Working for an international private healthcare organisation with millions of customers and over 50 000 staff
Helping a global healthcare group measure and increase the strategic benefits from its IT partner relationships
Our client is a large and complex international healthcare group, running hospitals, health centres, care homes and dental centres, and operating in multiple countries around the world. As such, it holds a number of substantial contracts with IT suppliers that represent a significant spend. While the organisation’s global procurement function was confident that these contracts were effective from a cost standpoint, it needed to be able to demonstrate to the business that the contracts were also bringing added value and strategic benefits to the organisation, globally and locally.
Because of the company’s complex and diverse structure, with many national business units and different service divisions, the global procurement team needed external assistance to assess the effectiveness of these contracts, and called on Mason Advisory to help.
We worked with the global procurement team to define what constituted a strategically important supplier relationship. From this, it was agreed that three relationships were of pivotal importance, with suppliers respectively of software and cloud services, telephony and networking, and end-user devices.
We agreed a survey-based approach and formulated a set of key questions to discuss with both internal stakeholders and representatives from each of the three suppliers. The questions covered the expectations of the relationship(s) from both sides and whether these were being met, what ‘good’ looked like for them, how they could measure that from a qualitative and quantitative perspective, and whether the relationships were leading to improvements and innovations in the way services were delivered. In particular, we looked for evidence that the technologies and services were being used to drive competitive advantage for the business.
Our work enabled us to obtain documented evidence of how the contracts were currently operating in practice, and detailed feedback on perceptions of whether the relationships were delivering value over and above operational service levels.
We delivered a report to the Global Head of Procurement setting out our findings and providing a clear set of recommendations.
Our work enabled us to make a number of specific recommendations, which our client is now in a position to implement. Specifically, our advice covered the areas outlined below.
- Roles and responsibilities – we highlighted instances where clearer definition of roles and responsibilities on both sides was needed to remove ambiguity around accountability and ownership of issues/actions.
- Innovation forums – we recommended that individual contracts should be selected as pilot schemes and ‘innovation forums’ held to explore improved practice.
- Communications strategy – should be developed to engage and manage key stakeholders on an ongoing basis, including the sharing of best-practice exemplars.
- Resource analysis – should be conducted to understand any additional resource needed to manage the strategic suppliers and key internal stakeholders.
- Contract negotiation parameters – should be re-evaluated in order to move away from cost savings as a key metric of value and embed total cost of ownership in its place.
Through our work, the organisation now has the tools it needs to better measure the strategic effectiveness of its supplier relationships, both quantitatively and qualitatively, and to fundamentally change the way it engages with these key partners to drive better value and competitive advantage.