Thursday, 27 December 2012

You don't need an IT system for every ill

Over the last few weeks I made some suggestions on how the NHS could reduce procurement costs through minor changes in the use of existing IT. Let's remember that GPs are central to the government's reform of the health service. Even at present, as I understand it, every time I have a visit to the hospital my GP receives a notification of who, what, why, where and when - it helps the GP take a more holistic approach to the patient. it also generally seems to work.

We also know that the NHS has not had a particularly exemplar approach to introducing 'all singing and dancing IT systems' - indeed just over a year ago I discussed how this could be improved.

Today we learn of the proposal for another 'all singing and dancing NHS IT system' - this time it will be used to identify potential cases of child abuse - £8.6m has been allocated for the development of the software.

In keeping with last week's blogs on reducing costs I think this is another opportunity for reducing procurement costs:  'just say no' to this proposed system and use existing records. By this I mean retain central role of the GP in seeing records of all hospital interventions and let the GP identify potential areas of risk - allocate more GP time to consultations and then perhaps they will be able to review the data.

The new system aims at safeguarding children. But I suspect that the introduction of such a reporting system may well lead to those abusive parents taking the precaution of avoiding the spotlight by merely avoiding taking their children to A&E - the abusers have in the past appeared to be quite sophisticated in getting under the radar. If that were the case the children we aim to protect may actually receive appropriate medical care.

Either way, if this system is to go ahead please make sure that the relevant procurement decisions are transparent, including reporting of robust gateway reviews at every stage. That way at least we may ensure all options are considered, including better use of existing systems, and also that we don't learn of another failed system being blamed for a potentially flawed but good idea.

So in summary:

  1. Explore all the options, including greater use of existing systems;
  2. Consider the potential disbenefits;
  3. Evaluate the risks;
  4. Adopt an ethos of transparent procurement decision making;
  5. Ensure robust use of gateway reviews.

Monday, 24 December 2012

A Yule Blog: Disastrous procurement risk management could lead to untold grief

We have discussed Procurement Risk Management quite a bit in recent months and today, of all days, I would have hoped to have set that discussion aside. Unfortunately, although there seems to have been some flaws in the Mayan Calendar evaluation model the adverse impact of its predictions have now started to manifest themselves in the supply chain.

Personally, I was absolutely certain that predictions of the end of the world would prove wrong. I found it mildly amusing that shamans were casting spells on Friday to hold back the end of the world. Nevertheless, for some it will be reassuring that the intervention of the shaman business consultancy (SHAM & Co.) proved effective!

However, on a more serious note, I have now discovered that there was a major industrial dispute, well hushed up, that is causing unpredicted chaos in supply chains. Apparently a previously highly productive team of workers, the Elves, downed tools some months ago and rather than singing "Whistle while you work", reverted to R.E.M'.s "It's the end of the world as we know it".  Rumours abound that production of toys has been frozen since this time last year in Lapland but there has been evidence of a displacement to the Amazon. Tonight was the delivery date scheduled for global despatch, but all that is up in the air now. No one was available to comment from either the UN or indeed a spokesperson representing the Elves. It is understood the Elves feel more than a little aggrieved too - their view being that they were told a major strategic risk had been identified (the end of the world) and being very risk averse considered it was inappropriate to invest more time in the fruitless task of toy-making. It was impossible to get a coherent answer from dyslexic CEO Santa who just kept muttering "oh, oh, oh, ..."

No one knows what will happen tonight but Bruce Springsteen has requested that no one play his hit "Santa Claus is coming to town".  

Here's hoping all goes well and the last minute mitigation plans all come together. Just in case, enjoy this message from Northern Ireland

Thursday, 20 December 2012

How to reduce NHS procurement costs with a Smartie & a click

Yesterday I suggested a comparatively easy approach to reducing NHS prescription costs through placing an electronic gateway, which required merely the click of a GPs mouse, to affirm that, in their opinion, the prescription being issued was not a waste of money. I also suggested a wider trial of embedding such an affirmation more widely into P2P workflows.

Today I have learnt of further research which suggest that sleeping tablets frequently are no more effective than a ‘Smartie’ (well a placebo – I’m sure you get the drift). That’s not to say that the issue of prescriptions for sleeping tablets should be replaced by ‘Smarties’ (or other equal and approved equivalent). No, what I would suggest is, given that sleeping problems are rarely serious, why not first explore the lower cost and lower adverse impact option, and only if the ‘Smarties’ (or other equal and approved equivalent) fail to be effective, progress to trying traditional sleeping tablets.

Surely GPs should be completing yesterday’s and today’s evaluations  anyway, even though the evidence of the two research reports casts some doubt. Therefore why not introduce the ‘affirmative  click’?

So I would extend my proposal from yesterday to include a further affirmative statement:

I confirm I have thoroughly considered and evaluated other potentially lower cost options.

Like yesterday, I think this additional affirmative statement could also be trialled in P2P workflows to see if it proved worthwhile in more general purchasing beyond the NHS.

Wednesday, 19 December 2012

How to reduce NHS procurement cost with a click

On Sunday my minister made an announcement that he recognised that high price of stamps, therefore he hoped the congregation would understand that he would not be posting Christmas Cards. He also said he would understand if the congregation took a similar position. The easy way to save money is not to spend it - common sense.

Now if you knew that one one category of your expenditure was on something which had no real benefit, the easy answer to reducing costs is not to buy it. However, like paying for a postage to send Christmas Cards to addresses which you pass on the way to the post box it needs to be easy to break the habit.

So I am going to take the bold step of offering a low cost option to the NHS on how to significantly reduce costs. I propose that the online pro forma prescriptions which GPs use should be amended to include the following statement with a requirement to confirm, with a click, before the prescription can be issued.
In my professional judgement, I confirm that this medication is fit for purpose, is appropriate for the illness and will deliver an anticipated medical benefit.
If such a statement were included it would put the onus on doctors to confirm that they are not wasting money on prescriptions which they know are likely to 'do no good' and quite possibly go against that medical mantra of 'do no harm'.  My suggestion is aimed at trying to move from a recognition of recent research that "[an antibiotic which accounts for a third of all antibiotic prescriptions] is useless for most people who are getting it at the moment' to a change in prescribing behaviour and the associated reduction in prescription costs.

Come to think of it, could a similar affirmative statement, suitably reworded, be embedded into the workflow of most P2P systems? That would be an interesting pilot to run and test its impact.

Tuesday, 18 December 2012

Procurement due diligence

We have discussed the problem of 'fake experts' before. We have also questioned the value of professional qualifications when non-procurement staff are appointed to CPO positions. Indeed, only yesterday we raised concerns as to whether we can rely on the robust checking of qualifications and experience by headhunters and interim placement organisations. So readers of this blog should recognise the need for healthy scepticism.

You may therefore be astounded that, yet again, professional credibility has raised its head. Unbelievably, we have just learnt that the inquest into the death of singer Amy Winehouse has now had to be set aside and started from scratch again - you've probably guessed what's coming - yes, because the Coroner was not appropriately qualified. The coroner did not match the criteria of either five years as a qualified medical practitioner, or five years experience with the Law Society. To add to the bizarreness of the situation, the unqualified Coroner was appointed by her husband, who has now resigned as a result of not 'thoroughly checking' that his wife met the basic criteria. Those words 'thoroughly checking' straddle the procurement world too.

I will not revisit my earlier blogs. However, I will share some of my experiences of procurement 'thoroughly checking' credentials.

I once completed a supplier evaluation which included the rejection of one supplier. My report went to a meeting of the Board but at that meeting, which I wasn't attending, one of the Directors stepped in and said he had now received additional information which justified over-turning my recommendation and reinstating the supplier on the Shortlist. A subsequent costly challenge, inquiry which ruled against us, and allegations of corruption taught us a clear lesson - make sure you thoroughly check the claimed facts, even if they appear to come from a reputable source!

I have also completed third party Due Diligence on a number of proposed contract awards - surprise, surprise, when thoroughly checked there were flaws, with those included on shortlists who should not have been, and those not included, who should have been.

I have also seen, time and again, taking answers on PQQs at face value, including amazingly the acceptance of cited reference sites without even bothering to check (NB not 'thoroughly') with the referee!

It would be possible for me to also highlight the need for due diligence of the process itself. However, I do not think that is necessary as Peter Smith has provided the useful lessons of the West Coast Rail Franchise which I would encourage you to read.

Is there an aversion to due diligence in procurement? How good is the profession at 'thoroughly checking'.

Sometimes procurement has a lot more in common with unqualified appointments and Coroners than we would have expected!

Monday, 17 December 2012

The unprincipled Agent

On whose behalf does the agent work?

The procurement world is one immersed in the legal and economic world of Agents. The Chief Procurement Officer is an Agent of their organisation (the Principal) when they represent the organisation in negotiations. The CPO is required to act in the best interests of the organisation and not for their own personal benefit. Equally those dealing with the buyer can be expected to accept that the buyer has the authority to  make commitments on behalf of the buying organisation.

When the CPO lets a contract, as part of a recruitment process, for someone to run an assessment centre, who is the Principal and who is the Agent? To me the Principal is the buying organisation and the provider is the Agent. The provider will be paid by the buying organisation and not by the successful candidate - indeed the provider can expect payment whether or not a successful candidate is found.

When the organisation lets a contract though for intermediary services, say, Executive Search or interim placement services, who is that Principal and who is the Agent? 

Let's assume a headhunter contacts the CPO and asks if they would be interested in a potential new role, who is the Principal?  Is the Principal the CPO who will be represented by the headhunter or the organisation seeking the new CPO who will pay for the headhunter when a shortlist of potential candidates is provided? 

When the scenario is the placement of an interim CPO, who is the Principal and who is the Agent? The assumption of the buying organisation is that the 'interims' provided have been checked by the placement agency and that they have completed the relevant due diligence. Isn't it?

These questions were triggered by a report in today's Financial Times on Page Executive's approach. Page are alleged to be now taking a more cautious approach to the organisations they place candidates with. Not, it appears, to protect the buying organisation, the 'headhunted' or the interim. but to protect Page's financial investment should the buying organisation, which may be among those who, in Page's eyes "live week by week", default on Page!

If an organisation wants an interim CPO, perhaps because they realise they need a financial 'turnround', it implies Page will managing Page's risk exposure and not those who may have assumed they were the Principals, who have a lot of 'skin in the game'. Is this yet another change to the world of procurement as a result of the financial crisis?  Either way, it strikes me that before you jump to the conclusion that you are the Principal and the Agent is working on your behalf, perhaps reading the small print may prove advantageous and recalling: 'caveat emptor'. 

Monday, 10 December 2012

Can procurement learn from the tragedy of the Australian DJ prank

Let me put my cards on the table. I think the suicide which is linked with the prank call is a terrible sad tragedy. But I also grew up enjoying TV programmes such as Candid Camera which were based on pranks. It would therefore be hypocritical of me to point the finger at pranksters. Those, like me, who have laughed at pranks in the past must also be guilty of feeding the beast which lay behind this personal tragedy.

However, the tragedy strikes me as providing lessons for procurement.

Before explaining how I have arrived at that conclusions, I would encourage you to watch the YouTube recording watch the YouTube recording, then read the reported transcripts, for example here.  See if you can spot the difference?

If you compare the transcripts with what is actually said there appear to be some omissions.  In the YouTube there's an interesting response just about 10 minutes into the interview. At that stage there's a fascinating response from one of the DJs when asked about the approval process for airing the recording, the DJ answers: "I don't know the process, I honestly don't know the process".  

Sunday, 9 December 2012

Procurement literacy

New research has highlighted that "Doctors' orders are 'too complicated for most patients'". Some of those in need just can't read or understand what they must do. Excuse the pun, but this is a very 'unhealthy' situation. Who's fault is that? Does it matter?

You could put this down to falling education standards or doctors having insufficient time to spend with patients. It's easy to say it's 'their fault'.

The art of conversation is significantly different from giving instructions. When I go into a doctor's surgery, the introductory conversation is about creating a rapport, helping me feel relaxed enough to share what the doctor really needs to hear from me. Before I leave the surgery I have to convey sufficient information of the symptoms for the doctor to have made the correct diagnosis or assessement. Only then can the doctor provide me with instructions (orders) as to the next steps in making progress - particularly what I have to do to improve.

If the doctor doesn't create the right rapport there's a significant risk that I will not convey all the relevant information; perhaps because I feel intimidated, embarrassed or too deferential. In that situation I would suggest the doctor is at fault in not creating the rapport. However, when I feel comfortable discussing my problem with the doctor but fail to convey all the relevant symptoms, then some of the blame must lie with me. If at the end of the consultation the instructions given to me are too complicated and I cannot understand what I have to do, then the fault surely must be with the doctor. The responsibility has to be with the person who wishes to convey information to communicate in a way which the intended recipient understands. It is the communicator who needs to test for understanding, and if necessary, reshape until such times that it is clear that the instructions are understood. If the doctor doesn't do this there is a loss of patient confidence - what's more, both are losers.

Has this anything whatsoever to do with procurement?  Yes, I think so.

Thursday, 6 December 2012

The missed opportunity of P2P implementation

More often than not P2P implementation is being driven by a motivation to streamline and automate the Accounts Payable function – transaction cost reduction in the Purchasing and Accounts Payable administration is the focus. However, while the administrative costs need be reduced much more could be achieved, and potentially longer-term costs avoided, if a more strategic perspective were taken. Unfortunately, the involvement of some Strategic Procurement Units is not always recognised as being fundamental to the success of a P2P implementation and as a result their input is not sought. This is a serious mistake and Procurement need to ensure that this opportunity is seized for procurement improvement.
The starting position is that you should not focus on automating the existing process; the ‘As is’. Instead you should use the disruption as a procurement transformation opportunity. It is an opportunity to revisit Policy, Strategy, Procedures, and Structure.  It is an opportunity to introduce best practice strategic procurement. It is also an opportunity to demonstrate to the market that you should be treated as a preferred customer and to get the market to make the necessary financial investments too.
Automating the existing processes may sound sensible, but it is far better to take a longer-term perspective. Implementing a new IT system and then having to change again in the short to medium term is costly – staff and suppliers can understand managed change but their patience will be quickly exhausted if you subsequently want to make changes which, in their view could be been predicted at the earlier implementation. 
So it is wise to clearly define how procurement will be carried out in the future and design the implementation to reflect the future ‘To be’ state. This will require agreement on the future Procurement Strategy. Included in the Procurement Strategy will need to be clarity on whether you intend to increase or reduce your Vendor Base.
Your P2P system will not work in isolation of

Tuesday, 4 December 2012

Three compassion, please

“Three compassion, please.”  No, I haven’t taken leave of my senses, I’m just trying to think about the implications of the new three year vision and strategy, announced today by the Chief Nursing Officer

My mother has advanced Alzheimer's and is completely dependent on care. In fact without that care she is a risk to herself, others and even compassionate staff. So I fully applaud the call for putting compassion centre stage.
But I also see that the current system is totally dependent on a heavenly host of temporary 'bank workers'.  While it is may be considered comparatively easy to take steps during the recruitment, training and staff appraisal processes to embed the principles of the vision and strategy, has any thought been given to how this will be reflected in the procurement? Buying compassionate care is going to be a real challenge in an environment where bank staff are called in at short notice and low paid.

It will also be interesting to hear if any discussions have taken place with the key providers on how the principles will be embedded into existing contracts - I assume there isn't any extra budget available.
Another ingredient will be the number of nursing staff on wards. While I agree that there needs to be good visibility of nursing staff, it doesn't strike me that there is a surplus of staff on the floor. Extra staff,  assuming they are available, will increase cost while the NHS is trying to reduce budgets.
So there are some interesting discussions which need to take place:
  1. How will 'compassionate care' be reflected in new contracts for bank staff?
  2. How will existing contracts embrace the vision and strategy? 
  3. Have provider discussions started?
  4. Is there an available supply of additional bank staff?
  5. Is there additional money to cover the additional costs?
  6. Will all this come as a surprise to the Chancellor's Budget Statement?