Do we actually care about results?

The quality movement has been around for decades and regulated trading standards go back centuries, yet still we struggle to generate the right results. Our process for establishing and managing contracts frequently does not help.

Recently, IACCM ran a webinar featuring Warren Smith, a UK Government employee. Warren talked about work he is leading on reducing ‘fraud and error’ in public sector contracts. While precise numbers are difficult to establish, he believes that the amount at stake averages some 4-6% of contract value. This number is consistent with the findings of companies such as SirionLabs, who provide automated checking and validation services for major private sector clients.

You would think that most organizations might consider savings at this level to be a worthwhile target. With this in mind, IACCM approached members of its public sector Community of Interest, suggesting they might want to connect with Warren and share ideas and approaches. To date, there have been few positive responses – in most cases, it seems to be a matter of ‘Not my job.’ And it isn’t that they then identify someone else – because the answer seems to be that it is no-one’s job and no-one wants to pick it up.

Before those in the private sector dismiss this as a purely public sector problem of attitude, we should all reflect on the many ways in which contract value is eroded. Look no further than IACCM’s ‘ten pitfalls’ to identify a series of areas where more robust contract management could be driving better results. Claims and disputes is a good example: how many of us know the frequency of claims and disputes, how many of us know the underlying causes, how many of us are actively promoting improvements that would reduce the cost? Or what about some of the terms and conditions we insist on imposing during negotiations: do they truly benefit the organization? The thing is that it is easy to retreat into our areas of expertise or what we see as our defined job role, leaving ‘someone else’ to worry about the bigger problems of overall results.

Maybe we should all be learning from the work being done by people like Warren Smith – and the scale of commitment that the UK Government (and some other public sector entities) is showing towards achieving value through commercial excellence.