From Alistair MacLeod, Director, Waterstons.
Sir – While value for money has always been important for social landlords, recent noises from the regulator suggest the effectiveness of consistently achieving it is under scrutiny, as doubts have been raised over the actual value received from procurement contracts.
In my experience, a common problem for any organisation, public or private, is the failure to develop a robust enough benefits and impact appraisal, which allows long-term value to be quantified and measured. It’s easy to speak in broad terms about the likely RoI, but too often projects are signed off without a detailed business case and an understanding of what needs to happen in order to realise the benefits. You cannot rely on procurement processes alone as the safety net for value; it can only be delivered if there is commitment from the business to enact the change and, more importantly, if third-party suppliers are committed to achieving the outcomes.
Procurement departments can have a big influence over the success of a project by providing documentation and information to suppliers that is clear, concise and relevant. If the business objectives are clear, then it is easier for suppliers to demonstrate how their solution will add value.
IT projects and services can be particularly challenging for a variety of reasons: the gulf in understanding between technologists and executives; a lack of direction from management teams; or projects driven by a desire to use technology as an agent for change. IT can only add value if it is properly aligned to the business objectives and the IT department adopts a service-based culture, rather than trying to impose control.
Depressingly, many organisations still view IT as a cost centre, a necessary evil, rather than pursuing a strategy where it can add tangible value to the organisations business strategy. Customer service and low TCO should be at the heart of the IT function, where money is spent wisely on the infrastructure layer, leaving more of the budget for strategic value-adding projects at the systems and communications layers. To summarise, value for money is not one dimensional and shouldn’t be viewed as only cost and supplier capability; it’s a multi-dimensional benefits, impact and RoI exercise that requires business engagement and professional management of change.