Collaboration is King ! Matt Denham Executive Director 12 th January 2016

2 the CCS team are at the very centre of driving commercial advantage within the UK government. Key to their success will be exceptional collaboration with customer departments and our preferred suppliers... John Manzoni Chief Executive of the Civil Service and Permanent Secretary of the Cabinet Office Support from the top !

3 The UK government is under pressure to cut its budget despite the increasingly challenging environment The number of people aged over 85 is expected to quadruple over the next 50 years to 5.86m, while the number of over 65s will almost double, reaching 20m The Office for Budget Responsibility, 2014 Youth unemployment rate is worst for 20 year – young people are nearly three times more likely to be unemployed than the rest of the population Guardian, 2015

4 CCS was created in 2014 SOURCE: Bravo 2014/15 spend How much What we buy (examples) Why CCS Who are our customers £15bn annual spend in common goods and services £3bn managed service for Central Government customers Less framework factory, more commercial delivery ! All electricity used to run UK public prisons and courts Every car used by Ministry of Defence 1800 procurements in 2014/5 To create a more transversal and cross-government view on common goods and services procurement to deliver savings Policy delivery capability at centre 17 Central Government departments and wider public sector ( Health, Local authorities, Police )

5 Policy priorities Small and medium sized businesses Apprentice ships Directives Trans- parency One third of central government spend with small business by 2019/20; agreeing targets with each department. Prompt payment to suppliers. Contributing to the creation of three million apprenticeships through procurement. Consultation on the draft utilities and concessions directives; both designed to simply process and to make it easier to do business with government. Additional commercial information such as price and any incentivisation mechanisms, contract performance metrics etc to be disclosed at contract award.

6 Strategic category management Our focus - accelerating savings through taking a more strategic approach Listening to customers and suppliers Buildings Corporate Solutions People Technology Property FM Energy Travel Fleet Communications Financial Services Office Solutions Professional Services Consultancy & Contingent Labour Network Services Cloud Services Technology Products Software Licensing

7 Using the full range of commercial levers to deliver savings requires a partnership approach Specification Price Demand management Compliance Supplier scale Total cost of ownership (TCO) savings levers Price 10-20% Negotiate and bid competitively Develop fact base on spend and true costs Specification 10-20% Optimise product specifications and service levels Demand management 20-30% Challenge the user – implement strong demand management policies Compliance 5-15% Ensure compliance with preferred suppliers Implement tracking tools and reporting Optimise payment cycle to optimise reduction in unit prices vs. carrying cost Supplier scale 10-20% Leverage scale – Harmonise demand between departments Exploit changes in supplier utilisation, capacity etc.

8 Engagement with the departments has taken us to many locations across the UK

9 From a category-centered approach.. …to new ways of working with departments Working on 3 categories with support of external consultants – In line with CCS’ category-led structure and expertise Poor traction with departments – lack of buy-in and ownership – minimal interactions – limited alignment between CCS and departments’ priorities Category-centered approach across departments New ways of working to reflect a more collaborative mindset Single points of contact in CCS for each department, working in teams with category experts Cross-functional teams from CCS, departments and external consultants Rapid deep-dive in all categories in key departments followed by CAP implementation

10 It’s a contact sport! Roles of team members CCS: Cross-department category strategy Procurement and commercial expertise Departments: Local expertise and supplier relationships Understanding of business users’ needs and demand External consultants: Extensive procurement experience from other governments and private sectors Proven programme management tool and approach to deliver results

11 We use a central tool (Wave) to track and report on the status and progress of all savings initiatives “

12 What we have learned so far… 12 It’s a “contact sport” – commit to new ways of working with customers to reflect a much more collaborative mindset Create transparency and one version of the truth: vital to align all stakeholders if you want to make substantial progress Separate category strategy development from transactional contract and supplier management Ensure your teams are up for the challenge, travelling and time commitment Engage external consultants on outcome based arrangement

13 Reducing cross-government agreements ●In procurement - Digital Outcomes and Specialists (formerly Digital Services 3) (live March 16)*, Cyber Security (alpha) (live Feb 16)* ●To be refreshed - G-Cloud 8 (live Oct 16), Technology Products 2 (live October 16), Technology Services 2 (live April 17) ●Coming soon - Contact Centre Please check website for latest details of agreements. ●* Indicative dates tbc. FrameworkTo be used forCommercial Vehicle Digital ServicesBespoke digital outcomesRM1043 G-CloudCloud based commodity software, platform, infrastructure and specialist computing as a service RM1557 Network ServicesManaged telecom infrastructure including mobile RM1045 Managed Managed servicesRM1085 Technology ProductsCommodity hardware and software product and associated services RM1054 Technology ServicesCommon technology infrastructure support services RM1058 Enterprise Application Support ServicesSupport & maintenance for Enterprise solutions RM1032 Local Authority Software ApplicationsCitizen centric systems & servicesRM1059 Corporate Software SolutionsEnterprise solutions & associated servicesRM1042

14 G-Cloud or Digital Services? G-Cloud ➢ Commodity services ➢ Direct award ➢ Supplier T&Cs ➢ Supplier IPR/Source code ➢ No agile development configuration only Digital Services ➢ Bespoke services ➢ Further competition ➢ Government T&Cs ➢ Customer IPR/Source code ➢ Agile development - iterative