BRS does a significant amount of commercial acumen and capability training for infrastructure delivery organisations across Australasia. It is a skill gap across the public sector at all levels of government in understanding how to obtain best for community outcomes through the procurement of infrastructure projects. Traditionally the sector has focused on lowest price and transfer of risk to the supply chain, which can have some detrimental outcomes for the community.
Commercial acumen and building of these skills in the public sector across Australasia is seen as a top priority from many of our client government agencies. It is not a skill that normally comes naturally. It has been gained in the past through the “school of hard knocks”, previous project experiences, lessons learnt, failures and successes. What we are looking to provide is capability development that fast tracks this tacit knowledge in a way that provides confidence to public sector leaders that they can build relationships and credibility with their supply chain partners and service providers from a commercial perspective.
To do this, infrastructure delivery clients need to be on the pathway to becoming a mature and commercial intelligent partner in terms of understanding risk transfer, knowledge transfer, procurement models and procurement selection criteria. This is particularly important if one of the goals of the organisations is to deliver and realise value for money outcomes and non-functional benefits for the community they are serving. A great aspirational goal that needs capability and capacity building of their people to bring this to life.
So what does being a mature and commercial intelligent delivery client mean? From BRS’s perspective, we describe it as follows:
“No single feature, characteristic or capability defines an organisation as an Intelligent Client….it is a mix of both the skills and capability you have and the culture you evolve – “the way you do things” – so it is how your people behave and relate to customers, stakeholders, suppliers and each other…”
The key message for me around this is the combination of skills, behaviours and processes. This is an area I plan to write some further blogs around when organisations are looking to develop up a commercial capability framework that summarises what commercial skills and behaviours are needed from the people in their organisation. I will also work through what an infrastructure delivery client maturity matrix looks like from the perspective of the various levels you need to meet to be a commercially intelligent and mature client.
The other question I am often asked is what is the value in becoming a more commercially savvy client? From BRS’s perspective, the key benefits are as follows:
- Improved engagement enables the supply chain to bring their innovation and experience to solving problems and driving innovation;
- Government spend billions of dollars per annum on contractors and consultants through capital and operating projects. Benefits can be realised anywhere from 1-10% in cost and non-cost savings;
- Improved risk allocation can ensure sustainability for the supply chain and simultaneously protect government’s reputation;
- A focus on value for money can improve customer outcomes in terms of the stakeholder engagement, environment, safety, urban design, whole of life performance, asset performance, traffic disruption and stakeholder disruption;
- A well-managed process which is considerate of the pressures on the supply chain will build creditability and enhancing careers of people in the industry;
- Improved relationships with service providers are established in delivery projects that involve less disputes and disagreements;
- There is an opportunity to develop better internal leadership depth and bench strength through the addition of commercial leadership skills and strategies; and
- There in an overall improvement in commercial capability skills of the public service which translates to better decisions managing resources and expenditure; and
- Staff are likely to be attracted and retained in the public sector is there is an opportunity to learn the commercial skills that allow them to be more successful in their jobs and industries.
The benefits are clear. The challenge is to be intentional in striving towards a goal that just makes good dollars and sense to all involved.