right fit’ solutions
  • Keep in mind strategic vision – if all stakeholders are aware of the contract and their specific requirements within, then everyone will buy into the change
  • Produce a transformational schedule – the contract needs to spell out exactly what is required by each party and when, aligning to the project timetable with measurable targets and objectives
  • Ensure you have a transformational 'home team'  - each member should know which supplier they are responsible for and provide hi-level updates to the head of team

There will be day to day challenges but these need to be placed in the context of a strategic vision to stay on plan.  Always ensure the following are front of mind:

  • Price – if the cost of the project is likely to go over budget, do you fully understand why?
  • Internal politics – this can be avoided if all departments are consulted and made aware of the requirements from the outset
  • Time pressures – the ‘home team’ keeping a close eye on schedules will ensure you can plan accordingly for unforeseen events
  • New technology – particularly for long term transformational projects suppliers should be involved early to enable them to be proactive in bringing innovation to design and processes

What should be in a transformational schedule? As this document is key to a successful contract and working relationship it should contain firm commitments from all parties involved. This includes having a pre-determined timetable, clear objective and measurable milestones, a detailed description of responsibilities and lastly an updated service description and SLA. These should all be embedded in your contract whilst planning.

So to conclude, the three drivers for a successful transformational procurement process that need to be adhered to are:

  • Identify business needs and benefits
  • Keep your strategy in mind
  • Always monitor and manage the transformation

In a recessionary environment focus inevitably moves to cost reduction and best value, whether it is within a major project or business environment.  Consequently procurement is moving up the agenda of most organisations, with businesses looking to access expertise and more sophisticated systems such as those provided by Science Warehouse.

Clarion is a full service law firm operating across a wide range of industry sectors. Clients range from international and national FTSE 100 organisations to entrepreneurs and their start-up businesses. 

We’re grateful to Matthew for his expert contribution. Please feel free to post your comments in response below.  


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