Commissioned from Pact Consultancy by the National Primary and Care Trust Development Programme August 2003 Whole System Commissioning Insights from beyond the NHS

2 Full Research Findings Whole System Commissioning: Insights from beyond the NHS Research findings from a review of UK Public and private sector procurement experience Ian Tibbles & Susanne Haselgrove 31st August 2003 Commissioned by the National Primary and Care Trust Development Programme (NatPaCT). This presentation highlights key points of Research findings from a review of UK Public and private sector procurement experience Click here to download the full reportClick here to download the full report (Word document, 65 pages)

3 Sources Cabinet Office Office of the Deputy Prime Minister Office of Government Commerce National Audit Office Local Government Department of Education Private Sector – Construction Industry – Utilities

4 Critical Success Factors Clear Strategic Focus Secure Appropriate Ownership Effective Delivery Framework Competitive Procurement Mature Commercial Relationships Inform Future Procurement Achieving Excellent Procurement

5 Clear Strategic Focus Robust strategic framework Rigorous challenge to status quo (external and internal) Clear decision criteria Rich range of options Emphasis on benefits realisation

6 Secure Ownership Board engagement Stakeholder management – Identify all stakeholders – Clarify interests – Communication strategy Good governance – Clear accountabilities – Effective information flows Partnering principles – Establish good partnering principles where appropriate

7 Effective delivery framework

8 Ensuring competitive procurement Research market – Identify potential suppliers and types of offering Well specified decision criteria to inform choice Tendering processes that encourage good competitive bids Clear financial strategy informing robust contracts

9 Mature commercial relationships Open Book Mutual benefit Balance between risk and reward Well specified contracts – Rights and responsibilities – Managing changes – Dealing with problems

10 Informing future procurement The unforgivable managerial mistake is the one that is repeated! Each procurement process is reviewed – Learning is identified – Process for informing future procurement exercises

11 Why procurement fails Office of Government Commerce (OGC) research: Unclear objectives and success criteria Insufficient involvement of key stakeholders Weak risk management Unclear roles and responsibilities Lack of appropriate skills Weak financial control Lack of market knowledge

12 Why procurement fails Failure Inadequate strategic framework Lack of (senior) ownership Poor procurement process Ineffective delivery framework Insufficient strategic challenge Too few options Immature commercial relationships Gaps in capacity/ capability

13 Inadequate strategic framework Unclear vision Direction of travel uncertain Processes not clear Mismatch between strategy and delivery

14 Insufficient strategic challenge Internal and external status quo Opportunities not identified Low ambition Risk averse

15 Too few options Unclear decision criteria Go with first workable idea Failure to ask What else might be possible…? or What if..?

16 Lack of ownership Board/Directors not engaged Stakeholders not identified – Interests not clarified – Lack of a communication strategy No Senior Responsible Officer assigned to each major activity

17 Poor procurement process Poorly specified decision criteria Failure to research suppliers – Uncompetitive tendering Process inhibits communication – Bureaucratic and arms length Lack of financial strategy – Poor contracts – Risk and reward unbalanced – Exposure to avoidable risks

18 Gaps in capacity/capability Analysis of skills and experience inadequate Lack of investment in development Failure to develop specialised skills

19 Immature commercial relationships Information is power – Often withheld Lack of mutual benefit Attempt to get suppliers to bear disproportionate levels of risk Inflexible contracts

20 Inadequate delivery framework Poor programme/project management skills Unclear roles and responsibilities Failure to link operational and strategic Inflexibility Benefits not managed actively

21 Key resources (the how tos) Setting a strategic framework Designing the procurement process Benefits cascade Researching the market Stakeholder management Balanced scorecard Benchmarking Managing risk Programme and project management Effective review

22 Is the NHS different? Yes (possibly) Steep learning curve to modernise procurement processes – Issues of capacity and capability – Developing mature commercial relationships Policy imperatives impact in specific ways on commissioning – Patient Choice – Plurality and Diversity – Patient and Public involvement – NHS New Direction of Travel The market has some unique features – Foundation Trusts – Diagnostic and Treatment Centres – Clinical Networks

23 Is the NHS different? No (definitely not) Open Book and Partnership are best practice approaches to commercial procurement Modernisation, Quality of Services and Value for Money demand clarity of purpose and strategic challenge To achieve innovation in services requires innovation and leadership in commissioning Putting the patient (consumer) first is key commercial strategy Competition incentivises change – Payment by results, Patient Choice and Plurality and Diversity incentivise change

24 Overview of NHS (Whole System) Commissioning Learn from best practice (NHS & External) Develop Strategy Commission Services Manage Delivery Benefits Review (Re) Set Direction Analysis & preparation (Re) Set Direction Tools and Techniques

25 Conclusion Experience from other sectors is clear and consistent The NHS can easily learn from this Resources are available on the Internet - Click here to browse online summaries and linksClick here to browse online summaries and links Click here to download detailed findings Click here to download detailed findings