At eXceeding, we’re here to help our clients to do things better: to save time, resource, money, and to deliver better results at the end of it. We create win-win firm, but fair contracts for our clients.
Nowhere is the reward for “doing things better” greater than in the NHS, where budgets are squeezed and every penny saved on a procurement contract goes towards improving the patient experience, providing vital services and life-saving care. When you can directly equate financial savings on a contract to buying X new beds, employing Y more nurses, or putting in place an extra surgeon, the impact of the work you do is brought into stark relief.
Through our work with Cambridge University Hospitals Trust, we have generated cost savings of more than £4 million annually, which will be put back into the fantastic work the Trust does for its patients. The savings were made in transitioning their outsourced IT contract to a new service provider.
CUH’s example begs the question: how many other NHS trusts are over-paying on their current IT provision? If each one could make their budget go further to the tune of £4 million a year, imagine what that would mean for patient care.
The NHS is the biggest employer in the UK, and every NHS trust will use outsourcing to one degree or another. They may call a spade a spade, or it may be known as managed services or by another similar term but, essentially, it is a form of outsourcing. But, why outsource IT?
In the NHS, IT encompasses more than just storage and servers – it runs across every part of patient journey and care, from the imaging systems used in radiology and cardiology, to blood transfusions and the equipment used to perform certain tests on the ward. Electronic Patient Records (EPR) connected to a nationwide network ensure confidential, highly sensitive data about individuals is available to healthcare professionals treating that patient, no matter what hospital or GP surgery they may be at, simply by inputting their NHS number.
If you were building a new hospital today, everything would be digital. There would be no servers or storage systems on site – all records would be electronic, and everything would be hosted in the cloud. But existing hospitals often have legacy technology and reasons for needing to maintain a hybrid model, such as applications that cannot go to a cloud solution. So, the variance across Trusts is huge, from those at the forefront of digital to those still in the process of migrating to realise the more agile cloud based.
With such volume, demand fluctuations and complexity, it isn’t surprising that Trusts look externally to provide the support and expertise they need, but how do you choose an outsourcing provider that’s right for you?
Sadly, the NHS has acquired a reputation for outsourcing big IT projects that get delayed, exceed budget and ultimately fail to deliver.
The tips above hint at some of the potential issues at play, but – for us – all the reasons point to one thing… the NHS is too nice. Now, we’re not advocating the NHS stops caring about people and screws suppliers for everything they’ve got – that’s no way to run an effective supplier partnership – but, sometimes, it’s ok to offer up some tough love to drive the best commercial outcomes, as every pound saved help investment in patient care and outcomes.
Too often, we hear of invoices coming in from suppliers for extra charges, and no one really knows what they’re for, but Trusts pay them anyway. If you don’t understand what SLAs and service credits are included in the contract you’ve got and where extra charges might be incurred, how do you know if these invoices are fair, or if you’re paying again for work that’s already covered?
It’s ok and absolutely right to challenge suppliers, and to hold them to account. Outsourcing is a partnership, and it needs to work for both parties. Effective contract management should challenge suppliers to evolve the technology and improve the commercials each year to keep pace with the market, but often the NHS fails to include clauses enabling this to happen.
When things turn sour, there can also be a lack of a paper trail to evidence any failures on a supplier’s part.
Public sector procurement can be fraught with challenges, and IT is one of the most complex categories in which to procure, because the technology moves on so quickly, but the service is vital to patient care and often lifesaving! Even if you are knowledgeable about healthcare software requirements and the latest technological innovations, procuring IT services in a critical domain like the NHS requires in-depth market knowledge and skills of negotiation, transition management and supplier management that – with the best will in the world – you cannot expect your internal teams to have, especially if it has been a while since you last went out to market. With the potential for lives to be on the line in the event of any disruption in service during transition, you want to be sure you’re in the right hands.
Once you have run a compliant process and engage the right supplier, you’ve got to put in place a contract that’s competitive and evolves over time as technology moves on and your requirements change. You’ve got to effectively manage that contract during its entire duration to extract value from it.
At eXceeding, our procurement consultants have all worked in industry and have in-depth knowledge of their marketplaces. They all cut their teeth in commercial organisations and aren’t afraid to give the tough love, negotiating firm but fair contracts that challenge suppliers to give as much as they get from any agreement, and holding them to account to deliver promised service and value.
Our team includes consultants who have previously worked in selling outsourcing services, so we are uniquely placed to understand the potential pitfalls clients face in sourcing suppliers.
We have proven experience of managing critical transitions including establishing exit strategy, minimising crossover, and ensuring service continuity.
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