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Hemmington’s tips on outsourcing at Procurex North

Thursday January 29th, 2015

Taking to the Procurex North Live podium to discuss all the ‘do’s and don’ts’ of outsourcing will be Jim Hemmington, Head of Procurement for the BBC. Securing first class value through outsourcing: the role of procurement –overview is the title of Mr Hemmington’s presentation, which will take place at Procurex North Live on 26 February at Manchester Central. Government Opportunities

The BBC spends £1.5 billion a year on buying goods and services; a figure which doesn’t include buying programmes. As well as buying things that enable the making of programmes such as props, cameras, and production services, it spends about £680 million a year on 14 outsourced contracts that range from back office, facilities management, cleaning, security, catering, HR, and finance, to more diverse requirements such as the technology that supports broadcast services. As you might expect, the BBC requires the highest standards from its service providers. Mr Hemmington said:

“The big message I’m trying to get over at the session is that outsourcing can be a really good thing. But don’t make the dangerous assumption that, because you’re handing something over that you don’t do particularly well to a service provider that does it really well, the service provider hasn’t got to be closely managed. With this assumption you lose that value.”

At Procurex North Live, Mr Hemmington will share some of his outsourcing experiences as head of the BBC’s award-winning procurement team. Since 1995, the BBC has progressively outsourced a huge range of services and, in doing so, a lot of lessons have been learned about what works well, and what doesn’t. He added: “Some of it we’ve learned the hard way, but with some of it we’ve been fortunate in that things have fallen in a good way in terms of the relationships developed, while other relationships have been much more difficult to extract value. I’ll be sharing some observations about things that have worked well and what lessons we’ve learned, and how we’ve tried to implement some of those lessons. Also I’ll talk about the areas where we’re still learning and gaining experience, and hopefully learning to apply that in a positive way to extract more value from some of these services.

“We’ve done quite a lot of outsourcing over the years and this is about trying to share some of those experiences. A lot of it is common sense, but it’s the execution and delivery that is difficult and I am going to talk about how we’ve tackled some of those issues and overcome them.”

The key messages to be delivered at Procurex North Live centre on the benefits of outsourcing, what you should expect to gain when outsourcing, the potential cost savings, and the huge amount of discipline that outsourcing introduces to service levels and performance management.

Mr Hemmington says you get a much more disciplined performance as outsourcing is more incentivised to deliver, whereas if you work in-house you can fall victim to ‘politics’ and difficult operational priorities. The result of difficult in-house delivery is you never really get a meaningful set of measures like those you get when you outsource something. Boil it down and outsourcing creates a different dynamic. This is the kind of information that can aid procurement teams dramatically when outsourcing. Mr Hemmington continued:

“I am going to talk about the traps of outsourcing that are so easy to fall into. We recognise three, really. One thing you do need to do, particularly if you have outsourced to an industry giant in its field, is to have good strong contract management. You really need to understand the cost drivers that are driving that relationship from the supplier point of view. You need good people who are commercially savvy and operationally savvy.

“The next one is to try and understand your own organisation as a consumer of services, because we have a lot of inefficiency and wastage coming not from complacency on the side of the supplier, but from the way we consume services from the supplier. Self-analysis is important and it goes way beyond contract management to anyone who is a consumer of services. You have to make sure that you as a consumer buy well. The third area to talk about is making sure you keep your services aligned to the changing business needs. There needs to be a lot of effort to make sure your supplier understands how you as an organisation are developing, and how they need to support that.”

Mr Hemmington is also going to discuss the differences between relationship management and contract management. He says that some contracts only require you to manage and control the costs, for which you need a savvy commercial manager to do so effectively. In other relationships he says you need someone to drive collaboration and trust to really get the most out of the relationship to support your business.

There is a lot of vital knowledge to be shared and anyone with an interest in outsourcing will take great interest in Jim Hemmington’s keynote speech at Procurex North Live. His experiences and observations could just make the difference in helping you to understand outsourcing better and to do it more effectively.

 

For the full Procurex North Live 2015 keynote agenda, please click HERE.

 

To experience the Keynote Arena and many other features, delegates can book a place at Procurex North Live 2015 via the website.

http://www.procurexlive.co.uk/north/visiting/book-now/

 

Procurex North is FREE to attend for those working in the public, third and charity sectors. There are limited private sector delegate tickets available.

 

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