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SSE – IT Agreements

  • Warren Ward
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SSE needed to deliver a new set of IT agreements that met Directorate strategic objectives whilst considering technological challenges from across the business. We supported them to successfully transition to a smaller number of framework suppliers, all on standard terms. This resulted in a better-quality tender outcome, improved supplier performance and increased delivery on time.

SSE’s challenge was to deliver a new set of IT agreements that met the strategic objectives for each of the SSE Directorates. In delivering these agreements it was necessary to consider a variety of technological challenges from across the business.

We understood that successful stakeholder engagement would be key to meeting this challenge. Prior to starting the tender process, we advised the client to formulate a detailed business change roadmap which was distilled down into changes by Directorate. This formed the baseline requirements for tender.   

We ran the tender process through a small joint team which reported into the Executive. Our strategy was to award to seven suppliers on market standard contract terms and conditions, with the goal that five of the suppliers would then service the requirements of the client’s five main Directorates. This was to maintain competitive leverage and provide pseudo exclusivity. The supplier would only be awarded further work on the basis of continuing successful delivery within that Directorate.  

Established terms and conditions were then reviewed to ensure they were fit for purpose. To ensure supplier consistency, we introduced the terms and conditions early in the bidding process and made their agreement a prerequisite to the tender (this element was before the 2016 UCR changes, but to clarify the case study relates to activities still ongoing with the client in 2019).

Three pyramid models for small, medium and large projects were used to create the lowest rate benchmark across all submissions.  The best and final offer stage was structured in a way that stipulated the target percentage reduction needed by each bidder to align them as closely as possible to the lowest rate benchmark.  

Each Directorate was allocated a Barkers Contract Manager (BCM) who provided advice on the most appropriate commercial model to be used for future activity based upon the requirements, project complexity and client dependencies.  

Finally, we led the setting up of appropriate governance. Application of the governance model ensured risks and issues were managed effectively, and that all parties remained aligned from a relationship and strategy perspective.

  • As a result of implementing our recommended tender process, seven framework suppliers were established all on standard terms, with four suppliers servicing the five Directorates. Establishing this process led to an increased knowledge between the suppliers and the business operation, encouraging business to business collaboration. SSE consequently experienced a better-quality tender outcome, improved supplier performance and increased delivery on-time.
  • The review of terms and conditions focused upon ensuring a sensible balance of risk and provided the necessary and required robust provisions and consequences around time, cost and quality failures. Similarly, the governance provisions made were extensive and fundamental to the success of any future relationship. The agreement included innovation pots accrued based on spend, Supplier Relationship Management and exit planning.
  • Introducing terms and conditions early in the bid process successfully ensured that all suppliers are now signed up to standard terms with very few, relatively minor, deviations.
  • Our restructured best and final offer stage successfully resulted in material downward adjustments and alignment of rates, which helped offset any issue of selection by price versus quality and capability.

Barkers: SSE – IT Agreements Case Study

Author: Warren Ward