The UK public sector spends over £200bn a year procuring goods and services from third parties. But, despite its efforts, a disproportionate amount of this is still spent with the same large outsourcers.
The G-Cloud framework – and the numerous other frameworks that have followed it – have all sought to break down any unfair advantages that the ‘old guard’ of suppliers may have, and to make government contracts more accessible to SMEs. But, with business still being awarded to the same names again and again, questions are being asked about the future of these framework agreements.
First and foremost, it is difficult to question the government’s commitment to the digitisation of public services and the role it feels SMEs can play in this journey.
The government has remained publicly committed to spending 33% of its own procurement directly with SMEs by 2022. It has also created the Government Digital Service (GDS), the Cabinet Office ‘centre of excellence which aims to drive the digital transformation of government across all departments. Again, another very positive step.
However, the best will in the world doesn’t always translate into the results you want. In the case of the G-Cloud, results are definitely falling short of the mark. In G-Cloud 9, for example, while SMEs accounted for 80% of registered suppliers on the framework, only 56% of total sales by value were awarded to SMEs. This meant 44% of business was still picked up by a handful of the usual suspects.
What is going wrong?
From my perspective, the G-Cloud is being held back by two significant challenges; the wrong strategy; and poor technical execution.
The G-Cloud framework was introduced to improve competition among suppliers to the public sector by levelling the playing field for everyone pitching for government business. The problem is that a framework is not the most effective way to achieve this – it is simply the wrong strategy. Meaningful business relationships are not formed within a procurement framework.
You don’t create new business opportunities for others by putting up barriers between those who are already working together. Something Harley Davidson and the many other victims of the current US-China trade war know all too well!
Forcing existing business relationships to procure through a new framework does not automatically encourage them to look for new suppliers. They will simply be encouraged to find ways to work around the framework or bypass it altogether. This is because business is, and always has been, conducted through relationships. You cannot undo a good business relationship by forcing in a new system. There is simply not enough of an incentive for public sector purchasers to use the G-Cloud, so a lot of business continues to be done outside of the framework.
The G-Cloud platform is also challenged on a technical level.
Users of the G-Cloud will testify that it is unwieldy and difficult to navigate, while its search engine often fails to match contracts to the most relevant suppliers.
People expect search engines to work in 2018. They also expected them to work back in 2012 when the first G-Cloud was launched. People expect search engines to deliver results in an order that reflects their relevance to the search criteria. The search results in the G-Cloud do not appear do this – they do not appear to be in any discernible order.
At the same time, the filters do not reflect the types of services that buyers want today, such as change management and digital transformation. With 2,847 suppliers on G-Cloud 9, for example, how are public sector buyers expected to find the right supplier for their need? They put out a search, get overwhelmed by too many suppliers – many of whom are not related to their business need – and are then unable to meaningfully prioritise them effectively. So, what do they do? They either pay a third party to find the right G-Cloud approved supplier for them – and if you have to pay someone to help you use your own tools, then those tools are clearly broken – or they pick up the phone to the supplier who helped them last time. A supplier that may not even be on the G-Cloud.
However, the best will in the world doesn’t always translate into the results you want. In the case of the G-Cloud, results are definitely falling short of the mark.
The G-Cloud is currently failing to achieve its core objective of matching government buyers with the most appropriate suppliers for their needs. While questions remain about the suitability of a framework as the most appropriate strategy, addressing the technical issues is something that can be done relatively quickly as a meaningful quick win. Should the G-Cloud be shut down? Let’s see how this goes first.
At the same time, the government must allow business relationships to be fostered outside of the frameworks, and it must not be afraid to punish suppliers that continually fail to fulfil their contracts. By doing so, new suppliers will have a much better chance to prove themselves and build the relationships they need to deliver the digital change the government is seeking. If these businesses must then use the G-Cloud to tender for business, so be it.
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