UK government recognises the value of innovation to the economy as a source of competitiveness, productivity, revenues and profit. So, how does that apply to procurement?
UK government has made it clear through policy, procurement reforms and communication that it recognises the value of innovation to the economy as a source of competitiveness, productivity, revenues and profit. Indeed, UK government’s Industrial Strategy highlighted “ideas” as among the five foundations of productivity. There is also a growing understanding by government that we cannot keep doing the same things, in the same ways, for the new and growing set of challenges that we face. Almost invariably, meeting those challenges will rely very significantly on digital technology as a means to effectively serve and support society today.
I am proud to be a member of the Cabinet Office’s SME panel, which advocates and supports government working better with SME suppliers across every sector and every region in the UK. The Panel works with Cabinet Office and Crown Commercial Services (CCS) to lower unfair barriers to entry for small and medium businesses (SMEs) that wish to access government and public sector contracts.
UK government is definitely ‘Open for Business’ with SMEs, and it is investing considerable resources to affect the necessary culture change and procurement practices that enable SME-Fair buying behaviours. This can be seen by the policy changes, setting SME spend targets (33%) and the extensive procurement reforms undertaken in recent years. The commitment has also been underpinned by the appointment of SME Ministers in each Department, with a remit to ensure their Department hits its agreed target. These Ministers are supported operationally by SME Champions within each Department and Agency and they are required to publication action plans.
The increase in outreach from government to a wider supplier base (that includes SMEs) is repairing the faith and goodwill lost through some years of ‘lip service’. So, the desire for innovation and a more diverse, competitive supplier marketplace is real and clear, and many of the enablers are in place. However, effective culture change and moving the large, complex engineering of government buying behaviours, onto new ways of procuring innovative solutions, requires a different government buyer mind-set, particularly as regards selecting and working collaboratively with suppliers.
Procuring innovative solutions relies on a three-way relationship between the procurer, the buyer and the supplier. The key to success lies in making this three-way relationship work for all parties. Core to this is having a buyer and customer-side procurement team that has the confidence and capability to meet with interested suppliers and explore different types of options and different types of working partnerships. Traditional paper-based procurement processes, where the parties don’t even talk with each other and there is an over reliance on compliance with highly prescriptive, specified buyer requirements rarely produces successful innovation partnerships and best value.
Delivering innovative solutions is predicated on getting the evaluation, supplier selection and working dynamics right. I would propose that an ‘innovation’ mind-set in procurement is similar to a ‘diversity’ mind-set when looking to attract and recruit people. We can decide to recruit on a cookie-cut basis, hiring for skills and people-types that `we already have and we already know’. Alternatively, we can acknowledge the benefits and value of diversity by considering different types of people and different types of skills to those that we don’t already have, understanding that they need to be able to fulfil the needs of the role. There is little opportunity in the cookie-cutter approach to achieve any diversity, innovation or added-value ambitions. We need to encourage approaches that make space for diversity and different thinking, in both how we recruit people and in how we procure solutions. The societal challenges we face today require diverse insights, new skills and different approaches to solving problems.
From a personal perspective, at Informed Solutions, we place a huge emphasis on attracting talent that brings fresh viewpoints, respectfully and constructively challenges established thinking, and can team work with others to develop new solutions to both old and new problems. This diversity adds value both to our clients and to the business, as well as teaching all of us new skills and new ways of problem solving. Isn’t that what government should aspire to in its search for supplier diversity, attracting top talent and encouraging collaborative problem solving?
So, I welcome the opportunity to point out to government buyers that there is a diverse and highly-skilled supplier community wanting to work collaboratively with you to solve the big problems. Many of those suppliers are aspirational SMEs that want to compete on a level playing field, where they aren’t discounted or discredited because of preconceptions or biases about company size or how polished their marketing materials are. Fair competition is based on proven capabilities, a commitment to collaborate and deliver a great business outcome, and the ability to offer innovative ‘fit for purpose’ solutions, at a transparent and advantageous price.
The policy and procurement barriers to government buying innovative solutions are lower now than ever before. The next step is to support and train civil servants to build their confidence and capability in selecting the right innovation supplier-partner and to know how to work together to deliver great solutions and outcomes through collaboration, as well as by complying with the terms of a contract.
We’ve recently done some work shaping ‘what we stand for’ at Informed Solutions. Identifying and agreeing not just what we do and how we do it, but why we do it in the first place. Ultimately, we want to create economic and social value by helping build a more inclusive, fair and safe society through the ethical use of technology and data, and by investing in innovation and digital skills for the future. We are therefore delighted to see government looking to introduce new ways of procuring innovation on the near horizon. The new SPARK Dynamic Purchasing System, as well as including Social Value when assessing supplier proposals, offers all suppliers new ways to showcase their innovation. I sincerely hope that these are also new and further ways to level the playing field for SMEs and Scale-up businesses who want to compete for government contracts.